RESOURCE RECOVERY & REUSE SERIES 22 ISSN 2478-0529 Public-Private Partnerships for the Circular 22 Bio-Economy in the Global South: Lessons Learned Avinandan Taron, Ayan Majumder, Susanne Bodach and Dzifa Agbefu Resource Recovery & Reuse Series The Resource Recovery and Reuse (RRR) Series originated in 2014 under the CGIAR Research Program on Water, Land and Ecosystems (WLE), and continues since 2021 under the CGIAR Initiatives on Resilient Cities and Nature-Positive Solutions. The aim of the RRR series is to present applied research on the safe recovery of water, nutrients and energy from domestic and agro-industrial waste streams. IWMI’s research on RRR aims to create impact through different lines of action research, including (i) developing and testing scalable RRR business models, (ii) assessing and mitigating risks from RRR for public health and the environment, (iii) supporting public and private entities with innovative approaches for the safe reuse of wastewater and organic waste, and (iv) improving rural- urban linkages and resource allocations while minimizing the negative urban footprint on the peri-urban environment. IWMI works closely with the World Health Organization (WHO), Food and Agriculture Organization of the United Nations (FAO), United Nations Environment Programme (UNEP), United Nations University (UNU), and many national and international partners across the globe. The RRR series of documents present summaries and reviews of the research and resulting application guidelines, targeting development experts and others in the research for development continuum. RESOURCE RECOVERY & REUSE SERIES 22 Public-Private Partnerships for the Circular Bio- Economy in the Global South: Lessons Learned Avinandan Taron, Ayan Majumder, Susanne Bodach and Dzifa Agbefu The authors Taron, A.; Majumder, A.; Bodach, S.; Agbefu, D. 2023. Public-private partnerships for the circular bio- Avinandan Taron is a researcher at the International Water economy in the Global South: lessons learned. Colombo, Management Institute (IWMI), Colombo, Sri Lanka. He has Sri Lanka: International Water Management Institute an academic background in environmental and resource (IWMI). 50p. (Resource Recovery and Reuse Series 22). economics. His work involves the analysis of institutions doi: https://doi.org/10.5337/2023.205 and investments towards a circular bio-economy focused on agriculture and rural–urban linkages. (a.taron@cgiar.org) / resource recovery / resource management / reuse / circular economy / bioeconomy / public-private partnerships Ayan Majumder holds a Master’s in Environmental / developing countries / case studies / waste management Engineering and has been working on the technical and / solid wastes / recycling / composting / organic wastes / financial feasibility of urban waste management, sanitation organic fertilizers / bioenergy / biogas / briquettes / business and wastewater for the last two decades. He has wide models / markets / scaling up / appropriate technology / experience in implementing public-private partnership innovation / financial analysis / risk management / policies models in waste and resource recovery and currently works / regulations / legal frameworks / economic viability / as an independent consultant. (am@ess.ind.in) feasibility studies / project design / costs / environmental assessment / social analysis / infrastructure / investment / Susanne Bodach is a Circular Economy Expert marketing / small and medium enterprises / stakeholders / working at IWMI, Colombo, Sri Lanka. With over 19 municipal authorities / procurement planning / contracts / years of work experience, her areas of interest include sustainability / carbon credits / climate change mitigation / circular bio-economy and upscaling Resource Recovery agricultural wastes / faecal sludge / soil quality / communities and Reuse (RRR) business models addressing water, / awareness / Asia / Africa / India / Bangladesh / Ghana / Sri nutrient and energy recovery from domestic and agro- Lanka / Pakistan / Rwanda / Indonesia / industrial organic and liquid waste sources for overall agri- food system resilience. (s.bodach@cgiar.org) ISSN 2478-0510 (Print) ISSN 2478-0529 (Online) Dzifa Agbefu is the RRR Innovation Hub Coordinator at ISBN 978-92-9090-950-7 IWMI, Accra, Ghana. She is responsible for the design, setting up and continuous operation of an innovation hub Copyright © 2023, International Water Management Institute for resource recovery and reuse solutions. Dzifa is a certified (IWMI). civil engineer specialized in water supply and environmental sanitation. She is a practitioner implementing business Fair use: Unless otherwise noted, you are free to copy, models on the recovery of organic fertilizer and dry fuel from duplicate or reproduce, and distribute, display, or transmit domestic and agro-industrial waste. (d.agbefu@cgiar.org) any part of this paper or portions thereof without permission, and to make translations, adaptations or other derivative works under the following conditions: Acknowledgments ATTRIBUTION. The work must be referenced according This work started under the CGIAR Research Program on to international citation standards, while attribution Water, Land and Ecosystems (WLE) and was finalized under should in no way suggest endorsement by IWMI or the the CGIAR Initiatives on Resilient Cities and Nature-Positive author(s). Solutions. The authors are grateful for the support of the NONCOMMERCIAL. This work may not be used for CGIAR Trust Fund contributors (www.cgiar.org/funders). commercial purposes. SHARE ALIKE. If this work is altered, transformed or built upon, the resulting work must be distributed only under the same or similar license to this one. Front cover photograph: Karadiyana compost facility, Sri Lanka. Photo: Hamish John Appleby/IWMI Series editor (science): Pay Drechsel, IWMI English editor: Shikhar Vyas Designer: W. D. A. S. Manike - ASM Graphics ii CONTENTS List of Figures .......................................................................................................................................................iv List of Tables .........................................................................................................................................................iv List of Boxes .........................................................................................................................................................iv Acronyms and Abbreviations ............................................................................................................................... v Summary ............................................................................................................................................................vii 1. Introduction ...................................................................................................................................................... 1 1.1. Towards a Circular Bio-economy .............................................................................................................. 1 1.2. Public-Private Partnerships (PPPs) for Scaling Resource Recovery and Reuse (RRR) ......................... 2 2. Lessons Learned from the Asian and African RRR Market ............................................................................ 5 2.1. Country’s Readiness for PPPs .................................................................................................................. 5 2.2. Key Barriers and Factors of Success ....................................................................................................... 6 2.2.1. Input-related Bottlenecks ................................................................................................................... 7 2.2.2. Limited Awareness about Waste Recycling and RRR Production Services ......................................... 7 2.2.3. Barriers to Regulatory and Institutional Mechanisms ........................................................................ 11 2.3. Lessons Learned and Possible Mitigation Measures ............................................................................ 13 3. The Roadmap for an Effective PPP in the RRR Market ................................................................................ 20 3.1. PPP Project Preparation ......................................................................................................................... 20 3.1.1. PPP Project Selection and Development Process ............................................................................ 20 3.1.2. Prefeasibility Assessment and Risk Allocation .................................................................................. 20 3.1.3. Commercial Viability Assessment and Financial Strategy .................................................................. 21 3.1.4. The Hybrid Annuity PPP Model ........................................................................................................ 22 3.2. Structuring of the Project for Effective RRR .......................................................................................... 22 3.2.1. Prequalifying Criteria ........................................................................................................................ 22 3.2.2. Evaluation Criteria ............................................................................................................................ 22 3.2.3. Key Components of the PPP Contract Agreement ........................................................................... 23 3.2.4. Procurement Management .............................................................................................................. 25 3.2.5. Service Level Benchmark and Key Performance Indicators .............................................................. 25 4. Roles of Stakeholders in PPP Framework .................................................................................................... 28 4.1. Public Sector Participation ..................................................................................................................... 28 4.1.1. At National Level .............................................................................................................................. 28 4.1.2. At Regional Level ............................................................................................................................. 29 4.1.3. At Local or ULB Level ...................................................................................................................... 29 4.2. Private Sector Participation .................................................................................................................... 29 4.3. Matching Expectations between Private and Public Partners ............................................................. 30 4.4. The Role of Small & Medium Enterprises (SMEs) .................................................................................. 30 4.5. Role of Community Members ................................................................................................................. 30 5. Conclusion ...................................................................................................................................................... 33 References .......................................................................................................................................................... 34 Annex. Brief Description of Case Studies ......................................................................................................... 37 iii LIST OF FIGURES FIGURE 1. Resource recovery and reuse (RRR) plant in a circular bio-economy. 1 FIGURE 2. Objectives for a successful PPP in the RRR market. 3 FIGURE 3. Country scoring of the enabling environment for infrastructure-related PPPs in selected Asian 6 countries, 2019. FIGURE 4. Country scoring of the enabling environment for infrastructure-related PPPs in selected African 7 countries, 2019. FIGURE 5. Four key issues for establishing PPPs in the RRR sector. 13 FIGURE 6. Key stakeholders and their priorities within the circular bio-economy PPP project. 14 FIGURE 7. Overview of general challenges along the PPP project stage. 17 FIGURE 8. Key consideration for proper scoping of private sector engagement in a circular bio-economy PPP. 18 FIGURE 9. Project structuring for effective PPP procurement. 22 FIGURE 10. Checklists for procurement management to facilitate tendering process. 27 FIGURE 11. Main success factors of resource recovery PPPs in developing countries. 33 LIST OF TABLES TABLE 1. Public-private partnership (PPP) projects that reached financial close in selected developing 5 countries in Asia (1990–2016). TABLE 2. Overview of analyzed case studies from Asia and Africa. 8 TABLE 3. Barriers and risk factors for successful PPP project in RRR sector. 13 TABLE 4. Challenges with a PPP for circular bio-economy and suggestions for improvement. 15 TABLE 5. Key elements of the PPP during the project development and implementation stage. 21 TABLE 6. Matrix indicating prequalification and evaluation criteria. 24 TABLE 7. Expectations from public bodies and recommended actions for private entities. 31 TABLE 8. Expectations from private entities and recommended actions for the public sector. 32 LIST OF BOXES BOX 1. Key objectives for a successful RRR business model through a PPP arrangement. 4 BOX 2. Checklists for contract preparation. 26 BOX 3. An example of benchmarking for FSTP biosolids. 28 iv ACRONYMS AND ABBREVIATIONS APCF Asia Pacific Carbon Fund BASA Bangladesh Association for Social Advancement BMGF Bill & Melinda Gates Foundation BOOT Build-Own-Operate-Transfer BOT Build-Operate-Transfer CAGR Compound Annual Growth Rate CBE Circular Bio-economy CBO Community-based Organization CDD Consortium for DEWATS Dissemination Society CDM Clean Development Mechanism CER Certified Emission Reduction COOCEN Coopérative Pour La Conservation De L’Environement DBO Design-Build-Operate DBOT Design-Build-Operate-Transfer DCC Dhaka City Corporation DEWATS Decentralized Wastewater Treatment System DTMC Devanahalli Town Municipal Council FS Fecal Sludge FSM Fecal Sludge Management FSTP Fecal Sludge Treatment Plant GC Greenfield Crops GHG Greenhouse Gas HAM Hybrid Annuity Model IEC Information, Education and Communication JICA Japan International Cooperation Agency Kcal Kilocalorie KPI Key Performance Indicator KSWMIP Kolkata Solid Waste Management Improvement Project LCL Lahore Compost Private Ltd. LCS Lowest Cost Solutions MSW Municipal Solid Waste MW Megawatt NGO Nongovernmental Organization O&M Operation and Maintenance PIM Project Information Memorandum PMC Pune Municipal Corporation PPP Public Private Partnership RRR Resource Recovery and Reuse SME Small and Medium scale enterprise SWOT Strengths, weaknesses, opportunities, and threats TPD Tons per day ULB Urban Local Body WTE Waste-to-Energy WWR Worldwide Recycling WWTP Wastewater Treatment Plant v PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED SUMMARY Circular bio-economy aims at products and services from stakeholders. Prominent examples of unsuitable framework recovered resources to promote sustainable growth through conditions for promoting RRR PPPs include the lack of regenerative practices. It focuses on processing biomass tipping fees, a dearth of clarity on government assets from different waste streams into marketable products such and statutory commitments, poorly-defined payment as organic fertilizer and bio-energy.1 While the ‘circular’ mechanisms for using the equipment and machinery terminology remains dynamic, processes like organic owned by the municipality, insufficient marketing, missing waste composting and biogas production are established sales-oriented key performance indicators (KPI), and resource recovery and reuse (RRR) mechanisms, which can short-term contractual models.The process of establishing significantly benefit from private sector participation to link the PPP can be initiated by any party, including a third the sanitation and agricultural sectors, improve production party, and should be driven by strong local demand and efficiency, and enhance the quality of waste services in a not predominantly external funding agencies. standardized way. In developing countries, the private sector can be expected to contribute technical skills, Given these recorded barriers to success the study points out organizational capabilities, marketing expertise and leverage mitigation measures which include (i) technical analysis to find capital inflow. In contrast, the public sector will provide the the most appropriate technology, (ii) financial assessment to regulatory framework and help its enforcement, plan public understand the investment and operation costs and assess investments, involve and educate stakeholders, and ensure revenue streams to sustain business, (iii) legal analysis to waste supply. A well-organized and technically capable define the roles and responsibilities of the involved parties and structured mechanism of public-private entity can therefore stakeholders and (iv) social and environmental assessment render a sustainable bio-circular economy. to understand the likely impacts of the project. Apart from these general measures, PPP projects related to RRR can The present study reviews case studies that implemented benefit from considering ring-fencing of municipal finance, public-private partnerships (PPP) in resource recovery proper scoping of how to engage with the private sector and reuse from waste streams with a particular focus as well as implementing innovative payment mechanisms on Asia and Africa. Critical factors behind the success such as hybrid annuity or including penalty regulations. and failure of these cases were analyzed. Based on the Moreover, it is required to establish close monitoring, case studies and literature, recommendations are put appropriate procurement mechanisms and due diligence forward on how best to use PPPs to promote the circular during the project preparation and pre-bid. If possible, such business model and the key issues to be considered for a PPP project should consider scalability during the project successful implementation. It focuses on PPP models that preparations and integrate recovery from different waste recover and reuse the organic fraction from solid waste streams. and fecal sludge, which have received less attention than PPP models for wastewater treatment plants (WWTPs). Firstly, the project selection and development process of an The review indicates three key barriers to success: (i) effective PPP in the RRR market shall be backed by a pre- waste-related bottlenecks, (ii) limited awareness about feasibility assessment pointing out risk allocation, commercial RRR products, their market(ing), and waste recycling and viability assessment as well as financial strategy planning. (iii) lack of proper institutional frameworks. Municipalities Secondly, during the procurement, establishing appropriate often fail to meet their commitments in the quality and prequalifying and evaluation criteria for the bidder can facilitate quantity of waste, leading to underperformance of the selection from a competent set of private parties experienced resource recovery plants. Challenges related to source in the targeted market of the recovered resources. Contract segregation and collection of waste are frequently cited designing is an essential component outlaying the scope of as one of the primary reasons causing variations in the service and risks with clarity; it should include incentives for composition of waste and the quality of the recovered service delivery through service level benchmarking and KPIs resources. The lack of proper waste source segregation which go beyond resource recovery and include the reuse, stems from the limited awareness of the citizenry on waste i.e., sold volumes versus the waste collected. management. Municipalities might not fulfill their mandate to collect segregated waste for resource recovery, or there In a PPP, the public sector has a leading role in defining are competing collection services. These problems are objectives, prioritizing the project criteria, framing the aggravated by bottlenecks in the institutional framework applicable policies and regulations and finalizing the type of and an absence of well-defined interlinkages between the PPP to implement. Private sector involvement is crucial in 1 Organic fertilizer is usually compost based; it is also known by the public as bio-fertilizer, soil conditioner, humus or ‘manure’. Bio-energy can refer to biogas or, for example, briquettes made from sawdust, wood chips and/or charcoal. vii RESOURCE RECOVERY & REUSE SERIES 22 implementation, sharing the financial risk and engendering sector’s role in promoting circularity is visualizing the present technological innovation. An effective PPP formulation, investment needs and introducing efficiency through private therefore, requires matchmaking of the public and private sector engagement. The successful involvement of the private sector expectations. This study proposes different measures sector in the RRR market is critical to close the resource loop to tackle such expectations using close collaboration and safeguard human and environmental health, which is the between the stakeholders for resource recovery. The public overarching objective of sustainable waste management. viii PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED 1. INTRODUCTION 1.1. Towards a Circular Bio- The CBE market has substantial economic potential. economy The size of the waste-to-energy market is estimated Circular bio-economy (CBE) is the production of recoverable at USD 39.8 billion in 2021 (Globenewswire 2022), biological (waste) resources and the conversion of these with a compound annual growth rate (CAGR) of 5.3% resources into high-value-added products, such as (between 2022–28). Similarly, the compost market food, feed, bio-based products and bioenergy (Gatto et stands at USD 9.2 billion with a CAGR of 6.8% between al. 2021). The transition to a bio-based economy with 2019–2024 (Globenewswire 2019). The economic closed resource loops is necessary to ensure resource potential of resource recovery from fecal sludge (FS) conservation and sustainable growth for future generations treatment in low-income countries is estimated at USD (European Commission 2017). CBE minimizes the 5 per person and year (Mallory et al. 2020). Another depletion of resources, encourages regenerative practices, growing resource for CBE practices is food waste. and stimulates reuse and recycling in a way that adds the The economic potential for resource recovery through highest possible value to the system (Muscat et al. 2021). food waste management is estimated at USD 34.22 It focuses on using waste and residues as a valuable billion, with a CAGR of 5.4% between 2020 and 2027 resource (UNEP 2016; Stegmann et al. 2020). CBE fosters (Grand View Research 2022). Municipalities facing the the sustainable processing of biomass into marketable challenge of urbanization need to plan and envision the products (Figure 1) such as organic fertilizers, or energy safeguarding of citizens’ health and environment by in the form of fuel, power or heat (Hetemäki et al. 2017; taking steps toward appropriate waste management. Temmes and Peck 2020; Zabaniotou 2018; Stegmann et Investments made in the public utilities for waste can al. 2020). As shown by Otoo and Drechsel (2018) resource help in realizing economic returns in the long run by recovery and reuse (RRR) is no longer about technologies capturing the market potential as well as lowering but business models. health and environmental risks in future. Soil Enricher Food Waste Fertilizer Bio & Agro-Waste Energy Fecal Sludge RRR Plant FIGURE 1. RESOURCE RECOVERY AND REUSE (RRR) PLANT IN A CIRCULAR BIO-ECONOMY. 