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BlueEarth closes first SLL to Asian apparel maker
Loan terms tied to Q Collection’s performance in achieving ESG targets linked to Higg Index
Tom King 13 Mar 2024

Blue Earth Capital, a Swiss-based global impact investor, has completed its first sustainability-linked loan totalling US$$30 million to Q Collection, a Singapore-headquartered apparel manufacturer with production operations in Bangladesh.

The loan terms are tied to Q Collection’s performance in achieving predefined ESG targets linked to the Higg Index. The structure will allow both parties to align environmental and social impact outcomes with financial objectives.

The Higg Index is an apparel and footwear industry self-assessment standard to rate environmental and social sustainability throughout the industry’s supply chain.

BlueEarth’s capital infusion will be used to develop a new manufacturing site which includes upgrading to more energy-efficient machines and facilities, the installation of rooftop solar systems, and a rainwater harvesting initiative.

This will enable Q Collection to continue to expand its operations and create more jobs for underserved communities, while contributing to a more sustainable garment manufacturing sector. The company is also committed to building an inclusive and empowering workplace for its over 19,000 employees.

Amy Wang, head of private credit at BlueEarth, says: “We have aligned on a rigorous environmental and social action plan alongside the terms of the financial structure to ensure that we deliver on both impact and financial return. Closing our first sustainability-linked loan is an important step for us at BlueEarth as we continue to seek to tackle the world’s most pressing social and environmental challenges.”

The ready-made garment manufacturing industry is a key contributor to the economic development of Bangladesh. It accounts for over 80% of the country’s exports, employing over 4.5 million individuals, mostly women from economically disadvantaged backgrounds.

However, at the same time, the garment sector is the largest industrial contributor of CO2 emissions in Bangladesh, representing 15.4% of the country’s total.

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