UNDP Backs Thematic Bonds to Boost Bangladesh Capital Market

The United Nations Development Programme (UNDP) has pledged support to strengthen Bangladesh’s capital market by developing thematic bonds, with an emphasis on promoting green and sustainable finance.

The commitment came on Wednesday with the signing of a memorandum of understanding (MoU) between the Bangladesh Securities and Exchange Commission (BSEC) and UNDP at the commission’s headquarters in Agargaon.

BSEC Commissioner Khondoker Rashed Maqsood and UNDP Bangladesh Resident Representative Stefan Liller signed the MoU on behalf of their respective organisations.

Speaking at the event, Khondoker Rashed Maqsood said the market regulator remains focused on improving governance, transparency and investor confidence to build a strong and credible capital market.

“By reinforcing good governance and transparency, we aim to create a predictable and resilient regulatory environment,” he said, adding that partnerships with development partners would help position the capital market as a reliable source of long-term financing.

He also stressed the need to deepen the bond market and expand thematic bonds to support sustainable economic growth.

Stefan Liller said Bangladesh’s capital market has strong potential to mobilise long-term capital for high-impact environmental and social investments through thematic bonds.

“To sustain economic momentum, manage the transition from least developed country status and avoid the middle-income trap, greater investment is needed across sectors, particularly to address rising climate-related risks,” he said.

Liller noted that thematic bonds could help attract both domestic and international capital, adding that UNDP is committed to strengthening the enabling environment for their development through cooperation with BSEC.

Under the MoU, UNDP will provide technical assistance in areas such as sustainable finance, development of investment taxonomies and support for thematic bond issuers from pre-issuance to post-issuance stages.

The partnership also includes capacity-building and training for BSEC and other stakeholders, knowledge-sharing on best practices from emerging economies, and support for monitoring the use of bond proceeds.

It will further focus on improving bond reporting, project monitoring, impact measurement and management frameworks aligned with international standards, as well as third-party verification and risk mitigation mechanisms for issuers.

The collaboration will support the issuance of green, social, climate, sustainable and SDG-linked thematic bonds, contributing to long-term financing, Bangladesh’s LDC graduation and the country’s broader sustainable development goals.

Thematic bonds are widely recognised as an effective tool for channeling investment towards the Sustainable Development Goals. Green bonds finance projects with environmental benefits, social bonds support initiatives with positive social impact, while sustainable bonds combine both environmental and social objectives under a single financing framework.