IFC Solutions: Adapting to Limited Groundwater Availability
Looking to expand production and take advantage of a boom in regional container demand, Modern Karton, one of Turkey’s leading producers of paper-based containers, first needed access to a significant supply of water, a key ingredient for paper production.
But in the area where Modern Karton operates, 100 kilometers west of Istanbul, water is increasingly hard to come by. That’s where IFC stepped in, helping assess Modern Karton’s water needs and providing an $8 million loan to help build the most sophisticated water recovery and recycling system in Turkey’s paper industry.
“Due to rapid industrial development and the effects of climate change, access to sustainable water has been a real issue,” Ahmet Eren, Chairman of Eren Group, the parent company of Modern Karton. “The government of Turkey is encouraging water conservation and industrial customers face limitations on water consumption. We are grateful for IFC for helping us find a solution that will allow us to expand without increasing water consumption.”
Guy Ellena, IFC Director for Manufacturing, Agribusiness and Services in Europe and the Middle East and North Africa, added, “This project is critical as it will support Modern Karton's strategic investments in resource efficiency. It is now well documented that such investments not only help properly manage scarce natural resources in light of climate change risks, but can also help maintain and actually increase businesses’ long-term sustainability and competitiveness. Modern Karton is a pioneer in this area and we are proud to support them.”
Made through the IFC’s Cleaner Production Lending Facility, the loan will help Modern Karton reduce the risks related to limited groundwater availability and expand production by 50 percent without increasing water use.
This is the first IFC investment to directly address increasing risks associated with environmental change, in this case increased scarcity and variability in available water. Together with climate mitigation projects, which aim to cut greenhouse gas emissions, and special climate projects, these three pillars serve to delineate IFC’s climate business targets.