B Mirror Report: The Bangladesh Bank has established a special refinancing fund worth Tk 1,000 crore to promote the transformation of rural and local industries into environmentally friendly and sustainable sectors. Entrepreneurs will be able to access loans under this facility at a maximum interest rate of 5 percent.

In a circular issued  the central bank’s Sustainable Finance Department said the allocation has been made from its Tk 5,000 crore “Green Transformation Fund” to specifically support rural and local industrial development.

Under the new guidelines, financing will be provided for importing eco-friendly machinery and equipment, as well as purchasing domestically produced green technologies. The fund will also support initiatives in renewable energy, energy efficiency, water conservation and management, waste recycling, and workplace environmental improvements.

Banks participating in the scheme will receive refinancing from Bangladesh Bank at a 1 percent interest rate, while borrowers at the customer level will pay up to 5 percent. Loan tenure will range from 2 to 5 years, with a grace period of up to 6 months depending on project type.

Individual entrepreneurs may borrow up to Tk 5 crore, with financing covering up to 80 percent of the total cost of imports or purchases.

The central bank has set additional conditions, including a requirement that at least 10 percent of a project’s total electricity usage must come from renewable sources such as solar power. Defaulters and loan-delinquent individuals or institutions will not be eligible for the facility.

All state-owned banks will be allowed to distribute loans under the fund. However, private and foreign banks must maintain a non-performing loan ratio below 20 percent to participate. Banks already participating in the Green Transformation Fund will not need to sign new agreements.