36226 - Bangladesh RMG Sector Fire & Safety Program

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Summary of Investment Information

Project Number

36226

Company Name

Bangladesh Fire Safety Banks Program

Date SPI Disclosed

Mar 13, 2015

Country

Bangladesh

Region

South Asia

Projected Board Date

Apr 14, 2015

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Oct 25, 2025

Department

Equity Portfolio Management

Industry

Financial Markets

Previous Events

Approved : Jul 3, 2015
Invested : Jun 9, 2015

Sector

Commercial Banking - General

Project Description

IFC proposes to establish a comprehensive sectorial program to strengthen safety infrastructure in the ready-made garment (RMG) sector in Bangladesh. Under the program, IFC would engage with selected local banks (Partner Banks) to provide financing to RMG enterprises to implement structural, electrical and fire safety (SEF) retrofitting/ civil works and renovations upgrades and essential for worker safety (the Program). This is fundamental not only from an environmental and social perspective but also from a competitive angle as the RMG sector accounts for significant employment, export earnings and manufacturing in the country.

The SEF safety necessary upgrades are identified in the corrective action plans (CAPs) carried out by (i) the Alliance for Bangladesh Worker Safety (Alliance) (ii) the Bangladesh Accord on Fire and Building Safety (Accord) and similar credible institutions such as National Tripartite Plan of Action on Fire Safety and Structural Integrity in the garment Sector of Bangladesh (NTPA).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	53.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to SME Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

Support for the backbone of Bangladesh Industry and economy: RMG sector represents 78% of exports (2nd largest exporter after China) and 15% of GDP (15 to 20% annual growth rate). Any disruptions to the RMG sector would stall progress on alleviating poverty. The proposed safety upgrades are a vital element in helping Bangladesh to maintain its global market position in the RMG sector.

Improve all workers (including women) working conditions: about 90% of RMG sector˜s workers are women from poor backgrounds and families at the base of the pyramid with limited or no financial safety net. Improved SEF standards will help save lives and protect the livelihood of families relying on the income from RMG sector employees.

Enhancing E&S capacity: Utilizing IFC''s in-house E&S expertise to help create capacity in Partner Banks to monitor E&S standards and compliance, which would contribute to improving the overall working environment of Bangladesh RMG sector.

Establishing a prototype to engage other donors and development agencies to support worker safety in Bangladesh.
Job Creation: RMG sector has been the largest employer in Bangladesh, employing 3.7 million workers. By some estimates, it has the potential of generating 10.6 million additional jobs in the next 10 years.

Provision of long-term finance: The Program entails IFC providing term funding, which is needed by RMG enterprises to incur capital expenditures associated with SEF CAPs. Banks and RMG enterprises are unable to obtain hard currency term funding from the local markets. The proposed term financing by IFC in US Dollars also matches with the hard currency earnings of RMG enterprises. With some Partner Banks, this would be IFC''s first term financing engagement.

Upgrading environmental and social (E&S) standards and expertise: IFC expects to play an important role through its presence on the ground and its E&S expertise to help Partner Banks to upgrade their capabilities in this area. IFC expects to provide training to Partner Banks in Bangladesh on E&S and to help them to build a better understanding of SEF CAPs.

Catalytic role and structuring expertise: IFC has developed the structure of the proposed Program to support delivery of term credit for the implementation of the SEF CAPs. IFC''s proposed mechanism is comprehensive and helps to develop a scalable and replicable Program, which is expected to encourage other international financial institutions and development agencies to provide financing which is required by the RMG sector for critical upgrades in fire safety infrastructure.

E&S Category Rationale / Risks and Mitigation

This project is categorized as FI-2 according to IFC’s Environmental and Social Review Procedure. Key Environmental and Social (E&S) aspects in this project relates to the capacity of the Partner Banks to assess E&S issues associated with the RMG sector and specifically those to labor conditions and fire safety. Partner Banks, with IFC’s support, will address two aspects to mitigate E&S risks in this project: i) evaluation of labor and working conditions (e.g child labor, freedom of association, overtime) along with pollution issues in the beneficiary RMG enterprises; and ii) verification of fire safety remediation activities including identification and implementation of the SEF Corrective Action Plans.

The first component on the E&S risks as detailed above is typically addressed by the buyers (brands) thus Partners Banks will pre-screen RMG factories for labor and environmental elements based on information contained in completed Buyers'' compliance audits and qualifying criteria (e.g absence of zero tolerance issues, compliance with local environmental and social law, etc) for RMG enterprises. To undertake this an E&S Officer (appropriately trained) at each of the Partner Banks will be nominated to review the E&S audits and confirm adequate compliance by the RMG factories. The second component on fire safety aspects are addressed through Alliance, Accord or credible verification entities; Alliance and Accord will provide the initial Structural, Electrical and Fire safety (SEF) Corrective Action Plans and will monitor the progress on its implementation to ensure issues identified are corrected.

Risks and impacts under this facility are related to those in the garment sector in Bangladesh and relate to the following: i) compliance with labor and working conditions the most significant of which are related to labor practices, including that associated with child labor, forced labor, occupational health and safety, wages, overtime, grievance mechanism, and overall safe and fair employment conditions; ii) life and fire safety protection (including emergency response); iii) emissions to air and water, hazardous materials management and use of energy and water; and iv) the potential for ineffective implementation of fire safety remediation activities including identification and implementation of the Structural, Electrical and Fire safety Action Plans as generated under Accord or Alliance frameworks.

Contacts

For Inquiries About the Project, Contact

Due to the nature of the project, there is no client and no contact.

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Task Title & Description	Anticipated Completion Date	Status	Comments	Completion Date
Nominate officers		In Progress	In Progress
Formalize procedures		In Progress	In Progress
Staff Training		Completed	Completed	06/20/2015

Projects

Summary of Investment Information

Project Description

Sponsor / Cost / Location

Development Impact

E&S Category Rationale / Risks and Mitigation

Similar Projects

Contacts

Projects

Summary of Investment Information

Project Description

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

Total Project Cost and Amount and Nature of IFC's Investment

IFC's Investment as Approved by the Board

FIG Use of Proceeds/Beneficiaries

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

IFC's Role and Additionality

E&S Category Rationale / Risks and Mitigation

Environmental & Social Categorization Rationale / Key Risks & Potential Impacts

Environmental & Social Management System (ESMS)

Mitigation Measures / Environmental & Social Action Plan (ESAP)

Press-Release

Related Environmental Document

Similar Projects

Contacts

Information on E&S Complaints and Grievance Mechanisms

Disclaimer