The Asian Development Bank ( ADB ) has granted its first sustainability-linked loan ( SLL ) in Bangladesh, a US$30 million facility for Envoy Textiles Limited. The SLL will help the company achieve its sustainability objectives by further reducing its environmental footprint through the installation of rooftop solar panels and a decrease in greenhouse gas ( GHG ) emissions.

The proceeds of the loan, announced on October 2, will be used to fund the design and construction of a new spinning unit for Envoy to expand its annual yarn production capacity at the company’s manufacturing plant in Jamirdia, Bangladesh. The automated unit will have an annual yarn production capacity of 4,550 tonnes, mainly used for in-house production of denim fabrics.

Part of the proceeds will also be used to install 3.5 megawatts ( peak ) of rooftop solar panels at the factory, making the new unit more energy-efficient, as well as to refinance short-term local working capital loans. The selected sustainability performance targets for Envoy reflect its sustainability objectives, including the total installed electricity generation capacity of the rooftop solar and the amount of GHG reduction.

Commenting on the SLL facility, ADB country director for Bangladesh Hoe Yun Jeong says the partnership with Envoy advances environmental sustainability and industrial modernization, setting a new standard for the garment sector. He notes that the ready-made garment industry is a key driver of Bangladesh’s economy, accounting for over 80% of the country’s total export earnings.

Envoy chairman Kutubuddin Ahmed says the SLL will further reduce the company’s environmental footprint. “Envoy remains dedicated to upholding the highest standards in quality, inclusivity, and sustainability,” he adds.

The SLL transaction with Envoy is a follow-on to the textile manufacturing project with the ADB in 2022, under which the bank supported the company with a €10.8 million ( US$12.70 million ) facility to support and finance the purchase and installation of energy-efficient spinning machinery and other equipment to expand its sustainable textile production.

Envoy is the leading denim fabric maker in Bangladesh with an annual production capacity of 54 million yards – about 10% of the country’s total denim fabric capacity.  It has the world’s first platinum Leadership in Energy and Environmental Design ( LEED ) certification for a denim manufacturing facility from the US Green Building Council.