BD and Indonesia Strengthen Ties in Sustainable Finance

From February 24 to 27, a distinguished delegation from Bangladesh's Economic Relations Division (ERD) and the Ministry of Finance visited Indonesia’s capital. The delegation was led by Sheikh Abdur Rashid, Bangladesh's Cabinet Secretary, and accompanied by key officials, including ERD Additional Secretary AKM Sohel and Joint Secretaries Razibul Islam and Ashfaqul Islam Mukut. They were supported by the United Nations Development Programme (UNDP) and the Impact Investment Exchange (IIX).

The visit allowed the delegation to explore sustainable finance instruments such as Green Bonds, Sukuk, Orange Bonds, and other thematic financial models. The goal was to understand how these instruments can mobilize capital to support national sustainable development initiatives.

In meetings with Indonesia’s financial policymakers, bond issuers, and experts in climate-aligned projects, Bangladesh’s delegation gained valuable insights into Indonesia’s successful implementation of sustainability-focused finance. This experience is aimed at helping Bangladesh scale similar efforts to drive economic growth while addressing environmental and social priorities.

"Bangladesh is determined to build a resilient, sustainable economy, and our partnership with Indonesia is a crucial step toward unlocking innovative solutions in sustainable finance," said AKM Sohel, Additional Secretary of ERD and UN Wing Chief. "By learning from Indonesia’s successful green finance models and sustainability investments, we aim to create mechanisms that not only support our climate goals but also foster inclusive economic growth for all Bangladeshis."

Indonesia has long been recognized for its pioneering role in sustainable finance, introducing groundbreaking instruments like the Green Sukuk and sustainability bonds. These innovations have attracted global attention, demonstrating how finance can address both environmental and social challenges. The countries are particularly focused on ensuring that investments target communities most affected by these issues, especially women and underserved populations.

Bangladesh is exploring the issuance of its first Green and Orange Bonds, which will prioritize sustainability efforts that go beyond environmental concerns. The Orange Bonds, in particular, aim to address gender equality and social equity. IIX, a global leader in gender-lens investing and climate action, is actively assisting both countries in developing their Orange Bond frameworks, offering technical expertise and facilitating access to impact-driven capital markets.

At a welcoming dinner hosted by IIX, the delegation engaged with prominent organizations that are driving sustainable finance initiatives across Indonesia’s public, private, and philanthropic sectors.

"Sustainable finance must be inclusive and catalytic, ensuring that capital flows to those who need it the most," said Prof. Durreen Shahnaz, CEO and Founder of IIX. "The introduction of Orange Bonds in Bangladesh and Indonesia represents a bold, gender-responsive approach to financial innovation, and it shows how South-South partnerships can lead the way in mobilizing capital for large-scale impact. IIX is proud to support this knowledge exchange and looks forward to seeing these insights translate into impactful outcomes that benefit women and underserved communities."

The delegation’s visit further solidified Bangladesh’s commitment to expanding its sustainable finance market and integrating best practices from Indonesia, as both countries work together to mobilize private capital for social and environmental impact.