The African Development Bank (AfDB) will be channeling $ 4.3 million into a new trust fund to help push the circular economy efforts in Africa.
The Board of Directors of the AfDB has approved the establishment of a $ 4.3 million Africa Circular Economy Facility to drive integration into African efforts to achieve nationally defined contribution (NDC) targets.
The facility, a multi-donor trust fund, will operate over a period of 5-years and will receive initial support of $ 4.3 million from the Government of Finland and the Nordic Development Fund. The board approval took place on 30 March 2022.
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.
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Jussi Nummelin, Acting Director for the government of Finland Ministry of Foreign Affairs’ Unit for Southern and Western Africa, said: “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,” Nummelin concluded.
Henrik Franklin, director for portfolio origination and management at the Nordic Development Fund (NDF) said: “Circular economy is key to climate change adaptation and mitigation, and has vast potential to create jobs, improve productivity and strengthen the economic competitiveness of African countries.”
Al-Hamndou Dorsouma, officer-in-charge for climate change and green growth at the African Development Bank, said: “Putting in place a dedicated financing vehicle for the circular economy positions the Bank as a champion of solutions that decouple Africa’s economic growth from unsustainable extraction of natural resources. ”
This type of economy’s principles plays a strategic role in advancing the African Development Bank’s High-5 development priorities.
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The facility is expected to consolidate the Bank’s portfolio of operations that align with circularity, 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.
Dorsouma said the Bank would leverage its network to bring additional donors and partners on board.
The model has gained momentum as a paradigm for sustainable development in recent years. 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.
Several African nations have also embedded circularity in their Nationally Determined Contributions, and some are developing national action plans.