Green bond in Bangladesh attracts investors in trading debut

Dhaka, Bangladesh


Bangladesh’s first Green Sukuk Bond, floated to raise $400 million to fund 230 MW of solar power generation, made its trading debut on the Dhaka and Chittagong stock exchanges on Thursday.

On the first trading day the Tk 100 (US$1.16) per unit priced bond received commendable response from the investors and traded between Tk 99.50 and Tk 110 and finally closed at Tk 101 at the Dhaka Stock Exchange and at Tk 104 at the Chittagong Stock Exchange. Some 3.44 million units of the bond changed hands on the day.

Investors of the bond will receive a minimum 9% return that could reach as high as 16% with various others incentives to be given by the issuer company.

Presently banks pay below 6% interest to the depositors, thus the Green Sukuk Bond has become an attraction for both long-term and short-term investors after it started trading.

With the funds raised by issuing green bonds, local conglomerate Beximco Group is financing two solar PV power plants: the 200 MW Teesta Solar Limited in Rangpur district and the 30 MW Korotoa Solar Limited in Panchagarh district — both located in the northern part of the country.

Its Chinese partners, TBEA Xinjiang Sunoasis Co. Limited and Jiangsu Zhongtian Technology Co. Limited, are also investing in the projects.

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The government will buy solar power from the two plants for a period of 20 years at the rate of US$0.16/kWh.

Salman F Rahman, private sector affairs adviser to the prime minister in Bangladesh, said at the inaugural trading session of the bond that many of institutions were now coming forward to issue bonds to raise funds for various development projects.

In the future the government’s mega infrastructure projects also can be financed by issuing bonds, he said.

Presently, Bangladesh’s renewable energy generation capacity stands at 777.43 MW while a number of large and medium-scale plants are under construction and at approval level. Rooftop solar is also getting a huge response from industrialists with large buildings.

The government has prepared a roadmap to generate 40% of the country’s total electricity from renewables by 2050 through aggressive efforts.

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