The IFC claims it has helped install new cleaner and efficient production equipment in 12 factories so far, reducing water consumption by annual 75m litres and saving US$1m in operating costs.

It acted after a series of pollution incidents in Bangladesh involving its textile sector - a serious problem for a country where 31m people lack clean water.

It has worked with six major international buyers - Hennes & Mauritz, KappAhl, Lindex, Mothercare, Levi's, and WE Fashion - and Dutch international development group Solidaridad to deliver technological improvements. The UK Department for International Development and the Norwegian Agency for Development Co-operation have also participated.

An IFC note said: "Preliminary results show that the implementation of clean and resource-efficient production methods yielded significant savings."

It claimed if the industry's 1,700 textile wet-processing units adopt cleaner production measures, they could save up to US$70m and 10.5bn litres of water annually.

The World Bank arm's Monika Weber-Fahr added: "The success of this project will allow the Bangladesh textile sector to gain a competitive edge by showcasing...a greener supply chain."