Investment aims to enable up to 5x catalytic funding
Jakarta, Indonesia, November 14, 2022—This week, the Alliance to End Plastic Waste (Alliance) announced a US$36 million commitment to support Indonesia’s national goals to reduce 70% ocean plastic pollution by 2025 and achieve near zero leakage by 2040. This seed fund aims to develop a portfolio of sustainable solutions and projects in the country, which in turn can catalyse up to five times more public and private sector investment to end plastic waste in the environment.
With this commitment, the Alliance will support projects across the archipelago including its flagship programme, Bersih Indonesia: Eliminasi Sampah Plastik, which has started with Phase One in Malang. Through the portfolio of programmes, the Alliance and its partners aim to:
- Divert up to 60,000 tonnes of plastic waste from the environment by 2025;
- Achieve a recycling rate for plastic waste of up to 50% by 2025 for its projects; and
- Engage with up to 2.7 million Indonesians through behavioural change programmes.
In addition, work will be underway to scale the programme in two additional regencies, aiming to provide end-to-end waste management to a further 3.9 million people. The Alliance will also run broader education campaigns on waste management and household waste segregation to enhance waste management literacy, as well as enable better collection and sorting.
Jacob Duer, President and CEO of the Alliance, said: “In our experience, mobilising philanthropic financing is a key first step to develop, deploy and derisk sustainable solutions that can be scaled and replicated for greater impact.”
“No one organisation can solve a challenge of this size alone. Therefore, one of our goals is to catalyse additional funding from governments and development banks as blended finance that will mobilise private funds to improve waste management and advance a circular economy for plastic.”
He was making the pledge during the Tri Hita Karana Blended Finance Forum, the pre-eminent sustainability G20 side event which aims to mobilise US$30 billion in catalytic and commercial capital to support projects linked to sustainable development goals.
As the first country to establish a National Plastic Action Partnership, Indonesia has demonstrated a strong commitment to addressing the plastic waste challenge. It is also a priority for the Alliance, which began working in the country in 2019. Its first project was Project STOP Jembrana in partnership with Systemiq, which is still operating. The project aims to develop a collection, sorting, processing, and recycling system to serve 150,000 people in the regency.
The Alliance’s Bersih Indonesia programme is built on lessons learnt from the Jembrana project and others in the country. A memorandum of understanding to embark on Phase One was inked with the Coordinating Ministry for Maritime and Investment Affairs, and the Malang Regency in May this year. Bersih Indonesia in Kabupaten Malang will establish an integrated waste management system, including household collection services for 500,000 households. The Alliance is providing a US$29 million grant to build infrastructure including five transfer stations, five materials recovery facilities, and a fleet of over 1,100 vehicles.
With the programme, the Alliance aims to demonstrate a financially sustainable waste management system for emerging markets that includes household collection fees; the sale of collected plastic waste material to off-takers in a competitive market; and government contribution to operating expenses. If successful, the model can be replicated nationally.
The Alliance has also supported Systemiq’s research of an investable blended finance model for waste collection and sortation infrastructure. A white paper will be published soon. Co-developed with the Government of Indonesia, this is a first attempt at designing a viable and replicable financing scheme for waste management systems in underserved areas.
Sri Indrastuti Hadiputranto, Chair of the Indonesia National Plastic Action Partnership, said: “Ending plastic waste is a complex challenge that requires holistic action, underpinned by strong public-private-people collaboration to address various systemic gaps for sustainable waste management. The Alliance to End Plastic Waste has been a valued partner in the implementation of the NPAP roadmap to reduce plastic pollution.”