Unprecedented $8 Billion Fund Fuels Climate Resilience And Sustainability For Bangladesh – OpEd

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A consortium of development partners has introduced an $8 billion fund aimed at supporting Bangladesh in both mitigating and adapting to the impacts of climate change. Spearheading this cooperative endeavor is the International Monetary Fund (IMF). Currently, Bangladesh is benefiting from funding for nine climate projects in the private sector, with contributions totaling $441.2 million from the Green Climate Fund (GCF), along with $135.5 million from various other development partners, national implementing entities, and private banks, as indicated in the statement.

This pioneering collaborative initiative, unique in the Asian context, aligns with the $1.4 billion Resilience and Sustainability Facility (RSF) arrangement endorsed by the IMF in January. Additionally, it corresponds to the $1 billion programmatic series known as Green and Climate Resilient Development (GCRD) Policy Credits by the World Bank, along with the ongoing financial support from the Asian Development Bank (ADB) for climate projects in Bangladesh.

Bangladesh has demonstrated noteworthy endeavors to streamline regulatory and institutional frameworks, aiming to achieve climate-resilient sustainable development. These efforts involve the formulation of essential policies and regulatory structures. Over time, the government has introduced various policies, plans, and programs to address climate change and disaster management in the country. These include:

1. Bangladesh Climate Change Strategy and Action Plan (BCCSAP), 2009
2. National Adaptation Programme of Action, 2005 (updated in 2009)
3. Bangladesh Climate Change Trust Act, 2010
4. Nationally Determined Contributions (NDC), 2015 (Enhanced & Updated in 2021)
5. NDC Implementation Road Map, 2018
6. Bangladesh Delta Plan, 2100
7. Mujib Climate Prosperity Plan 2030 (Draft)
8. National Disaster Management Policy, 2015
9. Standing Orders on Disaster 2019
10. Plan of Action to Implement the Sendai Framework for Disaster Risk Reduction 2015-2030
11. National Strategy on Internal Displacement Management 2021
12. National Plan for Disaster Management 2021-2025
13. Bangladesh Energy Efficiency and Conservation Master Plan up to 2030
14. Renewable Energy Policy of Bangladesh, 2008
15. Bangladesh National Action Plan for Reducing Short-Lived Climate Pollutants (SLCPs), 2012 (Updated in 2018)

Additionally, in the fiscal year 2009-10, the Government of Bangladesh pioneered the establishment of the Bangladesh Climate Change Trust Fund (BCCTF) using its own resources. To date, the BCCTF has initiated approximately 800 projects, involving an investment of around 480 million US dollars. These endeavors align with the strategic goals of the Bangladesh Climate Change Strategy and Action Plan (BCCSAP), emphasizing adaptation, mitigation, and climate change research. Furthermore, Bangladesh embraced the Climate Fiscal Framework (CFF) in 2014, with an update in 2020, to ensure the climate inclusivity of the Public Financial Management (PFM) system. The cumulative budget allocation of the twenty-five most relevant Ministries/Divisions constitutes 57.33% of the total national budget for the fiscal year 2021-22.

Within this allocation, 7.26% is dedicated to climate-related initiatives. Over the past seven years, the budget allocation for climate-relevant activities has doubled, surging from TK. 12,163 crore (approximately US$ 1.44 billion) in FY2015-16 to TK. 25,124.98 crore (about US$ 2.96 billion) in FY2021-22, representing 0.73% of the GDP for FY2021-22. Despite accessing resources from various international funds, such as the Green Climate Fund (GCF), Least Developed Countries Fund (LDCF), Adaptation Fund (AF), Global Environment Facility (GEF), Climate Bridge Fund, and other bilateral and multilateral sources, totaling 200.20 million USD as grants, 250 million USD as loans, and 747.22 million USD as co-finance, the international financial support remains inadequate compared to the country’s needs. Bangladesh also holds the presidency of the Climate Vulnerable Forum (CVF), collectively establishing Bangladesh as a significant player in the realm of climate change mitigation and adaptation.

Disaster Management in Bangladesh stands as a global exemplar, showcasing remarkable success in both Disaster Management and Disaster Risk Reduction efforts. The Cyclone Preparedness Programme (CPP), initiated by the Father of the Nation, Bangabandhu Sheikh Mujibur Rahman, boasts an impressive force of 76,020 volunteers, with nearly half of them being women dedicated to Disaster Risk Reduction (DRR). In urban areas, an additional 46,000 volunteers contribute to enhancing safety and resilience. The country has proactively constructed 4,530 Cyclone Shelters along the coast and 320 Flood Shelters nationwide, with an ongoing construction of 393 Flood Shelters. Notably, 550 Mujib Killa, specifically designed elevated lands, have been established to provide shelter for both people and livestock in coastal regions during cyclones and tidal surges. To ensure inclusivity, 60 Multipurpose Rescue Boats have been crafted to cater to persons with disabilities. The establishment of 66 Disaster Relief Warehouses, doubling as Disaster Information Centers, further enhances the nation’s disaster response capabilities. In efforts to reach and inform coastal communities and fishermen, 18 community radio networks (FM) have been established. Additionally, an Interactive Voice Response (IVR) system plays a crucial role in providing weather updates and early warnings, facilitating anticipatory actions to mitigate loss and damage.

