Play store
BRAC Bank is set to issue a Tk 1,000 crore green bond to expand environmentally friendly and sustainable financing, becoming the first private commercial bank in Bangladesh to launch such a bond.
The three-year bond will raise funds for eligible green projects, including renewable energy, environmentally friendly buildings and energy-efficiency improvements in industries.
BRAC Bank Managing Director and CEO Tareq Refat Ullah Khan formally announced the initiative at a press conference at Pan Pacific Sonargaon in Dhaka on Sunday.
According to the bank, the initiative will strengthen its commitment to sustainable finance and support efforts to make Bangladesh’s economy greener and more resilient.
The bond will be a three-year zero-coupon instrument, meaning it will not pay periodic interest. Instead, investors will purchase it at a discount to its face value and receive the full face value at maturity. The difference between the purchase price and the maturity value will constitute their return.
Each bond will have a face value of Tk 10 lakh, with an annual discount rate of 7.50%. Depending on the applicable pricing terms, the indicative purchase price for a three-month period will range from approximately Tk 8,04,861 to Tk 8,19,957. The final price will be determined according to the applicable terms and calculations.
The bank said issuance would begin on November 15, 2026, with the bond maturing three years after the initial issuance date. No maximum investment limit has been set.
Proceeds will be channelled into eligible green projects through BRAC Bank. The bond framework also outlines criteria for project selection, fund management and reporting to ensure transparency and accountability in the use of the proceeds.
The bank said the bond would comply with Bangladesh Bank’s Green Bond Financing Policy for Banks and Financial Institutions and the International Capital Market Association’s Green Bond Principles. S&P Global Ratings has also provided an independent second-party opinion on the bond framework.
The bond will be open to both institutional and individual investors, subject to applicable regulations and investment requirements. Eligible investments may also be made from company provident funds and gratuity funds, subject to relevant conditions.
Investors must have a Beneficiary Owner (BO) account to participate. BRAC Bank said it would assist investors in opening such accounts if necessary.
Applications will be accepted until the designated deadline every Wednesday. If the scheduled day falls on a government holiday or a Bangladesh Bank holiday, applications will be accepted on the preceding working day.
According to the bank, income from the zero-coupon bond will be exempt from withholding tax and other applicable taxes under the relevant provisions of the Income Tax Act, 2023. Investors may also be eligible for tax rebates after the bond is listed on a stock exchange.
The bank cited a holding-period return of 24.20% over three years as an illustrative example. However, the actual return will depend on the final purchase price and applicable terms.
Khan described the green bond as an important milestone in the bank’s sustainable financing journey and said it could contribute to the further development of Bangladesh’s capital market.
By raising dedicated capital for environmentally friendly projects, the bank aims to support environmental objectives while expanding financing options for businesses investing in cleaner energy and more efficient infrastructure.
As Bangladesh faces growing climate risks and increasing demand for energy-efficient infrastructure, green financing is becoming an important tool for mobilising funds for sustainable development.
The effectiveness of the initiative will depend on the proper use of the proceeds, regular disclosure of information and assessment of the environmental benefits delivered by the funded projects.