Bangladesh, Indonesia explore new frontiers in sustainable finance

Bangladesh and Indonesia engaged in high-level discussions on sustainable finance, demonstrating their shared commitment to advancing sustainable economic growth. 

During a visit to Jakarta from 24 to 27 February, a delegation from Bangladesh's Economic Relations Division (ERD) under the Ministry of Finance participated in the exchange, according to a press release.

The visit aimed to gain insights from Indonesia's pioneering success in sustainable financing and thematic bonds, including green and sustainability mechanisms.

The delegation was supported by the United Nations Development Programme (UNDP) and Impact Investment Exchange (IIX), highlighting the strong partnership between both nations.

The delegation was led by Sheikh Abdur Rashid, cabinet secretary, while AKM Sohel, additional secretary of the ERD, Razibul Islam, joint secretary of the ERD, Ashfaqul Islam Mukut, joint secretary of the ERD, and other senior officials were also present.

The visit provided an opportunity for both nations to explore how financial instruments such as Green Bonds, Sukuk, Orange Bonds, and other thematic financing models can mobilise capital for national sustainable development.

The delegation engaged with Indonesia's financial policymakers, bond issuers, and climate-aligned projects to understand how sustainability-focused finance has been successfully scaled to drive economic growth while addressing environmental and social priorities.

"Bangladesh is committed to building a sustainable and resilient economy, and this collaboration with Indonesia is a vital step toward unlocking innovative financial solutions through capital markets. By learning from Indonesia's successful experience in green finance and socially and sustainability-aligned investments, we aim to develop financial mechanisms that will not only support our climate goals but also ensure inclusive economic growth for all Bangladeshis," said AKM Sohel, UN wing chief and additional secretary of the ERD.

IIX, a global leader in gender-lens investing coupled with climate action, is actively supporting both countries in structuring their Orange Bond frameworks, providing technical expertise, and facilitating access to impact-driven capital markets.

At a welcome dinner hosted by IIX, the delegation engaged with key organisations leading Indonesia's sustainable finance initiatives across public, private, and philanthropic sectors.

"Sustainable finance must be both inclusive and catalytic, ensuring that capital reaches those who need it most. The introduction of Orange Bonds in Bangladesh and Indonesia marks a bold step toward gender-responsive financial innovation, demonstrating how South-South partnerships can lead the charge in mobilising capital for impact at scale. IIX is proud to support this regional knowledge exchange and looks forward to seeing these insights transform into actionable outcomes that benefit women and underserved communities," said Professor Durreen Shahnaz, CEO and founder of IIX.

The delegation's visit reinforced Bangladesh's commitment to expanding its sustainable finance market and integrating insights from Indonesia's experience in mobilising private capital for social and environmental impact.

Both countries recognised that diversified, well-structured financial solutions are essential for advancing national economic priorities and achieving the Sustainable Development Goals.

Such financial solutions are also crucial for funding climate change adaptation and mitigation actions as enshrined in Bangladesh's National Adaptation Plan and Nationally Determined Contributions.

Both countries have demonstrated commitment to ensuring that investments are directed toward the communities most affected by these issues, particularly women and underserved populations, with Bangladesh looking to issue a Green Bond and their inaugural Orange Bond, recognising that sustainability must encompass more than just environmental concerns.

Indonesia has been recognised for its leadership in sustainable finance, having introduced award-winning financial instruments such as the Green Sukuk and sustainability bonds.