Report on the InvestCEC Project: A Scalable Model for Financing the Circular Economy in Alignment with Sustainable Development Goals

Introduction: The Circular Economy as a Catalyst for the SDGs

A proven financial model from Klagenfurt, Austria, demonstrates that circular economy initiatives can be transformed into scalable, profitable investments that directly advance the United Nations Sustainable Development Goals (SDGs). The EU-funded InvestCEC project has created a replicable framework for cities to convert waste, water, and energy solutions into bankable projects. This report outlines the model’s structure, its alignment with key SDGs, and its implications for investors and policymakers.

The initiative addresses a critical gap between policy and practice, moving beyond theoretical concepts to create tangible business models that support a green transition. The primary focus is on urban environments, which are central to achieving global sustainability targets. The project’s success is rooted in its contribution to several interconnected SDGs, including:

• SDG 11 (Sustainable Cities and Communities): By improving waste, energy, and water systems in urban centers.
• SDG 12 (Responsible Consumption and Production): By promoting the reuse and recycling of materials, turning waste into valuable resources.
• SDG 13 (Climate Action): By developing solutions that reduce emissions and enhance urban resilience.
• SDG 17 (Partnerships for the Goals): By fostering collaboration between public utilities, private investors, and innovators.

The Klagenfurt Pilot: A Case Study in SDG Implementation

Project Overview and Strategic Alignment

Klagenfurt, designated as one of the EU’s 100 climate-neutral cities, served as the pilot location for the InvestCEC project. The initiative, led by the public utility Stadtwerke Klagenfurt and venture firm Venionaire Capital, was designed to prove the financial viability of circular models. The city’s ambitious climate goals and the utility’s integrated management of energy, water, and waste systems provided an ideal environment for testing and integrating innovative technologies.

This integrated approach is fundamental to achieving multiple SDGs simultaneously:

• SDG 6 (Clean Water and Sanitation): By innovating in municipal water infrastructure.
• SDG 7 (Affordable and Clean Energy): By improving energy systems and reducing waste.
• SDG 9 (Industry, Innovation, and Infrastructure): By providing startups with access to municipal resources to test and scale new technologies.

Fostering Partnerships for the Goals (SDG 17)

A core success factor of the InvestCEC model is its emphasis on public-private partnerships (PPPs). The project bridges the gap between innovators seeking to implement solutions and municipal bodies that operate under bureaucratic constraints. By creating standardized templates, reports, and guidelines, InvestCEC facilitates a clear pathway for collaboration. This structured approach helps de-risk projects for private investors and ensures alignment with public sector objectives, embodying the principles of SDG 17.

A Replicable Framework for Sustainable Investment

The Four-Stage Process for Developing Bankable Projects

The InvestCEC project developed a structured, four-stage process to transform circular economy concepts into investable ventures. This framework is designed for replication across other European cities, promoting widespread adoption of sustainable practices.

1. Needs Identification: The city identifies critical needs in waste management, water, energy, and logistics and develops targeted solution requirements.
2. Call for Innovation: Entrepreneurs and companies are invited to submit proposals using standardized templates to ensure fair and transparent evaluation.
3. Business Plan Refinement: Selected companies refine their business models, define key performance indicators (KPIs), and structure financing to meet investor criteria.
4. Financing and Monitoring: Public and private funds are blended to make projects bankable. Progress is monitored to generate data and lessons for future replication.

Advancing Innovation and Infrastructure (SDG 9)

This standardized process directly supports SDG 9 by creating a transparent and efficient system for fostering innovation. According to project lead Paul Stern, the focus on concrete utility needs and standardized data makes due diligence faster and investment risks clearer. This approach shifts the focus from abstract “climate solutions” to commercially viable “resilience technologies,” which address critical infrastructure challenges while attracting market-rate capital.

Investment Implications and Future Outlook

Mitigating Risk and Attracting Capital

Historically, investors have been hesitant to fund circular economy projects due to perceived risks, fragmented supply chains, and unproven revenue models. The InvestCEC model addresses these concerns directly:

• Revenue Security: By linking projects to long-term utility contracts, startups gain a reliable revenue stream without diluting equity, which significantly reduces investor risk.
• Data-Driven Evaluation: The program’s emphasis on data collection and sharing from pilot projects allows private investors to more accurately assess and fund ventures.
• Strategic Partnerships: Collaborations with impact-focused funds like Universe Partners and Una Terra provide both capital and operational expertise, bridging the gap between EU policy and market realities.

Scaling for Global Impact

Building on the success in Klagenfurt, Venionaire and its partners are launching a new public-private investment vehicle focused on resilience technologies. The goal is to replicate the model in other European cities and beyond. The October 14 event in Brussels will disseminate the project’s learnings through free guides and templates, empowering other municipalities to adopt this framework.

