Development finance institution the African Development Bank Group (AfDB) has launched the Africa Circular Economy Facility – its first dedicated fund to support circular economy innovations and policy frameworks.

The facility will focus on three strategic areas, namely institutional capacity building to strengthen the regulatory environment for circular economy innovations and practices; providing support for the private sector through a business development programme; and providing technical assistance for the African Circular Economy Alliance (ACEA).

The multidonor fund will operate over a five-year period. It will receive initial support of €4-million from the government of Finland and the Nordic Development Fund.

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.

The fund will channel finance and derisk innovative circular economy business models beyond waste management. It will support the country-led ACEA in integrating the circular economy into African green growth strategies, the AfDB said.

“The AfDB is committed to the promotion of the circular economy as a development strategy. Circular economy principles align with the AfDB’s agenda to transition Africa towards green growth.

“It is indeed in line with the theme of this year’s annual meetings, achieving climate resilience and a just energy transition for Africa,” says AfDB power, energy, climate change and green growth VP Dr Kevin Kariuki.

“The African Circular Economy Facility will increase the AfDB’s portfolio of operations that align with the circular economy. This includes renewable energy, climate-smart agriculture and green manufacturing sectors. This will create new value chains that generate new green jobs for the African youth,” he adds.

Circular economy principles play a strategic role in advancing the AfDB’s ‘High-5’ development priorities, which will help African countries achieve their nationally determined contribution targets. These are the public pledges from countries on how they plan to play a part in post-2020 collective action on climate change.

Circular economy principles will also advance countries’ progress towards the United Nations Sustainable Development Goals and contribute to Africa’s economic recovery, Kariuki says.

“Finland is committed to supporting the ACEA and the circular economy as a pathway to green growth,” says Finland Ministry of Foreign Affairs deputy director-general and temporary Bank Group Governor for Finland Juha Savolainen.