2015 Fall Conference: Closed Loop Fund Essentials
- 1. Christopher Ladd | CHRIS@CLOSEDLOOPFUND.COM @LOOPFUND
- 2. Investors include: The Closed Loop Fund is a social impact fund investing $100M to increase the recycling of products and packaging.
- 3. CLOSED LOOP FUND | PAGE 3 REDUCE COST OF GOODS •Increase supply of recycled commodities available to source •Protect supply from resource scarcity and price volatility by recovering material from waste stream. The Closed Loop Fund is building local and national recycling infrastructure to create systemic value for the entire value chain MEET SOCIETAL DEMAND •Meet consumer, societal demand for recyclable products •Ensure citizens have access to recycling where and when they need it •Improve city resiliency TRANSPARENCY AND ACCOUNTABILITY •Revenue backed loans prove the business model and return capital •Provide data of GHG reductions and money saved by municipalities
- 4. CLOSED LOOP FUND | PAGE 4 UNLOCK PUBLIC AND PRIVATE FUNDING NATIONALLY Create scalable models that prove financial value to funders across the country to help bring modern recycling programs to homes across the US. FINANCIAL TO MUNICIPALITIES $21.2B in avoided landfill tipping fees and revenue generated from selling diverted commodities. ENVIRONMENTAL 50 million metric tons of GHG reduction SOCIAL 20,000 incremental local jobs vs. land- filling. Anticipated impact of the fund The Closed Loop Fund targets following impact could be achievable over the life of the Fund (10-years):
- 5. CLOSED LOOP FUND | PAGE 5 COLLECTION SORTING PROCESSING & MATERIAL SCIENCE The Closed Loop Fund unlocks recycling’s value by providing 0% and low interest loans to cities and companies to build recycling infrastructure. WE INVEST IN: We invest in replicable models that remove barriers to an effective and financially viable recycling system
- 6. CLOSED LOOP FUND | PAGE 6 Innovation of Closed Loop Fund Model LARGE SCALE LOANS Zero interest loans in amount required to achieve measureable and systemic change drives proves the model and drives accountability. Revenue-backed loans are repaid via savings from increased landfill diversion and/or revenue from sale of commodities. SYSTEM CHANGE: Capital is pooled from consumer goods companies and retailers with a vested interests in increased recycling rates. Affect a system that no company can do alone. SCALABILITY Each project will be leveraged to inspire exponential increases in investment from other municipalities interested in self funding and replicating success of the a similar project in their location. UNLOCK 5x CO-INVESTMENT Fund will co-invest in select projects with private investors to enable projects to have an effective IRR for private investors, spurring and increasing in private investment.
- 7. CLOSED LOOP FUND | PAGE 7 Fund Structure FINANCIAL PARTNERS (CPG companies and Retailers) LOANS TO MUNICIPALITIES SAMPLE LOAN #3 Emerging technologists SAMPLE LOAN #2 Processing facility SAMPLE LOAN #1 Carts for recycling SAMPLE LOAN #4 Remanufacturing facility Landfill cost savings and commodity revenue Capital returned and unlock funding for similar projects across the country Loans to municipalities and companies servicing municipalities FUND STRUCTURE • 0% loans to municipalities for investments in recycling and waste reduction infrastructure and programs. • Below market interest loans to private companies that build infrastructure for recycling and waste reduction. • Loans are repaid via landfill diversion savings and or commodity revenue from the increase in recycling. • Fund co-invests with local state agencies, economic development corporations (EDC’s), local banks, foundations and other relevant institutions, thereby expanding the amount of capital invested. REPAYMENT STRUCTURE • Investment period is 5 years. • Loans are on an average of 7 years. • Goal is to return all principle and interest to Investors by year 10.
- 8. CLOSED LOOP FUND | PAGE 8 QRS -- Plastic Recovery Facility (PRF) Baltimore, MD Investment: Create profitable market for hard-to- recycle rigid plastics (#3-7) for the east coast. Impact Over 10-years: 650,000 tons, 670,000 tons of GHG Total Project Cost: $11,000,000 Closed Loop Fund Portion: $2,000,000 Co-investment unlocked: $9,000,000
- 9. CLOSED LOOP FUND | PAGE 9 Portage County, OH Investment: New Single Stream Recycling Carts and Trucks in Midwestern semi-rural community Reach: 25,000 households Impact over 10-years: 37,000 tons, 110,000 tons of GHG Total Project Cost: $3,100,000 Closed Loop Fund Portion: $3,100,000
- 10. CLOSED LOOP FUND | PAGE 10 Quad Cities, IA In: Upgrade local Material Recovery Facility (MRF), Trucks and Carts to single stream Reach: 150,000 households Impact over 10-years: 86,000 tons, 250,000 tons GHG Total Project Cost: $10,725,000 Closed Loop Fund Portion: $2,725,000 Co-investment unlocked: $8,000,000
- 11. CLOSED LOOP FUND | PAGE 11 Who should apply? • Municipalities • Recycling Haulers • MRFs • PRFs • Recycling companies expanding which materials can be sorted • Glass and Plastics Processors • Companies creating markets for PCR material
- 12. Christopher Ladd | CHRIS@CLOSEDLOOPFUND.COM @LOOPFUND