Climate finance is increasingly woven into Bangladesh’s public financial management systems, and these dialogues will further deepen that integration and unlock new investment streams for resilience.
Bangladesh has taken a major step towards its first National Climate Finance Strategy, aiming to bridge the gap between ambitious climate commitments and the financing needed to protect vulnerable communities.
Through a series of nationwide consultations, from November to December 2025, convened by the Finance Division, with UNDP providing technical assistance and financing from Agence Française de Développement (AFD) under the Inclusive Budgeting and Financing for Climate Resilience (IBFCR II) project, the country is laying the foundation for a comprehensive roadmap to mobilize and manage climate finance at scale.
Climate finance is increasingly woven into Bangladesh’s public financial management systems, and these dialogues will further deepen that integration and unlock new investment streams for resilience.
Bangladesh ranks among the world’s most climate‑vulnerable countries while contributing less than one per cent of global GHG emissions, facing recurring climate induced disasters that damage agriculture, infrastructure and livelihoods, with annual climate finance needs estimated at over USD 26 billion, especially for adaptation and loss and damage. Over the past decade, Bangladesh has emerged as a forerunner among climate‑vulnerable countries by adopting the Bangladesh Climate Change Strategy and Action Plan (BCCSAP), the National Adaptation Plan (NAP), updated Nationally Determined Contributions (NDCs) and Delta Plan 2100, yet a persistent gap between the investment needs set out in these plans and available public, private and international finance underscores the urgency of a dedicated Climate Finance Strategy to translate climate priorities into concrete financial decisions.
Insights from the Consultations
Banks, insurers, and business associations highlighted barriers to scaling private climate finance, including the lack of a clear taxonomy, tax incentives, and innovative instruments. Participants called for expanding tools such as green bonds, sukuk, resilience bonds, ESG-aligned funds, blended finance, and climate insurance, while addressing regulatory hurdles like VAT on crop insurance and duties on solar equipment.
Development partners and DFIs International actors emphasized the need for a country-owned framework to guide concessional resources and reduce fragmentation. They urged operationalizing the Bangladesh Climate Development Partnership (BCDP) and strengthening project preparation capacity to access major climate funds and build bankable pipelines aligned with NAP and NDC priorities.
Government stakeholders Ministries stressed improving climate-responsive public financial management, faster post-disaster disbursement, and updating climate budget tagging and the Climate Fiscal Framework. Ensuring that climate finance reaches vulnerable groups, including women, children, and marginalized communities, through social protection systems was a key priority.
Throughout the consultations, national leaders and partners stressed that Bangladesh’s climate ambition must be backed by a clear, country-led financing framework. From the Ministry of Finance, AKM Sohel, Additional Secretary and UN Wing Chief at the Economic Relations Division, underlined that “despite being highly vulnerable, Bangladesh receives only a fraction of the climate finance it requires” and that a clear Strategy will help “navigate this imbalance” and develop bankable projects for long‑term resilience.
Syeda Rizwana Hasan, Honourable Advisor at the Ministry of Environment, Forest and Climate Change, called for a fundamental shift in the way climate finance is approached, urging Bangladesh to “build real capacity, simplify financing beyond slow tenders, and equip ministries and NGOs through clear working groups so climate finance becomes truly outcome oriented.”
The Finance Division and UNDP will now consolidate insights from the three national consultations to draft Bangladesh’s first National Climate Finance Strategy and its operational plan. The draft strategy will then be shared with key stakeholders for their input and validation. By embedding climate finance in national systems and sustaining engagement with government, partners, the private sector and civil society, Bangladesh aims to turn its climate ambition into scaled-up action that protects development gains and strengthens resilience.
Source: UNDP
