Developing SDG Investor Map to Identify Market-specific Investment Opportunity Areas (IOAs)

LightCastle Analytics Wing
November 9, 2022
Developing SDG Investor Map to Identify Market-specific Investment Opportunity Areas (IOAs)

The Opportunity

Bangladesh is an economy that is expanding quickly and has shown steady growth over the past few decades. Nevertheless, critical interventions are required to maintain the nation’s excellent record of economic growth and human development. The interventions are necessary to prepare the country to graduate from the least developed country (LDC) classification by 2026. The nation has excelled in terms of SDG progress measures. However, Bangladesh still has significant obstacles to overcome in terms of SDG financing.

Private investment as a percentage of GDP has stagnated due to external shocks and structural issues in the economy, despite a growing middle and affluent class and numerous quickly growing sectors. Private sector involvement is essential to attaining the SDGs given that the country has a USD 928 billion finance gap for the initiative. Therefore, despite its great SDG performance, Bangladesh is presently behind schedule in achieving 13 of the 17 SDGs. Despite solid market fundamentals, proactive government initiatives, and a large potential market for SDG-aligned investments, including the chance for climate-smart investments, the SDG financing gap still exists. Therefore, it is clear that there is a need for a market intelligence tool—an SDG investor map—that informs potential investors about Bangladeshi investment prospects that are in line with the SDGs.

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Our Approach

The SDG Investor map provides an awareness of market-specific Investment Opportunities Areas (IOAs) and they link with the SDGs in the context of a particular country. The Investor Map includes 20 unique data points for each IOA including sector, location, business case, impact case, and enabling environment.

The development of the map involves extensive consultation and participation from all relevant parties. They specifically include the corporate sector, governmental organizations, ecosystem builders, and regulators. The development of the Bangladesh SDG Investor Map involved 32 stakeholders. While 11 of them were from the public sector, 21 were from the business sector.

Figure 5 depicts the approach for developing maps. It begins with taking into account national development needs and policy priorities, investment and financial momentum from public and private partners, priority sectors, subsectors, and regions with the greatest need for development. The map is available as a public benefit to investors and governments in order to allow efficient SDG-aligned capital allocation. Data and evidence were acquired through intensive study.

Investment Funnel- UNDP SDG Investor Mapping

The team identified the priority sectors based on stakeholder interviews and a thorough examination of pertinent literature, including Bangladesh Investment Development Authority – BIDA’s sectoral investment promotion strategies, the 8th Five Year Plan (2021-2025), the Perspective Plan of Bangladesh (2021-2041), and the SDG Progress Report (2020).

Key Industries in the research

  1. E-commerce
  2. Education
  3. Finance
  4. Food & Beverage
  5. Healthcare
  6. Infrastructure
  7. Renewable Resources & Alternative Energy
  8. Technology & Communications

Following the identification of the sub-sector, Investment Opportunity Areas (IOAs) were determined using the sector mapping process. Sector categorization is based on the classification scheme created by the Sustainability Accounting Standards Board (SASB), known as the Sustainable Industry Classification System (SICS).

The Future

The map recognized 17 IOAs that have the potential to have a significant impact and have attracted investment and policy attention throughout time. These IOAs span 8 sectors and 12 sub-sectors. Some of these sectors include eCommerce, education, financial services, food & beverage, healthcare, infrastructure, renewable resources & alternative energy, and technology & communications. The investigation has also identified three business white spaces. However, they show prospects that require a more supportive environment to attract funding from the private sector. To supplement the IOA map, dissemination events, private sector engagement, additional market research, and investment facilitation efforts have been conceived.

WRITTEN BY: LightCastle Analytics Wing

At LightCastle, we take a data-driven approach to create opportunities for growth and impact. We consult and collaborate with development partners, the public sector, and private organizations to promote inclusive economic growth that positively changes the lives of people at scale. Being a data-driven and transparent organization, we believe in democratizing knowledge and information among the stakeholders of the economy to drive inclusive growth.

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