BRAC Bank to issue Tk 1,000 crore green bond as country's first bank

BRAC Bank is set to add a new chapter to Bangladesh's banking sector. As the country's 'first bank', it is going to issue a green bond worth Tk 1,000 crore. The information was learned from bank sources. Through this, a commercial bank in the country is formally stepping onto a path of raising a large fund for environmentally friendly projects.

The bank has said the bond will be issued in compliance with Bangladesh Bank's green bond policy. In other words, both the raising of the fund and its use will be conducted within the framework and conditions set by the central bank. Where the money collected through the bond will be spent has also been specified in advance.

According to the plan, the money raised from the bond will be spent on renewable energy projects, construction of environmentally friendly buildings and various initiatives to increase energy efficiency in the industrial sector. The fund will therefore not go into ordinary lending activities, but into environmentally sustainable sectors, the bank says.

A green bond is essentially a financial instrument through which funds are raised for environmentally sustainable and eco-friendly projects. At the same time, it assures investors of regular income. That is, a green bond is known worldwide as a structure that keeps an environmental goal and investor income together.

In a disclosure published on 23 May, it was announced that BRAC Bank PLC planned to issue a green bond of up to Tk 1,000 crore at face value to support its environmentally friendly financing activities. The process of issuing the bond is now moving forward in continuation of that announcement.

Two days earlier, the bank's board of directors, at its meeting, approved the issuance of the bond. Through the board's approval and the subsequent disclosure, the matter was formally brought before investors and the market.

According to the information, the three-year bond will be non-convertible and fully redeemable at maturity. This means the bond cannot be converted into shares and will be fully repaid at the end of its term — a structure that has been made clear to investors in advance.

According to information on BRAC Bank's own website, the bank provides special financing facilities to various environmentally friendly projects. These include renewable energy initiatives such as solar and wind power, energy-saving technology, construction of eco-friendly infrastructure and responsible waste management through ETP (effluent treatment plant) facilities. The target sectors of the green bond match the bank's existing activities.

This is not the bank's first experience of a large bond of this kind. Earlier, in October 2025, BRAC Bank received regulatory approval, as the first institution in Bangladesh, to issue a 'social bond' of Tk 1,000 crore. The money from that bond was targeted to strengthen the bank's Tier-2 capital under the Basel-III framework and to be spent on social development.

After the social bond, now the green bond — in both cases the figure of Tk 1,000 crore is a large one in the country's banking sector. This sequence, from a bond with a social goal to one with an environmental goal, makes clear the bank's tilt towards sustainable financing.

From an analytical perspective, renewable energy, eco-friendly buildings and energy efficiency in industry are three sectors that repeatedly come up in discussions of the country's energy and environmental policy. The money raised from the bank's bond is intended to go into exactly those sectors, so the market will watch how the bond is applied in practice.

Now the formal process of issuing the bond and the response of investors will determine how quickly this initiative moves into the field. If this Tk 1,000 crore green bond, issued in line with Bangladesh Bank's policy, is successfully raised, it could become an example of environmentally friendly financing for other banks in the country as well.