|Published : 23 Nov 2016, 21:47:24|
Atiur pleads for issuing green bonds to attract FDI
Former Bangladesh Bank (BB) Governor Atiur Rahman Wednesday emphasised the need for issuing green bond to attract more foreign direct investment (FDI) from both foreign investors and Non-Resident Bangladeshis (NRBs).
"Growing urbanisation and industrialisation in developing economies like Bangladesh will need a huge amount of additional investment fund and green bond could be a desired option for the sovereigns to support and encourage central bank, development banks and city corporations to go for such blended strategy of mobilising green resources from abroad," Dr. Rahman said while addressing at a panel discussion on Green Bond at the Asian Development Bank (ADB) headquarters in Manila, according to a message.
This could be as good as attracting FDI which could as well be contributed by the NRBs who may be buying this green bond as they dream of building desired infrastructures of their motherland as fast as possible, according to the former governor.
The panel was moderated by Noel Peters of ADB and participated by Christopher Knowles of EIB, Gregory Schneider Maunoury of Humanis Gestion of Actifs and Anthony Ruschpler of ADB.
"We, therefore, need to work together including public finance policymakers, regulators, banks and municipalities. This collaboration will also help avoid green washing as there can be closer monitoring of whether the mobilized resources are actually going to green projects or not," Professor Rahman explained.
He also said only deeper familiarisation of all the stakeholders can instill sense of ownership of new financial product like green bond.
"So there is an imperative of educating the issuers and investors of green bond," Dr. Rahman observed.
Multilateral organisations like ADB and IFC can play this bridging role of providing technical assistance for such financial literacy and exchange of lessons on such a product, he added.
The former governor said that Bangladesh, like most developing countries, depends overwhelmingly on banks for financing medium and long-term financing.
"So there can be mismatch between tenors of savings and investment and hence the need for developing capital market," he noted.