IFC Recycling Project in Mexico to Help Local Laborers and the Environment
IFC, a member of the World Bank Group, is today disbursing on its loan to Petstar SA de CV, a subsidiary of Promotora Ambiental SAB de CV, that will build and operate a bottle-to-bottle recycling facility in Toluca, Mexico. In addition to environmental benefits, the project will have a significant impact through an innovative social responsibility program, which will help improve the welfare of informal laborers and reduce the incidence of child labor in the waste sector.
Petstar’s state-of-the-art facility will convert post-consumer plastic bottles into resin, which will be resold to Mexico’s soft drink bottling industry. It will be able to recycle over 30,000 tons of plastic bottles annually, representing 900 million bottles with a volume equivalent to a soccer stadium. This will help reduce informal garbage dumps and contribute to greater longevity for formal landfills. Petstar has agreements with Bonafont SA de CV, Grupo Embotelladoras Unidas SAB de CV, and Pepsi Bottling Group, for the sale of 18,000 tons or 90 percent of the facility’s initial capacity.
IFC provided a $24.5 million loan to the project—$13 million for its own account and $11.5 million in a loan participation from Cordiant Capital. IFC also provided financial and advisory support to develop the social responsibility program, which will improve access to education for waste collectors and their children. The program will also test new models for formalizing waste separation and engage public and private stakeholders to influence long-term change in Mexico’s waste management sector.
Alberto E. Garza Santos, CEO of Promotora Ambiental SAB de CV, said, “The new plant will have an important environmental and social impact in Mexico, while also helping transform Petstar into a solid and profitable operation. We would like to thank IFC and Cordiant for their vision and commitment to Petstar, an innovative project that is unique in Latin America.”
Rashad Kaldany, IFC Director for Infrastructure, said, “IFC is delighted to support a project that will significantly impact the lives of a marginalized segment of the population in Mexico. This project reflects the World Bank Group’s increased integration of environmentally sound initiatives in its efforts to reduce poverty.”
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