Bangladesh: Sustainable Projects in the Textile and Garment Sector

Nonsovereign Project | 50197-001

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 Details

  • Project Officer
    Guadix Martin, Pablo A.
    Private Sector Operations Department
    Request for information
  • Country
    Bangladesh
  • Sector
    • Finance
Project Name Sustainable Projects in the Textile and Garment Sector
Project Number 50197-001
Borrower/Company EASTERN BANK LTD.
Country Bangladesh
Location Nation-wide
Type or Modality of Assistance
3480 Loan Ordinary capital resources USD 20.00 million Committed
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 Guadix Martin, Pablo A.
Project Sponsor(s)
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 In progress.
Status of Operation/Construction Operation loan fully disbursed and repaying.
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.

Safeguard Categories
Environment FI
Involuntary Resettlement FI
Indigenous Peoples FI-C
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 11 Aug 2021

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.

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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.

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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