09/13/2023 | Press release | Distributed by Public on 09/13/2023 09:12
São Paulo, Brazil, September 13, 2023-IFC is investing in Orizon Meio Ambiente S.A, an environmental service provider, to help promote innovative waste solutions and increase recycling capacity in Brazil, enabling a strong circular economy. This will contribute to greater sustainability of the Brazilian waste sector and help the country's efforts to mitigate climate change impacts.
IFC's eight-year loan of BRL 130 million to Orizon is the first sustainability-linked loan for the waste management sector in emerging markets. This investment supported financing the construction of Latin America's largest mechanized material recovery facility (MRF), in the state of Pernambuco, along with the expansion of two leachate treatment plants in the state of Rio de Janeiro and provide capital investments for three of Orizon's sanitary landfills. The MRF in Pernambuco operates on a dirty mixed waste stream and has the capacity to process approximately 2,000 tons of waste a day. This will help reduce the amount of waste going to landfills by increasing recycling rates.
The material recovery from solid waste and reuse of water from treated leachate will help boost recycling in Brazil and contribute to climate change mitigation, as the adequate disposal and treatment of waste prevents methane gas from being released to the atmosphere. Methane gas is known to be significantly more polluting than CO2, thus materially impacting on global warming.
IFC is also sharing its global expertise to better integrate recycling and wastewater management operations into Orizon's current processes. IFC and Orizon will work together to promote innovative waste solutions that will enable a circular economy and protect the environment.
"Given our strong commitment to generating value from sustainable solutions, IFC's investment and expertise will help us evaluate opportunities in new technologies focusing on adding value to waste. IFC will support the company's ongoing progress in environmental, social, and governance (ESG) practices, helping the company direct its growth toward a more circular economy approach," says the CEO of Orizon VR, Milton Pilão.
According to Carlos Leiria Pinto, IFC Brazil Country Manager, "this project is an important step towards closing the large investment gap of the waste management sector in Brazil. Innovative financing tools, such as the sustainability-linked loan, will diversify the sources of financing in the sector and help promote more inclusive and sustainable urban services in Brazil."
Adequate waste management solutions have been a challenge for Brazil's Solid Waste Management (SWM) sector due to limited public sector investment capacity. The participation of the private sector will be key to provide significant investments in new landfills and waste treatment infrastructure, as well as help the country achieve its target of eliminating dumps by 2024 and improving its rate of recycling.
Sustainable waste management is a global challenge stemming, and rapid urbanization and population growth have pressured the pace of investments in the waste sector. The World Bank estimates that about two billion tons of municipal solid waste management are produced every year globally, of which at least one-third is not managed in an environmentally sustainable manner. This figure is projected to grow to 3.4 billion by 2050, according to the World Bank Report "What a Waste 2.0: A Global Snapshot of Solid Waste Management to 2050."
IFC has been investing in Brazil's private sector since 1957 to address the country's most critical development challenges, including those of urbanization, social inclusion, competitiveness and productivity, and management of natural resources.
With ESG on its DNA, Orizon VR is a waste treatment and recovery company that believes in the sustainable development of cities and constantly invests in innovation and technology to generate clean energy, promote a circular economy and protect the environment. It currently manages 15 ecoparks across Brazil, taking care of waste generated by nearly 40 million people from nine Brazilian states.
IFC - a member of the World Bank - is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org