The fund will also be used to reduce ocean plastic waste
Mumbai, NFAPost: The Asian Development Bank (ADB) and Indorama Ventures Public Company Limited (IVL) signed a $100 million financing package to reduce the environmental impact of plastic and promote a circular economy by boosting the capacity of IVL’s plastic recycling plants in India, Indonesia, the Philippines, and Thailand.
The plants will recycle polyethylene terephthalate (PET) plastics widely used in beverage bottles. The finance package comprises $50 million from ADB and $50 million from the ADB-administered Leading Asia’s Private Infrastructure Fund (LEAP). A $150 million loan will be provided by the International Finance Corporation (IFC), and $50 million from DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH.
ADB Vice-President for Private Sector Operations and Public–Private Partnerships Ashok Lavasa. said the recycling of plastics like PET is a must for healthier oceans, and this initiative will help to achieve that objective by partnering with IVL, which is the global leader of PET production and recycling.
“We are also excited to work closely with IFC and DEG in this important journey. There is a rising global demand for recycled plastic packaging. ADB’s support will help IVL to meet this demand by collecting and treating plastic waste that would otherwise have been released into the oceans,” said ADB Vice-President for Private Sector Operations and Public–Private Partnerships Ashok Lavasa.
Expressing happiness over the new funding, Indorama Ventures Chief Sustainability Officer Yashovardhan Lohia said he is honored to agree to this Blue Loan with ADB.
“IVL 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 value to waste. This drives improvements in waste collection systems, meaning less waste and cleaner oceans,” said Indorama Ventures Chief Sustainability Officer Yashovardhan Lohia.
Mismanagement of all plastic waste damages the marine ecosystem. 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 5 billion additional bottles are diverted from waste annually.
ADB’s loan is its first independently verified nonsovereign blue loan, following Blue Natural Capital Financing Facility’s Blue Bond Guidelines, with an assurance report from 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 $5 billion during 2019–2024.
IVL is a Thailand-listed, global business committed to develop 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, IVL supports all aspects of the circular economy to reduce the amount of waste entering the environment. IVL is listed on the Dow Jones Sustainability Index and operates 125 manufacturing facilities in 33 countries, across 5 continents.
LEAP is a cofinancing vehicle established by ADB and the Japan International Cooperation Agency to support private sector investments in energy and power generation, as well as water, urban infrastructure, transport, information and communications technology, and health.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.