1 RESOURCE RECOVERY & REUSE SERIES 22 In developing countries, bio-based waste can act as a commercial feasibility and viability. The urban local bodies significant revenue source if managed well, for example, (ULBs) depend heavily on household tax (e.g., property as potential feedstock through various biomass conversion taxes) and user fee collection for services such as waste and processes (Nizami et al. 2017). The CBE focuses on wastewater. They are also reliant on the general budgetary sustainable resource-efficient biomass valorization in Asia and provision from the state and central governments. However, Africa using an integrated, multi-output product chain. Such in many instances, these three means cannot ensure the optimization must ideally consider each of the three pillars of commercial viability of the system. In many cases, public sustainability: economic, environmental and social (Stegmann authorities have not been effectively able to recover the et al. 2020; Feleke et al. 2021). Resource recovery and reuse investment, failing to recirculate the potential physical (RRR) practices offer immense potential for improving the resources back into the system. With increasing urbanization, return on investment of safely-managed sanitation-waste waste management has become a significant challenge services in public-private partnerships (Zarei 2020). Nutrients for ULBs and municipalities. Promoting CBE practices and energy can be recovered from different resources — in municipal solid waste and fecal sludge management raw wastewater streams, sewage sludge, fecal sludge and (FSM), particularly resource recovery from the organic waste organic solid waste — to create an additional revenue stream fraction, is an excellent opportunity to increase the cost (Zhang et al. 2018; Zarei 2020). Promotion of sanitation and recovery of these public utility services. Organic fertilizer for waste management in a circular bio-economy through the soil amelioration and fertility enrichment as well as recovered financing mechanism of PPP is an effective way to convert energy are broadly understood to be major components which waste into a resource and render it harmless (Xu et al. 2015). can be derived through a CBE system. Segregated municipal organic waste, agro-industrial (including agricultural) residues Many RRR initiatives explore the means to mitigate the and FS are the three major resources with revenue-generating impacts of climate change within the waste sector by potential. Recovery of valuable materials employing organic encouraging waste reduction and recycling and reducing the composting, co-composting, fecal sludge treatment and negative impact on the environment. Opportunities to realize waste-to-energy technology can generate substantial these goals are available via organic fertilizer, energy and revenues if effectively and efficiently implemented. Moreover, water for irrigation and aquaculture. Creating an affordable resource recovery brings an enormous positive impact on nutrient-rich organic fertilizer would address possible environmental and community health, local economy as well adverse effects of chemical fertilizers on the environment. as the resilience to climate change. In addition, the use of waste-derived briquettes can reduce charcoal and firewood consumption and deforestation. The participation of the private sector in scaling RRR solutions in the waste sector using PPP approaches Effective and efficient low-cost conversion technology and can significantly ameliorate the efficiency and quality of risk mitigation processes can generate revenue for the CBE service provision in a standardized way. In developing value chain by transforming biomass feedstock into valuable countries, the private sector can be expected to contribute products (Tapia et al. 2019). Such technologies include technical skills, organizational capabilities and flexibility. In aerobic or anaerobic digestion for compost and biogas contrast, the public sector must strengthen the regulatory production, amongst others. The conversion efficiency of framework, control costs, plan investment, educate these processes plays an essential role in the economic users, establish and enforce regulations and by-laws and performance of a technology. For developing countries, involve producers and consumers. Thus, a well-organized composting is a relatively ‘low-tech’ conversion solution for and technically capable public-private entity can render feedstock, which can remove pathogens as a way of risk RRR services required to achieve a full circularity. While mitigation from the final treatment of feedstock (Cofie et al. developing a PPP in the RRR market, the following key 2016). Composting can constitute an attractive solution issues should be considered: for treating fecal sludge (FS) and provide an opportunity to sanitize it. At the same time, composting ensures the 1. Long-term technical feasibility, recovery of nutrients and returns them at a low cost to the 2. Ensuring revenue generation to run the service, soil (Moya et al. 2019). Experience from developing countries 3. Attracting sufficient private sector investment, underscores the several challenges that waste-to-energy 4. Inviting the local community to participate actively, and technologies face in terms of waste feedstock quantity and 5. Effectively factorizing a high investment load and loan on quality, emission control, citizen’s perceptions as well as other assets, etc. factors, which is discussed in the successive sections. In discussing the PPP framework as an instrument for scaling 1.2. Public-Private Partnerships RRR, it is imperative to understand the key challenges: (PPPs) for Scaling Resource Recovery and Reuse (RRR) In small cities, towns and peri-urban areas of the developing While running municipal public utility services, one of the world, the solid and liquid waste in general is not always most common issues in developing countries is the techno- properly managed, with bio-waste being neither reused nor 2 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED recovered. Waste collection rates are low and municipal 1. Capturing the potential market, waste disposal relies heavily on open dumpsites and 2. Producing a high-quality end-product for improving landfills that are not adequately engineered and do not crop and soil quality, follow sanitary landfill standards (UNEP 2010; ADB 2011). 3. Technological innovation, In most cases the waste is not segregated, leading to lower 4. Climate change mitigation and resilience, resource recovery. Due to improper disposal practices, 5. Risk sharing benefit, and the randomly disposed waste clogs waterbodies which 6. Policy level opportunities. causes flooding. With increasing urbanization, this practice is leading to serious environmental, social and economic Box 1 describes the above-listed objectives in detail and concerns (UNEP 2010; Hoornweg and Bhada-Tata 2012). explains their significance. In Asia and Africa, where population density in small cities and peri-urban areas is very high, moving towards resource Employing resource recovery and reuse (RRR) in the waste and energy recovery is a necessity. PPP may help to value chain does not always leads to huge commercial improve operational efficiency, reduce financial and technical benefits or high economic prospects. However, it contributes burden on the local government and manage potential substantially to the environment and social improvements. risks. It allows for a win-win situation for the government Other anticipated benefits include improved soil quality and and the private contractor, to obtain valuable economical reduced industrial fertilizer use, which are often imported. resource and revenue from solid and liquid waste. However, Moreover, RRR decreases the waste disposal load and, for a successful RRR business model through a PPP in turn, the amount of waste which goes into the landfill, arrangement, the project should aim to achieve at least promoting a shift towards the holistically sustainable model some of the following objectives (Figure 2): of circular bio-economy (CBE). The PPP framework can potentially strengthen RRR projects by making the implementation more effective and efficient, Capturing the potential a win-win situation for government and private entities. market Investment in water and sanitation infrastructure often has lower financial returns when compared to businesses in other sectors (Peterson 2003). Furthermore, typical accounting practices generally overlook the positive externalities of RRR projects, such as avoided disposal costs, reduced Producing a high-quality end-product soil erosion and climate change mitigation (Oviedo-Ocaña et al. 2016). Other unaccounted cost reductions are linked to reduced energy use and decreased waste incineration, less air and water pollution, and the conservation of natural resources (Abdel-Shafy et al. 2018). Small municipalities Technological innovation suffer and are often short of monetary funds and capacities — they might not have the vision to propagate the social and environmental benefits achievable through a circular economy approach to the general public. Conceptualizing a PPP model in the RRR market comes Climate change mitigation and resilience with specific challenges. For example, institutional and contractual adjustments between private and public entities might be required to cope with unforeseen political intervention. That might also lead to changes in the project timeline and reallocation of responsibilities. While adopting Risk sharing benefit or replicating success stories, sufficient case-specific due diligence is essential to meet regional and local needs. This publication brings comprehensive insight into circular bio-economy practices with a particular focus on Asia and Africa. It showcases opportunities for using the PPP Policy level opportunities framework to effectively recover material and energy resources from bio-waste by involving private entities. Critical factors behind the success and failure of case FIGURE 2. OBJECTIVES FOR A SUCCESSFUL PPP IN THE studies in different regions are also analyzed. Based on RRR MARKET. the case studies and literature, recommendations are put 3 RESOURCE RECOVERY & REUSE SERIES 22 forward to use PPPs as an instrument to promote the RRR mitigation measure to address the barriers and challenges. business model and the key issues to be considered for The third chapter, The Roadmap for an effective PPP in successful implementation. It focuses on PPP models that the RRR Market outlines key issues to be considered for recover and reuse the organic fraction from solid waste and preparing a PPP on resource recovery and describes how fecal sludge, which have received less attention than PPP to structure the PPP project effectively. It can be used models for wastewater treatment plants (WWTPs). by municipalities and project advisors as a guideline for developing, preparing and implementing PPPs in the RRR In the following section, Chapter 2 – Lessons learned from market. Finally, Chapter 4, Roles of Stakeholders in PPP the Asian and African RRR market presents the findings framework assesses the PPP stakeholder landscape in the from the analysis of 12 PPP case studies in the RRR market RRR market and discusses the important contributions of and highlights the major barriers to success. It also suggests each stakeholder for achieving a successful PPP. BOX 1: KEY OBJECTIVES FOR A SUCCESSFUL RRR BUSINESS MODEL THROUGH A PPP ARRANGEMENT. Capturing the potential market: Generating revenue through RRR has an enormous market potential in developing countries. The RRR end-product from the household’s resources (organic waste, fecal sludge) and agricultural resources such as biomass from agriculture can significantly contribute to the revenue products, which have economical value indeveloping countries. Intervention of private entities can always effectively help to capture this potential market through institutional mechanisms and an effective business framework. Producing a high-quality end-product for improving crop and soil quality: Soil enricher, organic fertilizer and compost produced from solid waste, co-compost plant or fecal sludge treatment plant (FSTP) can effectively improve crop production and enhance soil quality. Technological innovation: Research organizations, entrepreneurs, trade organizations and NGOs can be involved and play a significant role in the PPPs for supporting product development, marketing and sales. Knowledge institutions can also enable the provision of technology and expertise. Climate change mitigation and resilience: Besides the economic revenue, scaling of CBE practices through PPPs will contribute to Greenhouse Gas (GHG) emission reduction in the waste and agriculture sector, helping in substantial environmental benefits, local climate change mitigation and resilience. Outcome-oriented result: In a well-structured PPP framework, an outcome-oriented result can be achieved with specific, measurable, attainable goals within a particular time frame. The ultimate benefit of the end product lies with the consumers or citizens, thus making the system more convincing and outcome-oriented. Financial sustainability: Resource recovery from bio-waste generates additional revenue and allows the business model to be more self-sustainable. It also reduces the dependency on public funds. Risk sharing benefit: The joint efforts of the public and private sectors offer great potential for closing infrastructural development gaps. The PPP provides a framework for the public and private sector partners to build and sustain a medium to long-term relationship of mutual benefit. In a PPP, the role of the private partner is often to become a long-term service provider rather than being an upfront project contractor. It may also combine the responsibilities of designing, building, operating and financing projects to deliver the services needed by the public sector. Policy level opportunities: Policy gaps in the sector can be jointly turned into opportunities by co-designing effective and efficient PPP ventures. The active involvement of both public and private sector partners is essential in this process. Development partners can provide guidance. The PPP innovation in the RRR market can also be used to improve PPP regulation to empower the public and private stakeholders to engage in a fruitful collaboration. 4 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED 2. LESSONS LEARNED FROM THE ASIAN AND AFRICAN RRR MARKET During the last couple of decades, circular bio-economy is The following section provides an overview of the countries’ being seriously adopted as a potential means of resource readiness for PPP in Asia and Africa before analyzing recovery in many developing countries. While CBE relevant PPP success stories among African and Asian projects structured through a PPP framework have proven countries. The analysis aimed to identify critical factors for successful in several cases, there are some notable failures the successful setup, process and operation of plants which as well. The primary reasons for the failure of such projects use organic municipal waste, agro-waste and fecal sludge include: for resource recovery. Finally, the lesson learned have been summarized, with some suggested mitigation measures. ƒ Limited market knowledge to optimize revenues, ƒ Limited management capacity of municipalities, 2.1 Country’s Readiness for PPPs ƒ Lack of proper institutional framework, ƒ Inconsistent waste flow information, Asia ƒ Lack of citizens’ awareness on waste segregation. Endo and Ram (2021) categorize developing countries in Asia implementing PPPs into (i) PPP mature countries, (ii) At the same time, there is evidence of several examples intermediate PPP application countries and (iii) PPP less- from Asia and Africa with a robust PPP framework which developed countries (Table 1). The authors observed that have resulted in technically feasible and commercially viable developing countries in Asia with higher incomes relative to circular bio-economy projects. Key factors in their successful other countries have better success in implementing PPPs, implementation were: a trend noted worldwide. ƒ Optimizing operational procedure and responsibilities, The first group comprises China and India, where the ƒ Increased design capacity (economics of scale), application of PPPs has readily taken off, with the ƒ Advanced know-how of waste flows and nature, total amount of project investment reaching USD 455 ƒ Inducing small enterprises and entrepreneurs, billion, equivalent to 77% of the market share in Asia. ƒ Well-established market linkages, The second group includes Indonesia, the Philippines, ƒ Understanding market size and co-finance options Thailand and Viet Nam. According to the number of ƒ Strong bonding between public and private entities, projects, PPPs in these countries are increasingly taken ƒ Performance-oriented PPP contract. off. However, Group II countries are still in the process TABLE 1. PUBLIC-PRIVATE PARTNERSHIP (PPP) PROJECTS THAT REACHED FINANCIAL CLOSE IN SELECTED DEVELOPING COUNTRIES IN ASIA (1990–2016). Country Number of Projects Total amount of projects (USD billion) Group I: PPP mature countries India 861 314.0 People’s Republic of China 1,052 139.0 Group II: Intermediate PPP application countries Indonesia 120 18.6 Philippines 119 56.9 Thailand 150 38.8 Viet Nam 84 16.2 Group III: PPP less-developed countries Cambodia 25 3.1 Myanmar 6 1.5 Source: Endo and Ram 2021. 5 RESOURCE RECOVERY & REUSE SERIES 22 of improving their PPP-related legislation, regulation and is a significant bottleneck for implementation. Sectors institutions to promote extensive deployment. Compared like energy, transport and ICT account for the majority of to the first two, Cambodia and Myanmar comprise the PPP investments, while less than 5% of the total amount less-developed country group with a smaller number of between 1999 and 2019 was observed to be invested in realized projects. water, sewage and solid waste management (Dauskardt and Ganguly 2020). The enabling environment of several countries shows evidence of efforts toward improving the enabling climate Compared to developing Asia, African countries are less for PPPs (Figure 3). Countries like India, China, the ready for the deployment of PPP models. South Africa Philippines and Thailand receive high scores equivalent has with 71 by far the highest scoring for an enabling PPP to developed countries like Japan and Korea (EIU 2015, environment. It is followed by Morocco, Kenya and Egypt, 2018). Despite such efforts, countries like the Philippines which score above 50 (see Figure 4). PPPs are seen as an and Thailand still lag behind the developed world in their essential element to fill the gap for infrastructure investment application of PPP models because the PPPs are limited in the coming years. Africa’s infrastructure investments need to few sectors. To address this gap, development partners financing of up to USD 170 billion a year by 2025, with a have recently started actively pursuing the creation of financing gap of USD 68 to USD 108 billion a year which bankable PPP projects. This is achieved by supporting could be filled by the private sector (Terry 2020). feasibility studies and bringing all relevant stakeholders together. Consequently, PPP transaction advisory services constitute the top of the agenda of development institutions 2.2 Key Barriers and Factors of (Endo and Ram 2021). Success Significant infrastructure investments in developing countries African countries are successfully utilizing PPP models; they have further In Africa, five countries account for more than 50% of all attracted private investment in the waste sector at a limited successful PPP activity from 2008 to 2018: South Africa, scale. For upscaling investments, it is critical to learn from Morocco, Nigeria, Egypt and Ghana. Other countries have the failures. As a result, this study analyzed 12 PPP cases multiple PPPs in] the pipeline, e.g., Burkina Faso with 20 in the RRR sector from Asia and Africa (see Table 2)2 and projects and Botswana with 8 (Terry 2020). Although 33 of identified key barriers that can be considered as lessons the 54 total African countries have PPP policies in place, learned for establishing successful PPPs. These barriers are limited experience in structuring and procurement of PPPs further described in the next section. 75 78 75 80 66 73 67 59 61 68 72 64 47 81 58 37 78 81 76 50 56 55 59 71 58 72 80 58 72 73 67 42 94 97 90 94 53 94 88 84 65 77 78 7 70 85 87 4 61 Regulations Institutions Maturity Investment and Business Climate Financing Overall FIGURE 3. COUNTRY SCORING OF THE ENABLING ENVIRONMENT FOR INFRASTRUCTURE-RELATED PPPs IN SELECTED ASIAN COUNTRIES, 2019. Note: The higher the score, the better the enabling environment for PPPs. 2 The detailed description of the case studies is presented in the Annex. 