Under the terms of the deal between IFC and Epic Group, the debt financing package includes a $70m sustainability-linked loan and a $30m green loan – IFC's first green loan with sustainability-linked features in the manufacturing sector.
The funding will support Epic Group's expansion in Bangladesh, including upgrading its washing and wastewater treatment facilities, as well as the construction of a new manufacturing facility in India. Proceeds will also be used to invest in technology and equipment to reduce energy and water consumption in Bangladesh operations.
The partnership aims to help Epic Group create over 10,500 direct jobs and 17,000 indirect jobs across the two countries.
“Partnering with IFC is a significant step for Epic Group in pursuit of a more sustainable and innovative textile manufacturing industry,” said Ranjan Mahtani, executive chairman of Epic Group. “This collaboration not only allows us to expand our operations in Bangladesh and India but also reinforces our commitment to reducing our environmental footprint and enhancing resource efficiency. Together with IFC, we are paving the way for a more resilient textile sector.”
The sustainability-linked loan is structured with ambitious targets for reducing greenhouse gas emissions intensity, decreasing freshwater use intensity, and increasing representation of women in junior and middle management roles.
The partnership between IFC and EPIC Group will support Epic Group in reducing its environmental footprint, targeting a 65% reduction in GHG emission per garment produced by 2030 compared to the 2019 benchmark.
Riccardo Puliti, IFC's vice president for Asia and the Pacific also commented: “IFC’s funding will enhance the competitiveness of the textile sector in Bangladesh and India by supporting a leading ready-made garment manufacturer to increase efficiency and improve its manufacturing processes through sustainable practices. Making the textile sector more sustainable and competitive is key to the region’s future economic resilience.”
The companies believe the textile industry accounts for 6-8% of global carbon emissions annually, with Asia contributing around 60%. At the same time, it remains a critical economic driver in Bangladesh and India. IFC's advisory support will help EPIC Group strengthen its environmental, social and governance capacities to meet sustainability goals.
