InvestEU: EIF invests €50 million to support circular plastics

• The EIF has invested €50 million in Infinity Recycling’s Circular Plastics Fund to accelerate circularity in the plastics industry.
• With a target size of €150 million, the fund will bolster the industrial and commercial scale-up of companies enabling advanced recycling of plastics.
• This agreement was made possible with the support of the InvestEU programme, which aims to unlock over €372 billion in additional investment from 2021 to 2027.

The European Investment Fund (EIF) has signed a €50 million participation in Infinity Recycling’s Circular Plastics Fund I SCSp, a European impact fund that invests in companies developing new processes for the advanced recycling of plastics. The fund supports companies with scalable technologies that need financing for the industrial and commercial scale-up of their operations. The Circular Plastics Fund has a target size of €150 million, a third of which is covered by the EIF’s commitment. The transaction is supported by the InvestEU programme, which aims to mobilise over €372 billion in additional investment for EU policy priorities over the 2021-27 period, as well as by the European Investment Bank.

As traditional (mechanical) recycling causes plastics to lose their initial properties (safety for food use, strength, or elasticity), the Circular Plastics Fund supports advanced recycling technologies. These include chemical processes that enable the full recycling of end-of-life plastic waste, producing new plastics with virgin-equivalent properties and reintroducing them into the existing value chain. The fund can thus play a role in enabling a fully circular plastics industry.

“For most Europeans recycling is already an integral part of their daily lives. Establishing a true circular economy also requires industrial solutions that allow plastics to be recycled fully, efficiently and many times over,” commented Commissioner for Environment, Oceans and Fisheries Virginijus Sinkevičius. “Today’s funding through InvestEU will help innovative European companies advance a circular plastics industry, acting as a booster for the EU’s green transition.”

“The proportion of plastic packaging that is recycled is still far too low,” said EIF Chief Executive Marjut Falkstedt. “Our climate change and environmental sustainability challenge is a combination of many different issues, and the excessive use of plastics is a major factor. A lot can be achieved by changing our habits, but innovation is key to finding new ways of dealing with structural plastic use and making sure we use every piece of plastic as many times as possible. With the support of the InvestEU programme, we are very happy to be supporting this kind of innovation.”

“Demand for the use of recycled commodities in plastics production is on the rise, but only a few advanced plastics recycling technologies have been able to achieve commercial scale,” added Jeroen Kelder, Managing Partner at Infinity Recycling. “While these technologies are often viable, many companies lack the specialised financial structuring and business development skills required to scale up production, source high-quality inputs and establish supply agreements with offtake counterparties. We are thrilled by this investment from the EIF, which pushes our Circular Plastics Fund beyond the €105 million threshold and empowers us to accelerate circularity in the plastics industry through an impact-driven strategy.”

The fund is established in Luxembourg and is managed by Rotterdam-based fund manager Infinity Recycling BV. The InvestEU support for the EIF’s participation in the fund falls under the initiative’s thematic “Joint Equity Product” and “Climate & Environmental Sub-Product” windows.

Background information

The European Investment Fund is part of the European Investment Bank Group. Its main goal is to support microenterprises and small businesses by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments that specifically target this market segment. In this role, the EIF contributes to the pursuit of key EU policy objectives such as competitiveness and growth, innovation and digitalisation, social impact, skills and human capital, climate action and environmental sustainability.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of sustainable recovery. It also helps mobilise private investment for EU policy priorities, such as the European Green Deal and the digital transition. InvestEU brings together under one roof a multitude of EU financial instruments previously available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is deployed through implementing partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increasing their risk-bearing capacity and thus mobilising at least €372 billion in additional investment.

Infinity Recycling BV was established in 2019 to create markets for end-of-life waste streams by investing in advanced recycling technologies that enable circularity in the plastics industry. Their first offering, the Circular Plastics Fund, contributes to solving the plastic waste problem and unlocking much-needed capacity in high-demand recycled commodities. The fund implements a return and impact-driven investment strategy that drives value creation in advanced recycling and accelerates the transition to a circular economy for plastics. Since its first closing in February 2022, the fund has made seven investments. Building on the momentum in investor interest and deployment, the fund is well on its way to final closing, projected for Q4 2023.

Source

European Commission, press release, 2023-08-31.

Supplier

European Commission
European Investment Bank (EIB)
European Investment Fund (EIF)
European Union
Infinity Recycling B.V.

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