British International Investment

Pubali Bank Ltd.

South AsiaFinancial services

Pubali Bank is one of the largest private commercial banks in Bangladesh. It was established in 1959.

Our investment

Description of the investment.

This investment will support the development of climate finance in Bangladesh. The loan provided to Pubali Bank Ltd will be directed to finance the expansion of its portfolio of climate-related loans.

The loan is complemented by technical assistance to support Pubali, to build best practice, strengthen data collection on climate financing and climate risk, and further increase the bank’s ability to originate green projects and structure climate investments in line with international standards.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact

Increase access to renewable energy and avoid and reduce greenhouse gas emissions by providing financing to climate-positive projects.

How?

How?

Direct: The loan to Pubali Bank will be used to on-lend to 5-10 corporate customers for climate-positive mitigation projects that will contribute to reducing greenhouse emissions.

Who?

Stakeholder Geography Characteristics
Planet

Global

The loan will primarily be used for projects in the renewable energy, green buildings, textile and manufacturing sectors. The facility will enable Pubali to extend climate finance loans to its portfolio of corporate clients in such sectors. This will enable them to purchase key equipment required in climate projects and implement climate-related technology solutions in Bangladesh.

How much?

Scale Depth/Duration

$50 million of disbursements to climate-related projects (in line with our climate methodology) over 18 months after signing. Pubali’s overall climate portfolio is expected to grow by 25 per cent over 2021-2025 under the Bangladesh climate taxonomy.

  • Duration: Three years i.e. the tenor of the facility.

  • Depth: Expected to be varied given range of climate projects supported.

Contribution/additionality

Contribution/additionality
  • Financial additionality: Capital is not offered in sufficient quantity. Capital is not offered on the same terms.

  • Value additionality: Improvement of processes, practices or standards. Support for developmental strategies.

Risk

Execution Risk

The growth of the portfolio may be hampered by the macroeconomic environment or lack of pipeline for climate projects.

Endurance Risk

The tenor of the facility may not be appropriate for the end-borrowers.

Impact score

Impact score (at point of investment)

The Impact Score is a tool to help us manage our performance against our strategic impact objectives. It is designed to incentivise investments that support our productive, sustainable, and inclusive objectives. You can find out more here.

The Impact Score is published for investments made from 2022 onwards. The Impact Scores are calculated at the point of investment. We publish the Impact Scores of new investments annually, once the information has been externally assured by an independent third party.

7

Environmental and social information

  • Environmental and social summary

    A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.

  • Environmental and social risk

    A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.

Environmental and social summary

We agreed on an ESAP focused on strengthening the integration of E&S risk management in the bank's credit cycle, including appointing an E&S specialists to implement the ESMS and ensuring that E&S requirements for end-borrowers are proportionate to risk and align with international standards. Pubali will also update its Human Resource related policies in line with IFC PS 2/ ILO requirements.

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    Last updated

    When the last quarterly update of the website database occurred.

    :
    June 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D5496
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    South Asia
    Country

    The countries where the investment delivers impact. Where impact is delivered in multiple countries, this is indicated.

    :
    Bangladesh
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Financial services

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Debt
    Start date :
    November 2022
    Amount :
    $30m
    Currency of investment :
    USD
    Domicile

    The company or investment fund’s place of incorporation.

    :
    Bangladesh
    Climate finance

    Indicates whether the investment is climate finance qualified or partially climate finance qualified and the type of climate finance (adaptation, mitigation or both). We define climate finance using the multilateral development bank (MDB) and the International Development Finance Club (IDFC) Common Principles climate finance methodology. See Common Principles for Climate Mitigation Finance Tracking and Common Principles for Climate Change Adaptation Finance Tracking. We provide the climate finance qualification and type for commitments from 2020 onwards, which is when we launched our Climate Change Strategy.

    :
    Fully qualified
    Climate finance type:
    Mitigation

Related investments made by BII into this company:

Investment name Commitment Region Sector Start date Status
Investment 02 $30m South Asia Financial services November 2022 Active
Investment 03 $20m South AsiaSouth Asia Financial services October 2023 Active
Investment 04 $20m South AsiaSouth AsiaSouth Asia Financial services October 2023 Active

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