RMG industry faces $4.8b funding gap for green transition

Bangladesh’s readymade garment (RMG) industry faces a $4.8 billion funding deficit against the estimated $6.6 billion needed between 2025 and 2029 to transition to sustainable manufacturing, a gap that risks slowing decarbonisation efforts and eroding global market competitiveness.

Representing roughly 73 percent of the total investment needed, the shortfall underscores the difficulty of mobilising green capital for the apparel sector, speakers said at a seminar in Dhaka last week.

Hosted at a Gulshan hotel, the dissemination session – titled “Unlocking Green Finance Pathways for Bangladesh’s RMG Sector” – was jointly organised by LightCastle Partners and Policy Exchange Bangladesh (PEB).

Research shared at the session indicates that while approximately $1.6 billion in financing has been secured and an additional $175 million is in the pipeline, the majority of the required funding remains unallocated. The projections are tied to industry-wide targets to cut greenhouse gas emissions, which the study identifies as vital for the garment sector’s long-term viability and export competitiveness. Speakers also noted that the ongoing global energy crisis has made energy security and reduced reliance on fossil fuels even more urgent.

At the event, LightCastle Partners Principal Business Consultant Shoumik Shahriar presented the findings on the green investment gap, outlining major bottlenecks in accessing capital as well as emerging financing opportunities.

To bridge the deficit and lower emissions, participants called for more accessible green financing, higher capital inflows, and closer coordination among the government, lenders, and industry stakeholders. They emphasised expanding the number of environmentally friendly factories and making it easier for small and medium-sized garment producers—which often struggle to adopt green production methods—to obtain both financial and technical assistance.