6 Bangladesh India Indonesia Pakistan People’s Republic of China Philippines Thailand Vietnam PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED 71 92 71 46 52 53 51 56 51 33 49 39 46 39 45 44 45 39 43 43 75 59 55 42 39 54 58 38 58 37 60 52 28 33 58 34 31 61 33 56 41 53 31 56 75 44 34 31 53 47 34 39 53 50 31 0 21 6 50 5 25 50 50 50 31 42 41 50 33 25 38 50 25 75 25 6 56 66 59 50 53 17 50 38 47 50 44 31 50 17 28 22 Regulations Institutions Maturity Investment and Business Climate Financing Overall FIGURE 4. COUNTRY SCORING OF THE ENABLING ENVIRONMENT FOR INFRASTRUCTURE-RELATED PPPs IN SELECTED AFRICAN COUNTRIES, 2019. Note: The higher the score, the better the enabling environment for PPPs. 2.2.1. Input-related Bottlenecks other inorganic waste. Poor waste segregation eventually tends Not meeting the committed quantity of waste to affect the performance of the recovery process. For example, The analyzed cases3 offer evidence that resource recovery a calorific value of organic waste below 1,000 kcal/kg with high plants cannot achieve the expected treatment performance moisture content cannot support the effective combustion when the plant does not receive the waste as per the process in a waste-to-energy plant. The Nashik waste-to- design capacity. In most of the resource recovery plants4, energy (WTE) plant is operating at 40% of its operational design the municipality guarantees feedstock supply, but there can capacity, due to issues of the quality and quantity of waste be competing services for the same waste affecting the supply and segregation (Bhushan and Sambyal 2018). Gianyar supply like in the case of Somanya, Ghana. The urban local composting plant in Temesi, Indonesia, also operates below its bodies (ULBs) should provide realistic information on the financial feasibility due to the absence of source segregation — committed waste quantity (as provided in the bid document) the private entity needs to outsource segregation activity, which since this is a crucial factor for the optimal operation of the accounts for 42% of their total annual operational costs. plant. Adequate delivery of biomass feedstock enhances the capacity utilization of RRR businesses. If the RRR 2.2.2. Limited Awareness about Waste businesses financed through PPPs cannot access regular Recycling and RRR Production feedstock, it is difficult to ensure the seamless conversion Services to high-value-added products. Eventually, less waste input Limited educational activities and a lack of awareness will result in lower end-product quantity (soil enricher, bio- Insufficient awareness creation or absence of promotional fertilizer, compost or electricity), which might further impact drive towards waste segregation or the possible use the project’s financial viability. During the project planning of recovered material can factor into the failure of PPP and feasibility analysis, municipalities must also consider projects. An integrated plan to communicate, consult and possible competition for feedstock by different RRR projects. involve stakeholders from the community is required for the RRR plant to well-function. Information, education and Poor segregation and substantial variation in the communication (IEC) activities for citizens, SMEs, authorities composition of waste and employees are crucial during the early stage of the PPP Resource recovery from municipal solid waste largely depends project. As mentioned earlier, waste segregation is vital for upon the adequate segregation of organic waste and inorganic the optimal operation of the plant. Hence, sensitizing the waste from the waste stream. Inefficient, or an absence of, waste community (i.e., the primary waste generators) is essential segregation at source leads to mixing up dry and wet waste and and should continue beyond an initial campaign. 3 E.g., Tema Fortifier compost plant in Ghana, KSWMIP compost plants and Nashik waste-to-energy plant in India. 4 Including fecal sludge treatment plant (FSTP), compost plant, biomethanation and waste-to-energy plant. 7 South Africa Morocco Kenya Egypt Tanzania Cote d’Ivorie Tunisia Uganda Rwanda Ghana Cameroon Nigeria Zambia Angola DR Congo RESOURCE RECOVERY & REUSE SERIES 22 TABLE 2. OVERVIEW OF ANALYZED CASE STUDIES FROM ASIA AND AFRICA. Plant details PPP model and tenure Challenges and achievements (Feedstock type and output, scale) Somanya fortifer compost and briquette plant, Somanya, Yilo Krobo, Ghana • FortiferTM compost and pellets Service and management contract for Unexpected feedstock produced from fecal sludge and 20 years between Jekora Ventures competition organic solid waste Limited and Yilo Krobo Municipality Operating under-capacity • 5,000 cubic meters (m3) of fecal Assembly Unable to reach break-even sludge and 300 tons of organic and over-reliance on continuous waste per year external financial support for repairs etc. Strong links to clients able to absorb compost and briquettes Large-scale composting plant, Bulta, Bangladesh • Compost from organic municipal PPP between Worldwide Recycling Successful marketing strategy solid waste (including market waste) (WWR) Bio Fertilizer Bangladesh Ltd.5 PPP Model replicated in 27 cities • 75–100 tons per day (TPD) and Dhaka City corporation. Service of Bangladesh contract for waste collection. Design, Build and Operate contract for the compost plant. Matara compost plant, Matara, Sri Lanka • Compost and fuel pellets produced Service and management contract for 7 Strong institutional linkages with from municipal solid waste years between Matara municipality and clarity in operational and • 300–400 tons of organic waste Green Crops (GC) financial aspects every per month Suitable marketing strategy Lahore compost plant, Lahore, Pakistan • Compost produced from municipal Build-Operate-Transfer model for 25 years Technological barriers solid waste between Lahore Compost Ltd. (part of Lack of technical expertise, • 1000 tons per day of mixed waste Saif Group of Companies) and city district Poor marketing strategies collected government Lahore (CDG) Integrated solid waste management with compost and waste-to-energy recovery in Pune, India • Municipal waste to energy (used for PPP contract for service and management Proper planning by PMC towards street lighting) (renewable every 5 years) between Pune utilization of waste Municipal Corporation (PMC) and Cost recovery consortium of SWaCH (an NGO) and Strong institutional linkages with Mailhem Engineers Pvt Ltd., for defined roles and responsibilities management of waste to produce biogas, electricity and bio-sludge. Briquettes from solid waste in Kigali, Rwanda • Briquettes produced from municipal PPP between the Kigali City Council and Suitable marketing strategy solid waste Coopérative Pour La Conservation De (briquettes used as fuel in • 1,500 tons of briquettes sold since L’Environement (COOCEN) – build, schools, prisons and factories) 2018 operate and own briquette plant; service Provision of land from public contract for waste collection sector Sufficient waste available (Continued) 5 A joint venture company of Waste Concern in association with its Dutch partners - World Wide Recycling B.V, FMO Bank and High Tide Worldwide B.V. 8 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED TABLE 2. OVERVIEW OF ANALYZED CASE STUDIES FROM ASIA AND AFRICA. (CONTINUED) Devanahalli fecal sludge treatment plant and the co-compost unit, Karnataka, India • Co-composting and biogas6 Service and management contract for Operating under-capacity produced from fecal sludge 2-year between Devanahalli Town Participation of citizens for Municipal Council (DTMC) and CDD (NGO) approval of plant location Good institutional linkages Marketing facility for the product Co-composting plant Sakhipur, Bangladesh • Co-composting from organic solid Sakhipur municipality, WaterAid Proper planning by the waste, dried fecal sludge and Bangladesh, Bangladesh Association municipality toward waste sawdust for Social Advancement (BASA) and utilization, suitable marketing Department for Agricultural Extension strategies, cost recovery Kolkata Solid Waste Management Improvement Project, India • Compost from municipal solid Six municipalities of Kolkata Metropolitan Initially: waste Area and private parties (consortium Low management capacity of between SENES7 and Yachiyo Eng. Co. the municipality Ltd.) Improper waste separation Low awareness of the residents Inefficient market linkages Later: Institutional strengthening Awareness campaigns Training/capacity building of the municipality Gianyar composting plant, Temesi, Indonesia • Compost produced from municipal Local Municipal council and Low financial viability solid waste consortium formed by Rotary Club of Lack of waste segregation results • 60 tons of waste per day Bali Ubud, Yayasan Bali Fokus amd into increasing costs Yayasan Gelombang Udara Segar (GUS) Absence of tipping fees Tema compost plant, Ghana • Compost and pellets produced from Service contract management for 25 Operating under-capacity fecal sludge and organic solid waste years between Jekora Ventures Limited due to land rights issues (JVL) and Tema Metropolitan Assembly Weak marketing strategies (TMA) Strong research support Insufficient space for drying beds and composting heap for scaling Waste to energy plant at Timarpur, New Delhi, India • Energy produced from mixed waste First: Ministry of Non-Conventional Cumbersome institutional • 300 tons per day of mixed waste Energy Sources (MNES) and Volund arrangements with changing Miljotecknik Ltd. of Denmark operational plans Later: Build, own, operate and transfer Lower waste quality leading to for 25 years between Infrastructure technical issues and higher Leasing & Financial Services (IL&FS) operational costs and the Municipal Corporation of Delhi 6 Mostly used within plant premises. 7 Presently merged with Archadis. 9 RESOURCE RECOVERY & REUSE SERIES 22 Similarly, operational health and safety are required for Ltd. (LCL) staff underwent training to handle the composting workers associated with waste collection and transportation. machinery by the supplier, allowing them to manage the The municipalities involved in the waste recovery should aim existing facility with success (Masood et al. 2014). to understand the environmental, social and sustainability perspective of using recovered material or energy over and Limited knowledge and planning towards the end- above the project’s commercial viability. Limited capacity on product and service structuring the bid and the lack of vision at the municipal PPPs should be structured and planned towards the end- level can often lead to the project’s failure. Additionally, product or end-service using outcome indicators beyond budgetary constraints to engage professional transaction merely design and technology selection, but also for reuse/ advisory agencies can contribute to the failure of the PPP sales. Some of these possible indicators are, for example, project. the quality and quantity of sold manure, generated electricity, environmental compliances or emissions. Experience In the Okhla waste-to-energy plant, Delhi, the usage shows that the focus on input-based factors often leads to of organic waste as feedstock could not support the inefficient resource recovery or even complete technology combustion because a high proportion of plastics, paper failure. Defining technology specifications may act as a and cardboard was included for the incinerators to function. constraint for innovation and competition. These are precisely the materials that the informal sector recycles. Delhi’s waste pickers recognized this threat to In Timarpur, for instance, a 3.75 MW power plant was installed their livelihoods and began agitating against the project, to treat 300 tons of municipal solid waste daily. The plant holding multiple rallies and demanding for local and national conducted trial operations for 21 days before shutting down authorities to halt the project. Furthermore, there have due to the poor quality of the incoming waste. It required been public protests against the emissions and air pollution waste with a net calorific value of at least 1462.5 kcal/kg, but generated from the plant. the supplied waste’s calorific value was between 600–700 kcal/kg. Plant operators tried to supplement the combustion In contrast, the fecal sludge treatment plant (FSTP) in with diesel fuel, but without success. Subsequently, the Devanhalli is a good example where sensitization of different project remained non-functional and was demolished 3 stakeholders and awareness is helping to better operate years after construction. This incident supports the fact that the plant. This FSTP runs on a self-sustainable commercial thermal treatment of municipal solid waste is not feasible mode. A transparent, well-defined institutional framework for waste with a low calorific value. Limited knowledge and among the stakeholders, with clear commitments on improper planning might fail the desired RRR end-product operational aspects and revenues, has been a vital or service. parameter in the success of this plant. During the project development process, the gaps in Devanahalli residents’ In contrast, evidence from Pune city shows that proper behaviors were identified, basis which an education and technology selection makes resource recovery PPP projects awareness campaign was implemented. This community feasible. Pune Municipal Corporation has established a PPP engagement initiative has been implemented parallel to venture for decentralized waste processing plants dedicated the FSTP construction and operations. Furthermore, local to composting, biomethanation and waste-to-energy. Finally, farmers were incentivized to use the FSTP by-products. biomethanation technology of organic waste was selected The community engagement strategy was fine-tuned based due to the low calorific value, with 16 decentralized plants on local requirements. A similar community sensitization in set up across the city. A biomethane-to-electricity plant was Dhaka led to waste segregation at source and ensured the constructed by Goa State Waste Management Corporation efficient production of quality compost by the composting and the private company Hindustan Waste Treatment Pvt. plant operator Waste Concern. Ltd. to treat 40 tons of wet waste and produce up to 0.3 MW of electricity (Rao et al. 2018). In certain cases where there is a lack of capacity and skill to manage such PPP projects, capacity building and skill Another example is Ghana’s Somanya compost plant which development programs need to be incorporated even after can be made operational according to the design capacity. the project is deemed feasible. For example, the Lahore This requires an increase in area of the current composting compost plant in Pakistan faced technological challenges at platform within the plant. The increased composting platform the initiation. Since this was the first commercial attempt, the is necessary for two reasons: (i) the high mass reduction private entity lacked technical expertise and was unaware during composting, and (ii) the plant uses food waste for of available after-sales support on the equipment. They compost production; the composting duration of food contacted several composting companies around the world waste is 17–21 weeks, higher than the baseline projection of to get benefit from their experience; they also visited a few 14 weeks. It is estimated that reaching the design capacity composting plants in Europe, India and the United States to by expanding the composting platform would help the discuss issues involved in the manufacturing, marketing and plant break even, due to the verified market demand for the utilization of compost. In addition, the Lahore Compost Private compost produced at the plant. These cases indicate that 10 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED due diligence and technology selection is crucial to ensure 2.2.3 Barriers to Regulatory and Institutional the project’s technical viability. Mechanisms Lack of proper institutional framework The importance of marketing strategies and market The absence of well-defined interlinkages among the PPP linkages stakeholders and institutions involved in the RRR service A well-established market environment reduces transaction chain results in poor resource recovery. Consequently, costs between the private sector and the government, the PPP framework must ensure functional coordination thereby facilitating the adoption of PPP (Pan et al. 2020). between all respective parties or contractors. According Pan et al. (2020) note good governance and strong market to the literature, PPP projects in waste management and demand to be powerful factors for PPP adoption. A well- RRR are relatively slow due to inefficient institutions, limited developed market environment for the end products of governance and weak market linkages (Chatri et al. 2012; resource recovery stimulates the PPP adoption. However, Pan et al. 2020). A good institutional environment and the market is often unknown and has to be explored. The other market factors will attract private sector actors for partnership should be clear on the related responsibilities to the PPP project, increase private sector profits and temper better understand market stratification and develop client- stakeholder conflicts (Tan and Zhao 2019; Yang et al. 2013). oriented marketing strategies. Moreover, the effectiveness of the resource recovery PPP project is principally dependent upon performance at each There has been ample evidence that a weak market stage. The key performance indicators (KPI) at each stage of (understanding) is a significant constraint for composting waste management and RRR can help ensure performance plants. Lahore’s compost plant faced revenue generation and reach the optimal resource recovery potential. In Sri problems because of its poor marketing strategy. During the Lanka, the Western Province Waste Authority defined concession agreement, however, City District Government their KPI as the ratio between compost actually sold and Lahore (CDGL) agreed to purchase compost for the city’s potential compost production per month, ranking all their parks, gardens and municipal campuses. This has helped stations according to their performance to not only identify develop the composting product market and improve the those needing support but also to generate peer-pressure. prospects for investment returns. A private sector example is Greenfield Crops (GC) which Marketing strategies adopted by Waste Concern in revived the compost business in Matara, Sri Lanka, by Bangladesh have also been found to boost business adopting a better institutional framework. Initially, the RRR revenues. Waste Concern faces a strong buyer power as they business was not financially feasible, and was contingent mainly sell their compost to price-setting private chemical on government funds. It has now been revived through a fertilizer companies which rebrand and sell the compost PPP agreement for a period of 7 years. GC started satellite product. This model is an excellent example of a win-win compost stations closer to local markets to minimize partnership between key players. It has been instrumental transportation costs for waste collection for the municipality in attracting large amounts of foreign direct investment (FDI) and distribution of compost products. Its compost is in organic composting. Private entities need to strategize sold at a flat price exclusive of the transportation fee. marketing based on the underlying market conditions. This PPP has saved the municipal council a significant To illustrate, while there is a demand for compost among amount of money which hitherto was used in operating the the mango farmers in Somanya, Ghana, this demand composting business as it was incurring losses. According is seasonal. Such existing market conditions should be to the agreement, the composting facility and equipment identified at the business planning stage, according to which are owned by the municipality, and GC would pay a service mitigation measures should be developed. fee per month for using the facilities and equipment. In turn, the city paid tipping fees to GC for handling waste, An instance of good market linkage which helped the the other source of revenue (Otoo et al. 2018). Hence, the operation of a PPP producing briquettes from solid waste private sector cannot ignore institutional arrangements is visible in Rwanda. The Kigali City Council provided seven when delivering public services. It is the government’s hectares of land to the private entity COOCEN to produce responsibility to create a favorable institutional framework briquettes from organic solid waste. COOCEN is the sole which enables the development and implementation of PPP supplier of fuel briquettes to 16 prisons in the country. The (Harvey 2005). payback period for this project has been only 3 years; the gross profit margin is 42%. Notably, COOCEN anticipated In the compost plant at Bulta, Bangladesh, Waste Concern an increase in briquette demand due to the rising price maintains good relationships with Dhaka City Corporation, of charcoal coupled with the government policy to protect private enterprises and community-based organizations the environment and promote alternative sources of energy (CBOs) to optimize the allocation of resources and (Adam-Bradford and Gebrezgabher 2018). Thus, there activities. This reduces the risks associated with high capital is an excellent opportunity for upscaling the plant in the investments, assuring a large market for their end product future. (Otoo and Hope 2018). 