IFC Invests in Hexagon Solid Waste, Supporting Turkey’s First Waste-to-Fertilizer Plant and Boosting Sustainability

IFC Press  Release
June 24, 2015

Istanbul, Turkey, June 24, 2015 – 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.

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.

About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, IFC uses its capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, IFC provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visit www.ifc.org

About Infrastructure Crisis Facility Debt Pool
The Infrastructure Crisis Facility (ICF) Debt Pool, governed by an independent board and managed by Cordiant Capital Inc., provides direct loan financing to qualified infrastructure projects in emerging economies. The fund is available to all infrastructure projects originated by International Finance Institutions that cannot obtain commercial financing or re-finance existing loans as a consequence of the global financial crisis and the tightening of bank lending. The ICF Debt Pool was conceived by IFC and developed on the Private Infrastructure Development Group platform (www.PIDG.org). Its €500 million capital is provided by KfW, the German development bank, on behalf of the Federal Republic of Germany.

About Hexagon Solid Waste
Hexagon Solid Waste was established in 2008 by Kirac and Nahum Families of Turkey, to capture a new market opportunity. Hexagon Solid Waste’s business model is based on acquiring long-term concessions from municipalities in which Hexagon Solid Waste provides services including public education on source separation, solid waste collection and treatment, waste sorting, recycling, electricity production, composting, fertilizer production, and landfill construction and operation. For more information, visit www.hexagonkatiatik.com