Conclusion: A Profitable Pathway to Sustainable Cities

The Klagenfurt pilot proves that the circular economy is no longer just a concept but a practical, scalable, and profitable investment opportunity. By structuring bankable projects through robust public-private partnerships, the InvestCEC model offers a clear roadmap for cities to advance their sustainability agendas. For investors, policymakers, and innovators, this framework demonstrates how to effectively align financial returns with the urgent need to achieve the Sustainable Development Goals, particularly SDG 11 and SDG 12, creating resilient and prosperous cities for the future.

Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 11: Sustainable Cities and Communities

  The article is centered on a pilot project in Klagenfurt, an Austrian city, with the explicit goal of creating a replicable model for other cities. It discusses managing urban waste, energy, and water systems to build sustainable cities, which directly aligns with the core focus of SDG 11.

• SDG 12: Responsible Consumption and Production

  The entire concept of the “circular economy” discussed in the article—defined as “reusing and recycling as much as possible” and “turning waste into raw materials”—is the foundation of SDG 12. The project aims to create sustainable patterns of consumption and production at the city level.

• SDG 9: Industry, Innovation, and Infrastructure

  The article highlights the development of “resilience technologies” and the use of “cutting-edge sensors and machinery.” The InvestCEC project focuses on creating a new, investable infrastructure model for circular economies, fostering innovation by connecting startups with city utilities to upgrade and improve municipal systems.

• SDG 17: Partnerships for the Goals

  The success of the Klagenfurt model is attributed to collaboration. The article explicitly mentions the partnership between a public utility (Stadtwerke Klagenfurt), a venture firm (Venionaire Capital), and the EU. It also describes forging partnerships with other investment funds, demonstrating the multi-stakeholder approach essential to SDG 17.

• SDG 13: Climate Action

  The article states that Klagenfurt is one of the “EU’s 100 climate-neutral cities” and that a key goal of the circular economy model is “cutting emissions.” This directly addresses the need for urgent action to combat climate change and its impacts.

• SDG 7: Affordable and Clean Energy

  The project involves “improving energy systems” within the city. As part of a plan for a “climate-neutral” city, this implies a focus on energy efficiency and cleaner energy sources, which is central to SDG 7.

• SDG 6: Clean Water and Sanitation

  The article mentions that the circular economy model in cities includes “improving energy and water systems” and that the city utility manages “water infrastructure.” This connects the project’s activities to the sustainable management of water resources.

What specific targets under those SDGs can be identified based on the article’s content?

• Target 11.6: Reduce the environmental impact of cities

  The project’s focus on turning “waste into raw materials” and managing municipal waste systems directly contributes to reducing the adverse per capita environmental impact of cities.

• Target 12.5: Substantially reduce waste generation

  The core activity of the circular economy model described is to reduce waste through reusing and recycling materials, which is the exact aim of this target.

• Target 9.4: Upgrade infrastructure and industries for sustainability

  The initiative supports startups using “cutting-edge sensors and machinery” and developing “resilience technologies” to make city infrastructure (waste, water, energy) more sustainable and efficient.

• Target 17.17: Encourage effective public-private partnerships

  The InvestCEC project is presented as a model public-private partnership, combining a public utility, a private venture firm, and EU funding to achieve sustainable development goals. The article emphasizes that this collaborative structure is key to its success.

• Target 13.2: Integrate climate change measures into policies and planning

  The project is implemented in a city designated as “climate-neutral” by the EU, showing the integration of climate action into municipal planning and strategy. The model itself is a tangible climate change mitigation measure.

Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Key Performance Indicators (KPIs)

  The article explicitly states that a stage of the project involves companies refining business plans and defining “key performance indicators.” These KPIs would be used to measure the operational success and impact of the circular economy solutions.

• Financial Viability and Investment

  A primary theme is making circular models “financially viable” and able to “attract real investment.” Therefore, the amount of private capital invested, the profitability of the projects, and their ability to become “bankable” serve as key indicators of the model’s success and scalability.

• Replication and Scalability

  The project’s goal is to create a “model that can be replicated across Europe.” An indicator of success would be the number of other cities and utilities that adopt the templates, guides, and investment vehicles developed in Klagenfurt.

• Waste Reduction and Material Reuse

  Although not quantified, the process of turning “waste into reusable materials” implies that progress can be measured by the volume or percentage of waste diverted from landfills and successfully reintroduced into the economy.

• Emission Reductions

  The goal of “cutting emissions” implies that a relevant indicator would be the measured reduction in greenhouse gas emissions (e.g., tonnes of CO2 equivalent) resulting from the improved energy, waste, and logistics systems.

Table of SDGs, Targets, and Indicators

Source: forbes.com