Business Desk :
Bangladesh Bank Governor Dr Atiur Rahman spoke as a panelist in the closing plenary of the Global Green Growth Forum (3GF) in Copenhagen recently.
European Bank for Reconstruction and Development (EBRD) President, Asian Development Bank (ADB) Vice President, Pension Denmark CEO, Global Environment Facility (GEF) Chairperson, and Global Infrastructure Basel (GIB) Foundation Board President were the other panelists. The panelists outlined their country and institutional perspectives and contributions to the transformation processes towards green growth; highlighting the barriers on the path.
Felipe Calderon, Chair of the Global Commission on the Economy and Climate presented the keynote speech in the session moderated by Yvo de Boer, Director General, Global Green Growth Institute (GGGI).
Dr. Atiur dwelt on Bangladesh’s initiatives on the transition to green growth and on Bangladesh Bank’s (BB’s) initiatives promoting financing of the transitions to the green growth processes. He pointed out that BB recognized early on the ineffectiveness of conventional monetary and financial policy approaches focused on short term stabilization in addressing the longer term needs of inclusivity and environmental sustainability in growth pursuits; and mandated by its charter to support output and employment growth besides protecting monetary and financial stability, stepped into impart a deliberate directional bias in financing flows away from speculative and sustainability harming uses towards inclusive financing of ‘green’ output initiatives. To this end BB is pursuing a host of concerted initiatives drawn up consultatively with financial intermediaries and the relevant stakeholders. BB’s ongoing campaign of ingraining socially responsible corporate ethos is helping instill the right motivations in the financial sector. The consultative, motivating approach has drawn all banks and financial institutions in Bangladesh into enthusiastic engagement in the inclusive, environmentally responsible financing initiatives
Dr Rahman outlined BB’s priorities in environmentally sustainable approaches of rapid poverty eradication by narrowing down inequalities in advancement opportunities, food security and energy security on three broad fronts, viz., agricultural, SMEs, and ‘green’ projects including renewable energy generation, waste treatment, adoption of low carbon output options, and so forth. Dr Atiur went on to mention that one element of BB’s initiative of mainstreaming socially responsible financing is the promotion of the financial sector’s CSR engagements in the communities they operate in. These include grant supports to socially and environmentally beneficial projects.
He also outlined BB’s policy supports and enablement steps, including the refinance lines, the massive upgrading of financial sector IT infrastructure, and macro-prudential rules like lower equity requirement in financing of more environmentally beneficial options. In recapitulating the progress attained thus far he pointed out the exponential growth of cost efficient mobile phone based financial service delivery with more than 19 million users, agricultural loans for sharecroppers, and more than thirteen million no frills bank accounts opened for the poor with nominal Taka 10 deposit; generating a vast growth momentum in inclusive, environmentally sustainable financing for productive undertakings.
Dr. Atiur also mentioned that local corporates including the green project initiatives find it difficult to raise debt finance cost effectively from the underdeveloped local capital market, requiring them to lean excessively on bank financing. Also, the local green project initiatives are generally too small in size and stature to raise finance affordably from international markets by issuing green bonds. BB is therefore looking for ways of developing liaison between networks of local green project entrepreneurs and multilaterals like the WB, IFC that raise green bond funds on their own high credentials for investments in eligible green project initiatives, he added.
Dr. Atiur also mentioned that BB is actively seeking to deploy some of its foreign exchange reserves in investments in liquid issues of green bonds of multilaterals and other highly rated financial corporates. Concluding, he expressed the view that besides traditional long term investors like life insurers and pension funds, sovereign wealth funds and new multilateral fund initiatives like the proposed BRICS infrastructure fund can make big contributions in promoting financing of global green growth” he remarked.
Responding to a question from the floor, Dr Atiur mentioned that innovative initiatives of BB and a number of other central banks will be reflected in the UNEP sponsored Enquiry on Designing Sustainable Finance. Dr Atiur Rahman is a member of the global panel for this Enquiry.
