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ADB blue loan battles Indonesia marine pollution
US$44.2 million funding helps ALBA Tridi Plastics Recycling establish PET waste plant
The Asset 8 Jun 2023

The Asian Development Bank (ADB) has signed a US$44.2 million blue loan with ALBA Tridi Plastics Recycling Indonesia to establish a polyethylene terephthalate (PET) recycling facility in central Java.

The bank and the Leading Asia's Private Infrastructure Fund – an ADB-managed fund capitalized with a US$1.5 billion commitment by the Japan International Cooperation Agency – will each provide US$22.1 million in funding for the plant.

The certified blue loan adheres to ADB’s ocean finance framework and the defined criteria for investments under its Action Plan for Healthy Oceans and Sustainable Blue Economies. Blue loans are financing instruments that aim to safeguard access to clean water, protect underwater environments and invest in a sustainable water economy.

Plastic pollution, notes Ashok Lavasa, the bank’s vice-president for private sector operations and public-private partnerships, causes billions of dollars in irreversible harm to marine ecosystem, and it has severe impacts on economies and public health. “This project showcases the potential for PET recycling in Indonesia,” he adds, “while the certified blue loan aims to attract more investors into waste management and recycling.”

Each year, approximately 8 to 12 million tonnes of plastic ends up in the ocean. Indonesia, the bank notes, is one of the top contributors to marine plastic pollution. The Indonesian government has implemented policy initiatives targeting a 70% reduction in plastic waste leakage by 2025 and achieving near-zero plastic pollution by 2040.

The recycling plant will process PET beverage bottles into high-quality recycled PET (rPET) flakes and food-grade rPET pellets, which can be used to produce new rPET bottles.

The plant is expected to recycle up to 48,000 tonnes of PET bottles annually, diverting them from landfills, open burning or leakage into the ocean. The plant will produce 36,000 tonnes of rPET, which will offset up to 30,500 tonnes of carbon dioxide that would have resulted from using virgin PET.

Axel Schweitzer, ALBA Group Asia chairman, says: “Our project will increase food-grade rPET production capacity in Indonesia and contribute to the creation of a circular economy for plastics.”

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