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Reach for Change and the IKEA Foundation are teaming up to support young Ethiopian entrepreneurs who are building businesses that reduce waste and promote a circular economy.

Allocating $2.5 million, the three-year project aims to develop an ecosystem that can support the growth of waste management and circular enterprises. 

The project will also provide capacity-building, tailored upskilling, and funding support to green entrepreneurs to help them start and grow their green enterprises.

The circular economy is a model of production and consumption that involves reusing, repairing, refurbishing, and recycling existing materials and products as long as possible.

Ethiopia’s waste management infrastructure is currently grappling with several issues, including low recycling rates, limited resources, inadequate infrastructure, and underdeveloped markets for recyclables.

A few Enterprises are embracing a circular economy approach, where waste is not seen as an endpoint but as a valuable resource, including Kubik. Kubik which specializes in converting plastic waste into building materials, was able to raise 3.3 million dollars in seed funding last year.

Building on a previous pilot project that created 154 job opportunities, Reach for Change and IKEA’s program aims to reach a total of 105 green businesses and consists of two main components: the Green Business Incubator and the Green Innovation Lab.

The Green Business Lab will incubate, and support 30 small and medium enterprises (SMEs) focused on waste management and circular businesses over three years. This 12-month incubation program will accept the enterprises in three cohorts.

According to Buzunesh Gelaw, Head of Impact at Reach for Change, the program will help these businesses develop sustainable business models, improve their operational practices, and explore revenue generation strategies by providing participants with training, individual coaching, peer learning, and market access. In addition, equity-free funding ranging from $5,000 to $10,000 for each business will be awarded.

At today’s launch event, the first 10 green business incubator finalists were unveiled. Among these enterprises are Husky Energy and Technologies, which processes coffee husks and other biomass waste (such as sawdust) into solid biomass fuel called pellets, and Askema Engineering, which manufactures eco-friendly brake pads.

On the other hand, the Green Innovation Lab focuses on supporting 75 entrepreneurs with innovative ideas to modernize and enhance waste management and Ethiopia’s circular economy while developing and validating their minimum viable products (MVPs) over five cohorts.

“Though the innovation lab is targeting idea-stage green business, we are hoping to see them transition into an enterprise by the end of the 12-month program,” stated Johanna Nilson, Partnership Manager at Reach for Change.

The benefits of the Green Innovation Lab include group training and specialized support in idea generation, conceptualization, and building viable waste and circular enterprises.

It also provides business development and registration support, investor advisory, networking, knowledge-sharing, and learning opportunities with key ecosystem actors and industry experts, and equity-free seed funding of $1600. 

The IKEA Foundation is a Dutch foundation founded in 1982 by Ingvar Kamprad, a Swedish billionaire and founder of IKEA. The philanthropic organization provides grants for programs that fight poverty and climate change.

Meanwhile, Reach for Change Ethiopia is a social enterprise incubator focused on improving youth and children’s lives. Last week, Reach for Change announced an EdTech Fellowship in partnership with the Mastercard Foundation.

The program aims to accelerate the growth of promising Ethiopian EdTech ventures and bridge the gaps in the country’s education system. 

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Etenat holds a degree in Journalism and her master's in Public Relations. Previously, she served as a university lecturer and has five years of experience in communications, media, digital marketing, and consulting.