Bangladesh Bank’s fund for a green garment sector

Bangladesh Bank established a $200 million Green Transformation Fund (GTF) in 2016 to finance environment-friendly machinery for the country's pollution-intensive garment and manufacturing sectors. While the fund has supported specific companies like Goodrich Sweater Ltd and Skyline Apparels and expanded its scope to include the jute and general manufacturing sectors, it faces challenges including a lengthy approval process and a narrow focus on capital machinery rather than broader sustainability measures.

• The ready-made garment sector is the largest industry in Bangladesh, contributing 12.26 percent to the national gross domestic product from 2017-2018, but it is highly pollution-intensive. In 2015, 50 garment and textile industries in Dhaka alone emitted 58,177 tonnes of carbon dioxide, and the industry is estimated to use 1,500 million cubic meters of water, primarily groundwater.
• In 2016, Bangladesh Bank launched the $200 million Green Transformation Fund (GTF) to provide finance for export-oriented and leather manufacturing industries to purchase environment-friendly capital machinery. The fund provides loans in US dollars through scheduled banks for terms of five to ten years with a one-year grace period. Eligible uses include renewable energy, energy efficiency, waste management, and water-use efficiency.
• As of 2018, the GTF had provided $130,000 to two ready-made garment industries, Goodrich Sweater Ltd and Skyline Apparels, via South East Bank, with an additional $1.35 million worth of projects in the pipeline.
• The GTF faces implementation challenges, specifically a lengthy project approval process that acts as a barrier for private sector players. Additionally, because the fund is restricted to the purchase of machinery, some entrepreneurs prefer a composite fund that covers a broader range of sustainability measures.
• The scope of the GTF has been expanded over time, including the jute sector in 2017 and all manufacturing and export-oriented industries in 2019. Some experts suggest further expansion to include domestic industries and the purchase of machinery from local sources.

APA

Verma, S. (2020). Bangladesh Bank’s fund for a green garment sector. Climate and Development Knowledge Network. https://cdkn.org/sites/default/files/files/Bangladesh-Bank-Case-Study-2.pdf

Chicago

Verma, Simant. Bangladesh Bank’s fund for a green garment sector. Climate and Development Knowledge Network, 2020. https://cdkn.org/sites/default/files/files/Bangladesh-Bank-Case-Study-2.pdf.

Wikipedia

{{cite report |last1=Verma |first1=Simant |title=Bangladesh Bank’s fund for a green garment sector |publisher=Climate and Development Knowledge Network |date=May 2020 |url=https://cdkn.org/sites/default/files/files/Bangladesh-Bank-Case-Study-2.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{verma2020bangladesh, author = {Verma, Simant}, title = {{Bangladesh Bank’s fund for a green garment sector}}, institution = {Climate and Development Knowledge Network}, year = {2020}, month = may, url = {https://cdkn.org/sites/default/files/files/Bangladesh-Bank-Case-Study-2.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }