The City Council voted unanimously to approve borrowing $40 million from the state to help build a $77 million green waste recycling plant in Miramar expected to serve the region's composting needs.
City officials said the new plant, expected to begin operations next year, was needed to handle all the yard trimmings, food scraps and other organic material that must be recycled under a new state law, according to The San Diego Union-Tribune.
The state law requires that more green waste be recycled to fight climate change.
City officials said the 20-year loan has lower interest costs than selling bonds or borrowing from a bank.
The loan will increase the city's total payout for the new facility by $18 million, from $77.2 million to $95.3 million, the paper said.
San Diego already operates the region's largest composting facility, the Miramar Greenery. But instead of expanding that facility, the city will tear it down and replace it with a larger version in a separate part of the landfill.
The new plant is slated to be able to compost 250,000 tons of green waste per year.
Composting organic matter speeds up the natural process of aerobic decomposition using bacteria, worms and similar organisms and prevents the emission of methane.