11 RESOURCE RECOVERY & REUSE SERIES 22 Incentive structures and mechanism Build-Operate (DBO) models. A significant share of land in It often seems challenging to attract new private companies Ghana is owned by traditional authorities, not the government. to operate in the waste sector. Despite proposed subsidies, it However, the government has the right to lease it for 99 years. may remain difficult to encourage investments in the sanitation This can lead to a conflict of interest, with projects becoming sector. In Ghana, for example, most companies which respond unduly overburdened financially since they must pay money to government’s calls for scaling up RRR business initiatives to both the local assemblies and the traditional authorities are waste management companies. They are already used to simultaneously (Alidu 2018). In the case of the Somanya dealing with waste, with waste collection activities in place — plant, the site for the plant was changed several times due to any recycling or reuse activity offers an opportunity to reduce land ownership issues leading to delays and additional costs. waste volumes and save costs, e.g., for transport, dumping, Tema compost plant in Ghana failed, among others, due and landfilling, with the advantage of eventually expanding their to a third party claiming the land of the PPP. The operation business horizon. Compost sales are not their primary interest if of the compost plant in Sri Lanka improved under a 7-year they can rely on tipping fees. Therefore, they are not necessarily PPP contract where the municipality allowed the private repelled by the prospect of (at least initially) ‘limited’ potential for entity to utilize the machinery and equipment payable by the generating additional revenue. Private technical firms are at times partner. Such arrangements during the contract phase entail attracted to such initiatives primarily for the opportunity to test necessary stock-taking and proper negotiation between the and validate their technologies, without interest in actual compost parties and entities. marketing. The design of effective incentive mechanisms like tipping fees is crucial for boosting the revenues of private entities For the fecal sludge treatment plant (FSTP) in Devanhalli, the entering such partnerships. In the case of compost plants, the municipality committed to (i) provide the land and approval compost generated through resource recovery does not fetch for the construction, (ii) take responsibility for operating a immediate revenue unless marketed and tailored as per user desludging vehicle on a fee-for-service basis by issuing the demand. Tipping fees provided to the private entity for handling license to private desludging operators and (iii) ensure that the waste act as an incentive to recover a part of their operation FS is disposed at the FSTP, and organic waste is delivered and maintenance (O&M) costs for the initial years, before the to the co-composting plant. increase in revenues from compost. Short-term contractual models The Gianyar composting plant in Temesi, Indonesia, for Most resource recovery and reuse (RRR) projects, particularly instance, demonstrates limited financial feasibility due to small, decentralized facilities, face failure due to short-term the absence of tipping fees. Similarly, subsidies to chemical contractual models (Cookey et al. under review). Bidders are fertilizers provide an uneven playing ground for the revenue not offered convincing time to reach a breakeven period for stream of the derived compost. The importance of tipping their investment if the concession period is not long enough fees can be explained with the case of Green Crops in Sri to generate sufficient revenue through the sale of recovered Lanka, where the business was revived by tipping fees material. A complex set of value domains is critical within provided by Matara Municipal Council (USD 5 per ton of PPPs for RRR because it allows the organization to maintain waste disposed). a longer time horizon to realize financial returns. The venture may not generate revenue gains in the short term, as system Municipalities should design their KPIs, payment outcomes centered on social or environmental impact mechanisms and fee structures, keeping in mind that while may not always be compatible with economic outcomes waste management is a mandate for them in the short run, (Velis 2015). Thus, a socially-driven enterprise temporarily actual resource recovery and environmental health are the overlooks the insufficient revenue in the short term. However, overarching goals. they are committed to the long-term endeavor as long as they meet social and environmental objectives and find ways Less clarity on Government assets and statutory to remain financially viable via other avenues. commitments A lack of clarity on government land and its interdepartmental Fluctuating carbon price handover process substantially reduces the project’s RRR plants are also eligible for climate financing, i.e., through credibility to attract potential private players. The risk of carbon credits. Many of the analyzed composting plants8 less transparency on land ownership and its statutory are highly dependent on the revenues through Certified documentation becomes a critical parameter for stimulating Emissions Reductions (CERs), a carbon credit scheme the participation of the bidder. The concession authority obtained through the Clean Development Mechanism (CDM). must ensure that public assets are made available to the However, the CERs price has been fluctuating in the recent bidder for setting up the plant. decade resulting in lower revenues for the RRR projects. Sometimes the CER revenue is too low to even pay for the Land ownership is a major obstacle for PPPs in Ghana, periodic verification of carbon credits. In this situation, existing especially in the Build-Operate-Transfer (BOT) and Design- projects are no longer viable, which runs contrary to the CDM 8 Such as Pakistan’s Lahore compost plant, Bulta compost plant in Bangladesh, Gianyar composting plant in Temesi, Indonesia. 12 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED objective. This is especially applicable to small scale projects project (see Table 3). Mitigation measures can be identified heavily dependent on CDM carbon credits. by assessing the relevant issues in each key area through the following studies: Waste Concern in Bangladesh, however, managed 34,200 CERs from the Asia Pacific Carbon Fund (APCF) of the Asian 1. Technical analysis: to find the most appropriate Development Bank (ADB). APCF signed an agreement with technology WWR Bio Fertilizer Bangladesh Ltd. to purchase CERs, 2. Financial assessment: to understand involved stemming from emission reductions generated by the investment and operation costs, assess economic project. This illustrates that alternative source of funds for viability, and develop a financing plan CERs should be sought by the project. 3. Legal analysis: to create the legal basis for implementation and operation, in particular, the roles 2.3. Lessons Learned and Possible and responsibilities of public and private partners and Mitigation Measures 4. Social and environmental impact assessment: to Many of the above-described challenges lead to increased understand the likely positive and negative impact on revenue risks of the RRR PPP project. Other critical factors people and the environment and develop mitigation for poor performance range from insufficient information measures, including an education and awareness on the project background, poor quality of scoping due plan. diligences and inefficient bid transaction processes to less clarity on the land availability and associated permits. Some projects face technical problems during operation, causing reduced performance. The market rate of the end-product is Technical Feasibility Financial Viability also significant in the commercial success or viability of the RRR economy. Low quantity and poor quality of the end- products (e.g., compost manure, soil enricher, bio-fertilizer or power) might reduce revenues and limit the success of PPPs in the RRR Sector the RRR PPP project. Key barriers recognized in the resource recovery PPP Legal & Contractual Communication, projects can be broadly linked to (i) technical feasibility, (ii) Issues Education & Awareness financial viability, (iii) legal and contractual issues, and (iv) communication, education and awareness (see Figure 5). These barriers can be translated into risk factors which need FIGURE 5. FOUR KEY ISSUES FOR ESTABLISHING PPPs IN THE RRR SECTOR. mitigation to achieve a successful resource recovery PPP TABLE 3. BARRIERS AND RISK FACTORS FOR SUCCESSFUL PPP PROJECT IN RRR SECTOR. Key Issue Barriers Risk Factor Required assessments Technical feasibility Poor segregation and substantial Operational risk, Technical analysis variation in the composition of revenue risk waste Financial viability Not meeting the committed Revenue risk quantity of waste Short-term contractual models Contract risk, revenue risk The importance of marketing Revenue risk Financial analysis strategies and market linkages Fluctuating carbon price Revenue risk Legal and contractual Lack of proper institutional Contract risk, performance, issues framework and revenue risk Limited knowledge and planning Political risk, towards end-product and service performance risk Legal analysis delivery Incentive structures and mechanism Revenue risk, contract risk Less clarity on Government assets and statutory commitments Contract risk Communication, Limited educational activities and a Health and environmental Social and education and awareness lack of awareness raising risk, operational risk environmental analysis 13 RESOURCE RECOVERY & REUSE SERIES 22 An important lesson learned from the case studies is that experience of the public authorities, lack of waste weak linkage between the PPP stakeholders will negatively data and problems in securing land for the PPP impact the performance of the RRR project and increase constitute a significant for the project. In the partner the potential for failure. The needs and requirements of all identification stage, resource recovery PPPs often face stakeholders must be balanced to design an effective and the challenge of potential private partners not being successful resource recovery PPP. Figure 6 illustrates the able to meet some critical qualification criteria. Limited priorities and concerns of the four major stakeholders. For financial capacity and contracting problems might also example, the users are looking for an affordable public act as substantial bottlenecks. General challenges service while the operator focuses on assessing the during the implementation stage range from a lack market demand. Communication, transparency, efficiency of service standards and limited monitoring capacity and competition are critical components in designing and to poor stakeholder or community engagement and implementing a PPP in the RRR sector. weak implementation planning. All challenges require addressal with effective application of strategies and The analyzed case studies illustrate several general mitigation measures. Table 4 provides a detailed challenges along the stages of the PPP project summary of all identified challenges along the project development (Figure 7). In the initial stage, the limited stages with suggestions for possible solutions. Competition • Legal and institutional framework • Market analysis • Technology selection • Investment needs • Public service • Country risk • Transfer of risks • Limited financial • Public financial burden oblications • Upside potential Rource Communication Recovery Efficiency PPP • Project bankability • Affordability • Commercial viability • Subsidies • Country risk Transparency FIGURE 6. KEY STAKEHOLDERS AND THEIR PRIORITIES WITHIN THE CIRCULAR BIO-ECONOMY PPP PROJECT. Source: Adapted from Fridegotto 2017. Apart from the general challenges listed above, the expenses, the public entity bears the revenue risk. They analysis of the case studies brought out several specific collect the sewerage charges from the end-users but pay issues. These issues and possible mitigation measures are the contractually agreed amount to the private sector. In discussed below: such a PPP system, a payment security mechanism through ring-fencing of the revenue may mitigate the financial risk Ring-fencing of Municipal Finance — Resource recovery and burden on the public authority. In a typical bio-circular and reuse (RRR) through a PPP model depends on the economy PPP model, where resource recovery is an essential financial mechanism of the macro project within which the aspect of the value chain, the following components entail RRR framework is being inbuilt. For example, in a sanitation ring-fencing to strengthen the financial framework of the RRR project where sewerage charges cover the O&M model: 14 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED TABLE 4. CHALLENGES WITH A PPP FOR CIRCULAR BIO-ECONOMY AND SUGGESTIONS FOR IMPROVEMENT. Stages Challenges Impact Recommendations Limited experience of the Limits PPP expectations Establish PPP units within the central public service authority to and reduces clarity in governments to strengthen the authority’s function effectively as client, responsibilities. understanding, and to build to build regulator and enabler within the capacities and systems, for example in PPP framework. contract management, monitoring and enforcement. Municipal authorities often lack Limited understanding of the Establish a monitoring system for waste systems to measure the waste nature and magnitude of the generation, including quantity and quality, generation quantity and monitor the waste problem to design resulting in better long-term planning of waste composition. Available waste appropriate management waste management and RRR. data are primarily estimates. options. Difficulty in securing land availability Lack of adequate land for The government should identify and and clearance. waste processing and allocate land to handle, manage, process landfills constraints project and dispose of waste, taking the Changing implementation sites due implementation. expected waste generation amount over to land tenure issues will require the next 40–50 years as a priority. repeating feasibility studies (waste The PPP contract should not exceed the supply, market demand). maximum time of available land for processing and disposal of waste amount. Challenges in contracting processes, Leads to prolonged and Preliminary investigation on possible e.g., cumbersome due diligence, sometimes delayed contract contractual arrangements to identify contract drafting and negotiations. implementation. problems that could constrain contracting for infrastructure management and services. Select PPP options that are legally possible and most suitable under the givenv context, policy, and revenue streams. Lack of essential qualification criteria Defining loose qualification Define relevant qualification criteria to in mitigating performance risk. criteria could lead to unfair enhance a transparent bidding process competition and increases and effective shortlisting of reputed the risk of non-serious bidders with a demonstrated track record. operators getting in. While developing qualification criteria, the public partner should balance quality/ experience considerations with contestability. While setting very stringent standards could reduce competition intensity. Limited financial capacity. Late withdrawal can Consider the private partner’s financial negatively impact resources capacity and genuine interest at the and timelines. proposal preparation stage. Delays in receiving feedback on The public sector usually To address this challenge, organize short documents and lengthy procedures works within power and briefing sessions and constant follow-up for legal review. authorities, which might with key decision-makers to obtain involve lengthy bureaucratic feedback on important decisions. procedures. (Continued) 15 Identification of public Identification of private sector Initiation sector RESOURCE RECOVERY & REUSE SERIES 22 TABLE 4. CHALLENGES WITH A PPP FOR CIRCULAR BIO-ECONOMY AND SUGGESTIONS FOR IMPROVEMENT. (CONTINUED) Stages Challenges Impact Recommendations Partners who are new to technology Partners might not see the Decision-making officers should help and required to commit their prospects of the business. clarify the business potential of RRR resources can be affected by project and build technology confidence skepticism. Low confidence in RRR among partners. business and technology Conduct a regular and open discussion among partners. on the business ideas and requirements involved. Loose standards for service It reduces the viability of Develop and apply innovative and provision. private sector-led services. cost-effective smart monitoring and Limited capacity for monitoring and regulatory measures (such as GPS enforcement of standards. tracking of vacuum trucks in Kampala). Additional modes of monitoring and enforcement can complement the public sector efforts. Difficulty in getting private sectors to Some private entities scout Public funds can de-risk capital invest in RRR business because of for donor agencies to invest investments in innovative business low demand and limited proven in RRR. models by supporting capacity building market for sanitation products. Minimal capital investments. or incentivizing the private sector. Poor stakeholder engagement, Lingering conflict among PPP can adopt a merit-based approach lack of transparency and openness stakeholders. to attract partners with the required in the PPP processes. Risks pushed to the public resources in terms of expertise, partners due to sole sourcing. technology and finance. Avoid partisan considerations. Adopt an open and transparent process as much as possible involving all potential private actors to bid for the process. Lack of a flexible legislative Weakens local government Strengthen the capacity of local framework and weak local institutions. government to formulate laws and implementation plan. principles for PPP regulation. Provide robust regulatory frameworks with monitoring systems to prevent, for example, excessive tariffs from the private institutions. Lack of cooperation or involvement Without the active Ensure good communication and of community members. participation of people and engagement with the community. communities, even Build strong partnerships with local well-funded RRR projects communities and users to gain trust and may fail. support. Poor client relationship. Reduced confidence level Establish customer complaint and in good service provision redressal system and use feedback to and customer dissatisfaction. improve constantly quality of service. Insufficient waste supply during the Lower end-product quantity The government should guarantee to concession period. and quality, e.g., lower power supply the required waste amount to the generation. concessionaire in accordance with the Reduced revenue lead to agreement signed by both sides. lower profitability. (Continued) 16 Implementation Negotiation PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED TABLE 4. CHALLENGES WITH A PPP FOR CIRCULAR BIO-ECONOMY AND SUGGESTIONS FOR IMPROVEMENT. (CONTINUED) Stages Challenges Impact Recommendations Financial limitations and uncertainty. Unexpected delays and The government should explore as early additional costs during the as possible funding sources, such as implementation stage. appropriate allocation of taxes, capturing commercial potential through recycling and levying user charges. Encourage community participation and management of a door-to-door collection of user charges. Limited technical and financial Slow responses and delays National policies and regulations with an capacity of local municipality in decision-making implementation and financing scheme regarding waste management. processes and action that empower local governments and implementation. equips them with the required capacities for implementation. Technical challenges due to the The recycling plant is not Find a strong implementation partner and and construction of the recycling able to produce at full foster technological innovations retrofit to plants. capacity. existing plants. Implementation stage ● Lack of standards for service provision ● Limited monitoring capacity ● Lack of market demand for end-product Partners identification and ● Poor stakeholder engagement negotiation stage ● Weak implementation plan ● Problems in contracting process ● Lack of community involvement ● Not meeting qualification criteria ● Poor client relationship Initiation stage ● Limited financial capacity ● Insufficient waste supply ● Limited PPP experience of public ● Time consuming bureacracy ● Financial limitations and uncertainty service authorities ● Limited confindence in RRR business ● Technical challenges ● Lack of waste generation data and technology ● Difficulty in securing land for PPP FIGURE 7. OVERVIEW OF GENERAL CHALLENGES ALONG THE PPP PROJECT STAGE. 17 Implementation (continuation) RESOURCE RECOVERY & REUSE SERIES 22 ƒ Desludging charges paid by users to the service provider on benchmarking (quality and standard of output and ƒ Property tax designated for FSM-related activities services) and project tenure. Altogether, these processes ƒ Tipping fees from private operators may be charged at indicate the risks for the private sector; thus, the private designated disposal sites sector should accordingly plan for risk mitigation ƒ Registration and licensing charges or deposits to be paid measures. by the desludging operators ƒ Fines for faulty containment system construction and Implementation through Hybrid Annuity Model (HAS) — illegal disposal of fecal sludge The Hybrid Annuity based PPP model for RRR projects, a ƒ Sale of by-products — compost, soil enricher, bio- well-balanced framework with clear commitments and risk- fertilizer, biogas, etc. sharing from both parties, has been successful in developing ƒ Other sources, e.g., advertisements countries. Thereby, the most critical feature is the Annuity and O&M payments being linked to the performance. A well- The system needs to be a self-sustainable model bringing performing plant will eventually lead to effective resource the different components under a single umbrella. recovery and reuse of the end products (soil enricher or bio-fertilizer). It will also ensure the sustained usage of the Proper scoping to engage the private sector — The assets due to better accountability, ownership and optimal private sector engagement should be guided through a performance. The role of transaction advisory is essential to scoping mechanism with key considerations (Figure 8). not only develop a balanced ‘Request for Proposal’ but also First, a common understanding of the operational role and for market development by promoting the project with the responsibility of the private sector and linkages with the right target group. Continued engagement with the private public sector (mostly municipalities) is vital. The operating sector through the project’s life is indispensable for building limit can either be spatially demarcated or based on trust. Revenue risk is one of the biggest challenges in RRR activities. The contract to engage the private sector can projects arranged through a PPP model — both demand subsequently be designed basis these operating limits. and payment are critical factors for performance. However, Second, the private sector should formulate financial plans such risks have been somewhat counter-measured in the to determine their operations’ feasibility. The financial hybrid PPP models. feasibility comprises defining viable revenue stream(s) capital investments, and operational and maintenance Close Monitoring — Depending upon the end use, the costs. For developing a robust plan, private entities require implementing agency should closely monitor the soil, crop information from the public sector in the form of assets products and health of the associated farmers to ensure the (to be generated and shared), the payment mechanisms quality of recovered material such as soil enricher, bio-fertilizer, and the project’s tenure. The public sector usually derives etc. Active participation of the fertilizer organization, agricultural this information while conducting the project’s feasibility research institute and other concerned stakeholders is assessment. The public entity must take stock of their needed from the onset of the project formulation. capital investments in the form of land, machinery and equipment; the assets shared for implementation of the Preparedness for the PPP procurement process — PPPs project must be delineated. Additionally, the public sector should provide a transparent risk-sharing arrangement should undertake planning for a payment structure based between the parties involved. The general principle is Revenue meets the private player’s How to structure expectations? payments to the How to address private partner? major identified risk? Bundled or Who should unbundled 2 invest in capital What is the best contract? assets? 