BB asks lenders to ensure third-party environmental assessment for financing infrastructure projects
The Bangladesh Bank has ordered all banks and non-banking financial institutions to ensure a third-party assessment of the likely environmental and social impact before financing any infrastructure project.
To that end, the central bank updated its guideline, titled The Management of Environmental and Social Risks, and issued it to chief executives of financial institutions on Sunday.
“We published the guidelines for banks and financial institutions in 2017. Following the experience of implementing the guidelines, the central bank is now issuing its updated version to establish industry best practices,” the governor said. of Bangladesh Bank, Fazle Kabir, to the media.
He hoped banks and financial institutions would effectively enforce the guidelines.
According to the updated guidance, a third-party environmental and social impact assessment, also known as an ESIA, will generally be organized by the client at their own expense and submitted with the loan application.
The banks or financial institutions will ensure that the third party is qualified based on the criteria established by Bangladesh Bank for this purpose.
The infrastructure projects defined in the guidelines are those related to power generation, supply, pipeline in the electricity category; roads, bridges, tunnels, airports, ports, railways, terminals and depots, inland waterways in transport categories; economic zones and export processing zones in the category of industry, fixed lines, transition lines and pylons, satellites and others in communication; real estate, commercial buildings in land use categories, etc.