IDB Invest Keeps Promoting Honduras’ Sustainable Textile Sector with Elcatex Group Financing Deal
• The funds will support job creation, increased purchases from local SMEs and the integration of regional value chains, as well as the group's decarbonisation strategy.
IDB Invest has granted a $40 million financial package to Elcatex and San Juan Textiles, both members of the Elcatex Group, one of the main textile groups in Honduras with more than 15,000 employees. The financing consists of $25 million from IDB Invest and $15 million in mobilized capital.
In addition, IDB Invest will offer technical advisory services for the development of a Net Zero strategy, identifying greenhouse gas mitigation and compensation actions for a target year.
The funds from this project will support the construction and adaptation of civil works, as well as acquisition of textile machinery and equipment to increase the production of the San Juan Textiles plant by 50%, in addition to the purchase of sewing equipment and conditioning of two new sewing plants.
A large part of the resources will be used for the acquisition and adaptation for the operation of efficient machinery, which will reduce the consumption of energy and water per productive unit. In addition, the funds will serve to increase purchases from local suppliers, mostly small and medium-sized companies, by 91%.
This financing deal will boost Elcatex Group's exports and will encourage the creation of more than 2,000 new jobs. The new plant is located in San Juan Innovation Park in Choloma, a city located 45 minutes from the main port of Honduras.
This is the second deal that IDB Invest has conducted with Elcatex Group and demonstrates IDB Invest's commitment to supporting the integration of regional value chains, one of the strategic pillars of the IDB Group's Vision 2025, contributing to the flow of trade through exports and the generation of employment through expansion.
This project is expected to contribute to six United Nations Sustainable Development Goals (SDGs): No Poverty (SDG 1), Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), Reduced of inequalities (SDG 10), Responsible production and consumption (SDG 12) and Alliances to achieve the objectives (SDG 17).
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $14.1 billion in asset management and 325 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
About Elcatex Group
The Elcatex Group was founded in 1960 by Juan Miguel Canahuati, a pioneer in the textile industry in Honduras. The Group has diversified its operations with four business divisions: textiles and synthetic filament; Energy; industrial parks; and technology and innovation, which generate 15,000 direct jobs impacting more than 60,000 people. Elcatex and San Juan Textiles are leading companies in the market with an annual production of 160 million pounds of fabric, operating eight sewing plants that produce more than 270 million pieces of clothing a year (basic t-shirt, sweatshirts, men's underwear and sports clothing.) The US is its main export market, taking advantage of the competitive and comparative advantages of Honduras (geographical location, labor availability, regulatory framework with incentives, free trade agreements, among others).