Plastic Recycling Plant-Financing and Loan
The global plastics economy is largely linear. Plastics are produced, used and more than half of them are disposed of with no recovery. It is on record that, about 95% global of plastics are sent to landfill and only 13% recycled. Moreover, some 1m tones of plastic consumption per annum is single-use plastics, with Australia one of the world’s biggest users, generating around 60kg of single-use plastic waste per person, every year. “Closing the loop” between new and recycled packaging is critical to increasing circularity of the economy. Over a 12-month period, amid the height of Covid-19, the two financiers led complex negotiations that focused on a fundamental shift in the financing structure that was required to meet the requirements of Circular Plastics and its investment-grade corporate sponsors. Dissimilar to a pure-play SPV project financing, the structure has unique features that changed the approach to risk allocation and mitigation, and has implications for the way thes...