Bangladesh Factories Get Funds for New Safety Standards

WASHINGTON — The Alliance for Bangladesh Worker Safety said it has reached a breakthrough in providing affordable financing to hundreds of its garment factories in Bangladesh that are undergoing extensive remediation to comply with new fire, building and electrical standards. “Our goal is to create a credit facility of $20 million to $35 million via five local banks,” the Alliance said in an 18-month progress report released Monday. The Alliance, which includes Wal-Mart Stores Inc., Gap Inc., VF Corp. and Target Corp., said it will work in partnership with international finance institutions to provide financing to Alliance factories through the new credit facility. To “encourage” the banks to provide loans to member factories, the Alliance said it will provide technical assistance to the financing organizations on remediation progress and cover administrative and start-up costs and up to $2 million in a “first-loss guarantee.” “Although this facility is still in the start-up phase, it represents an important breakthrough in providing access to affordable financing,” the Alliance said. The proposed financing comes at a pivotal time for the group, one of two industry initiatives launched in the aftermath of two factory tragedies that claimed the lives of more than 1,240 people and cast a global spotlight

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