SWITCH-Asia – Circular Development Finance

In order to support the further uptake of circular economy practices in the textile industry in the People’s Republic of China, ICLEI – Local Governments for Sustainability and the Transformative Actions Program (TAP) were assigned to the SWITCH-Asia Project to help mobilize sustainable infrastructure projects from small-to-medium sized enterprises and provide financing match-making opportunities.

Transition to Circular Economy Practices in Textile and Apparel MSMEs Along the Lifecycle in Huzhou and Shaoxing

SWITCH-Asia Program

SWITCH-Asia is a program backed by the European Union (EU) and operational since 2007. The program aims to advance Sustainable Consumption and Production (SCP) in the region. The EU’s commitment to Sustainable Development Goal 12 and the Paris Agreement is reinforced by its 2019 EU Green Deal and Global Gateway initiatives, which facilitate the transition of countries in the region towards low-carbon, resource-efficient, and circular economy. Consequently, this has bolstered the knowledge foundation and momentum of the SWITCH-Asia program in assisting Asian countries in fulfilling their SCP obligations.

China’s Textile Sector

The People’s Republic of China is the largest producer and exporter of textile products in the world with an estimated export value of $323 billion in 2022. There are numerous enterprises of different sizes active within this sector, among which the small-to-medium sized enterprises (MSMEs) seem to dominate. In fact, the small-to-medium sized enterprises account for more than 90 % of the total number of enterprises in the country. The magnitude of the numbers and the scarcity of circular economy practices in the textile industry point towards the fact that reforms in the production processes of the small-to-medium sized enterprises could bring positive economic and environmental impacts.

The role of TAP

The main role of the Transformative Actions Program (TAP) is to serve as a platform for mobilizing sustainable projects from small-to-medium sized enterprises, supporting them with business models, feasibility study designs and financing match-making opportunities. Using the world-wide local and regional government network, ICLEI and TAP can support the cities of Huzhou and Shaoxing and guide them towards faster transition to circular economy practices in the texitle and apparel industry. The specific objectives are:

Improve sustainable management and resource efficiency,
Enable conditions for a conductive policy environment, and
Increase access to financing for eco-design

Projects

The Transformative Actions Program (TAP), in collaboration with SWITCH-Asia, mobilizes small-to-medium sized enterprises from the textile sector in the cities Huzhou and Shaoxing.

Projects accepted to the Pipeline that show high transformative potential get increased visibility to potential investors and are connected to project preparation facilities and financial partners.

Timeline

Events

Event 1: Awareness-Raising

Awareness-raising event will be held in January 11-12 to initiate the activity. The participants of the event will have the chance to:

Find out multiple access to circular green financing mechanisms and opportunities in the textile sector
Learn more on the Transformative Actions Program (TAP)
Engage TAP partners and other financial institutions in the “Circular economy practices in textile and apparel MSMEs along the lifecycle in Huzhou and Shaoxing” project
Initiate the development of TAP project ideas
Establish contact between the project submitter MSMEs and ICLEI

Click here to see the Agenda of the event.

Event 2: Matchmaking Opportunities

This event will bring relevant Chinese investors and international finance entities active in the country.

The event will build on the TAP methodology and consist of three main stages:

Pre-event activities:
- project selection;
- pitch preparation;
- PPF/investor identification and engagement.
On the spot activities:
- support and facilitation of discussion.
Post-event activities:
- follow up with project pitchers and financiers;
- define an action plan to make a deal;
- collect key takeaways and learnings.