Colesco Launches New Impact Credit Fund for Circular Economy

Colesco Capital has announced the expansion of its responsible investment capabilities with the launch of a new Impact Credit Fund, specifically targeting the financing needs of the circular economy and energy transition sectors. The move signifies a growing appetite among institutional investors for senior secured debt instruments that support tangible industrial sustainability, particularly within the European mid-market.

Financing the Circular Transition

The newly launched strategy is designed to address a critical funding gap for companies scaling technologies that reduce resource dependency. For the bioplastics and advanced recycling sectors, access to capital has historically been a barrier to moving from pilot facilities to commercial-scale operations. Colesco’s fund aims to deploy capital into businesses that offer distinct environmental solutions, such as bio-based material production, waste valorization, and carbon-efficient manufacturing processes.

By focusing on direct lending, Colesco intends to support companies that are often overlooked by traditional banking sectors due to the perceived technical risks associated with new circular business models. The fund emphasizes “impact” by integrating rigorous sustainability performance targets (SPTs) into its lending structures, ensuring that financial returns are intrinsically linked to environmental outcomes.

Strategic Focus on Europe

The fund’s investment mandate focuses on the Benelux region and Northern Europe, areas currently serving as global hubs for bio-economy innovation. Colesco seeks to partner with companies demonstrating proven technologies ready for market expansion. This approach aligns with the European Union’s broader regulatory push under the Green Deal, which mandates higher recycling rates and the integration of bio-based content in packaging and industrial products.

The launch underscores the evolving role of private credit in the industrial biotech landscape. As regulatory pressure mounts on fossil-based plastics, the availability of specialized debt financing is expected to accelerate the adoption of compostable polymers and drop-in bio-based chemicals, providing the necessary liquidity for infrastructure development and supply chain optimization.

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