Bangladesh gets $256.5m Green Climate Fund
Bangladesh has received $256.5 million from the global Green Environment Fund to market private sector expense through large scale adoption of energy-efficient technologies in the textile and garment sectors.
Here is the first concessional line of credit for Bangladesh, and the first private sector financing from the GCF in the country, the Infrastructure Development Provider Ltd (Idcol) said yesterday.
The fund was approved at the board meeting of the GCF on November 13.
The GCF is a fund established within the framework of the United Nations Framework Convention on Environment Transformation as an operating entity of the financial mechanism to aid growing countries in adaptation and mitigation practices to counter climate change.
The Idcol, as the immediate access entity (DAE) of the GCF, received the approval of the funding proposal for the programme titled "Promoting private sector investment through large scale adoption of energy-saving technologies and equipment for Textile and Readymade Garment sectors of Bangladesh".
It is the major approved financing proposal for just about any DAE of the GCF accredited globally, the Idcol said found in a press release.
Under the programme, Idcol are certain to get $250 million concessional loan for a tenure of 20 years with a grace period of five years for funding energy-efficient equipment.
Another $6.5 million should come as technical assistance (grant) to build up allowing environment by covering areas such as capacity building, recognition, support in loan disbursal and monitoring and analysis of the program parameters.
Out of $250 million loan, $100 million will be utilised to financing textile sector energy proficiency assignments, while $150 million will come to be channeled to four area financial institutions for financing energy efficiency jobs in the RMG sector.
The total programme size will be $423.50 million, including co-financing from Idcol, community financiers and the task sponsors, Idcol said.
"This programme is a exceptional success for Idcol when it comes to accessing climate switch fund to pave the road for the nation to attain its Sustainable Advancement Goals (SDGs)."
This is a massive accomplishment for the united states, and Idcol while a whole lot of requirements have to meet, and thanks diligences must be carried out to get the fund from the GCF, said Mahmood Malik, executive director of Idcol.
The fund for the garment sector would be distributed through three banking institutions and one non-bank lender, he said.
Loan providers would get the fund in a flat rate of 1 1.75 % for 20 years. Industries would receive the loans at 4.75 %, Malik said.
The Sustainable & Renewable Energy Development Authority can be implementing an element of the programme to fortify the regulatory and institutional framework at the national level to overcome the operational constraints linked to implementing energy efficiency and conservation in the united states.
Presently, the professional sector in Bangladesh makes up about 47.8 % of commercial strength consumption. Textile and RMG take into account approximately 38 % of the full total energy intake in the commercial sector.
The readymade garment sector may be the largest commercial contributor in CO2 emissions at 15.4 %, followed by the textile sector at 12.4 %, in line with the GCF website.
"These sectors aren't operating efficiently as a result of continuous usage of aged and badly maintained devices in conjunction with poor energy management."
If the current professional energy intensity persists, together with the monetary growth outlook in the method to long term, Bangladesh will face serious difficulties in managing increasing energy demands and obtaining its GHG emission lowering targets beneath the Paris Agreement, the GCF explained.
Textile and garment suppliers face countless barriers to buying strength efficiency including inadequate economical incentives, insufficient technical expertise and having less an enabling environment.
The sectors must overcome these barriers in order that Bangladesh can meet its nationally determined contributions target of 15 % GHG emission reduction compared to a business-as-usual scenario by 2030, the Fund said.
The programme provides an integrated package of concessional financing for textile and RMG producers, and technical assist with create an enabling environment and finally to reduce 14.5 million tonnes of skin tightening and equivalent in emissions.
Set up found in 1997, Idcol is a good government-owned non-bank financial institution working to catalyse private sector investment in the areas such as for example renewable strength and infrastructure.
