(BSS) - The Asian Development Bank (ADB) has signed a US$30 million sustainability-linked loan facility agreement with Envoy Textiles Limited (Envoy) of Bangladesh.

This transaction with Envoy is a follow-on to the textile manufacturing project with the ADB in 2022, said a press release.

This is ADB’s first sustainability-linked loan in the country. It is a forward-looking, performance-based debt instrument with predefined key performance indicators assessed against sustainability performance targets.

The selected sustainability performance targets reflect Envoy’s sustainability objectives including total installed electricity generation capacity of the rooftop solar panel and the amount of greenhouse gas emission reduction.

The proceeds of the loan will be used to fund the design and construction of a new spinning unit for Envoy to expand its annual yarn production capacity at Envoy’s manufacturing plant in Jamirdia, Bangladesh; install 3.5 MW of rooftop solar panels at the factory; and refinance short-term local working capital loans.

The new unit will be automated and more energy-efficient, and will have an annual yarn production capacity of 4,550 tons, primarily for in-house denim fabric production.

“The ready-made garment industry is a key driver of Bangladesh’s economy, accounting for over 80% of the country’s total export earnings, and Envoy is the leading denim fabric manufacturer,” said ADB Country Director in Bangladesh Hoe Yun Jeong.

“ADB is pleased to support Envoy with its first sustainability-linked loan in Bangladesh. This partnership advances environmental sustainability and industrial modernization, setting a new standard for the garment sector,” he added.

“We are honored to receive continued support from ADB, whose partnership affirms our commitment to sustainable growth and innovation. This new sustainability-linked loan will enable us to expand our production capacity, invest in renewable energy, and further reduce our environmental footprint,” said Envoy Chairman Kutubuddin Ahmed.

“Envoy remains dedicated to upholding the highest standards in quality, inclusivity, and sustainability,” he added.

Envoy is the leading denim fabric manufacturer in Bangladesh with an annual production capacity of 54 million yards—about 10% of the country’s total denim fabric capacity.

Envoy has the world’s first platinum Leadership in Energy and Environmental Design (LEED) denim manufacturing facility certified by the United States Green Building Council.