The creation of the platform to support financing the circular economy responds to a real need for public and private investment that. The creation of the platform was announced by the European Commission on Wednesday 25 January, as part of the mini-package on the circular economy (see EUROPE 11711).
Investment in innovation for the circular economy will create jobs and enable the enormous potential offered by this fourth industrial revolution to be exploited, said European Commission First Vice-President Frans Timmermans, who is responsible for sustainable development.
The platform will enable innovators and investors to come together in order to find financing solutions for projects, thanks to the pooling of the financial resources and expertise of the Commission and European Investment Bank (EIB). In order to do this, the platform will have a three-pillar structure, reflecting the three missions it will fulfil: coordination and awareness-raising, advice, and financing.
To make the platform operational, the Commission will first launch a call for expression of interest with a view to appointing members of an expert group that will focus on activities under the "coordination and awareness-raising" platform.
Building on the momentum of the Investment Plan for Europe, which had mobilised €164 billion in investment by the end of 2016, the platform will strengthen the links between existing instruments, like the European Fund for Strategic Investments (EFSI) and the InnovFin initiative (EU Finance for Innovators backed by Horizon 2020), and potentially develop new financial instruments for circular economy projects.
"Our goal is to upscale investment, both public and private, in the circular economy. It very often means new business models and they may require new, innovative ways of financing. This new platform is an excellent tool to raise awareness of the circular economy projects' immense business potential and, consequently, draw in more funding for their financing", said European Commission Vice-President Jyrki Katainen, who is responsible for jobs, growth, investment and competitiveness.
China is already well advanced on the path of this new business model, Katainen stated, adding that he is aware that banking establishments often find it difficult to grant financing to SMEs, for example. There is therefore a need to explore new opportunities for financing and perhaps to change the regulation to facilitate credit aimed at stimulating the circular economy in Europe. Projects which do not have financing from the private sector but which are viable could benefit from the EFSI, he said, although there are not currently many projects that have asked to benefit from this.
The "advice" pillar of the platform will focus on providing help in developing and structuring projects, as well as in improving financing opportunities for these projects. The advisers will provide financial and technical expertise to potential circular economy project developers and will be proactive in helping them understand the existing opportunities for financing.
In 2016 the EIB mobilised €19 billion in financing for projects to fight climate change. The new platform to aid financing of the circular economy will be an essential tool to raise awareness of circular economy projects and to support their financing, EIB Vice-President Jonathan Taylor said in a press release. (Original version in French by Aminata Niang)