Deni Ghifari, Jakarta – The Asian Development Bank (ADB) has signed a deal for a US$44.2 million loan for PT ALBA Tridi Plastics Recycling Indonesia, the Indonesian subsidiary of ALBA Group Asia, to establish a polyethylene terephthalate (PET) recycling facility in Central Java.
The multilateral development bank will provide $22.1 million, while the other half will be covered by its intermediary, Leading Asia's Private Infrastructure Fund (LEAP), according to a press statement released on Tuesday.
"This project showcases the potential for PET recycling in Indonesia, while the certified blue loan aims to attract more investors into waste management and recycling," said ADB vice president for private sector operations and public-private partnerships Ashok Lavasa in the statement.
Approximately 8 million to 12 million tonnes of plastic end up in the ocean, and Indonesia is one of the top contributors to marine plastic pollution, according to the statement.
The government has implemented policy initiatives under Presidential Regulation No. 97/2017 on household waste management to reduce plastic waste leakage by 70 percent by 2025.
Despite various initiatives put in place since 2018, up until 2021, the reduction stood at a mere 28.5 percent, according to a report from CNN Indonesia, which is a far cry from the government's goal of near-zero plastic pollution by 2040.
The recycling plant ALBA is meant to recycle PET beverage bottles into high-quality polyethylene terephthalate (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, according to the release, and it 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.
"Our project will increase the food-grade rPET production capacity in Indonesia and contribute to the creation of a circular economy for plastics," said ALBA Group Asia Limited chairman Axel Schweitzer, as per the statement.
"We are excited to do more projects like this in Indonesia and the wider Southeast Asia region and look forward to partnering with ADB to explore future opportunities," he added.
Germany-based ALBA Group has worked in waste management and the recycling industry for 50 years in Europe and more than 20 years in Asia. It set foot in Indonesia in 2022 when it entered a partnership with PT Tridi Oasis Group and created PT ALBA Tridi Plastics Recycling Indonesia.
The term blue loan refers to an increasingly popular financing instrument that aims to safeguard access to clean water, protect underwater environments and develop a sustainable water economy.
Established in 2016, LEAP is an ADB-managed fund capitalized with a $1.5 billion commitment from the Japan International Cooperation Agency and founded to focus on environmentally friendly infrastructure projects.