Closing the Loop

IFC has committed more than $1 billion to circular economy projects across emerging markets

Today’s global challenges—poverty, fragility, climate change, and biodiversity loss—require more than incremental solutions. They demand smarter models of economic growth. The circular economy offers just that: a multi-trillion-dollar opportunity to build resilience, create jobs, and boost innovation, while helping to protect our environment.

This means shifting from the linear model of “take-make-waste” to the circular economy, which reduces waste, reuses materials, and restores natural systems. To date, IFC has committed more than $1 billion to circular economy-related projects across emerging markets and across the entire product lifecycle—supporting companies that are turning waste into opportunity and designing smarter, more resource-efficient systems.

This strategy is delivering notable results. In Brazil, a recent $130 million investment in Magalu—one of the country’s largest retailers—will help increase e-waste recycling fivefold while supporting the company’s e-commerce growth. In Türkiye, IFC financed a new textile recycling facility in an earthquake-affected region, supporting job creation and reuse of 200,000 tons of waste annually. In Ghana, support to Rider Steel enabled the company to use scrap materials, reducing emissions and import dependence. In India, IFC is supporting Attero Recycling to scale up its e-waste processing capacity and promote safe, responsible recycling.

Circular business models are not only helping reduce waste—they’re opening new markets, improving business resilience, and creating local jobs. There is momentum across sectors, from textiles to electronics to agribusiness.
 

Aligning the Market around Circularity

While momentum builds, clarity and consistency remain a critical challenge in scaling investment. Definitions vary, investment data is limited, and many clients still only associate circularity with recycling.

Uncertainty around labeling and definitions remains one of the biggest barriers preventing financial institutions from investing in circular solutions. To unlock private capital at scale, identifying circularity investment opportunities help give private sector investors the clarity they need to act.

To help address this, IFC and partners launched the Harmonized Circular Economy Finance Guidelines at the World Circular Economy Forum in São Paulo, Brazil in May 2025. The Guidelines provide a shared foundation to identify circular investments and align reporting. They outline definitions, eligibility criteria, and metrics that enable private investors to spot and quantify opportunities across the circular value chain: with (1) circular design and production, (2) circular use, and (3) value recovery, along with circularity enablers that cut across the three categories.

By providing a clear framework and definitions for circular finance, the Guidelines help pave the way for greater private investment in circular solutions.

Enabling the Shift: Policy and Partnerships

Unlocking private capital at scale will require coordinated action. Public and private stakeholders must work together to align incentives, unlock capital, and ensure a just transition.

Policy will play a catalytic role in scaling circular solutions—by addressing bankability challenges, supporting infrastructure, and encouraging innovation. Tools like Extended Producer Responsibility (EPR) and recycled content mandates can help mobilize capital and create predictable demand.

Well-designed EPR policies can be game changers, sending clear signals that reduce risk and unlock private investment in circular infrastructure, especially in emerging markets.

To deepen the conversation on this topic, the World Bank, IFC, and UNITAR recently co-hosted a high-level event on Extended Producer Responsibility and the private sector, bringing together voices from policy, business, and finance to explore enabling policy environments for circularity.

IFC is supporting efforts in markets like Côte d’Ivoire to bring together public and private sector actors to develop effective policies that will unlock investment.

As Jamie Fergusson, IFC’s Global Director for Climate Business, puts it: the circular economy isn’t just good for the planet—it is a smart strategy for development. IFC is proud to be building the financial infrastructure that will help grow the market.