Governance Challenges in Climate Finance in Bangladesh and Way Forward

Published: 04 November 2025

Due to climate change, Bangladesh ranks seventh among the most vulnerable countries (Climate Risk Index, 2021). In addition, it ranks ninth among countries at risk from climate-induced natural disasters (World Risk Index, 2023). Because of the impacts of climate change, Bangladesh’s GDP may decline by two percent by 2050, and this loss may increase to nine percent by 2100. Rising sea levels may submerge 17 percent of the country’s land by 2050, and during the same period, total national production may fall by 30 percent due to damage to agricultural land. The coastal region will be the most affected due to salinity and flooding. Moreover, climate-induced internal displacement is increasing day by day. Notably, in 2024, the number of displaced people in Bangladesh was about 2.4 million, and by 2050, more than 20 million people may be displaced from coastal areas. The frequency and intensity of cyclones in Bangladesh have increased significantly due to climate change. Tropical cyclones alone are already causing an averageannual loss of nearly one billion dollars (0.7 percent of GDP). By 2050, the number of cyclones may nearly double, further disrupting the lives of people in coastal regions. Additionally, about 40 percent of the Sundarbans may disappear within the next few decades.

There are various inconsistencies in the targets set in national plans and the timelines for achieving them. In project formulation, allocations are often lower than actual needs, target areas are inadequately identified, and the needs of local communities receive insufficient attention. Moreover, challenges related to good governance—such as lack of transparency and accountability in managing these funds and implementing activities, delays in project execution, and various irregularities and corruption—continue to persist. These issues have been highlighted over the years through TIB’s research as well as reports in various media outlets. TIB has maintained a consistent track record of research and policy advocacy on governance in climate finance and project implementation. However, while previous TIB studies focused specifically on certain funds and the management and implementation of related projects, there remains a significant lack of research that presents an overarching picture of governance in the climate sector of Bangladesh.

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