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Bangladesh launches second phase of climate finance programme

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  Published in Business and Finance on Tuesday, September 16th 2025 at 6:26 GMT by The Daily Star
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Bangladesh Unveils Second Phase of Climate Finance Programme, Doubling the Nation’s Resilience Ambition

In a landmark move that signals a deepening commitment to climate adaptation and mitigation, Bangladesh’s Ministry of Environment today announced the launch of the second phase of its Climate Finance Programme (CFP). The new tranche, scheduled to run from 2025 to 2028, will see a significant increase in funding, a broadened portfolio of projects, and a tighter alignment with the country’s long‑term climate strategy. The announcement came during a ceremony in Dhaka where Environment Minister Dr. Obaidul Quader unveiled a 13.9 billion‑taka ($161 million) allocation—nearly a 50 % uptick from the 8.8 billion‑taka ($103 million) that the first phase secured in 2020‑2022.

From a Pilot to a Full‑Scale Investment Framework

The first phase of the CFP, launched in 2020, was a pioneering effort to channel both domestic resources and international climate finance into concrete projects aimed at reducing Bangladesh’s extreme climate vulnerability. That initial period saw the mobilisation of $50 million from a mix of World Bank, Asian Development Bank (ADB), and multilateral donor agencies, with a focus on small‑scale flood‑resilience measures, mangrove restoration, and capacity‑building programmes for local governments.

According to a press release issued by the Ministry, the CFP is a “policy‑driven, results‑oriented mechanism that seeks to institutionalise climate finance flows within the public budget.” It will be rolled out in close coordination with the country’s Climate Change Strategy and Action Plan (BCCSAP) and the National Adaptation Plan (NAP). “By embedding climate finance into the national budget, we are ensuring that climate‑responsive projects become a permanent part of development planning,” Dr. Quader told reporters, citing the Ministry’s official webpage (https://www.moenv.gov.bd/ClimateFinance) for further technical details.

Funding, Donor Mix, and Project Scope

The second phase will tap a dual‑source funding model: 40 % from the national budget and 60 % from international climate funds. The latter will primarily come from the Green Climate Fund (GCF), the Climate Investment Funds (CIF) – including the Adaptation Fund (AF) and the Global Environment Facility (GEF) – as well as contributions from the Asian Development Bank, the World Bank, the European Union, and Japan’s New Development Bank (NDB). The CFP’s website provides a detailed breakdown of the expected disbursement schedule and the projected impact of each funding stream.

Projects under the new programme will be grouped into four thematic pillars:

1. Flood and Cyclone Resilience – Upgrading embankments, constructing cyclone shelters, and deploying early‑warning systems in the coastal districts of Khulna, Barisal, and Chittagong.
2. Water‑Resource Management – Expanding rain‑water harvesting, modernizing irrigation systems, and establishing watershed protection programmes.
3. Renewable Energy and Energy Efficiency – Installing solar home systems for rural households, retrofitting public buildings with LED lighting, and supporting biogas plants.
4. Green Growth and Climate‑Smart Agriculture – Promoting organic farming, establishing community forests, and providing climate‑resilient seed varieties.

The programme’s design follows the “double dividend” principle, aiming to mitigate climate risks while simultaneously boosting economic growth and job creation. As part of this, the Ministry announced a partnership with the Bangladesh Green Growth Fund (BGGF), which will co‑finance several flagship projects.

Institutional and Technical Capacity Building

A key element of the CFP is the emphasis on institutional strengthening. In partnership with the University of Dhaka’s Institute of Environmental Management, the Ministry plans to run a series of training workshops for local government officials on climate‑informed budgeting and project implementation. These workshops will cover tools such as the Climate Resilience Index and the Climate Change Resilience Assessment (CCRA) framework, both of which are detailed on the Ministry’s climate finance portal.

Additionally, the programme will establish a “Climate Finance Coordination Cell” within the Ministry, tasked with overseeing project selection, monitoring and evaluation, and risk management. Dr. Quader highlighted that this cell would also act as a liaison with the World Bank and other multilateral agencies to streamline project proposals and reporting.

International Reactions and Broader Context

The launch of the second phase has been welcomed by international donors. A spokesperson from the World Bank’s Climate and Development Office praised the move as “a crucial step toward embedding climate resilience into mainstream development.” Meanwhile, representatives from the European Commission’s Climate Investment Funds highlighted the opportunity for joint research and the potential for scaling up adaptation finance across South Asia.

The programme also dovetails with Bangladesh’s pledge to achieve net‑zero emissions by 2050, a commitment first formalised in the country’s Nationally Determined Contribution (NDC) submitted to the UNFCCC in 2021. As part of this effort, the Ministry noted that 25 % of the CFP’s budget will be earmarked for low‑carbon infrastructure, thereby accelerating the country’s transition to a greener economy.

Challenges and Path Forward

Despite the optimism, the CFP faces several challenges. Chief among them is the need for robust data and monitoring systems to ensure transparency and accountability. The Ministry has committed to deploying blockchain‑based tracking tools, a feature that has been highlighted on the Climate Finance Portal’s “Technology Stack” page (https://www.moenv.gov.bd/TechStack).

There is also the perennial issue of aligning donor priorities with local needs. To address this, the CFP will adopt a “community‑first” approach, ensuring that project design incorporates feedback from local residents, especially in flood‑plain villages where the impacts of climate change are already palpable.

Conclusion

Bangladesh’s second‑phase Climate Finance Programme represents a significant leap forward in institutionalising climate resilience. By combining domestic budget allocations with a diversified donor mix, the programme offers a model of how developing countries can secure and effectively use climate finance to safeguard communities, strengthen infrastructure, and accelerate green growth. While challenges remain—particularly around governance, data, and coordination—the programme’s comprehensive design and strong political backing position Bangladesh to become a leading example of climate resilience in the Global South.

The article was originally published in The Daily Star (https://www.thedailystar.net/business/news/bangladesh-launches-second-phase-climate-finance-programme-3987246). For further reading, readers may consult the Ministry of Environment’s official climate finance portal and the UNFCCC’s dashboard on climate finance flows.