(Ecofin Agency) - Norfund announced its inaugural direct investments in the African plastic recycling sector. The Norwegian development finance institution is supporting Nigerian company Wecyclers with a convertible loan and Ghanaian company Miniplast with an equity investment.

On July 13, Norfund unveiled two financing operations aimed at bolstering the plastic recycling industry in West Africa. Wecyclers Nigeria Limited, a Lagos-based plastic recycling company, will receive a convertible loan of €2 million ($2.2 million). Additionally, Norfund will invest $10.5 million in Miniplast Ghana Ltd, a manufacturer of industrial and household plastic products.

The investment in Wecyclers will enable the establishment of a new plastic bottle recycling plant, facilitating local and European production of new bottles. Meanwhile, the investment in Miniplast will be utilized to acquire advanced equipment and manufacturing machinery, expanding the company's recycling capacity, promoting the use of locally sourced recycled materials as substitutes for imported plastic resins, and reducing production costs, according to Norfund.

While these investments may appear modest given the scale of the plastic pollution challenge in West Africa and globally, Norfund believes they will contribute significantly to the development of the regional plastic recycling industry.

It is worth noting that in West Africa, Norfund is present in Nigeria and Ghana, mainly in the energy and financial services sectors through direct and indirect investments in numerous companies. However, the financial support provided to Wecyclers Nigeria Limited and Miniplast Ghana Ltd is its first direct investment in the plastic recycling sector in Africa.

In 2022, Norfund's commitments increased by 20% to SEK 6.5 billion ($608 million). These commitments were channeled into diverse industries across Africa, Asia, and Latin America, underscoring Norfund's dedication to supporting businesses in these regions.

Chamberline Moko