Bangladesh Bank (BB) has earmarked Tk 1,000 crore from its Green Transformation Fund (GTF) specifically for rural and local industrial sectors to decentralize sustainable industrialization.
The initiative aims to help small-scale and regional entrepreneurs acquire eco-friendly machinery, shifting sustainable production beyond major urban hubs. This allocation is part of the central bank's larger Tk 5,000 crore revolving fund dedicated to green manufacturing.
Under this refinance scheme, financial institutions will receive funds from the central bank at a 1% interest rate, while the maximum rate for customers is capped at 5%. Loan tenures range from two to five years, with an optional six-month grace period.
The fund covers projects including renewable energy and energy efficiency. Water conservation and waste management and resource recycling and workplace environment improvements.
Individual borrowers can secure a maximum of Tk 5 crore, provided the debt-equity ratio does not exceed 80:20. Crucially, financed projects must draw at least 10% of their electricity from renewable sources.
To ensure transparency, loan defaulters are barred from the scheme. Private and foreign banks must maintain a classified loan rate below 20% to participate. Bangladesh Bank warned that any false reporting or non-compliance would result in financial penalties.