4 contract duration Source of 6 for private and 1 revenue Payment public partner? Risk mitigation 3 structure and allocation Operation role 5 of the private sector Investment and ownership of assets Contract length and value FIGURE 8. KEY CONSIDERATION FOR PROPER SCOPING OF PRIVATE SECTOR ENGAGEMENT IN A CIRCULAR BIO-ECONOMY PPP. Source: CEPT University 2015. 18 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED that project risks are allocated to the most cost-effective production process should be reexamined to identify and party. For example, political and regulatory risks are more reengineer the critical bottlenecks to improve efficiency, appropriate to the public sector, while the private sector ƒ Scale-out through replication at other sites, increasing handles construction and operation risks. The allocation the total output of the RRR outcome, thereby reaching of commercial risks depends on the expected demand for economies of scale and a subsequent decrease in the services produced by the project and the predictability of unit price or costs and revenues. ƒ Scale up through partnerships with other socially conscious organizations, for example, a private company Pre-bid due diligence — The government, as a party to with other private or public entities interested in the PPP agreement, should ensure preparedness during the establishing similar RRR businesses. pre-bidding phase, with due attention to the following: ƒ Standardized documents (request for qualification, Connecting the last mile — In most cases, a resource request for proposal), recovery project is an integral part of a larger project, such ƒ Selection of appropriate project site, as a wastewater treatment plant, a fecal sludge treatment ƒ Land procurement arrangements, plant (FSTP) or an integrated waste management system. In ƒ Project appraisals, such cases, the success largely depends upon the service ƒ Detailed technical studies, chain, in which the overall performance does not necessarily ƒ Financial and risk analysis and lie upon a single accountability point. Therefore, stringent ƒ Required statutory and regulatory approvals, permits, monitoring of regulatory compliance is essential at each and clearances. service chain of the PPP project. An integrated and inclusive approach which can ensure regular and sufficient supply A readiness mechanism aids in streamlining and facilitating of feedstock (from multiple sources) can lead to business the bidding process. The plant’s technical parameters are the sustainability (Cookey et al. under review). governing criteria for a PPP project to become successful or fail. Two critical technical parameters are (ii) the demand Other Measures — To regulate and make the PPP for the recovered product in the market and (ii) the quantity contract more effective, the contract should provision of feedstock (septic sludge or organic agro-waste). These for penalties for the illegal dumping of fecal sludge should satisfy the design capacity of the plant. and waste. During the design of the plant capacity, the provision to accommodate future requirements Scalability — Project scalability is essential for enhancing should also be considered. Giving incentives to the the PPP revenue from resource recovery. In the private partner is another effective tool for performance decentralized system, the option of a modular capacity consistency. For example, the contract with the private increase of the FSTP or organic waste composter might partner may be extended by another 5 years after raise the revenues. The modality of scalability could be satisfactory performance. Such incentives could be achieved in three ways: linked with targets of achieving a certain collection ratio. Performance-linked incentives will push the ƒ Scale up at the current production facility by optimizing private partner to accomplish the project’s KPI) (SNV the use of existing production facilities whereby the Bangladesh 2020). 19 RESOURCE RECOVERY & REUSE SERIES 22 3. THE ROADMAP FOR AN EFFECTIVE PPP IN THE RRR MARKET Lessons learned from PPP projects in the RRR market have 3.1.2 Prefeasibility Assessment and Risk shown promising potential for attracting private investment. Allocation However, it is important to consider the key associated barriers Public consultations and detailed technical surveys and and address them through suggested mitigation measures. audits are the most significant parameters in determining The roadmap presented outlines critical issues to be evaluated the baseline condition during the project development. while developing and implementing a PPP in the RRR sector. Thorough and extensive collection of baseline data can It aims to guide public authorities, PPP advisors and private mitigate the risk of failure to a substantial extent during the stakeholders to establish a successful resource recovery PPP. implementation phase. 3.1 PPP Project Preparation A project information memorandum (PIM) document must be prepared and validated through competent technical 3.1.1 PPP Project Selection and agencies for robust and realistic project scoping. The Development Process viability of achieving sufficient segregation is one of the The first and most important step before developing a PPP governing parameters while implementing the RRR project. project for RRR is to identify the needs and analyze the project’s Therefore, a feasibility assessment on waste composition viability. For this purpose, a project’s cost-benefit analysis shall and the public authority’s commitment to promoting waste be conducted as a part of the feasibility study. The cost-benefit separation are two game changers for the PPP private analysis must consider the government’s strategic objectives contractor. and available budget, along with ensuring legal and regulatory compliance. The probability of success, possible externalities, Through literature review and primary survey, the social costs and stakeholders’ accountability shall also be quantity of fecal sludge and solid waste generation considered as a part of the viability analysis. in the target area must be verified first. Before project implementation, the current use of waste and A Strength, Weakness, Opportunity, and Threats (SWOT) unprocessed waste details shall be identified, along analysis on private operators, availability of public funds and with the sessional fluctuation of quantity and quality. project risks are required to identify project risks and provide Besides physical feasibility, other important information, mitigation strategies. The optimal utilization of public funds such as local labor charge, transportation costs, etc., and the efficient reuse of the recovered material should be key shall also be gathered during the project preparation driving parameters while formulating the PPP RRR project. and development period. A clear and transparent vision on land availability for setting up the recycling and In the implementation of a resource recovery project in the recovery facility (FSTP, co-compost plant or waste-to- solid waste or sanitation sector,9 two major parameters at the energy plant) should be in place. forefront are (i) the effectiveness of waste management system and (ii) efficiency of the resource recovery in terms of technical Information, education and communication (IEC) must and financial viability. Through a PPP framework, these can be initiated from both partners for a robust outcome. primarily be addressed during the project development The municipal authorities shall inform and consult all key process itself. A PPP project will be more effective and stakeholders — users, community groups and associated efficient if the following requirements are fulfilled: NGOs, potential private operators, financial institutions, political representatives and other government organizations ƒ Scope for an open technological intervention and innovation — during the project development phase. Furthermore, the for private contractors, local demand for recovered material and energy, the market ƒ Optimization of the operational expenses, link, the user’s readiness, and the acceptability must be ƒ Minimizing the technical risk by introducing KPIs, analyzed before the implementation. A business development ƒ Greater speed of delivery, plan and promotion strategy for the recycled end-product is ƒ Cost certainty at early project stage and recommended as part of the feasibility assessment. ƒ Less administrative complexity. The municipality should also assess its financial status to For a successful implementation of the RRR project, the determine the revenue surplus or deficit. This analysis will structure of the PPP is fundamental. Critical components also determine the possible financial contribution of local to be considered at the project development and authorities. An initial assessment of possible technical implementation stage are enumerated in Table 5. options might be required at this step. 9 For a conceptual exploration of PPPs related to CBE sanitation please refer to Cookey et al. (under review). 20 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED TABLE 5. KEY ELEMENTS OF THE PPP DURING THE PROJECT DEVELOPMENT AND IMPLEMENTATION STAGE. During Project Development Stage During Implementation Stage Volume and quantity of the agro-waste, sludge Construction plan KPIs and standards Project implementation, operational and Environmental parameters maintenance plan Land details Monitoring and environmental management plan Asset ownership details Revenue collection mechanism Engineering aspect, design and estimation responsibility Pay out mechanism Penalty and risk parameters Disaster mitigation plan Procurement plan and bid process management Risk allocation and sharing plan Source of finance Reporting framework Investment model and period Financial model, tariff and revenue structure 3.1.3 Commercial Viability Assessment and or the private party undertakes data collection as part of due Financial Strategy diligence before bidding. Commercial viability is the major parameter that decides the fate of a PPP project. A commercial viability assessment Commercial viability from a public perspective — The involves public and private partners as well as the users. financial strength of the ULB or municipality in terms of recovery or collection of municipal tax, indirectly governs Commercial viability from citizens’ perspective — Assessing the success of the PPP project. The structure of municipal the Willingness-to-Pay (WTP) is an integral part of many PPP finance, tax collection and other departmental revenues projects. In a centralized system, the financial mechanism eventually impact the annuity or installments to be disbursed or viability of the project largely depends upon the user to the private players. Therefore, the economic strength and charges. When the integrated system comprises collection, weakness are important parameters on which feasibility transportation, processing, treatment and disposal, the assessment is also required. user charges are vital for the success of the overall project development. WTP studies are often more optimistic than Commercial viability from private players’ perspective actual revenues show; nonetheless, they can serve as a —The commercial quote of the private contractor indicates planning indicator to stratify the population into groups more an initial viability of the project during implementation. In or less willing to pay. the instances where the final selection criteria are hinged on the least cost method, the bidder’s quote should not be User changes are the source of the public fund disbursed too low so as to become non-viable for operation. Before to the private contractor in terms of installments through quoting, bidder must undertake sufficient due diligence, the Hybrid Annuity Model. Therefore, in a centralized or background exercise and project appreciation. The bidder’s integrated system, the community’s willingness to pay user financial strategy should evaluate the project baseline, charges plays an important role and is indirectly linked inflation, return on investment and payback period through with the financial success of the RRR component in that the revenue model. service chain. On the other hand, in a decentralized RRR mechanism such as small fecal sludge treatment plant or External Fund Sourcing — If external funding is needed decentralized biomethanation plant, the operational cost to support the PPP, the carbon market or other green is also linked with the fees paid by the public towards the finance options should be explored as well as agencies collection and conveyance of waste to the decentralized which contribute funding for sanitation, agriculture or soil plant. In both cases, the willingness to pay user charges or regeneration projects. Loans from international development service fees is a critical financial parameter linked with the banks could also be considered by the public partners for the recovery success of a PPP RRR project, although the WTP partnership because of the social and environmental impacts might not reflect the users’ ability to pay given other financial created by the cases described above. If banks were to household constraints. provide favorable loans for emerging social impact projects, more entrepreneurs might be observed to be engaging in Preliminary information on users’ willingness to pay is the RRR sector. For example, if companies with a mandated however a useful indicator to assess the possible revenue corporate social responsibility (CSR) offer favorable loans to stream from users for the project’s commercial viability. RRR projects such as the above-described cases, it can Either the municipality collects this information beforehand, help incentivize other companies or entrepreneurs to enter 21 RESOURCE RECOVERY & REUSE SERIES 22 into the RRR market. Ghanaian banks provide extremely 3.2.1 Prequalifying Criteria high-interest loans for risky ventures. These loans entail To maximize the participation and engagement of a interest rates ranging between 30–70%. Therefore, the competent set of private parties, the bid qualification government can legislate regulatory reforms to help projects conditions shall encourage private sector players, with with social impact. If the PPP is facilitated by a third party the a provision of consortium or join venture with locals financial obligations of all parties have to be clearly defined. small and medium scale enterprises. Although the number of small enterprises or SMEs in the market in the 3.1.4 The Hybrid Annuity PPP Model resource recovery sector is limited, these small players There exists several PPP models — Build-Operate-Transfer could be very effective in the last mile connections. (BOT), Design-Build-Operate (DBO), Design-Build-Operate- While SMEs cannot play a large role in setting up the Transfer (DBOT), etc. (PPIAF 2009). However, from the plant or facilities, they can however be instrumental resource recovery and reuse point of view, the most in different segments of the value chain such as: popular and widely accepted model has been the DBOT Hybrid Annuity Model (HAM). Here, the concessionaire is (i) Waste segregation, responsible for setting up the facility (FSTP, compost plant, (ii) Collections, biomethanation plant or any other waste-to-energy plant) on (iii) Marketing of compost, Design, Build, Operate and Transfer (DBOT-Hybrid Annuity) (iv) Sale of compost, basis. The concessionaire is responsible for effectively (v) Awareness raising, education, communication treating and recovering fecal sludge and sewage. and community mobilization and in (vi) Controlling the quality of the recovered material. In HAM, the engaging authority will finance the capital expenditure and the periodical O&M Costs. An agreed Municipalities can be critical in attracting the small parties,10 percentage amount of the quoted project cost (e.g., where the involvement of small enterprises or SMEs 50%) would be paid during the construction period. The enlarges the participant pool in the tender leading to cost remaining project cost, along with interest and the periodical optimization, improved output effectiveness and easing of O&M cost is disbursed in certain installments during the the local operation. Technology choice driven by an outcome entire operational period, where the engaging authority orientation instead of prescribing selected technologies will makes these payments through an escrow account. The encourage broader participation. concession period would be a minimum of 10 years. The resources recovered in the process (in form of compost, bio- The scope of agglomeration or consortium of cross-functional fertilizer, soil enricher, biogas, electricity, etc.) are managed private entities should be encouraged in the pre-qualification by the concessionaire, which shall market, distribute and sell criteria. The stringency on past experience should be kept them. The revenue generated through resource-recovered as optimal as possible, to better induce the engagement of material or energy will be kept with the concessionaire. small and medium scale enterprises and players. However, past experience on resource recovery and PPP projects of 3.2. Structuring of the Project for the partners will be a significant criteria. The financial turnover Effective RRR may be considered predominantly for the consortium with a The effectiveness of the circular bio-economy, framed in reasonable weightage to the individual turnover. a PPP model, is dictated by the structuring of the PPP framework. Essentially, the structuring indicates various 3.2.2 Evaluation Criteria stages of the PPP procurement process (Figure 9). The lack of technological competencies leads to the failure of many PPP projects which have resource recovery as an integral Key considerations and details of project requirements such part (refer to Section 2 - Lessons learned from the Asian and as the prequalification and evaluation criteria, key elements African RRR market). Bid evaluation criteria, structured upon the of the PPP contract as well as details on the procurement lowest cost solution (LCS) method may not always guarantee management are deliberated in the following sections. The the best technological solution. Therefore, it is necessary to process can be facilitated by the public sector or a third party. frame the bid structure through Quality Cost-Based Selection 1.Marketing and publication 2.Expression of 3.Pre- 4.Request for 5.Post-bid of the PPP 5.Evaluation Interest (EoI) qualification Proposal (RFP) negotitation opportunity FIGURE 9. PROJECT STRUCTURING FOR EFFECTIVE PPP PROCUREMENT. 10 Refer to case study of Kolkata solid waste management improvement project. 