Dhaka, May 14: Bangladesh Bank has introduced a Tk1,000 crore refinancing scheme under its Green Transformation Fund (GTF) to accelerate environmentally sustainable industrialisation and support entrepreneurs in acquiring green machinery and equipment.
The central bank issued a circular on Monday outlining detailed guidelines for the disbursement and management of the new facility, which aims to promote the adoption of energy-efficient and environmentally friendly technologies across local industries.
The newly allocated Tk1,000 crore fund has been carved out from the existing Tk5,000 crore Green Transformation Fund that was earlier dedicated primarily to export-oriented and manufacturing sectors.
According to the circular, the scheme will operate as a revolving fund, allowing recovered loan amounts to be reinvested continuously in eligible green projects.
Participating banks will be permitted to provide financing to entrepreneurs through term loans or a blended “product mix” combining term loans and working capital support.
The refinancing tenure will range from two to five years depending on the nature of the project, while borrowers may also receive a grace period of up to six months for repayment based on bank-client relationships.
Under the scheme, entrepreneurs will be able to access loans at a maximum interest rate of 5%, while banks will receive refinancing support from Bangladesh Bank at only 1% interest.
The facility will cover the purchase of both imported and locally manufactured environmentally friendly capital machinery. Entrepreneurs will be required to maintain a maximum debt-to-equity ratio of 80:20.
A single borrower can avail financing of up to Tk5 crore under the programme. Additionally, eligible industrial establishments must ensure that at least 10% of their total electricity consumption comes from renewable energy sources.
Bangladesh Bank also clarified that loan defaulters will not qualify for the facility. Moreover, participating private and foreign commercial banks must maintain a default loan ratio below 20% to remain eligible under the scheme.
The central bank has instructed participating banks to submit regular reports, including nil reports in cases where no loans are disbursed. Failure to submit reports on time or providing inaccurate information may lead to punitive action.
The circular further warned that if any customer under the scheme is later identified as a defaulter, Bangladesh Bank reserves the authority to recover the entire refinanced amount from the concerned bank without prior notice. An additional 3% penal interest will apply if the bank fails to maintain sufficient funds for recovery.
