South Africa takes 95% of funding for recycling

From the newsletter

In March, South Africa dominated the continent’s circular economy investments, securing $9 billion, which accounts for 95% of the total $9.5 billion raised. The remaining 5% was distributed across seven countries for funding initiatives such as waste-to-energy projects, urban infrastructure development and tech startup support.

• South Africa has received a significant boost in addressing infrastructure decline across its major cities. With a total of $9 billion in funding, comprising a $1 billion loan from the World Bank, $2 billion in government support and $3 billion from revenue collection, the country is tackling a range of critical issues, including waste management in Johannesburg, Durban and Cape Town. 

• A small portion, 0.04% of the total funding, equating to $3.5 million, is directed towards early-stage projects, with initiatives like waste management and tech startups receiving targeted support.

More details

• Sierra Leone Climate Fund Managers (CFM) invested $3.1 million in a 30 MW waste-to-energy (WTE) project in Freetown, supported by EU-backed funding. This innovative facility will process 365,000 tonnes of waste annually, converting it into 236.5 GWh of electricity while significantly cutting 94,000 tonnes of carbon emissions. The project directly addresses both the country's growing waste issues and energy shortages, positioning it as a key solution for sustainable development in the region.

• Building on similar efforts across Africa, the European Investment Bank (EIB) and the World Bank have partnered to provide $1.3 million in technical assistance for climate-resilient urban development projects in eight African cities. 

• The funding, provided under the City Climate Finance Gap Fund, will help support various initiatives, including waste management in cities such as Kisumu, Malindi, Kericho, Nyamira, Embu and Eldoret in Kenya, Zanzibar in Tanzania and Makindye in Uganda. By helping urban areas secure financing for early-stage waste management projects, this initiative contributes to broader sustainability efforts across East and South Africa.

• Meanwhile, in Kenya, a different aspect of the circular economy is being addressed by Badili, a smartphone refurbishment startup that has secured a $400,000 loan from French development finance institution Proparco through the Bridge by Digital Africa initiative. The funding will help Badili scale its operations, making refurbished smartphones more accessible and contributing to reducing the growing problem of electronic waste on the continent.

• To further support regional growth in the circular economy sector, Inside Equity Fund II L.P., a private equity fund focused on small and medium-sized enterprises (SMEs) in Southeast Africa, is allocated $62 million to support businesses across various sectors, including the circular economy, in Madagascar, Zambia and Mauritius. 

• The fund is also exploring expansion into Mozambique and Tanzania, further strengthening its commitment to fostering economic resilience and sustainable development through SME growth in underfinanced markets.

Our take

• The distribution of funding across sectors signals a strategic approach to developing a diverse and resilient circular economy, fostering long-term sustainability across key industries.

• A notable emphasis on urban infrastructure, particularly in South Africa, demonstrates a recognition of cities as pivotal hubs for implementing circular economy principles. 

• The focus on technical assistance and SME development reflects an understanding that a strong foundation is crucial for the long-term success of the circular economy. This investment in capacity building ensures emerging businesses can thrive and sustain growth.