Bangladesh and Nepal are already leading the way in finding solutions to address the climate change induced financial crises. According to a recent report, two of our South Asian countries are always the most vulnerable to climate impact. Yet today, they are among the most vulnerable to the dangers of climate debt. Recent climate disasters, such as the severe flooding experienced in Dhaka recently, have crystallized these urgent realities. In turn, both countries are now looking to innovative sustainable finance mechanisms to bolster their resilience.
This report was released on 11/26/2025. Far from undermining Bangladesh and Nepal’s efforts, the report underscores the urgent need for these countries to address the challenges of climate change. Continued heavy rains this 2023 monsoon season not only caused massive flooding across the city of Dhaka but also negatively impacted daily commuters and local economies. Photos taken by Reuters paint a dramatic picture of this tragic flooding as rickshaws make their way through the water-logged roads. This situation illustrates why timely investments are so important and why they must include the commitment to fund them without incurring debilitating debt.
To address these issues, Bangladesh is investing in green and blue bonds. These financial instruments will pay for much-needed climate adaptation initiatives. These innovative financial instruments seek to marshal private investment toward urgent environmental projects, all while reducing the likelihood of building up unsustainable debt burdens. Through prioritizing green finance initiatives, Bangladesh aims to ensure that its future infrastructure development is more resilient and equipped to endure climate-induced disasters.
In a related manner, Nepal is having discussions with the private sector about potential environmental business opportunities. Together, we hope to leverage much greater levels of private investment to help state and local leaders advance proactive climate resilience initiatives. By leveraging resources from the private sector, Nepal seeks to enhance its capacity to respond effectively to climate challenges while ensuring economic stability.
Similarly, rapid climate deterioration is now an existential threat facing the Pacific island countries as well, particularly when it comes to rising sea levels and tides. Let’s not forget the reality that climate events are getting stronger and happening more frequently. These changes are a significant threat to the environment and our economic underpinnings. Both nations are meeting these challenges at remarkable speed. They are committed to finding creative solutions that are sustainable and avoid debt traps.