Programme to Finance Safety Retrofits and Environmental upgrades in the Bangladeshi Ready-Made Garment (RMG) Sector

04.01.2024

About SREUP:

The Programme to Finance Safety Retrofits & Environmental Upgrades in the Bangladeshi Ready-Made Garment (RMG) Sector (SREUP) is designed in such a way to help the Bangladesh Ready-made garment sector factories to implement safety retrofits, environmental and social upgradation measures.

It aims to help maintain the global competitiveness of the Bangladesh garment industry by making it economically sustainable. This program incentivizes factories with low cost loans through financial institutions and incentive grants. The program is a result of collaboration several EU Member States to provide financial and capacity building support clearly an example of Team Europe Initiative effort.

SREUP is designed to strengthen the economic sustainability of the RMG sector through a Euro 50 million credit facility (AFD)& Euro 14.29 million grant (EU, KfW, GIZ & BB). The project, implemented by Bangladesh Bank, aims at providing financial and technical support for Safety Retrofits and Environmental and Social upgradation in RMG export oriented companies in Bangaldesh.

Project factsheet:

Programme to Finance Safety Retrofits and Environmental upgrades in the Bangladeshi Ready-Made Garment (RMG) Sector

SREUP booklet:

SREUP at a glance

Outcome/Specific objectives:

Improving safety standards;
Reduction of social and environmental costs linked to the RMG sector;
Improvement in the workplace wellbeing for workers;

Outputs/Expected results:

RMG companies gain access to subsidized loans through the Project;
RMG companies gain access to performance premium for achieving the stated objectives of their investments;
Textile entrepreneurs are adequately supported (by service providers) with regard to the planning and implementation of investments that are relevant in safety and environmental aspects

Project video:

Cheque Distribution Ceremony and Investment Grant Disbursement Mechanism Workshop under SREUP Project

The Cheque Distribution Ceremony and Workshop on Investment Grant Disbursement Mechanism, held on December 12, 2023 at Pan Pacific Sonargaon, focused on elevating the safety, environmental standards, and economic prosperity within Bangladesh's RMG sector.

The Programme to Finance Safety Retrofits & Environmental Upgrades in the Bangladeshi Ready-Made Garment (RMG) Sector (SREUP) offers low-cost loans and incentive grants through financial institutions. SREUP is designed to strengthen the economic sustainability of the RMG sector through a Euro 50 million credit facility (AFD)& Euro 14.29 million grant (EU, KfW, GIZ & BB). The project, implemented by Bangladesh Bank, aims at providing financial and technical support for Safety Retrofits and Environmental and Social upgradation in RMG export oriented companies. The SREUP PMU, Bangladesh Bank, hosted this Ceremony.

The program commenced with an inaugural address by Mr. Nawshad Mustafa, Deputy Project Director of SREUP, Bangladesh Bank, followed by remarks from Mr. Rafiul islam Project Manager, AFD Dhaka Office; Mr. Michal Sumser,Country Director, KfW Dhaka Office; and Edwin Koekkoek, Team Leader, Green Inclusive Development & Social Protection, EU, Mr. Amin Sharif, Senior Assistant Secretary, Financial Institution Division (FID). The Executive Director of Bangladesh Bank. Dr. Md. Kabir Ahmed graced the program as Chief Guest and Mr. Moni Shankar Kundu, Project Director honored the program as the Chair. Each donor organizations emphasized their commitment towards pre-finance support especially after post COVID-19 and Rana Plaza Tragedy boosting up sustainable economic growth of RMG sector.

Dr. Md. Kabir Ahmed emphasized the goal of achieving inclusive sustainable growth in the RMG sector through safety, environmental, and social upgrades. Mr. Edwin Koekkoek, Team Leader, Green Inclusive Development & Social Protection, EU, emphasized, "Our initiative reflects the Total Team Europe commitment to collective action for common goals. Addressing safety and environmental concerns in the RMG sector requires a holistic, collaborative effort, and we've partnered with organizations like AFD and KfW to implement sustainable solutions."

Top of FormValmont Sweaters, Tarasima Apparels Ltd., 4A Yarn Dyeing Ltd., and Ananta Garments Ltd. were awarded performance grant along with participatory financial institutions Bank Asia Pvt. Ltd., IPDC Finance Ltd., City Bank Limited, and IDLC Finance Ltd.

The technical workshop set out the idea of accessing performance grant, mechanism and due diligence requirements to access performance grants to the Participatory Fiannacial Insitutions (PFIs) and RMG factories. Participants expressed expectations that the green financing pre-finance incentive grant fund could be transformative, strengthening the RMG sector's capacity for continued sustainability in the global market. The program ended with a vote of thanks from the Chair.