The Dhaka bourse inked an agreement with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Thursday to provide financing solutions to 202 green ready-made garment factories.
It has made the move in its long-standing effort to bring more fundamentally strong companies to the capital market while big RMG exporters has started looking for alternatives to bank loans and expensive foreign debts.
Under the agreement, the Dhaka Stock Exchange (DSE) will sit with 50 top exporters in October to assess their fund requirement and the financing solutions that they would need.
Citing that 13 out of top 15 global green factories are situated in Bangladesh, BGMEA President Faruque Hassan said, "The deal will play a vital role in financing the green factories."
The DSE has been striving to bring green RMG factories to the capital market either through an initial public offering (IPO) or through the issuance of bonds.
Earlier, DSE officials said the branding of green factories and top exporters would be enhanced through their engagement with the capital market.
They said the green companies had the opportunity of getting sustainable investment solutions as the number of investors, who would prefer investing in environment-friendly businesses, was on the rise.
Talking to officials of some green factories, the FE had learnt that green factories need funds to meet operational and maintenance expenses as foreign debts has become costlier than before for the devaluation of the taka against the dollar.
Moreover, the Green Transformation Fund (GTF) that the central bank used to provide is no longer available.
Many companies are keen on raising funds by issuing green bonds as such investment tools offer a fixed repayment method unlike loans from banks.
Chairman of the Bangladesh Securities and Exchange Commission (BSEC) Prof Shibli Rubayat Ul Islam said that if LEED certified platinum rated RMG manufacturers came up with proposals for IPOs or bonds, the regulator would give its approval in the shortest time possible.
Bangladesh has 63 platinum rated garment companies, the highest in the world.
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