OTUA - INNOVATIVE CIRCULAR ECONOMY INVESTMENTS

The project, located in the Spanish Basque Region, concerns the construction of a new plastics recycling plant to treat automotive shredder residues and the upgrade of existing facilities for metal waste shredding and sorting.

The aim is to increase the recovery of materials from industrial waste, bringing a positive impact on the quality of the materials currently being recycled. The project will also reduce the amount of waste sent to landfills, in line with the relevant EU Directives, the EU Circular Economy Package, national and regional legislation. Additionally, it will improve the environmental and climate change performance of the promoter.

The Project is in line with the InvestEU objective of Environment. By contributing to the recovery of high-quality secondary raw materials, diverting recyclable waste from landfill disposal and energy recovery, the Project aligns with the European Union's legal requirements, Circular Economy Action Plan, and the Green Deal." The circular value recovery contribution of the Project makes it, alongside with other criteria, eligible for an InvestEU guarantee, as foreseen in the EU Sustainable Infrastructure Lending Envelope.

The Project addresses several market failures, such as the lack of recognition of positive externalities from recyclable metals and plastics, insufficient investments in recycling and circular economy initiatives, and the need for long-term financing to support the upfront costs and extended payback periods of sustainable infrastructure projects. Additionally, the Project bridges a gap in the waste treatment and recycling market by introducing an additional step in the end-of-life vehicle treatment process.

The Project contributes to reduce greenhouse gas emission, enhances public health, reduces environmental impacts associated with waste disposal, creates new jobs, and sustains existing employment.

The Bank provides a signal of the Project's quality, facilitating financing from commercial banks. The Bank offers a flexible financial product, allowing for an extended availability and grace period, as well as flexibility to drawdown thereby providing the Promoter with a long-term financing solution matching the economic life of its investments. These favourable terms contribute to strengthening the Promoter's financial standing, helping to carry out the Project.

Given the Promoter's experience, there is limited need and scope for technical contribution from the Bank.

It is noted that the Project would not proceed to the same extent and within the same timeframe without the InvestEU support.

The project complies with the hierarchy of waste management, as defined in the European Circular Economy Package, in particular the Landfill Directive 2018/850 (Directive 1999/31/EC as amended) and the Waste Framework Directive 2018/851 (Directive 2008/98/EC as amended). The project supports the implementation of the end-of life vehicles Directive 2000/53, notably its provisions to reduce adverse impacts on the environment. It also aligns well with a Proposal for a Regulation of the European Parliament and of the Council on circularity requirements for vehicle design and on management of end-of-life vehicles (COM/2023/451). During the appraisal of the Project, the EIB will assess compliance with the environmental "acquis", notably the Environmental Impact Assessment (EIA) Directive 2014/52/EU, amending the EIA Directive 2011/92/EU, as well as other applicable environmental acquis.

The promoter has been assessed by the EIB as a private company, not subject to the EU rules on public procurement or concessions.