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Promoting private sector investment through large-scale adoption of energy saving technologies and equipment for garment sector of Bangladesh

IDCOL is developing the funding proposal titled, “Promoting private sector investment through large-scale adoption of energy saving technologies and equipment for garment sector of Bangladesh,” The total value for the programme is expected to be USD 250 million, including GCF loan financing of USD 150 million and remaining co-financing of USD 100 million by Local Financial Institutions (LFIs) and garment sector borrowers. IDCOL will be the DAE, arranging concessional loans from GCF to selective Local Financial Institutions (LFIs) who in turn will finance the garments businesses in Bangladesh to adopt energy efficient technologies & appliances. The cost of purchasing energy saving equipment and technology will be the subject of the loan, which will be utilized by factory owners and business establishments in the garments sector to purchase, install and use energy saving technologies. Thus the LFIs will be the borrowers & executing entity (EE) and the garments industry borrowers will be Implementing Entity (IE) for the program.

IDCOL has shortlisted four LFI’s (South East Bank Ltd., The City Bank Ltd., BRAC Bank Ltd. and IDLC Finance Ltd.) based on their role play in the industry, management capacity & track record of financing energy efficient technologies (also considered Green Banking financing experience) and experience of working with international (direct & re-financed through Central Bank) fund. The type of customer/ market segment each LFI serves was also taken into consideration, to ensure a diverse set of RMG factories can be reached under the program.

The concessional financing of GCF will be transferred to LFI’s through IDCOL and the private sector financing will be leveraged through co-financing offered by the LFI’s and the garment industry sponsors.

Besides creating access to concessional financing the program also intends to address various other market barriers to ensure long-term sustainability of the program.

Notably, IDCOL has received Project Preparation Facility (PPF) from GCF, which is a grant financing provided to conduct detail appraisal of the program. All the relevant activities associated with the PPF are at it last stage of execution and implementation. IDCOL will soon submit the funding proposal for this program.

The detail approved PPF application is available in the below link:

Disclosures

Request for Proposal (RFP) and Terms of Reference (ToR)