Bangladesh Signs $400 Million Climate Budget Support Deal with AIIB

In a significant move to boost climate resilience and sustainable development, the Government of Bangladesh has signed a $400 million loan agreement with the Asian Infrastructure Investment Bank (AIIB) as part of its budget support initiatives. The agreement is designed to implement the "Climate Resilient Inclusive Development Program – Subprogram 2," which aims to enhance the country’s ability to tackle the impacts of climate change through targeted policy reforms and institutional strengthening.

According to an official press release, the program—initiated by the Finance Division—focuses on three key areas: establishing an enabling environment to integrate climate priorities across government ministries, promoting climate adaptation strategies, and accelerating efforts toward climate change mitigation. The initiative is expected to pave the way for more coordinated and effective climate action across multiple sectors in Bangladesh.

The $400 million financing comes under standard terms set by AIIB, including a 35-year maturity period with a five-year grace period. The interest rate is tied to the Secured Overnight Financing Rate (SOFR) plus a variable spread, and includes a front-end fee of 0.25%.

The agreement was signed by Mirana Mahrukh, Additional Secretary of the Economic Relations Division under the Ministry of Finance, and Rajat Misra, Acting Chief Investment Officer of Public Sector (Region 1) and Financial Institutions and Funds (Global) Clients, and Director General of AIIB's Public Sector Clients Department Region 1. This partnership underscores AIIB's continued support in helping Bangladesh transition to a low-carbon, climate-resilient economy.