The FINANCIAL — IFC, a member of the World Bank Group, arranged a $95 million financing package to Hexagon Solid Waste to help build and operate solid waste management and organomineral fertilizer production facilities in Turkey. Hexagon Solid Waste’s innovative business will increase agricultural productivity and further Turkey’s efforts to build environmentally sustainable cities.
IFC is providing a loan of $42 million and investing $20 million in equity along with a €30 million loan from the Infrastructure Crisis Facility Debt Pool, an independent body overseen by Cordiant Capital, a Montreal-based emerging markets investment fund. The debt financing will be used to fund Hexagon Solid Waste’s first two facilities at Pamukova and Bilecik, according to IFC.
Hexagon Solid Waste, a Kýraca Group company, is the first private solid-waste management company in Turkey to convert municipal, industrial, and agricultural waste into high-quality organic content fertilizer, which creates higher crop yields and improves soil quality, especially in areas with low organic material content. Hexagon Solid Waste has an operational facility in Pamukova, with three new facilities under different stages of development in Bilecik, Soke, and Odemis in Turkey. Once these are fully operational, Hexagon will collect about 211,000 tons of municipal solid waste and sell up to 425,000 tons of organomineral fertilizer each year.
Turkey’s population of 75 million produces 32 million tons of waste each year. Yet its 52 landfills that comply with EU standards have a total capacity of 400 million tons, and will be full in 10 years. As a result, waste management models that offer an alternative will be indispensable in the years ahead.
“Hexagon Solid Waste is an integrated solid waste management facility, and one of its kind in the industry,” said, Jan Nahum, Chairman and CEO of Hexagon Solid Waste. “We produce biogas, electricity, compost and fertilizer while collecting household and animal waste. We know we are doing something very good and important for the community at large. Our objective is to develop a systematic approach and a comprehensive business model that could be rolled out domestically and then internationally. We feel honored to be partners with IFC and ICF Debt Pool.”
The facilities are expected to establish a contractual basis for the provision of solid waste management services by the private sector in Turkey. The new facilities will be designed with environmental benefits and provide a model for municipalities at a time when they need to consider international standards.
“Turkish cities are among the world’s fastest growing, and are facing many of the challenges of urbanization,” said Carsten Mueller, IFC Regional Industry Head of Manufacturing, Agribusiness and Services in Europe, Middle East and North Africa region. “We are very pleased to partner with pioneering companies, like Hexagon Solid Waste, who are developing innovative and sustainable solutions to address global issues in the areas of waste management and agricultural productivity.”
Andy Bainbridge, Chairman of the ICF Debt Pool Board, said: “Furthering the ICF Debt Pool’s mission, this loan to Hexagon Solid Waste will enable the completion of a pioneering waste management and fertilizer production project in Turkey for which limited commercial financing was available. Our loan is expected to catalyze the growth of the waste-to-fertilizer and waste-to energy sectors in Turkey by demonstrating the viability of such a business model.”
IFC has been supporting private sector development in Turkey for 50 years. With a $4.3 billion outstanding portfolio, Turkey is the third largest country in IFC’s global portfolio. In line with the Turkey Country Partnership Strategy, IFC invested a record $2.8 billion in private sector projects in Turkey in fiscal 2012-2015.