Renewable Energy and Energy Efficiency in Bangladesh are integral components of the country’s commitment to a low-carbon development trajectory. There is a growing focus on advancing renewable energy sources and enhancing energy efficiency. With an already installed capacity of 541.7 MW in solar power plants, Bangladesh is actively working on installing an additional 911.8 MW in solar power and 149 MW in wind power. Furthermore, the country has successfully deployed over 6 million Solar Home Systems in off-grid areas, complemented by the distribution of 4.5 million Improved Cook Stoves in rural regions nationwide. In addressing greenhouse gas (GHG) emissions, Bangladesh has effectively fulfilled its obligations under the Montreal Protocol. Anticipated results indicate a substantial reduction of more than 2.14 MtCO2e emissions by 2025, aligning with the targets set by the Montreal Protocol. As part of its ongoing commitment to environmental stewardship, Bangladesh ratified the Kigali Amendment on June 8, 2020. Additionally, an SRO (Statutory Regulatory Order) was enacted on March 18, 2021, to curtail the import and consumption of hydrofluorocarbons (HFCs), signaling a proactive approach toward phasing down HFCs by 2045. More initiatives like this will take place.

As evidence of these efforts, the existing funding has been set in motion.

Kristalina Georgieva, the Managing Director of the IMF, remarked in a statement on Sunday that Bangladesh has been a leading advocate, alerting about the heightened risks of climate change for vulnerable nations and emphasizing the crucial role of global collaboration in supporting those in need. Georgieva praised Bangladesh’s substantial efforts in enhancing climate resilience, adaptation, preparedness, and conservation. The country’s dedicated implementation of its climate agenda and its relentless endeavors to foster worldwide collective action against climate change were acknowledged and commended. The Bangladesh Climate and Development Platform (BCDP) involves a coalition of partners, including the Asian Development Bank (ADB), the World Bank, the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), the Asian Infrastructure Investment Bank (AIIB), Agence Française de Développement (AFD), the European Union, and the European Investment Bank (EIB) as part of Team Europe. Additionally, the Green Climate Fund (GCF), the government of South Korea, the Japan International Cooperation Agency (Jica), and the United Kingdom are actively participating in this collaborative initiative.

The Asian Development Bank (ADB) is currently in the process of extending a $400 million policy-based loan to Bangladesh, with 53% of its 2023 project financing (totaling $1.9 billion) already earmarked for climate-related initiatives. The ADB further commits to allocating more than half of its 2024-26 funding for Bangladesh, totaling $5.5 billion, in support of the government’s climate agenda. The Korean government has pledged $50 million, and the Asian Infrastructure Investment Bank (AIIB) is considering an additional $400 million in 2024 at the request of Dhaka. The UK, through its Taskforce on Access to Climate Finance, will enhance coordination for bilateral climate finance, aiding the government in accessing diverse climate funding sources. The Green Climate Fund (GCF) is actively supporting various public and private sector projects, exceeding $400 million. These initiatives span across sectors such as energy, agriculture, water management, and resilient livelihoods. Team Europe has committed to providing an EU-guaranteed European Investment Bank (EIB) Loan of $381.5 million to support renewable energy projects in Bangladesh. The Renewable Energy Facility aims to mobilize up to $763 million in investments, contributing to the installation of approximately 750 MWp of new renewable energy capacity in Bangladesh. The EIB support will be complemented by an EU Grant of $49 million, covering Technical Assistance ($6.5 million) and an Investment Grant ($42.5 million) under the EU Global Gateway strategy, as part of the Team Europe Initiative on the Green Energy Transition. Agence Française de Développement (AFD) is processing a $320 million climate policy-based loan program, aligning with and complementing commitments from the IMF, World Bank, and ADB. Meanwhile, the Japan International Cooperation Agency (Jica) will support the Bangladesh Climate and Development Platform (BCDP) by aligning project pipelines with Bangladesh’s climate change agenda, providing technical assistance, concessional loans, and grants.

The UNDP will persist in offering technical support to Bangladesh in strategic planning and budget management that is sensitive to climate change. This support aims to enhance governance related to climate public finance and to improve the efficiency of planning and budgeting for climate finance at the local level. These endeavors are laying the foundation for a stronger climate action effort from Bangladesh, contributing to the enhancement of the region.

Syed Raiyan Amir

Syed Raiyan Amir is a Research Associate at The Center for Bangladesh and Global Affairs (CBGA)

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