CFC invests in used cooking oil recycler to boost circular economy in Colombia
The CFC has invested USD 450,000 into Colombian used cooking oil (UCO) recycling company, Muta, to support its expansion into the growing circular economy, while boosting the incomes of its informal street suppliers.
Muta processes, cleans, packages and exports UCO that can no longer be used for cooking to Europe, where it is used as a biofuel which is a renewable and cleaner alternative to fossil fuels. This promotes a more sustainable and efficient use of resources, and reduces the strain on sought-after raw materials. In addition recycling UCO limits the environmental damage caused by its incorrect disposal which leads to water pollution and clogged drainage systems.
Our investment will put it in a strong position to take advantage of a global UCO market that is expected to grow from USD 5.97 billion in 2021 to USD 10.08 billion in 2028. Muta operates in ten cities across Colombia, predominantly in the north of the country. It is B-Corporation certified and contributes to a number of the United Nation’s Sustainable Development Goals (SDGs) including: SDG 1 (No Poverty), SDG 2 (Zero Hunger), SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), SDG 10 (Reduced Inequalities) and SDG 13 (Climate Action).
Alongside increasing the sustainable supply of a lower emission fuel, without adding to the demand for cooking-grade sunflower oil, Muta’s work with street recyclers is preventing the potentially harmful disposal of UCO into local watercourses. Currently 35% of the 170 million litres of cooking oil used each year in Colombia becomes waste.
Another key element of Muta’s purpose is increasing the incomes of the street recyclers it works with. It intends to formalise employment for 350 street recyclers by 2025, up from 50 in 2021, generating between 40% and 50% additional income while providing them with health, pension and holiday schemes. This is supported by a mobile app that enables waste generators to request collection and transportation, while providing full traceability.
CFC Impact Investment Manager Ernesto Daza Lacouture said: “Muta combines positive environmental and social impact which is why we were so keen to support the company. It already has a solid business model and a reliable market, as well as ambitions to expand from collecting 1,138 MT of UCO in 2021 to 10,000 MT in 2025. From my perspective I’m particularly excited to see how our investment helps it improve the livelihoods of more informal recyclers who would otherwise be unable to access the global UCO market.”
Muta CEO Alejandro Caiaffa Agudelo, commented: “I am thrilled that we have secured funding from an esteemed international fund like the CFC. This partnership is not only a testament to our credibility but also a catalyst for our continued growth. With the CFC's support, we can significantly increase our UCO exports by 50% by the end of 2023, expanding the production of biodiesel in international markets. Such a milestone will have a profound impact on safeguarding our water supplies and transforming the lives of informal recyclers. We eagerly anticipate embarking on this journey alongside a forward-thinking fund that shares our commitment to sustainability.”
CFC Managing Director Amb. Mohammed Belal, added: “This is a landmark investment for the CFC, because it is the first time we have financed a company that specialises in a kind of circular economy that we did not invest in the past. As an organisation we are increasingly eager to support commodity businesses that have both an environmental and social purpose, addressing the twin issues of climate change and poverty alleviation. Muta’s strong business fundamentals and use of technology enables it to positively impact these vital challenges and I’m looking forward to working with them.”
To find out more about our work with Muta and how we invest in commodity and agri-SMEs in developing countries contact: managing.director@common-fund.org.