Mr Green Africa
Location
Kenya
Sector
Environmental Protection
Type of Investment
Risk Capital
Project Stage
Length of Investment
2019+
Website
Investment Overview
A tech-enabled plastics recycling company working to change the informal and exploitative plastic recycling sector in Kenya. Mr Green Africa offers an in-house end-to-end process for recycling, purchasing directly from their sourcing agents; waste pickers who are some of society’s most marginalised people. It owns and operates a series of trading hubs across Nairobi and Kenya’s coastal region, where they transact with their sourcing agents directly to purchase collected plastic for onward transfer to the Mr Green Africa recycling facility. Here, the collected plastics are processed and sold as post-consumer recycled plastic pellets to plastics manufacturers for use in plastic packaging for large, fast-moving consumer goods (FMCG) products, such as those sold by Unilever.
The Development Challenge
Waste management is a huge issue across Africa, and Kenya’s capital, Nairobi, is no exception. The city produces around 2,400 tonnes of waste a day, of which roughly 60% is collected and only around 10% recycled. Waste pickers collect waste and sell it on. They aren’t employed by anyone and are routinely exploited by traders who pay them very poorly or don’t buy from them at all. In addition, there is no guaranteed demand for the waste collected by waste pickers, which can render their collection efforts futile and leave them with no income regardless of the time spent collecting. They are highly vulnerable informal sector workers.
The Innovation
Mr Green Africa recycles and sells ethically sourced materials with a traceable social and environmental impact. It currently engages around 2,000 previously marginalised waste collectors and collects over 3,000 metric tonnes of fairly sourced plastic materials to process and sell to local markets annually. The business seeks to formalise the plastics supply chain and create jobs, as well as aid growing cities with the problem of plastic pollution.
Our Investment
A $1.2 million equity and debt investment.
Mr Green Africa is developing and building its business through GIF investment by growing its plastics processing volumes through opening further trading points, onboarding additional sourcing agents, investing in technological upgrades, and investing in new machinery to increase the quality, quantity, and types of plastics that can be recycled.
Mr Green Africa is already able to offer premium prices to its sourcing agents, over and above other local plastic recycling traders, due to its ability to streamline the value chain and increase the end-value of the recycled materials through high-quality processing. As Mr Green Africa continues to develop and innovate, with the help of GIF’s investment, it expects to improve its operating margins and focus explicitly on improving its engagement with sourcing agents and the employment benefits it offers.
Investment Objective
Mr Green Africa provides reliable pricing and significant income improvement for an extremely marginalised and impoverished population, and also has a positive impact on the environment in the process. Its model has the potential to become globally recognised as the model for building integrated recycling infrastructure in developing countries whilst formalising the employment of those previously living as informal waste pickers and helping to lift them out of poverty.
Mr Green Africa in numbers
Waste pickers empowered in 2020 alone
Of CO2 emissions saved in 2020 alone
Mr Green Africa Impact Brief
Mr Green Africa (MGA) is a tech-enabled plastics recycling company disrupting the informal and exploitative plastic recycling sector in Kenya. It offers an in-house end-to-end process for plastic recycling by purchasing directly from sourcing agents or waste pickers, who are often some of the most marginalised people in society. MGA owns and operates a series of trading hubs across Nairobi and Kenya’s coastal region where it transacts with its sourcing agents directly to purchase collected plastic for onward transfer to MGA’s recycling facility. Here, the collected plastics are processed and sold as post-consumer recycled plastic pellets to plastics manufacturers for use in plastic packaging for large, fast-moving consumer goods (FMCG) products, such as those sold by Unilever.
Use of GIF Funds
GIF’s investment is being used to fund additional recycling machinery, IT upgrades, team expansion, and working capital. GIF’s investment is made through the Advance Fund.
Objectives
To grow the volume of plastics processed by opening further trading points, onboarding additional sourcing agents, investing in IT upgrades, and investing in new machinery to increase the quality, quantity, and types of plastics that can be recycled, whilst improving its gross margins . Additionally, to successfully scale to reach 50 trading points in Kenya by the end of 2023, to collect 5,000 metric tonnes of plastic per year, to engage a previously informal supplier network of more than 3,000 full-time sourcing agents, and to be on the path to breaking even and then operating profitably by 2025.
Impact: MGA formalises the waste picker sector, using technology enabled information flow and transactions. MGA provides reliable pricing and significant income improvement for an extremely marginalised and impoverished population, and also has a positive impact on the environment in the process.
Innovation: The MGA model becomes globally recognised as the model for building integrated recycling infrastructure in developing countries while formalising the millions previously living as informal waste pickers and helping to lift them out of poverty.
Scale: MGA collects 20,000 metric tonnes per year, engages a previously informal supplier network of more than 5,000 full-time sourcing agents, and reaches both operating and cash flow breakeven.
Commercial: Increases revenues and margins to the point where MGA is operating profitably and can either buy back shares, pay dividends, consider acquisition offers, or scale to new markets beyond their current 3-year projections.
Additionality: GIF is providing capital at a relatively high-risk and decisive point for the business which not only leverages additional capital, but acts as a values-aligned investor who supports MGA to stay mission-aligned throughout their growth and also advocates for a more ethical supply chain in service of deeply impacting marginalised waste pickers.
Impact to Date
In 2022, MGA recycled 2,300 metric tonnes of plastic waste, and saved an estimated 4.8 million kg of CO2 emissions. Over 2,000 waste pickers were empowered through the MGA model in 2022.