Chapter 6 | PROJECTS
The OPEC Fund provided a US$35 million senior loan to Eastern Bank PLC in Bangladesh to support food security, climate action and the growth of small and medium-sized enterprises (SMEs), including women-led businesses. The financing will enable the bank to on-lend to projects that promote agricultural resilience, support green energy and climate solutions, and expand access to finance for underserved entrepreneurs. By targeting critical sectors vulnerable to climate change and aligned with Bangladesh’s development priorities, the project strengthens the country’s economic resilience, enhance climate adaptation and mitigation efforts and advance inclusive, sustainable growth.
The OPEC Fund’s contribution to Climate Resilience in Bangladesh
Situation Analysis of Climate Impacts
Bangladesh is one of the world’s most climate-vulnerable countries, facing a combination of rising temperatures, ex- treme weather and sea-level rise. Average temperatures have steadily increased and projections suggest a rise of 1.5–2.5°C by 2050, intensifying heatwaves and heat stress, particularly in cities and for outdoor workers. 6 The country is frequently hit by floods, cyclones and heavy monsoons, which already cause billions in damage. Sea-level rise — projected to reach 30 to 45 cm by 2050 — threatens to permanently inundate over 10 percent of the country’s land and displace millions. 7 Salinity intrusion in coastal areas is also damaging agriculture and reducing access to fresh- water. Agriculture, which employs 38 percent of the pop- ulation, is particularly vulnerable. Flooding, droughts and saltwater intrusion are reducing crop yields and increasingly threatening food security. Without adaptation, agricultural GDP could decline by up to one-third by 2050. 8 Energy and infrastructure are at increasing risk from climate shocks. Higher temperatures will raise electricity demand for cooling, while floods and storms could disrupt power generation and distribution. International indices confirm Bangladesh’s high vulner- ability and limited coping capacity in the face of climate change. The US ND-GAIN country index consistently rates Bangladesh as extremely climate-vulnerable. 9 Similarly, the EU INFORM Risk Index places Bangladesh in a high-risk category. 10
Purpose of the Loan
The OPEC Fund has approved a US$35 million senior loan with Eastern Bank to support food security, finance climate action projects and expand lending to SMEs — particularly women-led SMEs. In essence, this credit line will enable Eastern Bank to on-lend to sectors that are crucial for climate- resilient growth. Bolstering food security means investing in agriculture value-chains and agribusinesses (which may include climate-smart farming). Financing climate action projects may involve renewable energy, energy efficiency or climate adaptation projects in various sectors. By targeting SMEs and women-led businesses the loan aims to spur inclusive economic growth and empower groups that often lack access to finance.
Expected Outcomes
The project is expected to deliver tangible development outcomes by channeling funds into these priority areas. A key output of the loan will be at least US$35 million in new sub-loans disbursed by Eastern Bank to eligible SMEs, agribusinesses and “green” (climate-focused) projects. This infusion of capital should help entrepreneurs grow their businesses and farmers invest in productivity even as they implement climate-resilient practices. The intended out- come is an expansion of financing available for agribusiness, sustainable energy and other climate-related investments in Bangladesh’s private sector.
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