Staff Reporter :
The Government of Bangladesh has signed a $400 million loan agreement with the Asian Infrastructure Investment Bank (AIIB) to support the national budget and implement key climate-related reforms aimed at promoting sustainable and inclusive development.
The agreement, signed on Monday, forms part of the government’s broader strategy to strengthen resilience to climate change while advancing long-term environmental and economic sustainability.
According to a statement from the Ministry of Finance, the funding will be utilised under the “Climate Resilient Inclusive Development Program – Subprogram 2”, led by the Finance Division.
The initiative is focused on strengthening institutional capacity and enacting policy reforms in alignment with Bangladesh’s national climate objectives.
The programme targets three core areas: integrating climate action across government ministries, advancing adaptation in climate-vulnerable sectors such as agriculture and water resources, and accelerating mitigation through low-carbon energy solutions and emissions reduction.
Officials noted that the AIIB funding would bolster climate budgeting frameworks, encourage green public investment, and enhance inter-ministerial coordination in climate planning and financing.
The initiative also supports Bangladesh’s commitments under the Paris Agreement, alongside national strategies such as the Mujib Climate Prosperity Plan and Delta Plan 2100.
The $400 million loan is being provided on AIIB’s standard terms, with a 35-year maturity period including a five-year grace period. The interest rate is tied to the Secured Overnight Financing Rate (SOFR) plus a variable spread. A front-end fee of 0.25 per cent also applies.
The agreement was formally signed by Mirana Mahrukh, Additional Secretary of the Economic Relations Division (ERD), and Rajat Misra, Acting Chief Investment Officer for Public Sector (Region 1) and Director General of AIIB’s Public Sector Clients Department.
Both parties expressed optimism that the agreement would contribute meaningfully to Bangladesh’s transition towards a climate-resilient, low-carbon, and inclusive economy.
