IFC backs Nigerian PET resin manufacturer Engee with US$39 financing facility

NIGERIA — Engee Manufacturing Limited, Nigeria’s leading manufacturer of Polyethylene Terephthalate (PET) resin used in packaging for soft drinks, bottled water and other household products has acquired a US$39m financing facility to build a Continuous Polymerisation PET Resin plant in Ogun state.

The financing package includes a US$24 million senior ‘A’ loan from IFC and a US$15 million subordinated loan from the International Development Association’s Private Sector Window Blended Finance Facility.

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IDA Private Sector Window was created by the World Bank group to catalyse private sector investment in most fragile countries, providing concessional funds alongside IFC and Multilateral Investment Guarantee Agency (MIGA).

The new PET plant will enable Engee source more than 20 percent of its raw materials from local waste plastics, strengthening Nigeria’s recycling and manufacturing sectors.

It could double the number of plastic bottles recycled in Nigeria through a process of collecting, cleaning, and processing up to 30,000 tons of used plastic bottles every year.

According to IFC, Nigeria has no efficient disposal, recycling and waste management system for its plastic and non-plastic waste, with most solid waste ending up in landfills, drainages, beaches and waterbodies.

The new plant is expected to be fully operational within the next 24 months.

“IFC’s financing for the first continuous polymerization plant in Nigeria will support our efforts to grow the country’s packaging for drinking water, beverages and pharmaceutical industries. This will be the second such plant anywhere in sub-Saharan Africa,” said Alexander Gendis, Managing Director, Engee Manufacturing Limited.

“The plant and process are enough to fast-track the evolution of plastics recycling in the country and support jobs along the recycling value chain. This will be a big win for Nigeria’s economy and its environment,” he added.

IFC will also provide Engee with advisory services support to implement a plastics waste recycling program specifically for bottle-grade resins.

Eme Essien Lore, IFC Country Manager for Nigeria, said, “IFC’s partnership with Engee reflects our support for Nigeria’s private sector, especially at this difficult time when the global economy is facing the challenge of COVID-19.

“The new factory will make positive contributions to Nigeria’s manufacturing sector and job growth, while potentially revolutionizing the recycling industry in the country.”

The investment with Engee underscores IFC’s growing commitment to Nigeria, with investments focused on sectors including healthcare, agribusiness, manufacturing, technology, and SME financing.

The global plastic recycling market was valued at US$ 41.73 bn in 2018 and expected to grow at a CAGR of 6.6% during the forecast period from 2019 to 2027, according to a report by Research and Markets.

Rising environmental concerns among people worldwide will enhance demand.

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