The Asian Development Bank (ADB) has signed a $30 million sustainability-linked loan agreement with Envoy Textiles Limited in Bangladesh. This agreement follows up on a 2022 textile production project and marks a continued partnership between ADB and Envoy.

In a press release issued on Thursday (October 2) from ADB’s Dhaka office, the bank stated that a sustainability-linked loan is a performance-based financing mechanism where the terms of the loan are tied to the borrower meeting pre-defined sustainability performance targets. In Envoy’s case, the selected targets include the total installed solar power generation capacity on rooftops and the reduction of greenhouse gas emissions.

The loan funds will be used to design and construct a new spinning unit at Envoy’s production facility in Jamirdia, which will increase its annual yarn production capacity. Additionally, the funds will support the installation of a 3.5 megawatt-peak rooftop solar panel system and repayment of short-term local working capital loans. The new spinning unit will be automated and energy-efficient, producing 4,550 tons of yarn annually, primarily for in-house denim fabric production.

ADB’s Country Director for Bangladesh, Edimon Ginting, stated that The ready-made garments (RMG) industry is a key driver of Bangladesh’s economy. Envoy is one of the leading denim fabric manufacturers. We are pleased to support Envoy with ADB’s first sustainability-linked loan in Bangladesh. This initiative will promote environmental sustainability and industrial modernization, setting a new benchmark for the RMG sector.”

Envoy’s Chairman, Kutubuddin Ahmed, said ADB’s continued support is an honor for us. It reinforces our commitment to sustainable growth and innovation. The new loan will help us expand production capacity, invest in renewable energy, and reduce our environmental footprint. We remain committed to maintaining the highest standards of quality, inclusiveness, and sustainability.”

Envoy is one of Bangladesh’s leading denim fabric manufacturers, with an annual production capacity of 54 million yards—about 10% of the country’s total denim fabric capacity. Envoy’s facility is certified by the United States Green Building Council and is the world’s first platinum-certified Leadership in Energy and Environmental Design (LEED) denim manufacturing facility.