IFC is partnering with client companies to promote cleaner production in emerging markets. Cleaner production makes more efficient use of resources such as raw materials, energy, and water along a company's value chain. This reduces waste and saves companies money on direct input and cleanup costs. Many cleaner production investments also reduce emissions, which benefits surrounding communities.
IFC aims to show clients how cleaner production is financially beneficial as well as good for the environment. We have established a program, the Cleaner Production Lending Pilot, that provides fast-track loans to support the cleaner production activities of our clients globally. These may include energy efficiency process upgrades, waste heat recovery systems, a switch to lower carbon fuels, use of renewable energy solutions such as biomass, and recycling. We also finance such investments in our mainstream projects.
Promoting Energy Efficiency in Turkey
IFC works with clients in manufacturing and services to implement cleaner production in their operations. An example is Assan Demir, the largest player in Turkey's aluminum sheet, coil, and foil industry and a leading steel galvanizing company.
We recently provided a $4 million loan to help the company improve energy efficiency at its aluminum plant in Tuzla. The project will minimize heat loss in the plant's melting and casting furnaces, as well as recover and recycle waste heat. It will also reduce the furnace temperature in the casting operations, saving energy and reducing emissions. Other improvements include installation of more energy-efficient light bulbs, new variable speed control systems for pumps, more energy-efficient blower fans, and a new generation machine that uses hot water instead of detergents to degrease coils.
With IFC's support, Assan Demir is improving its environmental impact. The transaction was processed in only eight weeks—from project concept review to the signing of the loan agreement. This is IFC's fifth project with the company since 1994.
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"IFC's cleaner production loan provided a quick solution
for financing our ongoing investment needs, which are
shaped by global priorities such as energy efficiency.
This also shows how IFC can accelerate things
when it puts its full weight behind a program.
We highly recommend this product for other IFC clients."
—Adnan Şen, Advisor for Assan Demir
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Supporting Bulgaria's Recycled Glass Sector
Another IFC client, Drujba, is one of Bulgaria's leading manufacturers of glass container products. The company is increasing use of waste glass, also known as cullet, at its plants in Sofia and Plovdiv. Among other projects, a €2 million loan from IFC will help finance the purchase and installation of a state-of-the-art system that washes and sorts recycled glass bottles and containers by color. The equipment also removes debris such as metal caps or ceramic fragments that can contaminate the melted glass and lower product quality.
This cleaner production investment will increase the company's use of cullet, helping build the local market for recycled glass and keep glass out of landfills. Other benefits include higher energy efficiency and lower costs, as recycled glass requires less melting energy than limestone and other minerals used in glass production. The surrounding community will also benefit from a reduction in greenhouse gas emissions.
Drujba's parent company, Yioula Glassworks, has been an IFC client since 2004. It is a leading Greek glass container and tableware supplier in Ukraine, the Balkans, and Southern Europe. Yioula plans to replicate the Drujba cullet investment in its other operations.
About IFC's Cleaner Production Lending Pilot
IFC set up the Cleaner Production Lending Pilot in 2007 to encourage our portfolio clients to undertake cleaner production investments and to demonstrate the financial viability and environmental benefits of such projects. Through the $20 million facility, we provide debt financing from $250,000 to $5 million per project, and the loan transaction is swift thanks to a more streamlined process.
Loan recipients also have access to IFC's technical and environmental specialists, who can serve as a sounding board and help quantify project benefits. Advisory services can also be arranged as part of the program. We offer assistance in designing comprehensive audits of our clients' operations, which are conducted by external specialists.
Through innovative financing and advisory services, IFC is helping clients improve their operational efficiency and environmental footprint, while minimizing their use of resources. Supporting cleaner production activities, which reinforce good business practices, is one way that IFC is addressing the impact of climate change with clients in developing countries.
For more information contact:
Carmen Powell
IFC Communications Officer
Global Manufacturing & Services
Phone: +1 (202) 473-4982
E-mail:
cpowell@ifc.org
Published September 17, 2008
