Spanish fashion group Inditex, owner of Zara, has committed up to $50 million to a $400 million blended finance fund designed to accelerate decarbonisation across global textile, apparel and footwear supply chains.
The Decarbonization of Textile, Apparel and Footwear Suppliers (D-TAFS) Fund was developed by the International Finance Corporation (IFC), the private-sector arm of the World Bank Group, and will be managed by investment firm Social Investment Managers & Advisors (SIMA).
The fund aims to mobilise capital for small and medium-sized manufacturers in emerging markets, particularly those facing financial barriers to upgrading production facilities and adopting cleaner technologies.
IFC has committed up to $60 million, while other supporting institutions include Dutch development bank FMO, France’s Proparco, British International Investment, the Global Environment Facility and the Apparel Impact Institute.
The initial financing round is expected to reach $225 million, with subsequent fundraising planned to achieve the full $400 million target.
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D-TAFS will operate through two financing mechanisms, providing direct loans to manufacturers and supporting energy service companies and developers working with textile suppliers.
Eligible investments include renewable energy installations, energy-efficient machinery, boiler upgrades, water reuse systems, wastewater treatment and improved chemical management. The fund will also provide technical assistance to help manufacturers identify investment opportunities and implement decarbonisation projects.
Inditex Chief Executive Officer Óscar García Maceiras said transforming textile supply chains requires industry collaboration and access to financing and technical expertise for manufacturers.
The initiative could create opportunities for Bangladesh’s garment industry, where manufacturers face growing pressure to reduce factory emissions while maintaining export competitiveness. Access to affordable financing could support investments in renewable energy, efficient machinery and cleaner production, although individual projects will remain subject to the fund’s eligibility and assessment criteria.
The initiative reflects growing efforts by international fashion brands and development finance institutions to address emissions at the manufacturing level, where substantial investment is needed to make global supply chains more sustainable.