Project Name
Sustainable Projects
Project Number
49074-001
Borrower / Company
  • BRAC BANK LIMITED
Country / Economy
  • Bangladesh
Location
Nation-wide
Type or Modality of Assistance
Approval Number Facility Fund Source Amount Status
3278 Loan Ordinary capital resources USD 30.00 million Committed
Strategic Agendas
  • Environmentally sustainable growth
  • Inclusive economic growth
Drivers of Change
  • Private sector development
Sector / Subsector
  • Finance / Finance sector development

Gender
Effective gender mainstreaming
Project Sponsor(s)
  • BRAC BANK LIMITED
Description
ADB will provide a 5-year senior unsecured term loan to BRAC Bank of up to $30 million. The proceeds will be used to finance socially and environmentally sustainable projects, which include (i) the construction or expansion of RMG factories that meet the high structural, fire, and electrical safety standards required by the accord or the alliance; and (ii) improvement of existing factories to meet any of the above standards. The loan will also fund construction of wastewater and ETPs in the industry sector, primarily in the textile and garment industry.
Objectives and Scope
The objective of the proposed project is to (i) enhance health and safety standards of garment industry in Bangladesh; (ii) promote finance sector development; (iii) enhance environmental standards in the industry sector. The project will finance socially and environmentally sustainable projects, which include (i) the construction or expansion of RMG factories that meet the high structural, fire, and electrical safety standards required by the accord or the alliance; and (ii) improvement of existing factories to meet any of the above standards. The loan will also fund construction of wastewater and ETPs in the industry sector, primarily in the textile and garment industry.
Status of Development Objectives
On track in meeting most of its development objectives.
Status of Operation/Construction
On-going.
Linkage to Country/Regional Strategy

the Mid-Term Review of Strategy 2020, ADB aims to strengthen its support for the finance sector by supporting the development of financial infrastructure, institutions, and products and services. The project supports three priorities identified by the mid-term review of Strategy 2020 including (i) poverty reduction and inclusive economic growth; (ii) environment and climate change; and (iii) private sector development and operations The project is aligned with the country partnership strategy (CPS) for Bangladesh for 2011-2015, which prioritizes private sector development to accelerate growth by developing the finance sector with an emphasis on clean energy, infrastructure finance and credit for SMEs. The CPS also notes that environmental considerations should be integrated into sector interventions.

By financing wastewater treatment plants in industrial sector, the proposed project is in line with ADB's Water Operational Plan, which identified wastewater management services as one of the key elements of ADB's operations in the water sector.

Safeguard Categories

Environment
FI
Involuntary Resettlement
FI
Indigenous Peoples
FI

Summary of Environmental and Social Aspects

Environmental Aspects
The borrower will be prohibited from using the proceeds of the ADB loan to finance projects that are category A under the Safeguard Policy Statement. The borrower will update its existing ESMS to ADB satisfaction before the first disbursement of the proposed loan. BRAC Bank will be required to increase its existing staff capacity to effectively carry out both the assessment and oversight. The enhanced screening process covers (i) fire safety aspects, including verification of accord and/or alliance corrective action plans, and screening out high risk factories; and (ii) environmental and social aspects, which include review of the social and labor audits conducted by the factories' buyers and compliance with local environmental regulations. Subprojects having high risk environment and safety issues will be excluded from financing. BRAC will review government certification, screen and monitor subprojects to ensure compliance with the national legislations, including those related to wastewater treatment plants and effluent treatment plants.
Involuntary Resettlement
The proposed ADB funded sub-loans of BRAC Bank will support mainly the construction or expansion of textile plants and improvement of existing plants to meet standard of fire and building safety which are likely to have minor impacts on involuntary resettlement.
Indigenous Peoples
The project is not expected to entail any significant impact on indigenous peoples.
Stakeholder Communication, Participation, and Consultation

Potential stakeholders include bank staff and their borrowers, national and local government, regulatory agencies, and the project beneficiaries (employees of textile factories, sustainable projects, including women).

Consultation meetings were conducted by the bank with the relevant stakeholders, including the poor and vulnerable groups at the factories and surrounding communities.

Contact

Responsible ADB Officer
Doukidis, Doukas
Responsible ADB Division
Portfolio Management Division, PSOD
Responsible ADB Department
Private Sector Operations Department

Timetable for assistance design, processing, and implementation

Concept Clearance
31 Mar 2015
Credit Committee Meeting
-
Approval
16 Sep 2015
Last PDS Update
28 Sep 2018
 
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Source URL: https://www.adb.org/projects/49074-001/main