Dhaka, 7 November 2024 — The Government of Bangladesh, in collaboration with the United Nations Development Programme (UNDP) and Impact Investment Exchange (IIX), hosted a high-level consultation titled “Rebuilding an Inclusive Bangladesh with Orange Bonds™.” This pivotal initiative introduced Orange Bonds™ as a transformative financial instrument to catalyze sustainable growth and inclusive economic recovery in Bangladesh. The consultation demonstrates the government’s commitment to the country’s financial reforms that enable stability, growth, and empowerment, driving gender equity and climate action.

A New Financial Frontier: Orange Bonds™ and the Need for Inclusive Growth

As Bangladesh transitions into a middle-income country, traditional forms of Overseas Development Assistance (ODA) are expected to decline, creating a pressing need for new sustainable financing solutions. In response, introducing Orange Bonds™ – named after SDG 5 Gender Equality—offers an innovative cross-cutting asset class that prioritizes gender equity and climate action. This new approach provides a pathway to attract significant public and private investments while deepening the nation’s capital markets. The initiative seeks to mobilize up to US$1 billion across a series of bonds, channeling much-needed investments to strategic sectors essential for long-term stability and inclusive growth, such as ready-made garments (RMG) and agriculture, while promoting micro, small, and medium enterprise (MSME) development.

The introduction of Orange Bonds™ in Bangladesh demonstrates a commitment to leveraging financial innovation to achieve the Orange Movement™ mission to mobilize US$10 Billion by 2030 and empower 100 million women, girls, and gender minorities in driving gender-transformative climate action, sustainable peace, and economic prosperity.

Following recent socio-political changes, Bangladesh has entered a critical phase of economic recovery, where fostering sustainable development is paramount. The Interim Government, led by Honorable Chief Advisor Prof. Muhammad Yunus, prioritizes financial reforms, transparency, and international collaboration to rebuild trust. The Orange Bonds™ align closely with these priorities and represent a crucial instrument for promoting gender-equitable growth and supporting the nation’s broader economic transformation goals of zero poverty, zero unemployment, and zero net carbon emissions.

Dr. Salehuddin Ahmed, Honorable Financial Advisor at the Ministry of Finance, emphasized the positive impact of fostering an inclusive and supportive environment for sustainable financing initiatives like the Orange Bond. He stated, “People may be risk-averse, and banks often take a conservative approach, preferring larger loans. However, we have an opportunity to change this. By creating acceptable risk measurements and removing unnecessary barriers, we can ensure that everyone, especially women and small entrepreneurs, has access to the resources they need to thrive.”

Prof. Durreen Shahnaz, Founder and CEO of Impact Investment Exchange (IIX), further emphasized the strategic nature of this initiative: “The Orange Bond – is not just a financial vehicle; it is a powerful tool with a mission rooted in gender equality, climate action, and inclusive growth. The Orange Bond™ is our call to action, our way of inviting the world to invest in a brighter, fairer Bangladesh.”

The Role of The Strategic Alliance in the New Era

This initiative will be supported by the United Nations Development Programme (UNDP), working alongside the Bangladesh government, IIX, regulators, and various international partners. Stefan Liller, Resident Representative of UNDP in Bangladesh, stated: “UNDP is committed to supporting the Interim Government in policy and institutional reforms for a smooth transition and to create an ecosystem of sustainable investment. We reaffirm our support to Bangladesh in achieving both economic growth and empowerment, striving towards a sustainable and prosperous future for all Bangladeshis. Today marks the beginning of a journey to make finance work for gender equality and green development.”

Dr. Md Khairuzzaman Mozumdar, Secretary of the Finance Division, emphasized the dual focus on climate action and gender equality: “The scale of resources required to address climate risks is substantial, and we recognize that women, who often bear the brunt of these challenges, need targeted support. Global initiatives like the Orange Bond Initiative, with its emphasis on gender equality and women’s empowerment, are crucial in fostering resilience and inclusive growth. This initiative represents a transformative opportunity to mobilize the resources needed to protect our vulnerable populations and promote a more equitable future.”

The Economic Relations Division (ERD) of the Government of Bangladesh, in collaboration with UNDP and IIX, will facilitate the introduction of Orange Bonds™ in Bangladesh, with the initial bonds likely issued in key international markets, such as Singapore. This will enhance the visibility of the bonds, attract international investors, including the Bangladeshi diaspora and development finance institutions (DFIs), and eventually help the country develop its local bond market to issue the bonds in Bangladesh.

Driving Global and Domestic Partnerships for Sustainable Change

The consultation convened stakeholders from the government, financial institutions, regulators, and international partners. Discussions explored the roadmap to issuing Orange Bonds™ in Bangladesh, as well as the necessary policy reforms and market infrastructure that support their integration into the financial system. Special remarks from key government advisors highlight the pivotal role of international partnerships, underscoring Bangladesh’s vision to align domestic priorities with international development goals and the UN Sustainable Development Goals (SDGs).

Lamiya Morshed, Principal Coordinator for Sustainable Development Goals (SDGs) affairs, Chief Adviser’s Office, highlighted the global significance of the initiative: “The work of Bangladesh Orange Bond initiative embodies the same spirit of sustainable and inclusive finance that we have been working on – so we are very excited to share our encouragement for this and see it come to reality. The Orange Bond would be an opportunity to put this vision into practice. Through it, we will unlock new resources for the people of Bangladesh—especially women, youth, and the communities that form the heart of our nation.”

Looking Ahead: Establishing the Orange Bonds™ Working Group

Shahriar Kader Siddiky, Secretary of the Economic Relations Division (ERD), emphasized the importance of government collaboration and commitment to the successful implementation of Orange Bonds, saying, “Government efforts alone cannot bridge the significant financing gap, we need to get good support from our development partners and the private sector. We acknowledge UNDP Bangladesh and IIX for introducing the Orange Bonds™ which will bring considerable opportunities for women through our capital markets. This is groundbreaking work for us. We are confident that with the collaboration of all stakeholders, the first ever Orange Bond will be initiated.”

Moving forward, a comprehensive feasibility study will be conducted to provide recommendations on bond design, market readiness, and implementation, with support from key international partners. Additionally, the ERD, UNDP, and IIX announced the formation of a multi-stakeholder “Technical Working Committee on Orange Bonds™,” bringing together experts from government, industry, development, and civil society to guide regulatory frameworks and ensure an inclusive, transparent rollout.

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