Commonwealth Bank is supporting three clients in a joint venture to build Australia's largest polyethylene terephthalate (PET) recycling facility in regional Australia, an initiative that will create dozens of jobs and recycle the equivalent of around 1 billion PET plastic bottles.
Waste collector Cleanaway Waste Management Ltd., packaging producer Pact Group Holdings Ltd and leading drinks company Asahi Beverages have combined their expertise to form Circular Plastics Australia PET (CPA), a joint venture that will significantly boost Australia's PET recycling capacity.
CPA's facility, under construction in Albury-Wodonga, will be Australia's largest PET recycling facility with the ability to turn used PET plastic into more than 20,000 tonnes of new bottles and food packaging each year.
Commonwealth Bank played a leading role in supporting CPA, working alongside the Clean Energy Finance Corporation (CEFC), to tailor a flexible financing solution with appropriate controls in place, while recognising the strengths, and meeting the objectives, of the sponsors. Commonwealth Bank provided half of the $33 million debt finance package to CPA, with the CEFC financing the other $16.5 million.
"As Australia's largest bank, we are delighted to support three of our key clients in making this important project a reality and advancing Australia's circular economy. Our structured finance capabilities allowed us to tailor a bespoke solution that met the joint venture's objectives while appropriately managing the risks," said Andrew Hinchliff, Group Executive Institutional Banking & Markets at Commonwealth Bank.
"Our research estimates that Australia's circularity rate stands at about five per cent. Projects like CPA can play a crucial role in raising that rate and helping our great nation use its resources more efficiently," he said.
CPA's recycling facility will take feed-stock in the form of used plastic collected by Cleanaway and turn it into recycled PET for use in packaging by Pact Group and Asahi Beverages. The facility will increase the amount of locally sourced and recycled PET produced in Australia by two thirds.
CEFC CEO Ian Learmonth said: "It is great to see this vital piece of recycling infrastructure in Australia. We are particularly proud that the Australian Recycling Investment Fund's first investment builds Australia's capacity to generate high value recycled commodities that create an important revenue stream while also reducing carbon emissions.
"This is a genuine closed loop recycling solution that reduces the amount of plastic that goes to landfill. It also represents a significant advance in the development of Australia's circular economy."
"We're proud to partner with our clients to help shift our economy closer to a natural harmony that ensures a more sustainable future and helps build a better Australia," said Jake Potgieter, Managing Director, Industrials, Transport, Consumer, at Commonwealth Bank.
"As Australia advances its transition, there's a massive opportunity to uplift the circularity of our economy while building more efficient, diverse and sustainable supply chains.
"Our leading client proposition in part comes from the way we are organised - with banking teams structured around economic ecosystems, rather than sub-sectors. This allows our bankers to view our clients through the supply chain, understand their strategic objectives, and identify and work with customers on risks and opportunities in the system they operate in. This transaction also reflects our world-class structuring capabilities, which allow us to meet the needs of different industry players and deliver bespoke solutions," Mr Potgieter said.
