SFD Circular No. 03: Refinance Scheme for Green Factory Building and Green Industry

Statement for Public Information
Department of Banking Supervision
Central Office
Dhaka.
08 June 2026
SFD Circular No: 03
Date: ---------------------
25 Joishtho 1433
To: Chief Executive Officer / Chief Operating Officer of All Banks and Finance Companies.

Sir,

In line with the 'Refinance Scheme for Green Factory Building and Green Industry'.

The central bank has launched a new refinance scheme to promote the production, projects, and establishment of eco-friendly products and projects under the National Perspective Plan, National Sustainable Development Strategy, Intended Nationally Determined Contributions (INDCs), Bangladesh Delta Plan 2100, and Sustainable Development Goals (SDGs). This scheme covers 70 eco-friendly products and projects. To accelerate the production of eco-friendly products under the Green Factory Building and Green Industry, the central bank has decided to establish a refinance scheme with a limit of 1000 (One Thousand) Crore Taka. The guidelines for this scheme are as follows:

1. Scheme Limit: 1000 (One Thousand) Crore Taka (Internal).

2. Source of Funds: Internal resources of the Bangladesh Bank.

3. Refinance Tenure: 3-10 years. This refinance facility will be provided for the first time for a minimum of 1 (one) year.

4. Eligible Establishment: Refinance facility will be provided for the following establishments to promote eco-friendly products/projects/establishments:
   4.1. Establishment of Green Industry
   4.2. Establishment of Green Factory Building

5. Participatory Financial Institution (PFI): Under this scheme, the refinance facility will be provided to eligible banks/finance companies (PFI) through a participatory agreement with the Bangladesh Bank (Chief Executive Officer, Statement for Public Information Department, Bangladesh Bank, Central Office, Dhaka). The banks and finance companies that have signed this participatory agreement will be considered Participating Financial Institutions (PFI). Under this scheme, banks and finance companies that have been approved by the Bangladesh Bank from time to time through circulars will be eligible for PFI.

6. Interest/Musharaka Rate:
   6.1. The interest/musharaka rate payable by the PFI to the Bangladesh Bank is 2%.
   6.2. The interest/musharaka rate charged by the PFI to the borrower shall not exceed 5%.

7. Purpose of Refinance:
   Under this scheme, refinance may be provided for Term Loan/Investment for the products/projects/establishments mentioned in clause 4 above.

8. Eligibility for Refinance Facility:
   8.1. PFI Eligibility:
   (a) Banks and finance companies under the jurisdiction of the State Bank may provide loans under the refinance scheme; (b) For loans/investments classified as Classified Loan/Investment by banks and finance companies, the share shall not exceed 10%. However, if the performance is satisfactory, the Bangladesh Bank may allow this share to be increased to a maximum of 15%; (c) The maximum share of a single borrower or group of borrowers in the loan/investment facility shall be determined in accordance with the Banking Company Act, 1991 (Amended in 2023), Circular No. 01/2022, or other relevant circulars/guidelines issued by the Bangladesh Bank; (d) In granting loans/investments, the PFI must ensure compliance with the internal loan policy, facility approval and disbursement procedures, credit/investment appraisal, credit/investment monitoring, Bangladesh Bank's internal loan policy and credit risk management policy, and other relevant circulars/guidelines issued by the Bangladesh Bank, including Guidelines on Environmental and Social Risk Management (ESRM) for Banks and Finance Companies, Guideline on Climate Risk Management for Banks and Finance Companies, and Guideline on Sustainability and Climate-related Financial Disclosure.

   8.2. Borrower Eligibility:
   (a) The borrower must not have any outstanding loans/investments with any bank/financial institution. The PFI must verify the borrower's CIB report and credit/investment history to ensure no outstanding loans exist; (b) For the projects/products/establishments under this scheme, the borrower must contribute Equity Contribution for the entire project implementation (including the borrower's share). The PFI must ensure compliance with the bank-borrower relationship guidelines. The Debt/Investment-Equity ratio for project financing must be at least 70:30, meaning the borrower must hold at least 30% equity in the project; (c) The maximum share of the refinance facility shall be determined by the PFI in granting the loan/investment. However, a single borrower is eligible for a maximum refinance facility of 100.00 (One Hundred) Crore Taka under this scheme. The maximum share of the refinance facility determined by the Bangladesh Bank shall be final.

9. Required Documents:
   9.1. The PFI must submit the following documents to the Bangladesh Bank for the refinance scheme:
   a. Credit/investment appraisal report of the borrower for the loan/investment under the refinance scheme; b. Borrower's CIB report;
   c. Approval letter from the concerned bank for the refinance facility under this scheme;
   d. Project proposal; e. Credit/investment sanction letter; f. Confirmation that the applied project is Green; g. ESDD Certificate; h. Other relevant information and documents as per Circular No. 01/2023 of SFD;
   9.2. The PFI must submit a Demand Promissory Note, Letter of Continuity, and Letter of Debit Authority to the Chief Executive Officer / Chief Operating Officer of the Bangladesh Bank for the disbursement of the refinance facility.

