The Board of Directors of the African Development Bank (AfDB) has approved a new fund for the establishment of a €4 million Africa Circular Economy Facility to drive integration of the circular economy and Africa’s efforts to achieve Nationally Defined Contribution (NDC) targets.
The facility, which is a multi-donor trust fund, will operate over a period of five-years and will receive an initial support of €4 million from the Government of Finland and the Nordic Development Fund.
Jussi Nummelin, Acting Director for the Government of Finland Ministry for Foreign Affairs’ Unit for Southern and Western Africa, stated that the fund will boost the Circular Economy.
“Enhancing and promoting Circular Economy is very important for Finland. The world’s first national circular economy roadmap was developed in Finland in 2016.
“We are very keen on starting the cooperation with the African Development Bank and with the African Circular Economy Alliance and the Nordic Development Fund to enhance circularity in the World.”Jussi Nummelin
Henrik Franklin, Director for Portfolio Origination and Management at Nordic Development Fund (NDF), noted that the fund will help tackle climate change and strengthen Africa’s economies.
“NDF is pleased to join forces with the African Development Bank and the Government of Finland to establish the Africa Circular Economy Facility (ACEF). Circular economy is key for climate change adaptation and mitigation, and has vast potential to create jobs, improve productivity and strengthen the economic competitiveness of African countries.”Henrik Franklin
Al-Hamndou Dorsouma, officer-in-charge for Climate Change and Green Growth at the African Development Bank, also said that the bank is “Putting in place a dedicated financing vehicle for the circular economy to position the Bank as a champion of solutions that decouple Africa’s economic growth from unsustainable extraction of natural resources.”
More Donors to Come On Board
Dorsouma indicated that the Bank would leverage its network to bring additional donors and partners on board. He noted that the circular economy model has gained momentum as a paradigm for sustainable development in recent years. He added that at the continental level, the African Union and the African Ministerial Conference on the Environment have recognized circularity as a focal area for their respective recovery programs launched in the wake of the COVID-19 pandemic.
Meanwhile, the circular economy is a model of production and consumption that involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible.
Under the Paris Agreement, NDCs embody efforts by each signatory to reduce national emissions and adapt to the impacts of climate change. All 54 African countries are members of the Paris Agreement.
The Facility will focus on three strategic areas: institutional capacity building to strengthen the regulatory environment for circular economy innovations and practices; providing support to the private sector through a business development program; and providing technical assistance to the African Circular Economy Alliance. The African Development Bank hosts the Alliance’s secretariat.
Circular economy principles play a strategic role in advancing the African Development Bank’s High-5 development priorities.
The Facility is expected to consolidate the Bank’s portfolio of operations that align with the circular economy, including renewable energy, climate-smart agriculture and green manufacturing sectors. In addition to supporting African countries’ achievement of NDC targets, it will also advance their progress towards the UN Sustainable Development Goals.
Several African nations have also embedded circular economy in their Nationally Determined Contributions, and some are developing national circular economy action plans.