Climate adaptation financing

Facing intensifying cyclones, rising sea levels, and saline intrusion that imperil its coastal areas, Bangladesh has emerged as a global pioneer in mobilising innovative financing mechanisms for climate adaptation and in leveraging its maritime assets to promote sustainable economic growth.

Since issuing its inaugural sovereign green bond worth US$ 500 million in 2021, Dhaka has accessed international climate finance-including the Green Climate Fund and the Adaptation Fund-securing over US$ 1.2 billion. These funds have supported critical initiatives such as fortifying coastal embankments, upgrading cyclone shelters, and piloting salt-tolerant rice varieties alongside shrimp-rice rotational farming systems. At the same time, blended-finance models are attracting private investment for large-scale mangrove restoration, community-based early warning systems, and solar-powered irrigation projects.

Complementing these resilient efforts is Bangladesh's Blue Economy strategy, which is centred around the fisheries and aquaculture sector-contributing 3.5 per cent to GDP and employing over 1.6 million people. This strategy envisions sustainable port development in Chattogram and Payra, streamlined maritime logistics under the BBIN (Bangladesh-Bhutan-India-Nepal) framework, and feasibility studies for harnessing offshore wind and tidal power.

Bangladesh is also advancing innovative financial instruments such as parametric insurance, where payouts are automatically triggered by cyclone wind-speed indices, reducing bureaucratic delays in disaster response. Additionally, by channelling diaspora remittances through digital platforms into coastal microfinance and SME incubation programmes, the country is enhancing the adaptive capacity of vulnerable communities.

Through these multidimensional approaches, Bangladesh is not only strengthening its resilience to climate variability but also laying the foundation for a robust blue-green growth model-one that aligns ecological sustainability with inclusive economic development.

Fatema Jannat

Student

North South University

fatema.jannat05@northsouth.edu