Bangladesh is set to receive a $400 million budget-support credit from the Asian Infrastructure Investment Bank (AIIB) to facilitate critical structural reforms aimed at enhancing climate resilience in development activities.
The AIIB, headquartered in Beijing, is an emerging multilateral development bank and international financial institution. Its board of directors is expected to approve the loan program this Thursday, which coincides with a signing ceremony in Dhaka on the same day.
This financial assistance will co-finance the ‘Climate Resilient Inclusive Development Programme (Sub-programme 1)’ alongside the Asian Development Bank (ADB), which has already contributed $400 million to the initiative. A finance ministry official expressed optimism about the collaboration, noting that the primary objectives of the policy-based program have largely been met with ADB’s support.
The program, originally scheduled to end on June 30, 2024, may see an extension of three months due to the AIIB’s recent involvement. The funding is crucial for the Government of Bangladesh (GoB) to undertake policy reforms that integrate climate adaptation, mitigation, and disaster resilience into key sectors, thereby unlocking significant climate investments.
At the core of this initiative is the implementation of national climate objectives as outlined in the National Adaptation Plan (NAP) 2023-2050 and the Nationally Determined Contributions 2021 update (NDC-U). These plans aim to strengthen the intergovernmental policy and institutional framework, mobilize climate finance, and ensure gender equality and social inclusion (GESI).
The loan package focuses on three primary policy-reform areas: creating an enabling environment for climate-change actions, reinforcing climate-change adaptation measures, and accelerating climate-change mitigation efforts.
These areas address critical constraints and are designed to support Bangladesh in transitioning to a more sustainable, resilient, and low-carbon economy.
