FMO, the Dutch Entrepreneurial Development Bank, has committed USD 50 million to the Decarbonization of Textile, Apparel & Footwear Suppliers Fund (D-TAFS). Managed by Social Investment Managers & Advisors (SIMA), the fund is dedicated to financing the reduction of emissions across textile supply chains and is targeting USD 400 million, with a first close expected at USD 225 million.
DTAFS brings together development finance institutions, private investors and global apparel brands committed to reducing emissions across their supply chains. Among its investors is Inditex, the Spanish owner of Zara, Pull&Bear and other international fashion brands, which has committed USD 50 million to the fund. By connecting leading European and global apparel brands with textile, apparel and footwear suppliers across key manufacturing hubs in Asia, Africa, the Middle East and North Africa, and Latin America, the fund will direct financing to reduce emissions where most of the industry’s production takes place.
The textile, apparel, and footwear (TAF) industry accounts for ~8% to10% of global greenhouse gas (GHG) emissions. With global brands stepping up efforts to cut their supply chain emissions, suppliers are expected to invest in cleaner and more efficient production. Yet many small and medium-sized suppliers struggle to access financing needed to reduce their impact on the environment. D-TAFS addresses this gap by providing tailored financing solutions to support investments whose scale and complexity often prevent suppliers from accessing conventional financing.
FMO’s investment in the fund focuses on the role of energy in decarbonizing textile production. Reducing emissions across the TAF supply chain requires access to renewable energy, energy-efficient technologies, and storage solutions. FMO’s financing will cater to distributed energy developers and energy service companies (ESCOs) that provide these solutions to textile manufacturers in emerging markets.
Director of Energy at FMO, Marnix Monfort said, "Renewable energy has an important role to play in decarbonizing textile manufacturing. FMO is proud to support energy developers and service providers that bring clean and efficient energy solutions to manufacturers. Through D-TAFS, we are building on our long-standing partnership with SIMA to scale these solutions across the sector.”
“Availability of capital alone does not get these projects built. A supplier may have a strong case for replacing a boiler or modernizing certain production processes and still need help sizing and structuring the loan, convincing internal decision makers that now is the time to invest and ensuring that identified projects are implemented and commissioned properly. SIMA pairs the loan with that support and follow up that turns a pipeline into realized savings and impact,” said Jeremy Levin, Fund Manager, D-TAFS, SIMA Funds.
Social Investment Managers & Advisors (SIMA) is an SEC-registered impact asset manager founded in 2016 by Asad Mahmood and Michael Rauenhorst. SIMA invests across renewable energy access, financial inclusion, and affordable housing in emerging markets in Africa and Asia. The firm bridges the gap between institutional capital and underserved, high-impact sectors by pairing them with hands-on operational and technical assistance, all of which collectively address complex environmental and social challenges. The firm has closed 6 impact funds totalling more than $630 million, serving 173+ borrowers across 25 countries. For more information, visit www.simafunds.com.
