A workshop on “Investment Grant Disbursement Mechanism” and cheque distribution ceremony, held in Dhaka recently, symbolized a united effort to elevate safety, environmental standards, and economic prosperity within Bangladesh's RMG sector.
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The programme to finance safety retrofits and environmental upgrades in the Bangladesh readymade garment (RMG) sector (SREUP) takes a groundbreaking approach by offering low-cost loans and incentive grants through financial institutions, said a media release on Thursday.
SREUP is designed to strengthen the economic sustainability of the RMG sector through a Euro 50 million credit facility (AFD) and Euro 14.29 million grant (EU, KfW, GIZ and 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.
SREUP PMU, Bangladesh Bank, hosted the event.
Nawshad Mustafa, Deputy Project Director of SREUP, Bangladesh Bank; Rafiul islam Project Manager, AFD Dhaka Office; Michal Sumser, Country Director, KfW Dhaka Office; Edwin Koekkoek, Team Leader, Green Inclusive Development & Social Protection, EU; Amin Sharif, Senior Assistant Secretary, Financial Institution Division (FID), spoke at the event.
The Executive Director of Bangladesh Bank, Dr. Md. Kabir Ahmed joined the program as the chief guest and Moni Shankar Kundu, Project Director, joined as the chair.
Each donor organizations emphasized their commitment towards pre-finance support especially after post COVID-19 and Rana Plaza Tragedy boosting 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.
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."
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Valmont Sweaters, Tarasima Apparels Ltd., 4A Yarn Dyeing Ltd., and Ananta Garments Ltd. were awarded performance grant with dummy cheques along with participatory financial institutions Bank Asia Pvt. Ltd., IPDC Finance Ltd., and City Bank Limited.
The technical workshop explained the idea of accessing performance grant, mechanism and due diligence requirements to access performance grants to the Participatory Financial Institutions (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.