Financing wastewater treatment and resource recovery
Resource Recovery and Reuse (RRR) will be an important strategy to achieve several SDGs concerning environmental and human health, food security, waste and rural-urban linkages (SDGs 2, 3, 6, 11, 12, and 15). Once the decision is made for a new wastewater or faecal sludge treatment facility, the question is how to prioritize technology options in terms of costs, benefits and local capacities. How should financing mechanisms and business models be designed to ensure sustainable services and limited public resources leverage? Most investments respond to societal demands and a need to comply with rigid effluent thresholds without consideration to opportunities for resource extraction and improvement in efficiencies. Although full cost recovery is generally seldom, RRR can be instrumental for narrowing the financial gap.
Enabling Environment for RRR
The session will bring together practitioners, representatives from the public and private sector and development partners to review state of the art knowledge about the policy architecture, market mechanisms, institutional arrangements and incentive frameworks to facilitate RRR at scale. The session will identify regulatory barriers that are constraining revenue generation. With a mix of speakers from developed and developing countries, the session aims to identify both universally applicable and context-specific policy and enabling environment conditions.
Session 1. Enabling Environment for Resource Recovery and Reuse (RRR)
Chair: Anders Berntell, 2030 WRG
09:05 Global Context and Overview of RRR
Jennifer Sara, Water Global Practice
09:15 Valuing a circular approach: An European perspective on policies and financial instruments required to facilitate Resource Recovery and Reuse
Gerhard van den Top, Amsterdam Regional Water Authority
09:25 Highlighting enabling environment bottlenecks and solutions for private sector participation in RRR
Jack Moss, AquaFed
09:35 Examples of policy and financing frameworks to promote Public-Private Partnerships for RRR
Neeraj Gupta, IFC
09:45 Special Address - Resource Recovery and Reuse in Industrial Sector: Through Policy and Incentives in Economic Zones
Paban Chowdhury, Bangladesh Economic Zones Authority (BEZA)
09:55 Panel discussion: Enabling environment for RRR
Moderator: Bastiaan Mohrmann, 2030 WRG
• Jennifer Sara, Water Global Practice
• Gerhard van den Top, Amsterdam Regional Water Authority
• Jack Moss, AquaFed
• Neeraj Gupta, IFC
• Paban Chowdhury, Bangladesh Economic Zones Authority (BEZA)
10:25 Closing remarks
Anders Berntell, 2030 WRG
10:30 Close of session
Improving sanitation service delivery is essential for achieving the SDGs. Globally the sanitation and wastewater treatment sector is facing numerous challenges, expressed in the 2.3 billion people without access to basic sanitation facilities and the fact that over 80% of all wastewater is dumped in the environment without treatment. Poor utilities performance and major difficulties in attracting funding for sanitation and wastewater treatment projects are every day’s business.
Resource Recovery and Reuse (RRR) can be an important strategy to improve cost recovery, leverage private finance and return nutrients, energy and water back into the production cycle, in support of those SDGs concerned with sustainable consumption and production, environmental and human health, food security, water reuse, energy supply, and rural-urban linkages. While wastewater and fecal sludge treatment is mostly responding to societal demands and the need to comply with effluent thresholds, many RRR opportunities are missed.
The seminar brought together scientists, practitioners, representatives from the public and private sector and development partners, to discuss the lessons learned, challenges and opportunities faced in the design and financing of projects which aim at achieving certain goals of RRR. The seminar focused on three aspects: i) the enabling policy, regulatory and financial environment required to take RRR at scale; ii) partnerships and innovative business models; and iii) lessons learned from implementation and financing of RRR projects.
Three key messages can be summarized as the outcome of the seminar:
- As RRR projects are usually economically viable and required for achieving several SDGs, more efforts are needed to internalize these benefits for society and the environment in order to make them financially bankable and attractive.
- In many countries, the enabling environment for RRR remains constraint although the number of encouraging examples of PPPs is increasing, with increasing focus on the sanitation value chain. A great example is the As Samra wastewater treatment plant in Jordan, which was showcased in the seminar. This example highlighted the essential support needed from Governments to ensure proper risk sharing, tariff and tax strategies, green finance and regulations supporting wastewater reuse. The water sector must also leap-frog other infrastructure sectors, while benefiting from instruments such as power purchase agreements and feed-in tariffs.
- Many RRR projects miss the value chain approach of rigorous market data throughout the supply chain (e.g. on the locally most profitable waste-derived products and required product quality). Furthermore, the RRR entrepreneurs would benefit from project development that fosters speed and innovation and output based financing options.
While acknowledging the key role of the public sector in developing proper institutional and regulatory frameworks, the seminar advocated for the private sector as part of the solution, but also the need to support especially smaller RRR enterprise start-ups which can face significance finance constraints in low- and middle income countries.