The Closed Loop Fund, a "impact investment fund" group that has partnered with 10 companies — Walmart, Coca-Cola, PepsiCo, Keurig Green Mountain, Colgate-Palmolive, Johnson & Johnson, Procter & Gamble, Unilever, 3M and Goldman Sachs — announced in a press release that it will invest $100 million on U.S. recycling infrastructure by 2020. A high-tech plastic recycling plant in Baltimore is among the first projects funded by the group.
The fund provides zero-interest loans to cities and companies that want to build new recycling centers and projects. Company QRS, which will build the Baltimore plant, used $2 million from Closed Loop (in addition to other financing) to support construction.
"Recycling has been stagnant for the last five to ten years in the U.S.," Closed Loop co-founder Rob Kaplan told Fortune. He and former New York City deputy commissioner of recycling and sustainability Ron Gonen started the group. Its other two projects — in Portage County, OH and the Quad Cities area in Illinois — focus on collecting recycled goods from homes. The three projects will divert 500,000 tons of waste from landfills in 10 years.
In a press release, the Closed Loop Fund announced that this round of funding is the first of over $500 million that it expects to unlock for American recycling investment over the next five years. For now, the fund has $90 million left to dole out, which it will use on a long list of proposals.
Fortune called the Closed Loop Fund idea "so simple, it’s snooze-worthy. But unlocking capital for such an underdeveloped industry could be transformational."
The loans go to projects that can eventually make money to repay the loans, as well as make an impact on the waste problem. The Baltimore plant, which uses laser technology, will be able to sort 54,000 tons of recycled plastic materials a year and service a 500-mile radius, making it one of the largest of its kind in the U.S.
SWANA CEO David Biderman said that the association is pleased to see the Closed Loop Funds spreading efforts from the East Coast to the midwest. "Low cost financing that helps support the development and expansion of our national recycling infrastructure is critical to the industry’s future success," Biderman said in an e-mail. "These investments offer a nice blend of new market development and enhanced recyclables collection and processing by organizations that have been long-time industry participants.”