Bangladesh’s external debt-servicing record has historically been stellar for a least developed country. The country has comfortably met its external debt servicing obligations, largely thanks to its strong export performance. However, Bangladesh has taken on a large volume of foreign debt to finance multiple infrastructure mega-projects. The country has struggled with macroeconomic management in recent years, and climate change-related economic loss and damage could destabilise the economy and undermine Bangladesh’s debt sustainability.
This technical paper aims to assess the impact of climate change on Bangladesh’s debt sustainability by incorporating climate change risks and climate transition resource needs into the debt sustainability estimation.

Authors: Fahmida Khatun, Syed Yusuf Saadat, Afrin Mahbub and Zazeeba Waziha Saleh
Publication Period: October 2025