Tomorrow, on December 18th, Swedfund inaugurates Vietnam's first facility for waste management, Vietstar, which will process 1,200 tons of waste daily in the Cu Chi district, which lies 40 km from Ho Chi Minh.

It is Sweden, together with Germany's and Holland's Development Finance Institutions DEG, FMO and the majority investors Lemna Group and Vina Capital who are making a total investment corresponding to 350 million Swedish kronor in this facility which will have a great positive impact on the environment in and surrounding Ho Chi Minh, as well as providing important health advantages to the people.

The operator of the facility is Vietstar, part of the Lemna Group that develops infrastructures for waste management worldwide. The Vietstar facility will separate the waste into organic waste, plastics and metals. The organic waste will be converted to compost which is much in demand within agriculture. The plastic contents of the waste will be recycled by Vietstar and converted to Low Density Polyethylene granulate (LDPE) to be sold to plast producers, who may lower their production costs by mixing the recycled plastic with virgin raw material. The metals will be sorted and sold.

"The knowledge and flexibility of Swedfund made an enormous contribution to this investment. The loan structure is complicated and is a good example of creative financing and endurance which demonstrates the value added by Development Financers such as Swedfund", says Poldi Gerard, Chair of the Board of Directors for Vietstar.

Sida is also participating in the financing of the facility by sharing the risk with Swedfund under a guarantee.

"It’s very positive when we can collaborate to achieve better solutions for important investments in our collaborating countries, compared to what each of us would achieve on our own", says Elisabeth Ekelund, Manager for Sida's team for Loans and Guarantees.

Vietnam has, as many other poor countries, a very big problem with growing waste piles among urban residential areas which generate poisonous discharges causing illness.

"Vietstar will, with their facility, assist in creating a much better environment for the people, for the region and for the climate. Methane gas, which is a 21 times more potent green house gas than carbon dioxide, can now be captured through Vietstar's composting technology. In addition, Vietstar will create 600 new jobs for the poor", says Stefan Jansson, Senior Investment Manager at Swedfund.