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IFC, EPIC Group partner to support sustainable textile manufacturing in Bangladesh

BI Desk || BusinessInsider

Published: 23:57, 19 June 2024  
IFC, EPIC Group partner to support sustainable textile manufacturing in Bangladesh

Photo: Collected

To support sustainable textile manufacturing and improve the sector's resource efficiency in Bangladesh and India, IFC has announced a partnership with EPIC Group, a leading player in the global apparel industry, to finance its green capital expenditure program and create higher-skilled jobs.

IFC is providing EPIC Group with a $100 million debt financing package in the form of a $70 million sustainability-linked loan and a $30 million green loan, reports BSS.

This funding will support EPIC Group's expansion in Bangladesh and the construction of a new manufacturing facility in India, a press release said on Wednesday.

Additionally, EPIC Group will use the proceeds to upgrade its washing and wastewater treatment plant and to invest in technology and equipment that will reduce energy and water use in Bangladesh.

IFC's funding, which includes its first green loan with sustainability-linked features in the manufacturing sector, is expected to help EPIC Group create over 10,500 direct jobs and 17,000 indirect jobs in the two countries.

The loan is structured with three ambitious corporate sustainability performance targets, including reducing greenhouse gas (GHG) emission of intensity, decreasing freshwater intensity and increasing the representation of women in junior and middle management.

"Partnering with IFC is a significant step for EPIC Group in pursuit of a more sustainable and innovative textile manufacturing industry," said Ranjan Mahtani, Executive Chairman of the EPIC Group.

“This collaboration not only allows us to expand our operations in Bangladesh and India but also reinforces our commitment to reducing our environmental footprint and enhancing resource efficiency.

Together with IFC, we are paving the way for a more resilient textile sector." added Ranjan.

The partnership between IFC and EPIC Group will support EPIC Group in reducing its environmental footprint significantly, targeting a 65 percent reduction in GHG emission per garment produced by 2030 compared to the 2019 benchmark.

The textile sector contributes around 6-8 percent of total carbon emissions annually, out of which Asia accounts for about 60 percent.

At the same time, the sector is a critical source of growth in Bangladesh, generating around 85 percent of its export earnings, and is the second-largest employment generator in India, accounting for approximately 18 percent of the manufacturing jobs.

In addition to financing, IFC is providing EPIC Group with advisory support to help the company develop its environmental, social, and corporate governance capacity, as well as to meet its gender targets.

“IFC is committed to supporting a robust textile and apparel value chain across Asia," said Riccardo Puliti, IFC's Vice President for Asia and the Pacific.

"IFC's funding will enhance the competitiveness of the textile sector in Bangladesh and India by supporting a leading ready-made garment manufacturer to increase efficiency and improve its manufacturing processes through sustainable practices.

Making the textile sector more sustainable and competitive is key to the region's future economic resilience." added Puliti.

The investment announced today builds on IFC's existing relationship with EPIC Group.

IFC previously supported EPIC Group with advisory services on greener production and decarbonization through the Global Trade Supplier Finance programme.