The Asian Development Bank (ADB) has signed a $30 million sustainability-linked loan facility with Envoy Textiles Limited (Envoy), one of Bangladesh’s leading denim fabric manufacturers. This deal marks the ADB’s first sustainability-linked loan in the country, a performance-based debt instrument designed to incentivize strong environmental and social outcomes.
The proceeds of the loan will be channeled into key strategic projects for Envoy. Primarily, it will fund the construction of a new, automated, and energy-efficient spinning unit at Envoy’s plant in Jamirdia. The expansion is projected to boost annual yarn production capacity by 4,550 tons, primarily for in-house denim fabric production.
A new standard for green manufacturing:
A core component of the agreement is a commitment to sustainability, with the loan tied to predefined sustainability performance targets (SPTs). These targets include increasing the total installed electricity generation capacity of the rooftop solar panels and achieving measurable greenhouse gas (GHG) emissions reduction. Specifically, the financing will enable the installation of 3.5 MWp of rooftop solar panels at the factory, in addition to refinancing existing short-term local working capital loans.
“ADB is pleased to support Envoy with its first sustainability-linked loan in Bangladesh,” said Hoe Yun Jeong, Country Director for Bangladesh, ADB. “This partnership advances environmental sustainability and industrial modernization, setting a new standard for the garment sector.”
Envoy’s sustainability journey:
Envoy Textiles, which accounts for about 10% of Bangladesh’s total denim fabric capacity, has long been a sustainability leader. The company operates the world’s first platinum Leadership in Energy and Environmental Design (LEED) denim manufacturing facility, certified by the United States Green Building Council.
Kutubuddin Ahmed, Chairman, Envoy, highlighted the importance of the partnership. “This new sustainability-linked loan will enable us to expand our production capacity, invest in renewable energy, and further reduce our environmental footprint,” he stated.
The ready-made garment industry is a backbone of Bangladesh’s economy, generating over 80% of the country’s total export earnings. This ADB-Envoy partnership signifies a major step toward promoting green growth and industrial resilience within this vital sector.
