Zara’s parent company has committed $50 million to a World Bank-backed financing initiative offering affordable loans for textile, apparel and footwear manufacturers investing in cleaner production technologies.
Spanish fashion giant Inditex has committed $50 million to a new $400 million textile decarbonisation fund, designed to help manufacturers in emerging markets finance energy efficiency, renewable energy and environmentally sustainable production.
Launched on November 10, 2026, the Decarbonization of Textile, Apparel and Footwear Suppliers (D-TAFS) Fund is jointly developed by the International Finance Corporation (IFC), part of the World Bank Group, and investment manager Social Investment Managers & Advisors (SIMA).
$225 Million Targeted in First Funding Round
The fund aims to mobilise $225 million initially, with subsequent fundraising targeting $400 million.
IFC has committed up to $60 million, while Inditex is contributing $50 million.
Additional investors include British International Investment, Dutch development bank FMO, France’s Proparco, the Apparel Impact Institute and the Global Environment Facility (GEF).
GEF is providing $13.8 million in concessional financing to reduce investment risks, alongside a $917,000 technical-assistance grant for chemical and waste management.
Affordable Loans for Factory Modernisation
The fund will provide long-term financing through two mechanisms: direct loans to textile manufacturers and financing for energy developers serving those factories.
Eligible investments include renewable electricity, energy-efficient machinery, boiler upgrades, water reuse, wastewater treatment and cleaner production technologies.
IFC expects the programme to support approximately 60–80 borrowers, primarily small and medium-sized enterprises in Asia and other emerging markets.
Projects will undergo financial and environmental assessments, with technical assistance supporting implementation and performance monitoring.
A New Financing Model for Textile Suppliers
The initiative addresses a major obstacle to textile decarbonisation: suppliers often lack affordable capital despite facing growing pressure from international brands to reduce emissions.
For spinning, weaving, dyeing and garment manufacturers, access to financing could accelerate investments that reduce operating costs alongside environmental impacts.
However, financing eligibility, borrowing costs and project-level emission reductions will require verification.
The next milestone is the fund’s initial financial close and deployment of its first factory investments, demonstrating whether collaborative financing can deliver measurable emission reductions and commercially viable manufacturing improvements.