10. Refinance Application Procedure:
    10.1. The PFI must submit a one-page application letter to the Chief Executive Officer / Chief Operating Officer of the Bangladesh Bank, along with the documents listed in clause 9.1 and Annexure-1;
    10.2. The PFI must submit the application via the E-Refinance Software;
    10.3. For Green Factory Building/Green Industry, any relevant certificate/letter issued by Leadership in Energy and Environmental Design (LEED), Excellence in Design for Greater Efficiencies (EDGE), Building Energy Efficiency & Environment Rating (BEEER), or GreenARCH must be attached. For the first time, local collaboration with any international/local organization is required;
    10.4. Prior to the disbursement of the refinance facility, the Statement for Public Information Department must conduct a pre-disbursement inspection of the project. Based on the inspection report, documents, and application, the share of the refinance facility will be determined.

11. Refinance Disbursement Procedure:
    11.1. The refinance amount will be disbursed to the PFI's designated account within the Bangladesh Bank, and interest/musharaka will be paid according to the approved schedule. The PFI must maintain the required reserve balance with the Bangladesh Bank;
    11.2. The refinance facility will be disbursed in the form of installment repayments as determined by the borrower. The PFI must maintain the required reserve balance with the Bangladesh Bank and pay interest/musharaka to the Bangladesh Bank;
    11.3. The PFIs must deposit the required reserve balance with the Bangladesh Bank as determined by the Bangladesh Bank. The PFI will receive the approved interest/musharaka plus the bank rate from the designated account.

12. Interest/Musharaka Payment for Refinance-Included Loans/Investments:
    12.1. Under this scheme, the interest/musharaka for the refinance facility may be paid using the Fixed Principal Method. Similarly, the interest/musharaka for the relevant loans/investments may be paid by the borrower using the Fixed Principal Method;
    12.2. The borrower must not charge any hidden expenses or other types of charges/fees/interest/musharaka other than the interest/musharaka rate mentioned in clause 6 of this circular. However, statutory taxes/duties may be charged;
    12.3. The PFI must ensure that the borrower does not have any other outstanding loans/investments and that the refinance amount is used only for the refinance-included project. The PFI must ensure the repayment of the refinance-included amount;
    12.4. The PFI must inform the Bangladesh Bank in writing if the borrower defaults on the refinance-included loan/investment. The borrower must not charge any other fees/charges for the repayment of the previous loan/investment;
    12.5. The borrower must not repay the loan/investment to the Bangladesh Bank other than through the designated account.

13. Submission of Refinance-Related Information:
    13.1. The PFI must submit the credit/investment sanction letter (with forwarding letter from the Chief Executive Officer / Chief Operating Officer or authorized officer) to the Chief Executive Officer, Statement for Public Information Department, Bangladesh Bank, within 30 (thirty) days of receiving the refinance facility, according to Annexure-2. If the PFI has not sanctioned any refinance facility in a month, it must submit a 'NIL' report. The Bangladesh Bank may conduct post-disbursement inspections to verify the credit/investment appraisal and operational status;
    13.2. If the PFI does not submit the refinance-related information to the Bangladesh Bank or provides false information, the Bangladesh Bank may take appropriate action in accordance with relevant laws and guidelines;
    13.3. The PFIs must pay the interest/musharaka/charges (PFI payable interest/musharaka rate + bank rate) to the Bangladesh Bank in accordance with the participatory agreement. The Bangladesh Bank may take action against the defaulting institution under the Bangladesh Bank Order, 1972, Banking Company Act, 1991 (Amended in 2023), and Finance Company Act, 2023:
    (a) If the Bangladesh Bank finds discrepancies in the credit/investment appraisal of the refinance-included loans/investments; (b) If the borrower defaults on the repayment of the loan/investment under the refinance scheme, the Bangladesh Bank may immediately recover the amount;
    13.4. The PFIs must submit the refinance-related information to the Central Office and other relevant offices for public awareness.

14. Monitoring and Appraisal of Borrower's Loans/Investments:
    14.1. The PFI must ensure the appraisal of the loans/investments, and the borrower's loans/investments must be monitored by the Bangladesh Bank;
    14.2. The PFI must obtain necessary approvals from relevant authorities such as the Sustainable and Renewable Energy Development Authority (SREDA), Directorate General of Health Services, Office of The Chief Inspector of Boilers, and other regulatory bodies for the project establishment.

15. The annexures (Annexure 1 and 2) of this circular are considered integral parts of this circular.

16. Banks and financial institutions are advised to ensure that the investment method under their respective departments does not conflict with the provisions of this scheme.

17. The Statement for Public Information Department, Bangladesh Bank, will monitor the implementation of this refinance scheme and its guidelines.

18. This circular is issued under Section 45 of the Banking Company Act, 1991 (Amended in 2023) and Section 41 of the Finance Company Act, 2023, and is binding. No other action may be taken.

Sincerely,
(Kazi Riyajul Arefin)
Chief Executive Officer (SFD)
Copy: 9530320
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