African Development Bank to establish €4 million African economy fund

African Development Bank to establish €4 million African economy fund
African Development Bank to establish €4 million African economy fund

Africa-Press – Liberia. The African Development Bank (AfDB) is scheduled to introduce a €4 million trust fund to establish an African Circular Economy in order to meet the continent’s nationally determined contribution targets.

The idea to establish the €4 million Africa Circular Economy Facility (ACEF) multi-donor trust fund at the bank to drive integration of the circular economy into African efforts was approved by the bank’s board of directors on March 30, 2022.

The ACEF is the newest initiative in the fight against climate change. It is the product of protracted negotiations that began during the 2019 World Circular Economy Forum in Helsinki between the Bank, the Finnish government, the Finnish Innovation Fund (SITRA), and the Nordic Development Fund.

The Bank has established the €4 million Multi-Donor Trust Fund to support a five-year continental program aimed at fostering the adoption of circular practices in regional member countries.

The circular economy is expected to result in the creation of favourable regulatory environments for economy-wide adoption of circularity, capacity enhancement for private and public sectors in the field of the circular economy, and the creation of a pool of circular economy trailblazers who demonstrate new circular business models, encourage innovative partnerships, and knowledge sharing.

Enhancing and promoting the circular economy is highly essential for Finland, according to Jussi Nummelin, Acting Director of the Finnish Ministry of Foreign Affairs’ Unit for Southern and Western Africa.

Finland produced the world’s first national circular economy roadmap 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.

According to Henrik Franklin, Director of Portfolio Origination and Management at the Nordic Development Fund (NDF), the circular economy is critical for climate change adaptation and mitigation, as well as having enormous potential to create jobs, boost productivity, and boost African countries’ economic competitiveness.

“NDF is pleased to join forces with the African Development Bank and the Government of Finland to establish the Africa Circular Economy Facility (ACEF)”

“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,” said Al-Hamndou Dorsouma, Officer-in-Charge for Climate Change and Green Growth at the African Development Bank.

The ACEF will focus on building institutional capacity for the creation of enabling environments for whole-of-society transformation and the adoption of circular technologies and practices.

Another area is private sector support for start-ups in the circular economy through a differentiated business skills development program, and promotion of country ownership through the African Circular Economy Alliance (ACEA), whose secretariat will be housed in the Bank’s Climate Change and Green Growth Department.

South African, Nigerian, and Rwandan governments formed the Alliance during the 23rd United Nations Conference of Parties (COP23). Its purpose is to accelerate Africa’s transition to a Circular Economy at the national, regional, and continental levels by serving as a collaborative platform for coordinating and linking the continent’s many efforts.

Policy advisory, leadership & advocacy, as well as projects and business scale-up, are the ACEA’s key intervention pillars. By 2030, the transition to a completely circular economy is expected to create $4.5 trillion in global economic benefits.

The Alliance aspires to take advantage of urgent opportunities in Africa for increasing circularity in industries that will benefit the continent’s economy, jobs, and environment in the long run.

Ghana, Cote d’Ivoire, Nigeria, Rwanda, and South Africa are among the ACEA’s current members, with other countries expressing interest in joining.

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