ADB will provide a 5-year senior unsecured term loan to Eastern Bank of up to $20 million. The proceeds will be used to finance socially and environmentally sustainable projects in the textile and garment sector. In particular, the proposed loan will finance the construction or expansion of textile and garment factories that meet the high structural, fire, and electrical safety standards required by the accord or the alliance. All sub-borrowers will be required to consider energy efficiency and be encouraged to select energy efficient designs and equipment for the sub-projects.
|Project Name||Sustainable Projects in the Textile and Garment Sector|
|Borrower/Company||EASTERN BANK LTD.
|Type or Modality of Assistance||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Private sector development
|Sector / Subsector||
Finance / Finance sector development
|Gender Equity and Mainstreaming||Effective gender mainstreaming|
|Responsible ADB Department||Private Sector Operations Department|
|Responsible ADB Division||Portfolio Management Division, PSOD|
|Responsible ADB Officer||Doukidis, Doukas|
|Description||ADB will provide a 5-year senior unsecured term loan to Eastern Bank of up to $20 million. The proceeds will be used to finance socially and environmentally sustainable projects in the textile and garment sector. In particular, the proposed loan will finance the construction or expansion of textile and garment factories that meet the high structural, fire, and electrical safety standards required by the accord or the alliance. All sub-borrowers will be required to consider energy efficiency and be encouraged to select energy efficient designs and equipment for the sub-projects.|
|Objectives and Scope||The proposed loan will support textile and garment industry upgrades through long-term finance to the financial sector. It will also help enhance Eastern Banks environmental and social management system. ADB has proposed further enhancements to Eastern Banks screening and monitoring process, including the expansion of the banks due diligence checklist to include environment and social safeguards and other labor aspects. Finally, the ADB loan will incorporate gender elements in financing the ready-made garment industry. The project is classified as effective gender mainstreaming and through a GAP, ADB will incorporate a number of elements in the subprojects to improve facilities and working conditions for women in the RMG industry in Bangladesh. The GAP has several substantive and sound gender design features including day care, safety, and health clinics, which will be incorporated into operations by the RMG factory sub-borrowers.|
|Status of Development Objectives||On-going. Disbursement was made in January 2018; as such, Eastern Bank has yet to submit its first development monitoring report.|
|Status of Operation/Construction||On-going.|
|Linkage to Country/Regional Strategy||
(1) Consistency with ADB strategy and country strategy: Under the Midterm 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 Midterm Review of Strategy 2020: (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 for Bangladesh for 20112015, 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 country partnership strategy also notes that environmental considerations should be integrated into sector interventions.
(2) Consistency with sector strategy and relevant ADB operations. The proposed project is aligned with ADBs Financial Sector Operational Plan, which calls for finance sector projects to serve needs of the real sector development and fit into the overall development agenda of the economy, based on the country partnership strategy. The proposed project continues ADBs support to the textile and garment sectors in Bangladesh.
|Summary of Environmental and Social Aspects|
|Environmental Aspects||Eastern Bank was established in 1992 and has become a leading private commercial bank. It has an existing Environmental and Social Risk Management (ESMS) to manage the risks associated with the banks lending. The ESMS is has been reviewed for compliance against ADB Safeguard Policy Statement (SPS, 2009) requirements.|
|Involuntary Resettlement||The proposed ADB funded sub-loans of EBL will support mainly the construction or expansion of garment factories and improvement of existing factories to meet standards of fire and building safety which are likely to have minor impacts on involuntary resettlement. Sub-loans classified as categories A for IR will be disqualified for ADB financing. EBL Bank will update its environmental and social management system (ESMS) in compliance with the ADBs Safeguards Policy Statement (2009).|
|Indigenous Peoples||The proposed ADB funded sub-loans of EBL will support mainly the construction or expansion of garment factories and improvement of existing factories to meet standard of fire and building safety which are unlikely to have any impacts on indigenous peoples. Sub-loans classified as categories A and B for IP will be disqualified for financing. EBL does not expect to finance factories that will be located in areas with IPs. EBL will enhance its environmental and social management system (ESMS) in compliance with ADBs SPS (2009).|
|Stakeholder Communication, Participation, and Consultation||EBL conducts due diligence and consults with its borrowers and stakeholders at the proposed sites of investment activities. The consultation process with relevant stakeholders will be incorporated in the enhanced Environmental and Social Management System (ESMS).|
|Timetable for assistance design, processing and implementation|
|Concept Clearance||23 May 2016|
|Credit Committee Meeting||10 Oct 2016|
|Approval||29 Nov 2016|
|Last PDS Update||28 Sep 2018|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
|Title||Document Type||Document Date|
|Sustainable Projects in the Textile and Garment Sector: Faster Approach to Small Nonsovereign Transactions (FAST) Report||Faster Approach to Small Nonsovereign Transactions||Nov 2016|
|Sustainable Projects in the Textile and Garment Sector: Initial Poverty and Social Analysis||Initial Poverty and Social Analysis||Oct 2016|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
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