DBL Group, a ready-made garment and textile giant of Bangladesh, is stepping up on plans to establish a factory in Ethiopia that will provide around 4,000 jobs and be supported by long-time customer Hennes & Mauritz (H&M).

Fast fashion retailer H&M has committed to becoming a long-time buyer and supporting the factory with expert knowledge in sustainable textile production. The Mekele-based integrated knitting, dyeing and garment facility will be solely owned by DBL Group, with Swedish state-owned investment firm Swedfund investing US$15m through a loan for the facility.

According to local reports, the total investment will be in the region of $100m, with the Ethiopian Development Bank has extending an additional $55m loan to the Bangladesh company.

Anna Ryott, managing director at Swedfund, said that the factory will be a long-term sustainable industrial plant in every aspect and will be an important step for developing the textile industry in Ethiopia.

MA Rahim, vice president of DBL Group, says it is a "milestone for us to build an integrated textile factory entirely focused on export.”

The agreement was signed at the Swedish Embassy in Addis Ababa last week. Decent working conditions, job creation for women, and environmental considerations are some of the key goals for the project aimed at pushing one of Ethiopia's prioritised industry sectors forward.

The collaboration also involves local and international partners to enhance the know-how around sustainable production of ready-made garments in Ethiopia.