Thai-listed company Indorama Ventures has secured a financing package totalling US$300 million that would help reduce the environmental impact of plastic and boost the company’s recycling plants across the region and in Brazil.
The financing package, announced on November 24, is the first-ever blue loan granted to a global plastic resin manufacturer. It will contribute to the recycling of 50 billion polyethylene terephthalate (PET) bottles globally a year by 2025, diverting plastic waste from landfills and oceans.
The facility comprises a US$150 million senior loan from the International Finance Corporation (IFC), US$50 million from the Asian Development Bank (ADB), US$50 million from the ADB-administered Leading Asia’s Private Infrastructure Fund (LEAP), and US$50 million from DEG, a German development finance institute.
The funding will help Indorama increase its recycling capacity in Thailand, Indonesia, Philippines, India and Brazil – countries which IFC describes as grappling with mismanaged and serious plastic waste in the environment – and invest in renewable energy and resource efficiency projects.
This marks IFC’s first blue loan exclusively focused on addressing marine plastic pollution. On the other hand, ADB’s loan is its first independently verified non-sovereign blue loan, following Blue Natural Capital Financing Facility’s blue bond guidelines, with an assurance report from energy consultancy firm DNV GL. It is aligned with ADB’s action plan for healthy oceans and sustainable blue economies, which calls for ADB to expand its investments and technical assistance to US$5 billion during the 2019 to 2024 period.
“The recycling of plastics like PET is a must for healthier oceans, and this initiative will help to achieve that objective by partnering with Indorama Ventures, which is the global leader of PET production and recycling,” says Ashok Lavasa, vice-president for private sector operations and public–private partnerships at ADB. “There is a rising global demand for recycled plastic packaging. ADB’s support will help Indorama Ventures to meet this demand by collecting and treating plastic waste that would otherwise have been released into the oceans.”
Adds Alfonso Garcia Mora, IFC vice-president for Asia and Pacific: “This blue loan complements IFC’s ongoing work on a circular economy for plastics and enhanced waste management in Asia. It demonstrates that recycling can be an effective intervention to address plastic waste while supporting our overall sustainability and climate change agenda.”
Commenting on the blue loans, Yashovardhan Lohia, chief sustainability officer at Indorama Ventures, says the company is building the recycling infrastructure needed to divert waste from the marine environment. “By using post-consumer PET bottles as a feedstock for new bottles, we give waste an economic value,” he says. “This drives improvements in waste collection systems, meaning less waste and cleaner oceans.”
Indorama Ventures is aiming for a minimum of 750,000 metric tonnes of recycled PET globally by 2025. A key feature of the investment is to create value out of waste – processing post-consumer PET bottles into new bottles that would have ended up in landfill or been processed into lower-value products – by promoting higher-value bottle-to-bottle recycling, which brings significant value generating potential.
Mismanagement of all plastic waste damages the marine ecosystem, according to ADB. It is estimated that Asia accounts for more than 80% of all plastics released into the ocean. Globally, around half of PET is recycled. In a circular economy, products and materials are redesigned, recovered and recycled to divert plastic waste from landfills and oceans. The plants to be built under the project are expected to be fully operational by 2022, and will ensure that nearly five billion additional bottles are diverted from waste annually.
Besides helping Indorama Ventures increase its recycling capacities in the five countries, the financing will also help the company invest in other climate-related activities. Indorama Ventures will install more solar panels at facilities in Thailand and India with other sites to follow, while also securing more renewable energy for its manufacturing facilities.
With IFC funding, Indorama Ventures is working on a waste heat recovery (WHR) project at its PET and fibre manufacturing facility in Indonesia where energy efficiency (EE) measures are expected to reduce the facility’s carbon footprint by as much as 25%. In addition to developing innovative WHR projects, Indorama Ventures will be developing EE projects in Brazil and other manufacturing facilities to meet its corporate targets.
Indorama Ventures is a global business committed to developing technologies and processes that use post-consumer PET and polyester waste materials as feedstock for the future. As the largest producer of 100% recyclable PET in the world, Indorama Ventures supports all aspects of the circular economy to reduce the amount of waste entering the environment. Indorama Ventures is listed on the Dow Jones Sustainability Index and operates 125 manufacturing facilities in 33 countries, across five continents.