Closed Loop Fund Generating $24.8 Million for Recycling Projects

The recycling investment fund Closed Loop Fund has made three initial investments to bolster recycling infrastructure that is generating a total of $24.8 million.

The New York-based fund, which makes below-market loans for recycling infrastructure including household recycling carts, facilities and technologies, invested initial capital of $7.8 million. That helped unlock an additional investment of $17 million from other public and private co-investors, according to a news release.

This is the first of more than $500 million the fund expects to open up to invest in American recycling during the next five years. The fund plans to invest $100 million in the U.S. recycling infrastructure specifically by 2020.

The first investment is with a joint venture between QRS and Canusa-Hershman (CHR) to create a plastic recovery facility in Baltimore. The two firms will combine technology to recycle No. 3 through 7 plastics, such as yogurt containers and takeout packaging or large rigid plastics. The combined technology will allow for the separating of these products and the ability to turn them into new goods.

The new facility with the project will be able to process 4,500 tons of materials monthly, which is double the capacity currently possible in the United States.

Right now, 70 percent of U.S. communities are not able to collect and recycle those plastics.

Closed Loop Fund’s two other investments are in Quad Cities, Iowa, and Portage County, Ohio. The investments will allow the two communities to convert to single-stream recycling from dual stream.

During the next 10 years, Portage County could see waste diversion of 37,000 tons. Quad Cities expects to divert 86,000 tons from landfills.

“We know that when done right, recycling is a profitable business that can save city and taxpayer money,” said Rob Kaplan, Closed Loop Fund co-founder and managing director. “That’s why Closed Loop Fund invests in business models like QRS-Canusa, Quad Cities and Portage County that solve key bottlenecks in the recycling system, create economic value for cities and make recycling more accessible for citizens.”

 In April 2014, Closed Loop Fund launched a partnership with some of the world’s leading companies, including 3M, Coca-Cola, Colgate-Palmolive, Goldman Sachs, Johnson & Johnson Family of Consumer Companies, Keurig Green Mountain, PepsiCo and the PepsiCo Foundation, Procter & Gamble, Unilever, Walmart and the Walmart Foundation.

 By 2025, Closed Loop Fund aims to divert more than 20 million cumulative tons of waste from landfills.

Despite the popularity of recycling, haulers and processors continue to struggle with tough economics caused by sustained low commodity prices. Waste360 talked to several industry officials about what they are doing about it. Education about contamination and sharing the risk and reward with municipalities are two key means to change the situation.