Climate Investment Opportunities in South Asia Bangladesh Bangladesh is a fast-growing economy, driven by exports from the development of its garments industry, critical to the transformation of its economy over the last 20 years, alleviating poverty and increasing employment. Bangladesh is benefiting from its demographic dividend, with half of its population under the age of 25 in 2016, and is likely to achieve its goal of reaching middle-income country status by 2021. The Climate Change Vulnerability Index ranks Bangladesh as the country most vulnerable to the impacts of climate change. Recognizing this extreme vulnerability, the government has put in place more than 200 laws and by-laws to Transport mitigate the effects of climate change. Bangladesh’s Nationally infrastructure Determined Contribution (NDC) under the Paris Agreement $23.7B emphasizes resilience across all sectors, estimating a total investment need of $40 billion for adaptation from 2015 to Green 2030. The NDC also includes a Waste buildings 5 percent unconditional and 15 percent conditional reduction in $4B $118.8B emissions from the power, transport, and industry sectors. Bangladesh's Private sector engagement and investment is central to helping climate-smart investment potential Bangladesh achieve its development objectives. The government (2018–2030) is attempting to catalyze private sector climate investment through the Bangladesh Investment Development Authority, Urban $172B Renewable and policies such as the incentivization of private lending to water energy enterprises that invest in green technologies, and the financing $13B $3.2B of decentralized climate-friendly energy programs, such as solar home systems. Agriculture $9.1B 1 IFC estimates a total climate-smart investment opportunity of $172 billion in Bangladesh from 2018 to 2030: $ 3 . 2 B I L L I O N I N R E N E W A B L E E N E R G Y , created by the government’s pledge to generate 10 percent of its energy from renewable sources by 2020, going up to 3,800 MW by 2041, and 100 percent by 2050 $ 1 1 8 B I L L I O N I N G R E E N B U I L D I N G S arising from its emphasis on energy efficiency in buildings and annual addition of 500,000 urban and 3.5 million rural houses to bridge an annual shortfall of 5 million homes $ 2 3 . 7 B I L L I O N I N T R A N S P O R T I N F R A S T R U C T U R E to help achieve its goals of a multimodal public transport-oriented sector, with a focus on developing its inland waterways network $ 1 3 B I L L I O N I N C L I M AT E - S M A R T U R B A N W A S T E W AT E R , in line with the government’s interest in seeking investment in water-related infrastructure and water management $ 4 B I L L I O N I N M U N I C I PA L S O L I D W A S T E M A N A G E M E N T, to bring collection up to 80 percent in 2030 and manage the increasing amounts of waste generated by a rapidly urbanizing population $ 9 .1 B I L L I O N I N C L I M AT E - S M A R T A G R I C U LT U R E , reflecting the government’s intention to modernize the sector and encourage climate-smart irrigation practices 2 Climate Investment Opportunities: South Asia Priorities for Bangladesh to Attract More Climate-Smart Investment Improving access to low-cost, long-term finance and developing demonstration projects to assure banks of their commercial viability are essential to unlocking investment. Streamlining land procurement processes and promoting rooftop solar at manufacturing facilities through net metering and grid connection will help promote renewable energy investments. Launching green building codes and voluntary certifications will enable investments in greening new buildings. Public private partnerships to reduce water pollution and promote wastewater recycling, complemented by enhanced groundwater pricing to encourage water conservation can create investment opportunities in the water sector. IFC Advisory and Investment Spotlights BRAC BANK AND THE INDUSTRIAL D E V E L O P M E N T L E A S I N G C O M PA N Y O F BANGLADESH LIMITED (2012–2014) IFC is working with financial partners in Bangladesh to help increase access, improve affordability, and promote financing for sustainability initiatives for small enterprises. In June 2012, IFC supported Bangladesh’s leading SME bank, BRAC Bank, to increase its business performance by using evaluation tools and PA R T N E R S H I P F O R C L E A N E R T E X T I L E sustainability reporting. With IFC’s support the bank (2013–2016) has since launched the Planet Solutions Loan—an IFC launched the Bangladesh Partnership for Clean affordable financing product to support water and energy Textile (PaCT) Program in January 2013, with financing efficiency improvements for textiles manufacturers and of $11 million to improve resource efficiency across technology service providers that are PaCT partners, 13 global brands and 200 textile factories. Since 2013, and have undertaken water/energy audits. Similarly, IFC these measures have annually helped save 21.6 billion is partnering with the Industrial Development Leasing liters of water and 2.5 million megawatt-hours of energy, Company of Bangladesh Limited to provide financial reduce greenhouse-gas emissions by more than 460,400 solutions to PaCT partners to promote investments in tons of carbon dioxide equivalent, and realize cumulative resource efficiency technologies. The partnership will cost savings of $16.3 million. They have also helped expand the company’s loan portfolio in energy-efficiency catalyze $39 million in additional investments in the financing in the textile sector by providing technical program’s member factories. IFC partnered with Levi advisory services and business development support to Strauss & Co in 2016 to develop a global program for generate a sustainable pipeline of clients in the water and environmental sustainability through the PaCT Program energy-efficiency sector. for six facilities in Bangladesh, India, Sri Lanka, and Vietnam. Bangladesh 3 G R E E N D E LTA I N S U R A N C E L I M I T E D (2015) IFC signed an agreement with Bangladesh’s leading private insurer, Green Delta Insurance, in February 2015 to develop index-based insurance products that minimize the impact of crop losses caused by natural disasters such as drought, heavy rain, and cyclones. By the end of the project, the facility expects to cover about 75,000 farmers in Bangladesh. The project is also supported through the Pilot Program for Climate Resilience, which aims to increase the revenues of farmers and agribusinesses through sustainable and climate-smart technologies and practices. E N E R G Y PA C A G R O - G L I M I T E D , SUPREME SEED, ACI LIMITED, AND LAL TEER LIMITED (2013) IFC is providing advisory and financial support for a partnership between the country’s largest private seed companies and nongovernmental organizations to produce and market eight new varieties of stress- tolerant rice seeds that can withstand extreme weather conditions, while developing contract farming and BANGLADESH VENTURES FUND building farmers’ overall capacity. To date, more than (2010–2017) 67,000 farmers and 600 dealers and retailers have gained In June 2010, the Small Enterprise Assistance Funds a better understanding of stress-tolerant seeds through and IFC launched the Bangladesh Ventures Fund as the initiative, expanding the market for high-yield seed a commercial finance company to invest in SMEs in varieties. These farmers have reported a 15 percent Bangladesh. It focuses on key high growth-potential increase in revenue compared to farmers who did not sectors in Bangladesh that lack access to traditional receive the training. financing sources including renewable energy and energy efficiency. The Fund has invested $1 million in SOLARIC Ltd., which supports energy access by providing patented micro-inverter based solar home systems and power backup systems that optimize energy efficiency and facilitate the use of smaller batteries, solar panels and energy-saving appliances. In May 2017, the fund received a follow-on commitment of $10 million from IFC and the Climate Investment Funds’ Pilot Program for Climate Resilience. This factsheet summarizes details from the Climate Investment Opportunities in South Asia report, which covers Bangladesh, Bhutan, 2121 Pennsylvania Ave., NW India, the Maldives, Nepal and Sri Lanka. http://wrld.bg/PgpC30gS88e Washington, D.C. 20433, USA www.ifc.org Bangladesh 4