Shahjalal Islami Bank Signs Two Participation Agreements With Bangladesh Bank For Green, ICT Refinance Schemes

🤝 Shahjalal Islami Bank PLC has signed two participation agreements with Bangladesh Bank to facilitate financing for the establishment of green industries and information technology sector development under the central bank''s refinance schemes. AKM Nurunnabi, director of the Sustainable Finance Department of Bangladesh Bank, and Mosleh Uddin Ahmed, managing director of Shahjalal Islami Bank PLC, signed the agreements at the central bank''s headquarters in Dhaka recently, according to a press release.

📊 Through these agreements, Shahjalal Islami Bank PLC will be able to play a more effective role in increasing financing for the country''s eco-friendly industrial and information technology sectors. The participation agreements make the bank eligible to access concessional refinance facilities from Bangladesh Bank — meaning that the central bank will provide funds to the bank at below-market rates, which the bank can then on-lend to eligible borrowers in the green industry and ICT sectors.

🏛 Bangladesh Bank''s refinance schemes

The Bangladesh Bank refinance schemes for green and ICT financing are part of the central bank''s broader push to channel credit towards environmentally sustainable and technologically advanced sectors of the economy. The schemes work by providing banks with access to low-cost funding that they can on-lend to eligible borrowers — typically at interest rates that are 2-3 percentage points below the market rate. This makes it cheaper for businesses to invest in green technologies, energy-efficient machinery, and ICT infrastructure, supporting the country''s broader sustainable development and digital transformation agendas.

The green financing scheme supports investments in areas such as renewable energy (solar, wind, biogas), energy-efficient machinery, green building certification (LEED), waste management, water treatment, and pollution control equipment. The ICT financing scheme supports investments in software development, IT-enabled services, digital infrastructure, and technology start-ups.

👥 Shahjalal Islami Bank joins growing list

Shahjalal Islami Bank is the latest in a growing list of Bangladeshi banks that have signed participation agreements with Bangladesh Bank for the green and ICT refinance schemes. Previously, NCC Bank, Southeast Bank, Eastern Bank, BRAC Bank, Mutual Trust Bank and several other private commercial banks have signed similar agreements — reflecting the banking sector''s growing interest in green and ICT financing as both a regulatory compliance issue and a commercial opportunity.

For Islamic banks such as Shahjalal Islami, the refinance schemes are particularly significant because they provide a Shariah-compliant pathway for participating in green and ICT financing. Bangladesh Bank has structured the schemes to be compatible with Islamic banking principles, allowing Islamic banks to access the refinance facilities without violating their Shariah compliance requirements. This is important because Islamic banks represent roughly a quarter of Bangladesh''s banking sector, and their participation is critical to the success of the central bank''s green and ICT financing agenda.

💰 Why green and ICT financing matters

Green and ICT financing have become strategically important for Bangladesh''s economic development for several reasons. First, the country''s export-oriented sectors — particularly readymade garments, textiles, and leather — face increasing pressure from international buyers to demonstrate sustainability credentials. Access to green financing allows these sectors to invest in energy-efficient machinery, renewable energy, and pollution control equipment that helps them meet international sustainability standards.

Second, Bangladesh''s broader climate change agenda requires significant investment in green infrastructure, including renewable energy, energy efficiency, and climate resilience. The Bangladesh Bank refinance schemes are designed to mobilise private-sector financing for these investments, complementing public-sector climate finance flows.

Third, the ICT sector has been identified as a key driver of Bangladesh''s future economic growth, with the government setting ambitious targets for ICT export earnings and digital economy development. Access to concessional financing through the refinance schemes supports the growth of IT companies, software developers, and digital service providers.

🌏 Implications for Bangladesh''s sustainable finance agenda

Shahjalal Islami Bank''s participation in the schemes is a positive signal for Bangladesh''s broader sustainable finance agenda. The country has been working to build a more robust green finance ecosystem, including the development of green bond guidelines, sustainability reporting requirements, and a green taxonomy. The Bangladesh Bank refinance schemes are a critical piece of this ecosystem, providing the concessional funding needed to kick-start private-sector investment in green projects.

For the Islamic banking sector specifically, the schemes provide an opportunity to demonstrate that Shariah-compliant finance can play a leading role in sustainable development. Islamic finance principles emphasise risk-sharing, asset-backed financing, and avoidance of speculative activities — principles that align well with the long-term, productive nature of green and ICT investments.

Looking ahead, the success of the green and ICT refinance schemes will depend on several factors: the willingness of banks to actively promote the schemes to their customers, the availability of bankable green and ICT projects, the capacity of borrowers to prepare project proposals that meet the schemes'' eligibility criteria, and the central bank''s continued commitment to providing concessional refinance facilities. With more banks joining the schemes, the prospects for scaling up green and ICT financing in Bangladesh are improving — though significant work remains to be done to translate this momentum into actual disbursement of financing to eligible projects.