22 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED (QCBS) with a minimum qualifying technical score of 70% for (ii) The start date of the contract and further evaluation. Appointment of independent agencies to (iii) Any specific agreements made by the private firm to monitor the performance of the indicators, quality assurance enable it to enter into the contract. and control would be an important condition to be stipulated in the bid structuring. Conditions precedent — This section presents a summary of the issues that must be concluded before the PPP start To implement an effective recovery through PPP, a range date for the contract to come into force. In some cases, of qualitative parameters for the bidder need inclusion. if the actions are left pending before contract signature, Such parameters should encompass technology know- then only the contract bit might be signed. The most typical how, operating experience, approach towards managing conditions precedent are: existing workforce and bridging strategy for gaps in the existing waste systems. Evaluating bidders’ capability (i) Provision of land, which is usually the responsibility and commitment is critical against outcome and service of the government, delivery performance parameters. Table 6 summarizes (ii) Securing any necessary permits, the most essential prequalification and evaluation criteria. (iii) Developing and agreeing on an asset register and (iv) Securing the finance required to fund the project. The composition and prequalification criteria of the team of experts should be very clear and rigid. A typical PPP Grant of PPP — This specifies that the private firm has project with resource recovery from the bio-waste must been granted the rights to construct and operate the include the following key experts in the proposed team: resource recovery facility under the PPP arrangement for the specified location. Sectorial expert (wastewater, solid waste) Process expert Duration of PPP — Here, the length of time for which Quality assurance and quality check expert the PPP arrangement will be in place is specified, including PPP expert 1 with an in-depth knowledge a clear indication of: of public health sanitation aspects (i) When the contract commences and expires, PPP expert 2 with an in-depth understanding of the (ii) When the obligations that have been set out in the private sector agreement become effective and Financial expert (iii) Whether the contract can be renewed, and if so, the Procurement expert length of time it can be renewed. IEC or communication expert Early Termination Payments — In case of early termination 3.2.3 Key Components of the PPP Contract of the contract and project assets reverting to the public Agreement sector, the contract should set out the compensation The content of a PPP contract necessarily varies across payment depending on the cause of the early termination. different countries depending on the type, terms and conditions There are three broad reasons for early termination: of the agreed PPP arrangements. Below, the key components of an RRR PPP contract along with an explanation of each (i) Default by the private party, section and its purpose have been discussed to help project (ii) Termination by the public party, whether due to developers and stakeholders to adapt the PPP contract defaulting for reasons of public interest, and agreement to the local situation. A summary checklist for PPP (iii) Early termination due to some external reason (force majeure). contract preparation is provided in Box 2. Handover arrangements — Specifics include the contract Definitions — This is usually a brief section providing close date, and processes in place to manage the on-time descriptions of the key terms included in the contract. It termination and handover of any assets at the end of the must include an explanation of the relevant parties to the PPP contract or in the event of an early termination. PPP arrangement. It should also list each party’s ‘successors and assigns’ in situations where one of the parties is merged Representations and warranties — This defines any or acquired. Naming successors will avoid disputes about warranties in place related to, for example, the quality of whether the contract still binds the successor entity. the assets included as part of the PPP arrangement, or the minimum levels of water to be provided to the scheme. General provisions — The general provisions section covers the legal basis upon which the PPP will be Other obligations — This part of the contract should not established, and other critical issues related to the structure only detail any other obligations of the private firm, but also of the deal such as: define the obligations of the relevant government authority. (i) The rights and obligations of the private firm and This will include obligations such as the obligation: government, (i) To provide land and specified assets; 23 RESOURCE RECOVERY & REUSE SERIES 22 TABLE 6. MATRIX INDICATING PREQUALIFICATION AND EVALUATION CRITERIA. Criteria Prequalification conditions Evaluation process Legal status · Registered business entity Document verification · Fulfillment of legal compliances Social vision · Community level involvement to improve · Social mission statement and achievements sanitation · Role in market exploration and past growth Domain expertise · Have existing or past experience in waste · Check of their past/current activities management/reuse related businesses; or · Presentation of technical expertise · Credibility of partnering with established domain players Collaboration with · Have positive experience working with the · Preference given to partner with strong the public sector municipalities and local government management and operational team of · Have experience in PPP management working experience with the municipality Marketing and · Have experience selling a product to a · Compost sale agreement, power purchase distribution diverse customer base, e.g., farmers or agricultural department, etc. expertise landscapers; agreement, MoA with · Proof of target milestone achievement agencies, industries, or · Have partnership with entities that meets this requirement Solvency · Financial contribution (in the form of labor, · Audit report operations and management) at least towards the total cost of the business operations and capital cost to bridge any gap in revenues till break-even is achieved (ii) To obtain permits for the private firms; (iii) The government agency responsible for reviewing and (iii) To provide agreed payments to the private firms where acting upon the information or data being produced, relevant; and and the capacity of the agency to review the information (iv) To carry out required capital investment, repair and adequately, and renewals where relevant. (iv) The need for third-party verification or auditing of the information that is being produced. Periodic and extraordinary tariff adjustments — This section should describe the processes or mechanisms for Monitoring — The contract usually identifies the party managing changes to the tariff agreements. It will include responsible for monitoring the performance of the private making changes to the tariff in response to inflation through firm. Monitoring can be undertaken by the communities, agreed indexation mechanisms and the development of tariff ministries or other authorities, or a combination of these ‘re-openers’ that allow for changes to the tariff in the event of stakeholders. The private firm must provide financial and significant and unexpected changes to the conditions faced operational performance data for verification of the contract by the private firm that might arise over a longer-term contract. compliance. Monitoring and evaluation results are reported to the granting authority, which oversees the project Reporting and data requirements — This section will development and enforces private-sector compliance. detail any reporting and data requirements for the private firm and other parties to the PPP arrangement as and Dispute Resolution Mechanisms — The contract when relevant. When developing these requirements, the should identify the mechanisms designed to enable following issues should be considered: the resolution of disputes between the parties to the agreement before reaching the stage of litigation. While (i) The information or data needed to be included in each traditional instruments involve the courts, these may be of the reports and the likely availability of this information differently effective or efficient depending on the country’s or data, context. Alternative mechanisms may involve moving the (ii) The frequency with which the reports need to be disputes to a third-party forum better suited to handling produced, contractual disputes. 24 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED 3.2.4 Procurement Management ƒ The generation of power (MW), in case of waste to energy Navigating the various stages outlined above can prove to project, be challenging for public authorities. They must manage ƒ Offtake agreement and feed-in-tariff, the different technical and financial elements of the bids. A ƒ Emission control and liquid waste management (from checklist can help to make sure that all issues are considered process), (Figure 10). The public entity must also effectively coordinate ƒ Actual cost recovery through selling of recovered product, with private sector firms and other project stakeholders. ƒ Reliance on local government for waste supply and The common functionaries involved in the procurement payment of tipping fee, and management include the contract authority, contracting ƒ Percentage of compost sold versus organic waste collected. authority, local governments, operators, private service providers, regulators, government services, monitoring and A review of selected CBE-related PPP tender documents support services and non-profit organizations. offered some insights into its content and structure (Srinivasan 2018; Rao et al. 2020). Vital information generally Developing a management team with the capacity to manage omitted from most of the tender documents are: the bid process is very important. This team should include a steering group of representatives from key government (i) Details on the land, its area and site characteristics agencies and individuals with the technical expertise to (topography, hydrogeology, soil, drainage, etc.), review and evaluate the bids. The individuals in the technical (ii) The actual fecal sludge and waste characteristics, team will need to include at the very least some experts with and details on the type of containment systems experience managing a PPP deal, process engineers (waste (septic tanks vs. pits, pour pour-flush vs. cistern flush), management and sanitation), financial experts, economists (iii) Appropriate standards for bio-solids (most tenders and lawyers. It is typical for the government to use external were either silent on this or referred to multiple advisers with the necessary skills to support the process standards, thus confusing the bidders), completion. The procurement team should be careful with (iv) Compliance with environmental and food safety handling the provision of information to prospective private regulation, and sector bidders and other relevant stakeholders. (v) Process or service standards and/or RRR products’ standards expected from the FSTP operations (Rao et The effective monitoring and evaluation of the contract is a al. 2020; Mansour et al. 2021). pivotal task for ensuring that the PPP arrangement delivers value for money. Throughout the contract’s life, the PPP The above-mentioned parameters should be considered contract manager must ensure that the service standards as KPIs in a structured PPP document. KPIs should specified in the contract are effectively monitored and that be rationally framed and gradually tightened with the any performance-based bonuses or penalties are applied progression of the project instead of excessively high transparently and consistently. threshold values at the commencement during the signing of the contract. There should be a provision for revising the 3.2.5 Service Level Benchmark and Key KPIs every 5 years to establish a realistic contextual mode Performance Indicators of operation. Overview of the Indicators and their Importance The objective of benchmarking of KPIs is to ensure the quality Selection of Key Parameters and Values of outcome of the PPP projects. The performance indicators Selection or finalization of values of different KPI considered in a typical PPP RRR project are as follows: parameters depends upon the national and local context of the developing countries. For a successful implementation ƒ Quantity of the assured feedstock (organic waste, fecal through an outcome-based approach, the selection of sludge, agro-waste), critical parameters and values must always be rationalized. ƒ Composition and characteristics of the waste, However, specific widely accepted parameters ranges as ƒ The quality of the end-product, per international standards could always be referred to as ƒ The percentage or fraction of the recovered product (e.g., guidelines in defining the national or regional standards generated compost) against waste input, (Box 3). 25 RESOURCE RECOVERY & REUSE SERIES 22 BOX 2: CHECKLISTS FOR CONTRACT PREPARATION. Criteria Components Description of the components · Collection and transportation of the waste (municipality, third party or community) Feedstock Sourcing · Assign responsibility for weighing the waste · Changes required for waste collection and delivery from the existing condition · Responsibility for maintaining quality of the incoming waste · Guidelines on quality requirements of the feedstock input - specification of Materials waste and characteristics · Treatment of waste if any at transfer station (or during transportation) · Gate fees for accepting waste · Specification of quantity in a day · Quantity (or units in case of energy) of compost/co-compost/energy produced · Frequency of monitoring Incoming · Guidelines for receiving incoming organic materials, unloading, sorting, materials debagging and grinding, screening, and removal of excess waste materials Production · Distribution of roles between owner and operator Process and · Maximum holding period of feedstock hygiene · Specification of technology to be used and technical standards · Specifications for the process to maintain hygiene within the plant E quipment · Responsibility for providing equipment along the production chain · Assets and equipment to be used within the plant · Storage area specification Final processing · Responsibility for disposal of rejected materials steps · Quality specification of rejects Quality assurance · Specifications about the product and product testing and final product testing Ownership · Ownership about the end product and share of output and revenue Sales and Guidelines on marketing, if required, specifying co-sale (with chemical fertilizers Use through fertilizer vendors), packaging requirements, quality assurance Marketing labels (certifications) and price of the product Guidelines on use cases (for compost, co-compost, soil enricher) where the application is feasible · Specification of channels to be used (direct at site or through municipal/ Sales private owned shops; or indirect through retailers and wholesalers) · Ownership of revenue and payment mechanism for the private party · Awareness and clarity about the definitions of the contract among all Basic parties and entities Provisions · Specification of clauses such as contract period, terms of renegotiation and renewal, contract amount and payment mechanism (amount and L e gal, frequency), summary of the scope of services A dministrative, · Guidelines on time period for stocking the feedstock before processing, a n d other Performance with specification about maximum end-to-end processing time (especially C onsiderations and for compost and co-compost) deliverables · Details around the payment structure, including terms, amount, frequency, invoicing and renewal process · Process to be followed if output fails to meet quality and quantity standards · Legal requirements around labor that need to be adhered Labor · Responsibility for processing payroll · Rules around hiring and layoff, employee payment, minimal wage (Continued) 26 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED BOX 2: CHECKLISTS FOR CONTRACT PREPARATION. (CONTINUED) Criteria Components Description of the components · Detailed description on record keeping with responsibilities (including materials amount, production quantity, revenue and operational record Record keeping like utility bills, wages and salary) · Instructions on data sharing between different parties and entities · Environmental permits along with compliance to regulations (during construction, operation) Permit, insurance · Ensuring safety protocols through signage, procedures, awareness drill, and safety equipment standards and inspections · Anticipated insurance purchases and responsibility of procurement · Anticipated utilities required and responsibility for procurement Source: Adapted from Kaza et al. 2016. Procurement Management Criteria and needs Scope of service Bid evaluation Risk Goals at local context Identification of scope Evaluation of bids Awareness about define the scope of and responsibility of should go beyond the project risks and engagement private entity price limitations • Facility operation at • Obtaining permits: • Anticipated price • Environmental controls: regional or local scale consent to establish and schedule and viability noise, odor, air, water • Availability of public land operate • Staff and company and storm water or requirement of land • Defining the qualification based on • Design parameters aquisition engagement project requirement allowing expansion\ • Asset requirement from • Design and build • Bidding entity with a • Expected channels of the contractual party • Operational aspects track record of success feedstock and risk of • Market analysis quality and availability • End-to-end process • Viability of proposed demonstrates profitability design, build and solution (technology, • Performance for private entity operate climate, waste guarantees during • Multiple waste streams composition, staffing) facility development- and • Other services (like management, RRR or construction (schedule, marketing) • Detailed financials: integrated waste viability of costs and cost, design standards, management system • Requirement of the revenues product quality and with mixed waste consortium: contract price) with other private or • Backup disposal sites public entities planned FIGURE 10. CHECKLISTS FOR PROCUREMENT MANAGEMENT TO FACILITATE TENDERING PROCESS. 27 RESOURCE RECOVERY & REUSE SERIES 22 BOX 3: AN EXAMPLE OF BENCHMARKING FOR FSTP BIOSOLIDS. Bio-fertilizer as a material resource recovered from fecal sludge treatment plant (FSTP) shall satisfy the basic standard of certain parameters before application to the field. As per USEPA (United States Environment Protection Agency) guidelines, it should meet the following criteria of Class A Bio-solids: Fecal coliform density < 1000 MPN/g total dry solids Salmonella sp. Density < 3 MPN/4 g of total dry solids Helminth egg concentration of < 1/g total solids E coli of 1000/g total solids pH (at 5%) suspension: 5–7 Moisture (%): 10–30% Organic carbon (%): 10–25% Organic Nitrogen: 2–5% Phosphorus: 0.2–1% Bulk Density (Specific gravity): 0.65–0.9 4. ROLES OF STAKEHOLDERS IN PPP FRAMEWORK Both public and private sector perform an important It could also make it easier for the company to leave the role in a successful resource recovery PPP. During the project if the project fails. Therefore, the government must initiation phase, the public sector is responsible for strike a delicate balance in providing sufficient support to defining objectives, prioritizing project criteria, framing enable the private firm to finance the project but not to the applicable policies and finalizing the type of PPP to such an extent to deter the private-sector incentives. The be implemented. During the negotiation stage, both following describe the optimal conditions for public sector parties are involved in the partnering process and finishing involvement: the project scope and preparatory work. During the implementation stage, the private sector has a leading ƒ The contract is long-term stake in implementing and performing, while the public ƒ The scheme delivers value for money for service users sector primarily acts as a monitoring agency. PPPs can be and the government planned as centralized and decentralized, clustered based ƒ Risks are allocated to the party best able to manage them on the waste management approach. Centralized PPP ƒ The public sector can hold the private party accountable models prove to be effective in the urban areas where there for meeting its obligations is a commitment of large volume of segregated organic ƒ The private sector provides an innovative and effective waste. In contrast, decentralized PPP models are more service delivery appropriate where waste can be tackled in smaller volumes ƒ The private sector brings technical expertise across different waste collection points. This model requires stronger community involvement along with public and The tier-wise mandates of the government sector in the private parties. Clustered waste management comprises of implementation of a PPP project are discussed below. institutional arrangements between different municipalities. Therefore, based on the waste management and planning 4.1.1 At National Level for CBE, the involvement of the stakeholders varies, which At the national or central level, the public sector’s role is entails careful consideration in the implementation of a primarily focused on developing the necessary policies PPP for CBE. for establishing the PPP. In particular, it is responsible for formulating service level benchmarks for the outcome of 4.1. Public Sector Participation the PPP model and providing financial mechanisms to While the government could fund a PPP project entirely with target the PPPs. Standardization of different parameters public resources, doing so reduces the incentive for the in terms of KPIs is one of the critical roles that the public private party (or parties) to improve the scheme’s efficiency. sector plays at the national level. National government’s 28 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED policy for the utilization and application of the recovered material. The local authority shall be responsible for the product from agro-waste, bio-waste and septic sludge delivery of assured quantity and quality of waste to the largely governs the outcome of the PPP model and its bidders, as committed in the PPP concession agreement. viability. The national waste management guidelines set up by the central government of developing countries Besides technical mandates, the local authority is further need to accommodate a detailed provision of circular responsible for the enforcement of local rules, RRR regulation bio-economy, where the policies for PPP intervention and bylaws, as a mechanism of successful PPP project on resource recovery and reuse need to be understood. implementation. Local authorities have always been instrumental The procurement policies, institutional framework, to encourage, motivate and mobilize the community towards public participatory approach, financial mechanism, and the usage of recovered materials from bio- or agro-waste. provision for incentive, rewards and penalties should Stakeholder consultation and public participation are the two be clearly outlined. Such policy-level PPP intervention main foundations on which the implementation of a successful on the circular bio-economy would be instrumental PPP RRR project is carried out. in undertaking an effective resource recovery project implementation. 