Bangladesh

BB to create $500m green fund for textile

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The central bank will set aside $500 million of low-cost funds for textile factories to help them adopt eco-friendly technologies and practices, Governor Atiur Rahman said yesterday.

The money will come in addition to the existing export development fund (EDF) of $1.5 billion and will be named Green EDF, he told a discussion at the office of Policy Research Institute of Bangladesh in Dhaka.

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PRI organised the discussion on “access to finance: environmental sustainability in the textile sector” in association with the International Finance Corporation.

Rahman came up with the decision instantly after a number of bankers and economists stressed the need for such a fund for the textile sector.

At present, Bangladesh Bank is offering the EDF to exporters at a rate of LIBOR (London Interbank Offered Rate) plus 2.5 percent for six months. An exporter can borrow a maximum of $15 million in foreign currency.

“The criteria for accessing the fund by the wet processing units, which are also export-oriented or providing supplies to the garment sector, should be considered in view of the overall sustainability of the textile sector,” said Ahsan H Mansur, executive director of PRI.

At the seminar, he presented a paper, which he prepared in association with Ifty Islam, managing partner of AT Capital.

Mansur said inefficient resource use and poor environmental practices are major challenges for the textile sector. The textile factories in Dhaka currently consume 1,500 billion litres of groundwater annually to produce five million tonnes of fabric, with every kg of fabric gobbling up 300 litres against the global standard of 100 litres per kg of fabric.

Mansur said making funds available does not guarantee that entrepreneurs would use the resources.

“Education and awareness is important. Besides, customs and supplementary duties should be eliminated for importing cleaner technology equipment and machinery.”

The BB governor said the country’s garment sector would not be able to reach the $50 billion export target by 2021 without adopting green technologies.

Rahman called for a separate allocation in the budget to promote green financing in the textile sector. “Budgetary allocation makes it possible to provide low-cost funds.”

The BB chief said the progress in the textile sector has also brought in multiple challenges in urban expansion, land use, workplace safety and environmental safeguards.

For example, textile dyeing and finishing units in Bangladesh are known to be hugely wasteful in water usage as they consume five times the best practice benchmark.

The toxic discharges of the industry pollute both surface and ground water which has serious consequences for all living beings.

“Long-term sustainability of the industry greatly lies in its ability to produce green textile products mainly due to growing consumer demand for eco-friendly products,” the governor said.

Rahman also said a green development policy should be incorporated into the next five-year plan of the country.

Mohammed Abdul Jabbar, managing director of DBL Group, said with an initial investment of $100,000, his company was able to reduce wastage of water, energy, steam, dye and chemical worth $500,000 within a year. “So, it is a matter of mindset. It is not a big deal.”

Mustafizur Rahman, executive director of Centre for Policy Dialogue, said environmental sustainability is very important for the country’s mid- and long-term development.

“The country will be able to raise its garment exports to $50 billion by 2021 if the factories are eco-friendly.”

Ifty Islam said environmental sustainability has become a central point of China’s five-year plan although the country is infamous for environmental pollution. “We will have to do the same.”

Faruque Hassan, a former vice president of Bangladesh Garment Manu-facturers and Exporters Association, said the factories need financial support from the government and price support from buyers to go for eco-friendly practices.

Abrar Anwar, chief executive officer of Standard Chartered Bangladesh, said financing would not be available for factories if they are not eco-friendly.

Mamun Rashid, chairman of Financial Excellence Ltd, and Mrinal Sircar, programme manager of Bangladesh Water PaCT, also spoke.

** This article first appeared on the Daily Star here.

Experts Frame rules to make textile industry green

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Speakers at a seminar styled as ‘Legal and Regulatory Issues Related to Environmental Sustainability of the Textile Sector’ in Dhaka yesterday – See more at: http://www.dhakatribune.com/business/2015/mar/22/experts-frame-rules-make-textile-industry-green#sthash.pUsVEHfk.dpuf

In the wake of increasing demand for green products globally, experts yesterday suggested framing rules for making the textile industry environmental complaint for enhancing its competitiveness and sustainability.

They also made a set of recommendations, including giving financial or fiscal incentives to encourage entrepreneurs to low-cost cleaner production practices and making aware that the reduction of energy consumption can be a real cost-cutter.

The recommendations were made at a seminar on “Legal and Regulatory Issues Related to Environmental Sustainability of the Textiles Sector,” organised jointly by Policy Research Institute (PRI) and International Finance Corporation at the PRI conference room.

Speaking at the function, Environment and Forest Minister Anwar Hossain Manju said his ministry had put its best efforts to improve environment in the country.

“There are lots of regulations but effective implementation of them is important to reduce pollution,” he said.

He expressed disappointment that the water supplied by the government was not drinkable, which is “unfortunate.”

BGMEA President Atiqul Islam said ensuring quality and environmental matters in the factories is increasingly becoming a global issue.

“This means if any of the two is missing, you are simply out of business.”

“But it is easy for big factories but not for small factories to address the environmental pollution, which is a challenge.”

Atiqul Islam added the textile industry uses ground water as it contains less chlorine.

He laid emphasis on financial support at lower interest for implementing the environmental issue.

Senior environmental adviser to GIZ in Bangladesh Tanuja Bhattacharjee said rules and proper guidelines are necessary to make textile industry competitive as environmental sustainability is becoming an increasingly important issue in international arena.

“It is high time to look at the issue so that we can set example before the world,” she said.

She said GIZ is going to launch mobile testing water wastage programme by June next to identify the level of environment pollution in the textile industry.

Assistant Chief of Ministry of Environment and Forest, Khalid Hassan said the ministry is in the process of enacting Land Zoning Act to help make cluster textile industry outside of the city.

Chief Operating Officer of Comfit Composite Limited, Md Kawser Ali described that how his company had reduced use of water by adopting environment-friendly technology.

“Use of water has fallen to 50 litres from 180 litres for cleaning per kilogram fabric. ”

PRI Executive Director Ahsan H Mansur emphasised the need to address the environmental issue before being late for keeping the environment clean for generations to come.

He presented a paper at the seminar putting a number of recommendations, including differentiating water tariffs based on locations, strengthening enforcement and monitoring, tax and duty rationalisation for encouraging environmentally-friendly investment goods and for discouraging hazardous chemicals.

The paper said although data on the extent of washing dying and finishing firms with effluent treatment plants (ETPs) are not readily available, the perception of experts is that the coverage is very low at around 30%.

Without the full coverage with ETPs along with strict enforcement of rules, the water pollution could not be addressed, it said.

An assessment of four firms shows that 3 of 7 best practices cost less than Tk4.1 lakh each, two of them cost almost nothing.

None requires more than 15 months to recoup the costs and the improvements could reduce water and energy consumption by up to 25% as well as reduce chemical use significantly, according to the findings.

** This post was sourced from Dhaka Tribune here.