The European Union-Philippines Green Economy Partnership, funded by the European Union (EU), is a key part of the EU’s contribution to the Team Europe Initiative on Green Economy, which aims to assist the Philippines in its transition to a green economy.

Implementers of the EU-PH Green Economy Partnership Specific Objectives (SOs) include:

• German Agency for International Cooperation (GIZ) – SO1: Policy and Alliances

• United Nations Development Programme (UNDP) – SO2: Green Local Government Units

• Expertise France, in partnership with the Global Green Growth Institute (GGGI) – SO3: Green Business, Infrastructure, and Finance

• International Finance Corporation (IFC) – SO4: Green Energy

GGGI aims to support the financial sector in allocating financing, developing new or additional finance streams towards green and circular economy initiatives, and accelerating high-growth-potential innovative green and circular economy startups. This initiative is designed to drive sustainable economic development, promote innovation, mobilize private sector engagement, and create a supportive ecosystem for the green and circular economy transition.

GGGI will provide technical assistance to the financial sector to develop and promote financial products tailored to support green and circular economy initiatives. Additionally, GGGI will support innovative startups in the green and circular economy by facilitating acceleration programs and organizing investment roadshows to showcase their business models and attract investments.

The project aims to support the Philippines’ transition towards a green economy, including circular economy, reducing waste and plastic, and to increase energy efficiency and renewable energy deployment in support of climate change mitigation. The transition to circular economy will have other added benefits such as increased energy efficiency, reduced greenhouse gas emissions, improvement of biodiversity and natural capital, a decrease in pollution levels, as well as enhanced resilience to climate change impacts.

The Philippines is the sixth-largest economy in Southeast Asia. Despite significant strides in poverty reduction, with rates dropping from 49.2% in 1985 to 16.7% in 2018, economic growth has been paired with environmental challenges, notably in waste management. The country’s economic activities, spurred by a growing middle class and increased consumption, have led to a waste management crisis, highlighted by insufficient infrastructure and unclear regulatory roles. This crisis is exacerbated by the Philippines’ archipelagic nature, which complicates equitable access to services across its roughly 1,000 inhabited islands.

To address these environmental and socio-economic challenges, the Philippines recognizes the importance of shifting towards a circular economy. This shift involves rethinking production and consumption processes to maximize resource efficiency and minimize waste. The private sector is identified as a pivotal player in this transition, capable of driving innovation and implementing sustainable practices that can significantly impact waste management and resource conservation.

GGGI, together with Expertise France, will enhance private sector engagement, particularly financial institutions, in the Philippines’ transition towards a green and circular economy. GGGI is implementing Output 3: Support to the financial sector under SO3, which consists of four key activities:

1. Development of a country-level circular economy taxonomy.

2. Technical assistance to financial institutions to help identify, assess, and finance green and circular economy projects and/or implement related financial products.

3. Development of a financing vehicle with local government units and participating financial institutions to fund local circular economy projects.

4. Investment mobilization and acceleration of high-growth potential green and circular economy startups.

The objective of Output 3 is to create an enabling environment where the financial sector actively promotes and supports the transition towards a circular/green economy. Allocating financing to sustainable projects and accelerating the growth of innovative startups will help mobilize green investments, driving positive environmental and social outcomes while also generating economic benefits.

The Outcome of Output 3 is to increase funding and investment opportunities for MSMEs and high-growth potential start-ups linked to the circular and green economy transformation.