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How to make energy efficient blue jeans

IDB financing for renewable energy paves the way for denim maker in Ecuador to boost output while cutting energy costs

One of the oldest traditional textile manufacturers in Ecuador, La Internacional S.A., is not only looking for the latest trends in denim fashion, but also looking for ways to become more competitive and grow in a sustainable way.

In order to achieve this goal, the San Antonio de Pichincha, Ecuador-based company has teamed up with the Inter-American Development Bank (IDB) to boost investments on renewable energy and energy efficiency.

With technical and financial support from IDB through a $25 million syndicated loan, La Internacional will buy new turbines to expand electricity production by 44 percent at a small run-of-river hydropower plant located on the Guallyabamba River. It will also install new denim production lines and modernize its equipment and machinery.

The project will pave the way for the company to add 120 jobs and expand output by as much as 80 percent by 2013. Most of this new production will be exported to other countries in the region. The acquisition of two new turbines is expected to lead to an emission reduction of approximately 10,000 tons of CO2 per year when compared to electricity generated from fossil fuels.

Furthermore, the company is expected to further boost energy savings following an energy audit financed by the IDB. The audit revealed that small adjustments such as upgrading steam boilers, pumps, a compressed air system, lighting and engines for the transportation of materials may enable the company to slash energy use by as much as 25 percent. This would also mean an additional emissions reduction of around 5,000 tons of CO2 per year.

“We have received extremely valuable information from the energy efficiency audit,” said Eduardo Veintimilla, Industrial Director of La Internacional. “There are a series of recommendations, including some issues which we have never even observed, which are very important for the future of our company”

The financing consists of $10 million direct lending from the IDB, and another $15 million from the B-Lender, Banco do Brasil. La Internacional S.A. is owned by Vicunha Textil S.A., a leading Brazilian maker of denim, among other products. The loan was fully disbursed in April.