IFC-backed Morocco textile recycling pilot signals $1.9 billion investment opportunity

World Bank Group, through its private investment arm, the International Finance Corporation (IFC)-led Circular Textiles Program in Morocco has demonstrated that recycling textile waste at scale is both commercially viable and technically feasible, with potential to unlock an estimated $1.9 billion in private investment and create more than 30,000 jobs, according to findings from the World Bank Group’s diagnostic study on Morocco’s private sector.

The initiative highlights growing investor interest in circular economy models within North Africa’s manufacturing base, particularly as global supply chains shift toward low-carbon and traceable production systems.

Scaling circular textiles into a new growth industry

The pilot phase exceeded expectations, converting 427 metric tons of textile scraps into new materials for further processing, while an additional 2,400 tons were recycled across participating facilities.

Recycled fabrics produced under the program met commercial quality standards across all tested parameters, indicating that they can be reintegrated into global supply chains without loss of performance or durability. A life-cycle assessment further showed that recycled textile inputs can reduce carbon emissions by roughly 18% and cut water consumption by more than 60% compared with conventional production methods.

Jobs, informality, and structural transition

A major focus of the program is the labor structure underpinning Morocco’s textile recycling ecosystem, where more than 80% of waste collectors currently operate in the informal sector.

Program analysis suggests that up to 75% of these workers could transition into formal employment within five years if supported by targeted institutional reforms, potentially reshaping income stability for thousands of low-income households.

Positioning for Europe-driven demand

The push toward circular textiles is gaining urgency as global buyers tighten sustainability requirements, particularly in the European Union, which absorbs the majority of Morocco’s textile exports and is preparing to roll out digital product passports and extended producer responsibility frameworks from 2027.

Multi-stakeholder industrial platform

The “Morocco Textile Circularity” program brings together the Moroccan Ministry of Industry and Trade, the Ministry of Energy Transition and Sustainable Development, customs authorities, industrial agencies, manufacturers, recyclers, and global brands, forming one of the first coordinated national platforms for textile circularity.

IFC says the initiative reflects its long-standing partnership with Morocco, aimed at linking policy reform with private sector investment to drive inclusive industrial growth.

The IFC, part of the World Bank Group, operates in more than 100 countries and focuses on mobilizing private capital for development. In fiscal 2025, it committed $71.7 billion globally to private sector projects across emerging markets.