IFC Helps Promote Competitiveness and Sustainable Growth in Cambodia’s Garment Sector
Despite the challenges of COVID-19, local apparel and textile suppliers have reduced their energy and water consumption through a range of sustainable solutions as part of an IFC program that aims to increase the efficiency of resources and reduce operating costs.
As part of IFC’s improvement program in Cambodia, ten suppliers with cut and sew and garment washing businesses implemented resource efficiency measures in 2019 and 2020, saving energy consumption. energy and water by 18% and 29% respectively. It’s a move that helps boost productivity while supporting the country’s climate goals.
Over a period of 22 months, participating manufacturers implemented a combination of low-cost and more complex resource efficiency initiatives, such as preventive measures to avoid steam losses or the use of very effective.
Given the pandemic, so far about 60% of the recommendations have been implemented. Once fully adopted, the interventions could collectively reduce annual energy consumption by 29%, water by 44% and greenhouse gas (GHG) emissions by 25% compared to 2018 figures.
Cambodia’s garment industry employs over 750,000 workers, mostly women, contributing over a third of the country’s gross domestic product (GDP).
With $11.3 billion in apparel exports in 2021, the sector continues to be the country’s largest exporter. However, high energy costs and low productivity are impacting Cambodia’s competitiveness in the region.
High energy costs and low productivity have impacted the competitiveness of Cambodia’s garment industry, said Rana Karadsheh-Haddad, IFC Asia-Pacific regional director for manufacturing, the agro-industry and services.
Karadsheh-Haddad explained that this is why IFC supports the greening of global textile value chains at the local level to promote sustainable private sector growth and improve the competitiveness of local manufacturers.
Building on these positive results, IFC will leverage its partnerships with leading global brands to drive sustainability in Cambodia’s apparel sector, drive recovery, and build resilience.
Local suppliers with better sustainability performance will benefit from price incentives from IFC’s Global Trade Supplier Finance (GTSF) program, which provides short-term financing to suppliers exporting to international buyers, discounting invoices once they are approved by the buyer. In 2021, the GTSF program provided $276 million to Cambodian suppliers.
IFC’s Cambodia Improvement Program (CIP) has been implemented since 2019 with support from Korea’s Ministry of Economy and Finance. The objective is to increase the competitiveness, productivity and sustainable growth of the garment sector, contributing to the achievement of Cambodia’s national target of 40% reduction in its GHG emissions by 2030.
The CIP is part of IFC’s broader effort to decarbonize manufacturing industries across Asia by sharing knowledge and expertise on resource efficiency, renewable energy and the circular economy. IFC has implemented similar programs in Bangladesh, Pakistan and Vietnam. Heng Panha – AKP