Triggering Green Transformation of the Private Sector Through Central Bank-led Initiatives: The role of Bangladesh Bank in mainstreaming green finance in Bangladesh

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August 2018
Authors: 
Bushra Ferdous Khan
Source: 
UK Aid Direct, Economic Dialogue on Green Growth (EDGG)

This paper Triggering Green Transformation of the Private Sector Through Central Bank-led Initiatives: The role of Bangladesh Bank in mainstreaming green finance in Bangladesh presents a diagnostic assessment of the initiatives undertaken by Bangladesh's central bank to disburse green finance to the private sector. It also proposes a functional conceptualization of the term "green finance" for the national context and spells out a number of recommendations for triggering a green transformation of the private sector through central bank-led initiatives in Bangladesh. These include: 

  • Shifting from a supply-driven approach to a demand-driven  strategy for disbursing green finance
  • Developing a functional conceptualization of the term "green finance" that includes:
    • A definition that guides practical application;
    • A new categorization that recognizes that demand for green finance by different segments  of the private sector in their different roles has different roots; 
    • Identification of the drivers of expenditure on green solutions by private businesses and consumers that subsequently create private sector demand for green funds.
  • Designing targeted approaches such as compliance with regulation, the prospect of making an economic gain, and individual environmental awareness to drive the demand for green finance by private households and businesses.   
Countries: 
Bangladesh
Sectors: 
Finance