TeraPlast Group, one of the largest Romanian building materials manufacturers, has signed an agreement with BCR for a 12.7 million Euro green financing package. The funds will be used for a fully-fledged greenfield investment in biodegradable foils.
The financing will be used for the construction and equipment of a production unit for the manufacture of biodegradable packaging, bags and sacks, in accordance with Law 181/2020, on the management of compostable non-hazardous waste, which defines the compliance criteria for biodegradable waste (90% biodegradable materials and OK compost certification). The TeraPlast Group project benefits from a mixt financing, which includes the shareholders contribution, a bank loan in accordance with green financing principles and a state aid, covering 50% of the eligible costs.
The green financing package of EUR 12.7 million will be divided in two tranches: EUR 6.9 million for up to 7 years maturity and EUR 5.8 million bridge financing for the state grant to be received. For this investment, TeraPlast Gorup will create a new company, TeraBio Pack SRL, and the plant will be operational in the third quarter of this year. The addressed markets for this project are Romania and nearby countries. The main raw materials for this unit are polylactic acid and potato starch, falling under renewable feedstock – based activity, in line with EU taxonomy.
TeraPlast is the market leader in PVC exterior pipes and PVC granules. The Group is investing in 2021 to double its recycling capacity to become one of the top five European recyclers of rigid PVC. Investments will also continue in expanding their renewable energy production, as currently 11% of the production needs are covered through photovoltaic panels. The company aims to reduce greenhouse gas emissions by 100%, to increase the share of energy from renewable sources up to 20-30%, and to continue digitizing the internal processes. In 2021, TeraPlast has made a commitment for responsible corporate governance, becoming a part of UN Global Compact, adhering to principles in the areas of human rights, labour, environment and anti-corruption.