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Bangladesh’s RMG sector faces a substantial financing challenge as it seeks to reduce greenhouse gas emissions and maintain competitiveness amid rising energy costs, evolving buyer requirements, and LDC graduation. This diagnostic brief, developed under Bunon 2030 initiative, examines the financing barriers preventing the sector’s green transition and identifies pathways to unlock capital for decarbonisation. Bunon 2030 is implemented by LightCastle Partners in collaboration with Policy Exchange Bangladesh as part of the Oporajita initiative, supported by the H&M Foundation and with The Asia Foundation serving as the backbone organisation.
Drawing on stakeholder consultations across Bangladesh’s RMG ecosystem, the brief examines why existing capital is failing to reach the factories that need it most. The broader Bunon 2030 initiative has brought together policymakers, industry leaders, development partners, financial institutions, technical experts, and other apparel ecosystem stakeholders to identify practical pathways for a more competitive, resilient, and sustainable RMG sector.
Expanding access to finance for Bangladesh’s RMG green transition will require moving beyond aggregate green finance targets toward mechanisms that improve capital allocation, reduce transaction costs, and make financing accessible to Tier 2 and Tier 3 manufacturers. The report points to standardised RMG-specific financing frameworks, longer-tenor concessional capital, risk-sharing mechanisms, streamlined approvals, and blended finance structures as critical to unlocking existing and new capital.
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