4.2. Private Sector Participation A well-designed and managed PPP has an advantage of 4.1.2 At Regional Level attracting private sector participation. Following are the key In a PPP framework, the regional or state government has a aspects for which private sector participation is involved: pertinent role in capacity building and awareness generation for the appropriate recovery and reuse of the bio-waste, fecal ƒ The allocation of risk and the associated performance sludge and agro-residues. The state project management rewards and penalties create incentives in the PPP unit develops technical sessions and programs to enable contract to encourage the private partner to achieve the stakeholders, including the community, to engage in efficiency at each stage, and also to introduce efficiency understanding the benefit of the use of recycled/recovered improvements where possible. At the same time, by bio- or agro-waste residues. State-level project or program displacing the risk onto private partners, the public sector management units will work in close coordination with the is able to check its own exposure to cost escalation. private entity to ensure the robust implementation of the For private sector, a counterproductive strategy is an PPP project. effective mechanism which can make the system a win-win proposition. Instead of direct escalation of user Regional governments or administration shall also be charges by public entity, private contractor can be given instrumental in establishing the cost benchmark for the the decision-making opportunity on the user charge recoverable items such as bio-fertilizer, soil enrichers as per their commercial mechanism. Public sector can or compost. In the case of digested sludge, the state freeze the regulation and KPIs for the private sector government shall identify the project’s location and map and the private party should ensure the service. Thus, the area that could benefit the generated power. The through a counterproductive mechanism, the service state government will also initiate and monitor the power level benchmark can be achieved, deterring conflict purchase agreement between the PPP contractor and the between the public sector and citizens. concerned board. ƒ PPPs can be structured to create a whole-of-life focus 4.1.3 At Local or ULB Level in which the private partner designs the project to take Any successful resource recovery and re-use (RRR) account of the link between construction and operation project depends upon the roles and responsibilities of the to minimize the cost over the project’s lifetime. A private stakeholders at the local level, where the local authority should partner, which in addition to designing and building maintain a high quality of the input waste. The segregation the project, also provides the ongoing operations and of inorganic and organic waste must be strictly monitored, maintenance management, has the incentive to ensure and the organic wet waste delivered to the composting or the that the design and construction facilitate efficient O&M. waste-to-energy facility. ƒ Competition is introduced during the bidding stage, Poor waste segregation decreases the plant’s performance bringing market procurement benefits. As long as the and reduces the degree of recovery of material (as bio- project is well specified in terms of the output requirements fertilizer or organic compost) and energy. Municipalities (rather than specifying the inputs), each private sector must ensure that there is no mixing of industrial sludge bidder is incentivized to propose innovative solutions and in the FSTP or hazardous waste in the municipal waste minimize cost. stream. During the project development process, both parties of In a PPP model, the contractors’ revenue is primarily the PPP framework should develop a shared vision of the governed by the quality and quantity of the recovered requirements, risks and mitigation measures. An inevitable 29 RESOURCE RECOVERY & REUSE SERIES 22 risk in the short-term is financial in nature, incurring a plant (3 to 5 tons per day) or an organic waste compost loss instead of a profit — experience indicates that RRR plant can be operated by a local enterprise or the local businesses are not always profitable in the short term. community. Local SMEs are critical for understanding the Therefore, it is particularly appealing to social enterprises. demand for recovered material in the local market. They An enterprise is socially-driven when its objective is to meet also possess an effective economical network, as well as social needs through business innovations (Surie 2017; knowledge of reliable and guaranteed end-uses in the local Ramani et al. 2017; Bornstein 2004). Ramani et al. (2017) market. Alternatives to soil degenerating fertilizers and defines three conditions for socially-driven enterprises: (i) more sustainable sources for animal feed are also driving they offer a market or non-market avenue to address a demand in local markets. Many distributors operate at the social need, (ii) they are financially viable, in whatever way wholesale and retail levels and advertise their products they can finance their operation and (iii) they apply business accordingly. By partnering with such SMEs, private RRR management principles in their mode of operation and companies chance upon the opportunity to access service delivery. established distribution networks with the benefit of an increased geographical reach as well as benefit from their A PPP in RRR business which does not make a profit or experience in marketing and sales. The challenge will be break even is a big risk when compared to a traditional to create a suitable financial arrangement that meets the business. Private sector partners that are socially motivated needs of the concerned parties and the various distributors. are fairly different since they prioritize meeting social or This could be a necessary investment to address any environmental needs alongside the business and technical weaknesses in marketing, sales and distribution in the goals (Milward-Hopkins et al. 2018). At the core, they are short term. risk-taking — perhaps even risk-seeking — to allow for the growth of their business and accept uncertainty with 4.5. Role of Community Members risks (Hovy 2015). Such partners have a respect for new PPPs targeting resource recovery precipitate positive technology and in exploring innovative solutions (Bornstein impacts such as enhanced public health and environment 2004). They are collaborative and maintain a level of in the long run, along with improvement in the livelihood openness to capture learnings and develop innovative conditions. In RRR cases related to service delivery, solutions alongside the many stakeholders involved community members themselves are users of the service (Székely and Knirsch 2006). — the PPP should therefore focus on meeting their needs. However, in achieving an optimal service through 4.3. Matching Expectations efficient resource recovery, a strong role of the community between Private and Public in waste management is vital. As mentioned earlier, Partners source segregation of waste is an important means for In a successful PPP for resource recovery, public and private RRR, and households should accommodate the practice. entities must work in tandem, based on a relationship of mutual This would help to achieve higher efficiency of resource trust to pursue a common goal. In this context, developing recovery by reducing costs of segregation and enhance a shared understanding can be achieved by matching the the cost recovery through recycling of other materials needs of each part for a successful business proposition. (example metals, glass, cardboards, etc.), adding savings Tables 7 and 8 summarize the typical expectations and to the household budget. The community members suggests recommendation for action to address them. need to abide by laws, follow the guidelines stemming from the awareness drive and should participate in the 4.4. The Role of Small & Medium local meetings conducted to provide a comprehensive Enterprises (SMEs) understanding of waste management at the household Resource recovery from bio- or agro-waste though PPP and community level. Waste related PPPs need to attracts local small and medium players to become a part of incorporate payment mechanisms which the community the service chain. For example, in a decentralized resource members should be willing to pay, making the system recovery facility, a small decentralized biomethanation financially viable. 30 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED TABLE 7. EXPECTATIONS FROM PUBLIC BODIES AND RECOMMENDED ACTIONS FOR PRIVATE ENTITIES. Expectations from the public bodies Recommendations for the private entities • Private entities should initiate partnerships with • Identification of such bodies in the project area at the early stage research-based organizations, entrepreneurs and trade • Exchange of dialogues with such organizations organizations for technology innovation, product • MoU or formalization of association as technology partner development and marketing and sales. • A proactive and strategic planning to maximize revenue • Piloting the project to assess the technical viability of the process generation from waste (fecal sludge, organic municipal waste, before commercialization agricultural waste, etc.), with the aim to become commercially • Maximization of resources, time, and operational aspects self-sustainable and reduce the dependency on public funds. • The private sector should provide a long-term service rather • Express an interest towards a long-term contract and indicate the than just being an upfront project contractor and take the same in the project tendering (or Request for Proposal) responsibilities of designing, building, operating and financing projects. • The private sector should be technically capable and • Reconnaissance survey experienced to understand waste flows and assess the • Stakeholder consultation need for change in operational procedure, if required. • Desktop research Private partners should also engage with small enterprises • Regular review of process and operation and entrepreneurs to establish a good market linkage. • Identifying of SMEs • Workshops and brainstorming sessions with entrepreneurs • Private parties should develop an integrated plan and • Development of IEC material through professional organizations communicate and consult it with stakeholders from • Holding roadshows, flyers, posters, etc. for sensitizing the citizens, community. households, commercial users • Develop well-structured information, education and • Promotional sessions with nursery owners, farmers, horticulture communication (IEC) activities for citizen, SMEs, conservancy agencies for the use of recovered materials workers, and employees to be discussed with the public entity at early project stage. • A thorough and adequate information on the project • Site visit background, understanding bidders’ scope is expected • Assessing market demand for compost, bio-soils or other endby the public authority. products of the RRR plant • Public authority also expects bidder to conduct a proper • Interaction with the market linkages or facilitators (retail enterprises) due diligence of the project, site visit, understanding of the who could facilitate compost selling project area and market, including the citizens’ willingness to pay for the service. • The public authority expects the bidder to meet all service • Internal monitoring of the performance level benchmarks as per the KPI prescribed in the • Review of process and modification if required agreement. • In case of non-meeting of KPI, technical QA/C and laboratory testing to achieve the required quality, revisiting of process and design parameters • The public authority expects bidders to quote a price that • Detailed analysis of the project costing, with escalation, contingencies, ensures viable for operation. and other unforeseen costs • The private sector should take all the risks linked to • Judicious estimation of operational cost and profit margin construction, cost escalation, and tax and be solely • Proposing a realistic quote accountable for any operation-related functionality. • The private party should have prior operational experience • Understanding the proposed project and linking with projects of working with the municipality. executed in past • Having skills and experience in selling their product to a • Adopt the best available practices and showcase in the bid the diverse customer base, e.g., farmers or landscapers. credential obtained from past clients • Should have a strong team of experts with experience in the • Create a resource pool of in-house and external experts sector, the process, PPPs (with both public and private • Induce all experts during the technical bid submission stage for sector knowledge), quality assurance and control, writing approach and methodology procurement and IEC. • Review of process and operational performance by the experts • Onboarding ofexperts for all essential meetings with municipalities and higher authorities 31 RESOURCE RECOVERY & REUSE SERIES 22 TABLE 8. EXPECTATIONS FROM PRIVATE ENTITIES AND RECOMMENDED ACTIONS FOR THE PUBLIC SECTOR. Expectations from the private entities Recommendations for the public entity • Administrative facilitation in the marketing of soil enricher • Assisting private party to brand the recovered product and compost, etc., produced from solid waste, co-compost • Helping private partner to get introduced to the potential market plant or fecal sludge treatment plant. • Support to cope with unforeseen political and administrative • Initiate an open discussion to find solutions for risk mitigation risk, change in the project timeline, reallocation of responsibilities, etc., if required. • Public bodies should develop and enforce a regulatory • Holding meetings for industries and SMEs framework (including policies and by-laws) that promote • Advocating for the benefit of using recovered material and incentivize the use of recovered resources (soil enricher, bio-soils, the use of soil-enricher, bio-soils, and compost compost etc.). • A strong institutional framework ensures consistent waste • Develop guidelines for waste segregation (at household and flow and sensitizes contractors and citizens for proper commercial level), collection and transportation waste handling. • Defining parameters in the contract for waste management, feedstock • Assure the delivery of waste quantity in a segregated waste, characteristics and volume having organic components only. • The public sector should ensure a strong coordination along • Organize coordination meetings with all parties of the service chain the entire service chain including segregation, collection, • Brainstorming on evolving issues to optimize operational aspects transportation and hand-over of the waste to private sector • Encouraging a good network among different parties of the service which is responsible for resource recovery. The effectiveness chain of resource recovery depends upon performance at each of the stages. • A long-term PPP contract (10–15 years minimum) is • Plan for a long-term contract during the screening phase and prepare preferred instead of short phases (annual or 2-3 years). a feasibility study • Set clauses in the tender advertisement and the contract • The private bidder expects clarity on available government • Document of land status land for the recovery plant. The public administration should • Hand over documents also arrange permits to use the land. • Map, site plan, and layout • Satellite imagery of the site • Site surrounding features (physically on map) • Legal deeds, conversion and registration documents • Administrative support for sensitizing the community (the • Support the private party to hold meetings, and workshops with primary waste generators). stakeholders • Facilitate private parties with letters, authorization statements • Financial solvency of the public authority or municipality to • Ring-fencing of the municipal finance for the project release payments according to performance as agreed in the contract. • Technological flexibility will bring innovative solutions • Mention a wide range of possible technologies and options (instead of prescribing a specific treatment process in the • Stipulating the outcome-based parameters, e.g., capacity or tons of Request for Proposal). recovered material • Special recognition for innovative technology options • Incentive mechanisms like tipping fees would boost the • Private partner expects a balance between incentives to private players revenue for the initial years to recover a part of their and subsidies to industries operation and maintenance costs. Similarly, subsidies to • Discuss agreement between private party, the industry body and public chemical fertilizers provide an uneven playing ground for authority on the controlled use of chemical fertilizer the compost. • Flexible prequalification criteria: • Suitable clauses in the tender document (or Request for Proposal) - Scope for joint ventures or consortiums to accommodate the expectations - Nominal annual turnover criteria - Moderate qualifying technical cut-off score • The private contractor expects the public sector to gradually • Provide a time-based mandate (in the Request for Proposal tighten the KPIs in the future instead of imposing excessively scope) to achieve the 100% of the stipulated KPIs high threshold values when signing the contract. There • Possible revision of scope and KPIs within a predefined timeframe should be a provision for the revision of KPIs every 5 years. 32 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED 5. CONCLUSION The public-private partnership (PPP) framework is an a third party, and should be driven by local demand (and effective instrument for scaling resource recovery projects commitments) by the public and private sectors and not from bio-waste, agricultural residues and fecal sludge. predominatly be an externally driven ‘project’ as some of the Promoting circular bio-economy through a PPP framework less successful case studies showed. is often technology (efficiency) driven. It serves to reduce the waste volume, but is missing the potential for a market- This study has prepared a roadmap for a successful PPP driven enterprise. A related enabling environment will help to in the RRR market, outlining the critical issues which need (i) reduce barriers along the municipal solid waste (MSW) and consideration. It is important to start the PPP process via sanitation management chains, (ii) promote actual resource a thorough project preparation to ensure the technical and reuse like market-driven waste-to-energy (WTE) pathways commercial viability of the project. Early engagement with the and (iii) balance the risks shared by the private sector and private sector and the local community is required to attract the government. private sector investment and ensure the citizen’s acceptance. The main factors for the success of resource recovery PPP A practical regulatory framework and effective project projects consist of the following elements (Figure 11): structuring will make it easy for the public sector to implement the PPP. The legal framework involves environmental 1. An adequate municipal waste supply chain, laws, regulations on the proper management of municipal 2. Strong government policies and regulations with bio-waste, fecal sludge and agro-waste, procurement enforcement, management guidelines for engaging private parties and 3. Access to diverse financing and government subsidies, operational procedures for PPPs, including contractual 4. Access to advanced engineering and reliable equipment, design. For finding a strong private partner, it is crucial to 5. Cost-effective operation and maintenance by the private set the right prequalification and evaluation criteria in the sector, procurement process. Key Performance Indicators (KPIs) 6. Stringent environmental and social compliance and will aid in ensuring the quality of the end product or service 7. Good public relations which foster community support of the PPP, and should go beyond resource transition or recovery, but include sales. PPP projects for resource recovery might fail due to financial constraints, institutional weakness, lack of technical In a successful PPP, public and private entities must work expertise, or limited capabilities of municipal authorities. To hand in hand based on a trustful relationship with the mitigate these barriers and risks, the planning and execution common goal in mind, bridging across the waste/sanitation of the PPP should include (i) technical feasibility, (ii) financial management and the agricultural or domestic reuse sectors. viability, (iii) appropriate legal and contractual issues and (iv) This mutual understanding can only be developed through communication, education and awareness. The process of continuous engagement and exchange starting with project establishing the PPP can be initiated by any party, including preparation. 1 Adequate municipal waste supply chain 7 Good public relations and community support 2 Strong government policies & regulations 6 Stringent environmental PPP for RRR and social 3 compliance Access to diverse financing and government 5 Cost-effective subsidies 4 operation and maintenance Access to advanced engineering and equipment FIGURE 11. MAIN SUCCESS FACTORS OF RESOURCE RECOVERY PPPs IN DEVELOPING COUNTRIES. 33 RESOURCE RECOVERY & REUSE SERIES 22 REFERENCES Abdel-Shafy, H.I.; Mansour, M.S.M. 2018. Solid waste issue: Sources, composition, disposal, recycling, and valorization. Egyptian Journal of Petroleum, 27(4): 1275–1290. https://doi.org/10.1016/j.ejpe.2018.07.003 Adam-Bradford, A.; Gebrezgabher, S. 2018. Briquettes from municipal solid waste (COOCEN, Kigali, Rwanda) - Case Study. In: Otoo, M.; Drechsel, P. (eds.) 