Bangladesh: Catalysing Local Sustainable Infrastructure Investment
This Pathfinder Initiative was initiated by the Task Force with support from UNDP and UNCDF.
Bangladesh is exploring how to harness digitalization to channel domestic micro-savings into investments in sustainable infrastructure, and then use blockchain to improve the effectiveness and accountability in the use of funds. Domestic savers could choose SDG projects from which they would benefit, the approach could deliver significant reductions in the cost of capital, and economic multiplier effects as dividends flow to poorer Bangladeshi citizens.
Bangladesh Pathfinder Concept
Domestic savers would be able to choose which SDG project they want to invest in, such as particular roads or bridges, sanitation systems or hospitals, giving them the benefit of investing in improvements to their area, which will also pay back in savings of time and money, and improved standard of living. Pooled savings would then be used to finance much-needed SDG-related projects that generate dividend. Investments in local infrastructure will also need to overcome challenges of corruption and lack of trust. Technology solutions such as blockchain, together with public transparency offer the potential to improve effectiveness and accountability in the use of funds.
The potential gains for Bangladesh are significant, as they could be elsewhere. Bangladesh needs to invest an estimated US$67 billion a year in various projects to meet its sustainable development goals, with about half of current financing coming from international sources. International finance is already costly compared to domestic capital, with its relative costs projected to increase as Bangladesh moves to middle income status and loses access to concessionary finance. The envisaged approach would reduce the need for international borrowing, improving the country’s investor rating. The dividends would be returned to Bangladeshi citizens with associated equity and economic multiplier effects.
How does this pathfinder initiative exemplify the Task Force’s recommendations?
SDGs
Link to analysis and recommendations
Empowers citizens to invest in sustainable infrastructure
Aggregates micro-savings into investable capital at low cost
Enables long-term finance and ensures retail investor liquidity through product innovations
SDGs
Link to analysis and recommendations
Empowers citizens to invest in sustainable infrastructure
Aggregates micro-savings into investable capital at low cost
Enables long-term finance and ensures retail investor liquidity through product innovations
This Pathfinder Initiative was initiated by the Task Force with support from UNDP and UNCDF.
Bangladesh is exploring how to harness digitalization to channel domestic micro-savings into investments in sustainable infrastructure, and then use blockchain to improve the effectiveness and accountability in the use of funds. Domestic savers could choose SDG projects from which they would benefit, the approach could deliver significant reductions in the cost of capital, and economic multiplier effects as dividends flow to poorer Bangladeshi citizens.
Bangladesh Pathfinder Concept
Domestic savers would be able to choose which SDG project they want to invest in, such as particular roads or bridges, sanitation systems or hospitals, giving them the benefit of investing in improvements to their area, which will also pay back in savings of time and money, and improved standard of living. Pooled savings would then be used to finance much-needed SDG-related projects that generate dividend. Investments in local infrastructure will also need to overcome challenges of corruption and lack of trust. Technology solutions such as blockchain, together with public transparency offer the potential to improve effectiveness and accountability in the use of funds.
The potential gains for Bangladesh are significant, as they could be elsewhere. Bangladesh needs to invest an estimated US$67 billion a year in various projects to meet its sustainable development goals, with about half of current financing coming from international sources. International finance is already costly compared to domestic capital, with its relative costs projected to increase as Bangladesh moves to middle income status and loses access to concessionary finance. The envisaged approach would reduce the need for international borrowing, improving the country’s investor rating. The dividends would be returned to Bangladeshi citizens with associated equity and economic multiplier effects.
How does this pathfinder initiative exemplify the Task Force’s recommendations?
SDGs
Link to analysis and recommendations
Empowers citizens to invest in sustainable infrastructure
Aggregates micro-savings into investable capital at low cost
Enables long-term finance and ensures retail investor liquidity through product innovations
SDGs
Link to analysis and recommendations
Empowers citizens to invest in sustainable infrastructure
Aggregates micro-savings into investable capital at low cost
Enables long-term finance and ensures retail investor liquidity through product innovations
Bangladesh is exploring how to harness digitalization to channel domestic micro-savings into investments in sustainable infrastructure, and then use blockchain to improve the effectiveness and accountability in the use of funds. Domestic savers could choose SDG projects from which they would benefit, the approach could deliver significant reductions in the cost of capital, and economic multiplier effects as dividends flow to poorer Bangladeshi citizens.
