High cost of compliance, uneven competition, banks’ strict terms and conditions and weak regulatory environment were other key challenges of green finance
Lack of awareness was a major challenge for green financing, experts said on Wednesday in a seminar.
Besides, high cost of compliance, uneven competition, banks’ strict terms and conditions and weak regulatory environment were other key challenges of green finance, they mentioned.
The seminar titled “Green financing for sustainable growth” was organized by the Nordic chamber of commerce and industry (NCCI) in Bangladesh, in cooperation with the royal Norwegian embassy, the royal Danish embassy and the embassy of Sweden in Bangladesh in the capital.
Prime minister's Economic Affairs Adviser Mashiur Rahman was chief guest at the seminar.
Nordic Chamber of Commerce and Industry (NCCI), Bangladesh President Tareq Rahman delivered the welcome speech.
Dr Mashiur Rahman said: “Environmental risks are increasing with the industrialization. The technology used in the industry must be environment-friendly.”
Everyone must come forward to tackle the environmental risks, he added.
Bank Asia President and Managing Director Md Arfan Ali said his bank was playing an important role in green financing.
The bank was financing the purchase of solar panel in rural areas through agent banking outlets, he added.
He said lack of awareness, lack of adequate reward and incentives and weak regulatory environment were key challenges in popularizing the green financing.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) senior vice-president Faisal Samad said: “Our RMG sector is growing rapidly. Bangladesh has the greenest RMG factories in the world. On the other hand, the sector is facing various problems. Day by day, number of international competitors is increasing, while the cost of production is soaring. Given the situation, the government should increase incentive to convert factories to green ones.”
Bangladesh Banks' sustainable finance department general manager Khondkar Morshed Millat said central bank issued green banking policy in February 2011 to promote green financing in industries.
“The central bank continues coordination and consultations with all stakeholders concerned and time to time the technical advisory committee for 52 green products/ initiatives/ projects gives advices,” Millat said.
Mindset was very important for green finance, pointed out Morshed Millat.
Discussants at the seminar said only a few commercial banks were exposed to green finance, and all banks were required to engage with lower interest rate for green financing.
They highlighted the importance of formulating capacity development strategies to create a more enabling environment for the private sector to invest in green and sustainable projects.
Danish ambassador Winnie Estrup Peteresen, Norwegian ambassador Sidsel Bleken and Swedish ambassador Charlotta Schlyter also said they would continue to support green financing, a priority for the Nordic countries.