The Asian Development Bank (ADB) has signed a $30 million sustainability-linked loan facility agreement with Envoy Textiles Limited (Envoy), marking its first such financing initiative in Bangladesh.

According to a press release issued by the ADB on October 2, the transaction built on a previous textile manufacturing project between ADB and Envoy in 2022.

The release stated that the sustainability-linked loan was a forward-looking, performance-based instrument that tied financing terms to the borrower’s achievement of measurable sustainability performance targets.

It said that for Envoy, the selected targets focused on increasing installed rooftop solar power capacity and reducing greenhouse gas emissions, in line with the company’s broader environmental objectives.

According to ADB, the loan proceeds would be used to design and construct a new spinning unit at Envoy’s Jamirdia manufacturing complex.

The unit would be automated and energy-efficient, increasing annual yarn production capacity by 4,550 tonnes, primarily for use in the company’s denim fabric operations.

In addition, the facility would fund the installation of 3.5 megawatts peak (MWp) of rooftop solar panels and refinance short-term local working capital loans.

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

He said that the bank was pleased to support Envoy with its first sustainability-linked loan in Bangladesh, noting that the partnership advanced environmental sustainability and industrial modernisation while setting a new standard for the garment sector.

‘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.

Kutubuddin said that Envoy remained dedicated to upholding the highest standards in quality, inclusivity, and sustainability.

Envoy is the country’s leading denim fabric manufacturer, producing around 54 million yards annually—equivalent to 10 per cent of Bangladesh’s total capacity.

The company also operates the world’s first platinum-certified Leadership in Energy and Environmental Design (LEED) denim facility, recognised by the United States Green Building Council.

Established in 1966, ADB is owned by 69 members, including 50 from the Asia-Pacific region. It supports inclusive, resilient, and sustainable growth across the region, working with governments and private sector partners to mobilise resources, develop infrastructure, and address climate challenges through innovative financial solutions.