On July 27, the United States, through the U.S. Agency for International Development (USAID) Clean Cities, Blue Ocean program, joined Circulate Capital, an impact-focused investment management firm, and Prevented Ocean Plastic Southeast Asia (POPSEA), a plastic recycling company that is developing sorting and collection infrastructure in underserved communities across Indonesia, in announcing a partnership to expand collection and recycling infrastructure in Indonesia to generate high-quality, traceable recycled plastic.
“USAID is pleased to support this new partnership featuring a blend of public and private financing that will help meet the growing demand for recycled plastic while strengthening communities’ solid waste management systems,” said USAID Mission Director Jeff Cohen at an event held as Indonesia prepares to host this year’s G20 Summit.
“Together we will help capture and prevent otherwise harmful plastic waste from reaching the sea and transform it into profit and livelihoods for the Indonesian people.”
Initially the partnership will focus on the city of Semarang, Indonesia, one of the largest cities in Java. Like many cities, Semarang is increasingly under pressure to reduce and recycle growing volumes of waste but does not have an economically or logistically feasible recycling system in place. By 2025, 68 percent of Indonesia’s more than 270 million people are expected to live in urban areas, where only about half of the waste is collected.
“The Government of Indonesia is increasingly looking towards blended finance as an important tool for mobilizing funding to accomplish the Sustainable Development Goals,” said Scenaider Siahaan, deputy minister for development funding of the Ministry of National Development Planning (Bappenas).
“Blended finance in waste management brings opportunities for private investment to support the circular economy, closing the loop through product recycling to reduce material loss, therefore minimizing harm to the environment and discouraging resource depletion.”
The partnership will expand collection and recycling infrastructure, build local government capacity for solid waste management planning and management, and mobilize and empower the informal waste sector that is critical to local waste management, but often under-resourced.
For example, a new facility where plastics will be aggregated is set to process about 30 tons of material per day and will help to provide new income for roughly 100 employees and local waste collectors sourcing materials.
The partnership combines the strengths of development agencies and private investment to bring coordinated technical expertise and blended financing to emerging companies that are best placed to develop new, innovative models for reducing ocean plastic pollution through collection, aggregation, and recycling. Contributions from partners include:
- USAID Clean Cities, Blue Ocean’s technical assistance, drawing on more than 60 years of international solid waste management experience;
- Circulate Capital’s expertise in scaling innovation and driving growth; and
- POPSEA partners Polindo and Bantam Materials’ more than 20 years of experience in plastic collection and aggregation infrastructure, access to premium markets, and expertise in governance and traceability via the proven Prevented Ocean Plastic program.
“We’re proud to partner with USAID to support Prevented Ocean Plastic Southeast Asia to expand their best-in-class collection and recycling infrastructure across Indonesia, including in communities that have limited or no collection today,” said Regula Schegg, Circulate Capital’s Managing Director for Asia.
“Through this partnership, we collectively have the opportunity to demonstrate blended finance in action and create a blueprint for preventing plastic pollution in Indonesia and the region.”
Through the partnership, Prevented Ocean Plastic Southeast Asia aims to improve the recycling supply chain in Indonesia and provide high quality traceable recycled plastic to global markets, benefitting all actors along the waste chain—from bottle collection to consumption.
“We are delighted that this new partnership featuring a blend of public and private financing will help us to scale up collection and recycling infrastructure in Indonesia through Prevented Ocean Plastic Southeast Asia, alongside our long-term partner Bantam Materials,” said Daniel Law, CEO, Polindo.
“Working with the Clean Cities, Blue Ocean program and Circulate Capital will enable us to develop the infrastructure to meet the growing demand for traceable, recycled plastic, while creating a reliable income for communities in Indonesia.”
According to Raffi Schieir, director of Bantam Materials UK, USAID’s investment in Prevented Ocean South East Asia “is testament to the success of the Prevented Ocean Plastic model, which has proven it can be replicated on any at-risk coastline to deliver impact at scale. We’re proud to be the first recycling program to receive USAID investment and hugely look forward to seeing the social and environmental difference this partnership will make.”
Photo credit: Koldunov