The Asian Development Bank (ADB) has entered into a €10.8 million ($11.2 million) loan agreement with Envoy Textiles to fund a second yarn spinning unit at Envoy's manufacturing plant in Mymensingh's Bhaluka.

The fund will also support, finance the purchase and installation of energy-efficient spinning machinery and other equipment to expand sustainable textile production and create local jobs, according to a statement from the ADB today.

The new automated and more energy-efficient unit will have an annual yarn production capacity of 3,600 tonnes mainly used for in-house production of denim fabrics.

Construction and operation of the new spinning unit is expected to create 250 new jobs, according to the statement.

"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 one of the leading denim fabric manufacturers of Bangladesh," said ADB Vice-President for Private Sector Operations and Public–Private Partnerships Ashok Lavasa.

"Modern spinning equipment will increase yarn production capacity, reducing reliance on imported yarn and enhancing the industry's efficiency, sustainability, and energy efficiency," he also said.

"This project marks ADB's return to financing Bangladesh's textile sector after two decades, and it will help to crowd in much-needed financing to this strategically crucial part of the economy."

The project will reduce electricity consumption and greenhouse gas emissions through the use of energy-efficient and modern equipment.

Additionally, ADB will help Envoy to develop a gender action plan that will increase career opportunities for women employees, promote gender-inclusive procurement, and promote gender inclusion in the workplace, the ADB said.

"We are delighted to receive our first-ever financing from an international lender, and it is even more meaningful that it comes from ADB as we share the same vision of quality of service, inclusivity, and sustainability," said Envoy Founder Kutubuddin Ahmed.

"Partnering with an internationally reputable financial institution such as ADB is an affirmation of Envoy's direction and an important step in our sustainable growth," Ahmed said.

Envoy has an annual denim fabric production capacity of 52 million yards, about 10 per cent of the country's total 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.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.

Established in 1966, it is owned by 68 members—49 from the region.