SINGAPORE — A Singapore-based venture capital firm has unveiled a US$106 million (S$144 million) fund aimed at cleaning up Asia’s marine plastic crisis by financing companies focused on preventing plastic pollution.

The firm, Circulate Capital, said in a statement on Wednesday (Dec 4) that the fund was the “world’s first investment fund dedicated to addressing Asia’s plastic crisis”. Its founding investors include: The Coca-Cola Company, PepsiCo, consumer products giant Procter & Gamble and petrochemical company Chevron Phillips Chemical.

The firm said the new fund, called the Circulate Capital Ocean Fund, would both lend money to firms tackling plastic waste, such as waste management firms, and invest in equity stakes in these firms. Such financing is important given that 60 per cent of the world’s ocean plastic waste originates from Asia, it said.

The key issue is a “net financing gap” faced by firms dealing with waste in the world’s top five ocean-polluting countries: China, Indonesia, the Philippines, Thailand and Vietnam.

A report by United States environmental group Ocean Conservancy said this gap was between US$28 and US$40 per tonne for plastic waste collection in these countries.

Mr Rob Kaplan, chief executive officer of Circulate Capital, which is a Monetary Authority of Singapore licensed firm, said in the statement that the good news is that the new fund can plug that gap.

“We are able to reduce nearly 50 per cent of the world’s plastic leakage by investing in the waste and recycling sector in Asia, and even more if we invest in innovative materials and technologies,” said Mr Kaplan.

Speaking to TODAY in a telephone interview, Mr Kaplan said that interested parties who are able to show that they have a viable solution to prevent plastic pollution in South and Southeast Asia can make an application for the fund on the Circulate Capital website.

However, he stressed that the firm is not a philanthropic entity, and that companies and businesses must be able to show that they can generate investment returns.

As for researchers with an idea that may be in its initial phases, Mr Kaplan pointed out that his firm works with philanthropic partners for such cases to help them with grant funding.

One such partner is the firm’s non-profit entity called Circulate Initiative, which has an incubation programme where they try to help early-stage projects take off by providing funding and technical expertise.

So far, Mr Kaplan said that Circulate Capital has looked at 200 investment opportunities over the last year and is in “due diligence” on its first five or six investment opportunities, and hope to announce them in early 2020.

While it is premature to mention names, he said that for the most part, they are recycling and waste management companies from around Southeast Asia.

“These are companies that are buying waste plastic and other waste materials that currently often end up in the environment,” said Mr Kaplan. “Instead of letting that happen, they are processing them, adding value to them and selling them.”