The Asian Development Bank (ADB) has signed a $30 million sustainability-linked loan (SLL) agreement with Envoy Textiles, marking the bank’s first-ever SLL in Bangladesh. This landmark financing deal signals a major shift toward integrating environmental accountability with industrial funding in the country’s crucial manufacturing sector.
A sustainability-linked loan is a forward-looking debt instrument designed to incentivize companies by linking its financial terms directly to their performance on specific environmental and social goals. For Envoy, the loan's terms are tied to key performance indicators (KPIs) focused on two main goals; namely, increasing the total installed rooftop solar capacity and achieving specific reduction in greenhouse gas emissions.
By embedding these metrics, the ADB aims to drive measurable climate action and industrial modernization across Bangladesh’s massive ready-made garment (RMG) sector, which accounts for over 80 per cent of the country’s total export earnings.
Envoy will use the loan to fund the design and construction of a new automated spinning unit at its Jamirdia plant. This expansion will boost the company's annual yarn production capacity by 4,550 tons, primarily supporting its in-house denim fabric production.
Crucially, the financing will also cover the installation of 3.5 megawatts-peak (MWp) of rooftop solar panels. This significant renewable energy investment is expected to substantially reduce the factory’s carbon emissions, directly supporting Bangladesh’s national decarbonization targets under the Paris Agreement and its Vision 2041 development plan. A portion of the loan will also refinance short-term working capital, freeing up resources for further operational innovation.
Envoy, a pioneer in sustainable textile production and the world's first denim manufacturer to receive Platinum LEED certification, is positioned to lead this transformation.
According to Hoe Yung Jeong, Country Director, Asian Development Bank, this partnership advances environmental sustainability and sets a new standard for modernization and resilience in the garment industry.
As the world’s second-largest garment exporter, Bangladesh faces mounting global pressure to decarbonize supply chains. The success of the ADB-Envoy partnership demonstrates how green finance can act as a catalyst, rewarding manufacturers for turning environmental responsibility into a core business and a source of competitive advantage.
