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Bangladesh to raise $500 million Textile Green Fund

The Central Bank of Bangladesh will create a $500 million Green Fund for the textile sector. It’s aimed at benefitting the country’s vertically integrated knitting mills that operate their own dyeing and finishing facilities. Atiur Rahman, Governor of Bangladesh Bank says, the fund will help the sector adopt eco-friendly technologies and practices. The announcement follows the recommendations made at a seminar organised by the World Bank Group’s Trade and Competitiveness Global Practice and the Policy Research Institute of Bangladesh (PRI).

Textile processing like washing, dyeing, and finishing (WDF) are the key pillars of Bangladesh’s economy. The country has 1,700 WDF units and 200,000 workers contribute a net value added of up to 20 per cent to the textile value chain. The entire textile industry generated around $24 billion in 2014 and employed 4 million workers, 80 per cent of whom are women. Despite earning good margins, WDF units are the second largest polluter, consuming 1,500 billion litres of groundwater a year and relying on inadequate wastewater treatment. Many mills use 250 to 300 litres of water per kilogram of fabric, far beyond the global best practice of 50 litres per kilogram or less.

At least six major policy recommendations on finance issues were proposed by working group members to the central bank governor on February 14, 2015. As a result, US$500 million for resource efficiency financing in textile sector was announced by the governor.