Global Fashion Agenda (GFA) has partnered with Copenhagen Infrastructure Partners (CIP) to secure commitments from the fashion industry to invest in an offshore wind park off the coast of Cox’s Bazar, Bangladesh. The wind park will have an approximate capacity of 500MW, making it the first utility-scale offshore wind farm in Bangladesh to support the country in reaching its goal of supplying 40% of the nation’s power from renewable sources by 2041. The project is expected to contribute to creating job opportunities, stabilising energy supply, and reducing emissions by approximately 725,000 tonnes annually.

Copenhagen Infrastructure Partners (CIP) has launched its Growth Market Fund II (GMF II), a fund with a target size of USD 3 billion focused on renewable energy investments in high growth, middle income countries. This fund will develop and finance the project, in collaboration with a local partner. GFA and CIP are facilitating at least USD 100 mn investment from the fashion industry in the construction phase of the project. H&M and BESTSELLER are the first investors under this structure, which remains open for other fashion companies to join. The fashion industry is thus co-investing together with CIP’s GMF II in the Bangladesh wind park.

As strategic partners of GFA, the international fashion companies BESTSELLER and H&M Group have pledged to invest in the construction of the offshore wind park in Bangladesh. Furthermore, BESTSELLER has underwritten the full amount of USD 100mn, which is the minimum needed to invest in the project.

GFA and CIP are now calling for additional fashion brands/retailers to scale the project’s impact further. Get in touch at impact@globalfashionagenda.org to find out more.

Fashion companies such as brands and retailers are eligible to participate if they are aligned with the UNFCCC’s Fashion Industry Charter for Climate Change objective of 50% emission reduction by 2030 and net zero by 2050 and can provide a USD 10 million or higher investment. The collective approach not only represents the shared responsibility for the value chain, but also incentivises other market participants to contribute. GFA and CIP are now calling for additional fashion brands/retailers to scale the projects’s impact further. Get in touch at impact@globalfashionagenda.org to find out more.

The project is currently in early-stage development by CIP, with wind park operations expected to commence in 2028. The project is contingent on the outcomes of feasibility studies that will be conducted in the coming years as well as customary permitting, contracting and other development activities that are typical for a project of this nature.

More than 70% of the fashion industry’s GHG emissions come from upstream activities and current operations predominantly rely on non-renewable energy sources, such as petroleum, gas, oil, and coal. A multitude of solutions are needed to fully decarbonise the fashion industry’s value chain, from facility energy efficiency and electrification to national grid improvements and shifting power generation away from fossil fuels such as coal. Changing the industry power supply to 100% renewable energy across all processing stages would make the biggest single contribution to CO2 reduction and requires infrastructure solutions at scale. Proactive industry participation through equity investment in new power generation capacity is critical to this facilitating cost-effective and rapid decarbonisation. GFA aims to support this by providing opportunities for fashion companies to collectively invest the necessary capital in renewable energy infrastructure.

Subject to successful project development, the total investment in the wind park is expected to be approx. 1.3 bn USD. The parties expect that the majority part of the construction of the project will be financed through construction debt while the equity will be provided by CIP’s Growth Market Fund, local partner Summit Power and 100 Mio USD investment from the fashion industry.

This initiative complements existing financing solutions, such as climate and/or fashion funds due to its exclusive focus on scaling up the availability of renewable energy in manufacturing countries through investments in renewable energy projects at scale. For individual fashion brands, it is almost impossible to directly invest in renewable energy projects, especially in larger projects in more complex markets in manufacturing countries. GFA and CIP overcome this barrier by enabling collective investments in renewable energy infrastructure in manufacturing countries. The Bangladesh wind park is the first of its kind investment and we expect similar collective investments to come.

The fashion industry’s investment will become a separate vehicle alongside CIP’s larger Growth Markets Fund II. It will be structured with its own governance structure and to a certain extent its own conditions, to be decided upon by CIP and the participating brands.

Pre-feasibility studies have been completed. The project has received an in-principle approval to conduct feasibility studies to further advance the development of the project, including wind measurement, environmental impact assessment, seabed assessment and other permitting activities. These studies will help evaluate the site’s attractiveness and potential for constructing an offshore wind farm.

GFA has been raising the fashion industry’s sustainability agenda, since its origination at COP15 in Copenhagen. Combatting climate change is a key component in GFA’s holistic sustainability framework that advocates for a Net Positive fashion industry that gives more to the natural world, people and communities and the global economy than it takes. In 2020, GFA published Fashion on Climate together with McKinsey, a groundbreaking publication that presented the industry’s baseline and accelerated abatement pathways, pinpointing the importance of renewable energy in production. This research informed the approach to enabling collective financing in renewable energy infrastructure.