Dhaka Bureau: Bangladesh Bank has set up a fund of Tk 5000 crore called Green Transformation Fund (GTF) to accelerate sustainable growth in export and production oriented industries with the aim of establishing a green economy in the country. Long term loans will be given from this fund. The maximum loan interest rate will be 5 percent. This loan will be given to export and production oriented industries.
A circular in this regard has been issued from the Sustainable Finance Department of Bangladesh Bank on Wednesday (December 7).
Director of SFD Department. According to the circular signed by Rajab Ali, Green Transformation Fund (GTF) has been formed to promote sustainable growth in export and manufacturing oriented industries in establishing a green economy. Eligible customers from this fund will be provided refinancing facility against bank financing after payment of import price of capital equipment and parts.
The size of the fund will be 5 thousand crore rupees. This money will be provided from Bangladesh Bank’s own sources. The interest rate at customer level will be 5 percent and interest chargeable from PFI by Bangladesh Bank will be 1 percent.
The initiatives under which this benefit will be provided are – Water efficiency in irrigation, water conservation and management, waste management, resource efficiency and recycling, renewable energy, energy efficiency, heat and temperature management, ventilation and flow efficiency, work environment improvement initiatives and Other areas as directed by Bangladesh Bank from time to time.
Under this fund, the loan, investment-capital ratio of a borrower will be maximum 70 : 30. However, a single borrower will not be entitled to a loan facility of more than Tk 200 crore under this fund. The tenure of the refinancing facility will be 5-10 years depending on the tenure of the project. Defaulters are ineligible for loans from this fund. The rate of interest/profit recoverable from PFI by Bangladesh Bank will be 1 percent and the rate of interest/profit at the customer level will be a maximum of 5 percent. The type of refinancing facility will be Term Loan/Investment. Loan grace period will be one year based on PFI and customer relationship.
Eligibility for refinancing states that all state-owned banks can lend under the refinancing facility. In the case of private and foreign banks, the rate of classified loans or investments (classified loans) should be less than 10 percent. In case of single customer or group, the instructions stated in BRPD Circular No. 1/2022 issued by Bangladesh Bank along with the instructions of the Bank Companies Act, 1991 regarding the maximum limit of loan, investment facilities should be followed. Apart from this, all policies related to risk management issued by Bangladesh Bank should be ensured.
This Circular is issued under the powers conferred by Section 45 of the Bank Companies Act, 1991 (as amended in 2018) with immediate effect.
