Creating precedents for Blue Finance in plastic manufacturing through IFC’s first labelled Blue Loan

Blue Finance helps address pressing challenges by contributing to economic growth, improved livelihood, and the health of marine ecosystems. The ocean economy is expected to double to $3 trillion by 2030, employing 40 million people, as compared to 2010. Innovative financing solutions are key to enhancing ocean and coastal preservation and increasing clean water resources, and Blue Finance has a huge potential to help realize these goals. In November 2020, Indorama Ventures (IVL) became the first-ever resin PET (plastic) manufacturer to receive a Blue Loan. A Blue Loan is an innovative financial instrument whereby the funds raised are used exclusively for supporting eligible ‘blue’ projects that enhance ocean and water preservation (SDG 6-14). This US$300 million Blue Loan was arranged by the International Finance Corporation (IFC). The financing package was composed of a $150 million senior loan from IFC to IVL and parallel loans of $150 million from the Asian Development Bank (ADB) and Deutsche Investitions-und Entwicklungsgesellschaft (DEG). This financing was also IFC’s first Blue Loan. IVL will use the Blue Loan to help finance its plans to recycle over 50 billion plastic bottles annually by 2025 through the expansion of recycling capacity and improving waste management. The project is expected to divert PET waste from land and marine environments through recycling and reduce IVL’s emission intensity by replacing virgin plastic with recycled plastic. The loan will also help IVL invest in installing more solar panels at its facilities in Thailand and India, with other sites to follow, while also securing more renewable energy for its manufacturing operations. With IFC financing, IVL is also working on a Waste Heat Recovery project at its PET and fibre manufacturing facility in Indonesia. The project promotes a circular economy for PET bottles, helping to demonstrate innovative business models for valorising waste and to promote scalable solutions for tackling ocean plastic pollution. The Blue Loan also provided the groundwork for a new US$200 million loan from IFC to IVL in July, 2024, which will also support the company’s sustainability programs in India, Thailand and Indonesia. IFC has been at the forefront of advancing the field of Blue Finance by spearheading the development and implementation of detailed criteria and guidance for its structuring. IFC played a pioneering role in this area through the publication of the first-ever guidelines specifically tailored for the private sector's engagement in Blue Finance (see secondary links below).