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It was initiated and set up by a third party with external funding with the aim to commercialize compost from the combined treatment of dry fecal sludge and organic waste from municipal solid waste as well as briquettes from waste biomass. The composting plant has the capacity to transform up to 5,000 cubic meters (m3) of fecal sludge and 300 tons of organic waste per year. The fecal sludge is sourced from private and public onsite sanitation systems in nearby communities; organic waste is obtained from local markets. The briquette plant has a capacity of 1,000 tons per year. Briquettes are produced using sawdust and wood shavings sourced from nearby communities. Although the public entity provides land for the operation, there is no contract ensuring adequate waste for the private party. This is a challenge as JVL competes for waste with other big players. There is a huge seasonal local market for the compost, among mango farmers, where the demand is much higher than the plant’s capacity (even beyond maximum production capacity). However, as this demand is seasonal, there is a time-based output constraint for the plant. To reach a solution, alternative markets have been explored to make the plant operation commercially viable. Similarly, a local textile company offers to absorb the produced dry fuel for its biomass boiler which could establish the plant’s overall commercial profitability for briquettes. To meet the market demand and make the plant more commercially viable, there is a need to run the plant on multiple shifts (as the demand of the textile company is estimated to 600 TPD and plant’s capacity is 8 TPD). This case study shows that from a demand perspective a successful operation of a plant is feasible, provided steps are taken to address the feedstock shortage which undermines the plant from reaching the required operational capacity to break even. Contractual agreements between public and private parties on waste supply have to consider competing services. Large-scale composting Bulta, Bangladesh — In Bangladesh, a private entity Waste Concern has set an example for a successful case study though a large-scale community-based waste management solution at Bulta, Roopganj in Dhaka. The plant was commissioned by WWR Bio Fertilizer Bangladesh Ltd. — a joint venture company of Waste Concern in association with its Dutch partners, World Wide Recycling B.V., FMO Bank and High Tide Worldwide B.V. Under this project, vegetable waste from markets is being collected using the project’s own transport networks, and taken to the compost plant built on land owned by the project without any investments from the government. An agreement has been signed between WWR Bio Fertilizer Bangladesh Ltd. and Dhaka City Corporation (DCC) to collect waste from the DCC area. The compost plant daily processed between 75–100 tons of organic waste between 2009 and 2010. By 2012, the project had processed 76,697 tons of organic waste and generated 34,200 CERs. This project has improved livelihoods in the community, creating 150 direct jobs for the poor, with these jobs cutting across the entire MSW value chain from compost plant operation, transportation of waste and in the distribution of compost. Around 6% of the operational expenditure is disbursed for the welfare of the plant workers. The model caters to the contexts in both urban and rural areas, displaying great potential for implementation in slum areas at a small-medium- or large-scale. The sustainability of this model is grounded in strong partnerships and the assured benefits accruing to each partner. This partnership provides access to an assured, large, growing market base for Waste Concern, having sold about 10,000 tons of organic fertilizer per year (2010). While this initiative addresses the imminent environmental and social challenges, the production of compost represented a valuable agricultural input alternative for farmers. Waste Concern has forged strategic partnerships with the local government, private enterprises and community-based organizations (CBOs) to optimize the allocation of resources and activities, reduce risk associated with high capital investments and establish an assured market for their product. Research institutes (universities) undertook and continue to provide periodic quality testing of the finished compost for which Waste Concern pays for the services. The local government delivered land for the composting plants and offered Waste Concern legal access to the city waste. In alleviating Waste Concern’s initial investment costs, the municipality gains from reduced waste collection and landfill costs. The customer segment targeted for marketing recovery product and revenue generation includes rural and urban farmers, direct and bulk selling to fertilizer trading companies, municipalities and international carbon credit market. Waste Concern faces a strong buyer power as they mainly sell their compost to price-setting private chemical fertilizer companies which rebrand and sell the compost product. This model is a good example of a win-win partnership between key players. It has been instrumental in attracting large amounts of foreign direct investment (FDI) in organic composting and carbon trading. Compost produced by Waste Concern has increased per hectare yield by 30–50% 37 RESOURCE RECOVERY & REUSE SERIES 22 by adopters (potato farmers). This model has already been replicated in 27 cities of Bangladesh and 10 cities of other developing countries with support from external support agencies and local entrepreneurs. Matara compost plant, Sri Lanka — In 2005, the Matara municipal council, in Sri Lanka, established a solid waste composting plant with a private company Greenfield Crops (GC), targeting 300–400 tons of organic waste every month. Initially the company was not making profits and was dependent upon government funding. It was not performing well due to management and marketing issues of the entity. Generally, compost sales have been noted to be very low in Sri Lanka. This has been attributed to inadequate marketing strategies. Standard compost products penetrate less than 3% of the fertilizer market. The extensive use and over-application of chemical fertilizers have been in practice in the Eastern Province of Sri Lanka. This represents an opportunity for initiatives such as GC to access the market by producing high quality compost products. In 2010, GC revived the business through a PPP agreement for 7 years, with the first two being probationary years. Under this agreement, the private entity (GC) pays a service fee of USD 1,500 per month to the public entity (municipal council) for using the infrastructure (land, composting facility and machines). The municipality in turn pays USD 5 per ton of waste disposed as a tipping fee to GC. Forty tons of waste is collected daily by the municipal council in Matara city and delivered to several different processing sites. GC started satellite compost stations closer to local markets to minimize transportation costs both for waste collection for the municipality and distribution of compost product for the business. The organic compost produced is sold in local markets through selected retailers. Plantation farmers such as tea, cinnamon and coconut farmers constitute the main users of the organic compost produced. The municipality set up the composting facility and provided the land and other required infrastructure. GC only manages the business and bears the cost of operations and maintenance. It pays the municipal council for the use of the resources provided, i.e., the composting facility and equipment. The municipal council on the other hand pays GC tipping fees for the disposal and processing of solid waste. GC also partners with research institutes (Tea Research Institute and Coconut Research Institutes) for product quality analysis and USAID, which provided funds for the establishment of a laboratory. The satellite compost stations operated by GC are essential to this model. These stations are close to local markets and farmers, resulting in minimizing transportation costs for waste collection for the municipality and distribution of compost product for the business, thus increasing farmer accessibility to the organic fertilizers. GC sells its compost at a flat price exclusive of transportation fee. The PPP has saved the municipal council a significant amount of money which hitherto was used in operating the composting business as it was incurring losses. Additionally, through charges for the use of the composting facility and equipment, it can implement a mutual financial sustainability strategy. In this model, GC has adopted a system of compost production where the compost is produced at vantage points close to local markets. This model is highly replicable in medium to sizable towns. Lahore compost plant in Pakistan — The compost plant project at Lahore (LCL) has been set-up on a Build–Operate– Transfer basis for a period of 25 years. The project’s pilot phase started operation in March 2006 to initially process up to 300 tons/day of MSW. The project was registered as a Clean Development Mechanism (CDM) project by the Board of the United Nations Framework Convention on Climate Change (UNFCCC) in April 2010. Unable to generate profits, the project was hampered by delays in registering and a slow pace of developing the local market for compost (Masood et al. 2014). Poor marketing strategy and unsatisfactory quality of the compost also contributed towards not achieving the success. Since this was the first commercial attempt for using composting technology and equipment in Pakistan, LCL faced several technological barriers — the lack of technical expertise and lack of available after-sales support on the equipment. Subsequently, extensive technical research was conducted on compost manufacturing and its utilization. Several composting companies around the world were reached out to for sharing their experience. A few composting plants in Europe, India and the United States were also visited to discuss issues involved in the manufacturing, marketing and utilization of compost. In addition, LCL staff were trained to handle the composting machinery by the supplier, allowing them to manage the existing facility successfully. After that, the entity started working to enhance awareness among the farming community about the benefits of organic manure and demonstrate the benefits of compost use to help boost crop yields and in turn farmers’ productivity and income. The project also improved local employment and expertise through regular training programs, often employing previously underemployed workers and scavengers (ESMAP 2010). The composting plant ran at its full capacity and received approximately 1,000 tons per day of mixed waste collected from the city (UNFCCC 2013). Later the plant closed down and was reopened in 2016 running a lower capacity of 50 tons per day. It was envisaged to run the plant in limited scale for three months and then scale up the operations to 500 tons per day in March 2017.11 However, the plant could not achieve the operational scale and was closed for three years. In 2021, the rehabilitation of the compost plant was 11 https://dailytimes.com.pk/43893/lwmcs-compost-plant-resumes-operation/ (accessed on January 26, 2023) 38 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED initiated and production was initiated.12 The compost production ratio for this facility is 17%, as the plant receives waste on 275 days of the year. The mixed waste is manually and mechanically sorted. About 65% of the total waste received is organic waste that goes to the composting plant, and the remaining 35% is a combination of recyclable waste and rejects. Although the project offers a model with many benefits, the business is yet to reach breakeven due to poor initial marketing strategies and the low value of CER earnings. Such benefits include reducing waste going to landfills, decreasing environmental and health hazards and increasing the recycling of valuable materials. The compost can be used for agriculture, and the plant provides employment opportunities. The PPP has attracted private sector investment for such municipal services. Integrated solid waste management with compost and waste-to-energy recovery in Pune, India — Pune Municipal Corporation (PMC) had conceptualized PPP arrangement between PMC, SWaCH (an NGO) Mailhem Engineers Pvt. Ltd. for the management of waste to produce biogas, electricity and bio-sludge. The operations of biogas plant at Katraj Gaon electoral ward in Pune started in 2009. The land and building costs were covered by the municipality at an existing facility. Investment towards plant and machinery cost was USD 180,000, with PMC funding the entire investment on financials. The annual operation and maintenance cost incurred is about 18,000 USD/year. PMC has a contract with SWaCH to deliver organic waste from MSW, and as a part of providing waste management service to households, it pays an agreed amount. There is no additional amount given to SWaCH for supplying organic waste to the plant. Cummins India gave USD 45,000 to Janwani and offered 3,000 employees as volunteers, helping Janwani to create awareness. PMC biogas has indirect revenue sources in the form of savings from electricity and fertilizer. Based on these savings, PMC biogas plant has a payback period of 19 years on its investment with an internal rate of return of 2%. PMC can generate revenue from annual carbon sales. It offsets 76.1 tCO2eq per year. The plant effectively manages municipal solid waste generated within the Katraj Gaon ward, one of the biggest divisions in Pune, therefore providing environmental benefits as well as health benefits from proper waste management. PMC biogas plant in Katraj Gaon also has several interlinked value propositions production of biogas to generate electricity to provide street lighting services to Katraj–Kondhwa Road in Pune and organic compost produced from slurry and waste output from the biogas plant for landscaping of electoral wards within the Pune municipality. The project also displaces electricity for street lighting in Katraj–Kondhwa Road and displaces 144 MWh/year of electricity purchases by PMC otherwise. Furthermore, it mitigates GHGs totaling 76.1 tCO2eq/year as a result of the avoided electricity consumption. The key drivers for the success of this business are (i) partnerships with SWaCH/ NGOs to deliver segregated organic waste to the plant, (ii) technology partnership with the stakeholders for operation and maintenance of the plant, (iii) capturing demand for end products – electricity and compost, (iv) government policy toward renewable energy and (v) rising electricity tariffs. The contract can be renewed after 5 years. Segregation promoted by PMC has helped in the scaling up of the biogas project (only 20% of waste coming to biogas plant is rejected). This offers an example of how a proper waste segregation and robust institutional mechanism of an Urban Local Body could make a waste to energy technically viable and financially sustainable. Briquettes from solid waste in Kigali, Rwanda — Rwanda has established a commercially sustainable small circular bio- economy model, which could be replicated in many small ULBs, peri-urban towns. They have been successful in tapping a dedicated market for selling of the recovery product from their briquette manufacturing plant. The project is a collaboration between a private entity named COOCEN and Kigali City Council which has provided land (7 hectare) as investments for production of briquette. COOCEN being the only player in briquette production, is the sole supplier of fuel briquettes to 16 prisons in Rwanda. The payback period for this project has been only 3 years and gross margin is 42%. However, COOCEN anticipated an increase in briquette demand, because of the rising price of charcoal coupled with the government policy to protect the environment and promote alternative sources of energy. Thus, there is a bright opportunity to scale up the plant in future and make it more commercially viable. This evidence represents how correct identification of market demand, tapping the same, and then fulfilling that demand by an effective supply of recovered resource could make a project viable and successful. Devanahalli fecal sludge treatment plant and the co-compost unit, Karnataka, India — Devanahalli Town Municipal Council (DTMC), India, in collaboration with Bremen Overseas Research & Development Association (BORDA, a NGO specializing in full-cycle decentralized sanitation), and Consortium for Decentralized Wastewater Treatment System (DEWATS) Society (CDD) has developed and implemented a fecal sludge treatment plant (FSTP) in 2015. It is financially supported by the Bill & Melinda Gates Foundation (BMGF) (Mallory et al. 2020; Rao et al. 2020). However, a year after the start of FSTP operations, it became necessary to deactivate the helminth eggs that were retained in the solid component of the fecal sludge (FS) at the end of the treatment. Therefore, a co-composting unit was set up using the windrow process. The unit processes 150 to 200 kg of organic waste daily (CDD Society 2019). This has also helped to handle the disposal of huge quantities of organic solid waste generated in the town from hotels, municipal markets and event 12 https://www.thenews.com.pk/print/885702-lwmc-starts-rebuilding-compost-plant (accessed on January 26, 2023) 39 RESOURCE RECOVERY & REUSE SERIES 22 halls (Rao et al. 2020). In this PPP concession, the municipality provided (i) the land and approval for the construction, (ii) responsibility for the operations of the desludging vehicle on a fee-for-service basis and (iii) issuance of licenses to private desludging operators, ensuring that FS was disposed at the FSTP and organic waste is delivered to the co-composting plant. After biogas production, stabilization and drying, the FS is mixed with municipal solid waste for co-composting to produce and sell (CDD Society 2020). The CDD has been responsible for the operations and maintenance of the FSTP and the co-composting Plant for about 2 years. The CDD sells the co-compost to the farmers on behalf of the municipality. Since its commissioning, the plant has been operating under capacity due to low demand for desludging and FS delivery from the municipal trucks. This necessitated adjustments to the technical design to ensure optimization of the treatment process. The option of technological flexibility and scope of process modification in the operational phase, renders the plant operationally successful. Thus, the plant is now operating in technically and commercially viable conditions. A transparent well defined institutional framework among the stakeholders, with clear commitments on the operational aspects and revenues, has been a vital parameter for the success of this plant. The co-compost produced is sold to farmers. The contractor collects payment for the co-compost and transfers it to the authority at the end of the month (after covering incidental costs for maintenance). During the project development process, an Induction and close consultation with the NGO, government authority and contractor were organized. The project also involves highly motivated conservancy staff in its framework. Therefore, the project runs on a self-sustainable commercial mode. During the project development process itself, the gaps in Devanahalli residents’ behaviors were identified, and an (IEC) campaign was implemented. In this case, community engagement initiative has been initiated to be implemented in parallel to FSTP construction and operations. Furthermore, farmers were motivated to use FSTP by-products. The community engagement strategy was fine-tuned based on local requirement. Co-composting plant in a small municipality of Sakhipur, Bangladesh — In a small municipality of Sakhipur, Bangladesh, a co-composting plant was established in 2019 with an annual handling capacity of 1,500 tons of fecal sludge and 150 tons of solid waste. The plant is based on aerobic decomposition of dried fecal sludge and organic solid waste. The organic solid waste, dried fecal sludge and sawdust are mixed at a bulk volume ratio of 3:1:1. Plant construction was financed by WaterAid Bangladesh, without any public funds. An account is operated by the municipality and for the sale of compost. Farmers have accepted co-compost (for which there is a higher demand than supply) and the plant is running successfully. The Department of Agricultural has been providing technical guidance for recovery and reuse of compost. They are also assisting to enhance the capacity of the ULB in awareness creation and proper distribution of the compost among local farmers. Farmers are using the compost as a soil conditioner and their feedback is encouraging. The municipality, WaterAid Bangladesh and its partner BASA are the three major stakeholders involved in the operation. WaterAid provided technical and financial support (particularly linked to plant construction and part of the operation and maintenance) and BASA worked as the implementation partner. A proper institutionalization of responsibilities has made the project effective and successful. Representatives of all key stakeholders formed a committee with the mayor as its advisors to carry out the process of implementation and service delivery. Planning and implementation were done in phases, with the technology chosen to construct in a modular fashion, such as opening more drying beds as coverage increased. The 6-month trial period helped establish confidence in the technology and its end products. Continuous performance monitoring is carried out periodically from government laboratories. Sufficient baseline study, due diligence and stakeholder consultation before the project have been instrumental to safeguard any unforeseen risk during implementation. Participatory methods like face-to-face interactions, focus group discussions and media (print and audio) were used to communicate the benefit and importance of utilization of recovered product such as compost. There are nine Community Based Organizations (CBOs) in Sakhipur which could be potential entrepreneurs in sanitation and solid waste management. This plant is a replicable example of successful circular bio economy, which has been driven by organized capacity building, well defined operational framework, scaling up arrangement and awareness campaigning. It offers evidence and learning on FSM in the context of Bangladesh, especially for small municipalities with limited resources and with key driving factors as – (i) technology, (ii) process, (iii) estimate of resource needs, (iv) reuse potential, (v) socio-economic aspects of co-composting, (vi) identification of the impacts of using the compost on crops and soil and (vii) raising awareness and knowledge about co-composting as a waste recycling option. Kolkata Solid Waste Management Improvement Project, India — Japan International Cooperation Agency (JICA) implemented the Kolkata Solid Waste Management Improvement Project (KSWMIP), in 2007 in six municipalities, namely Champdani, Baidyabati, Serampore, Rishra, Konnagar and Uttarpara-Kotrung within the Kolkata Metropolitan Area in the state of West Bengal. The project was conceptualized on PPP basis. Procurement was done on equipment, and waste treatment facilities were constructed as assets. Initially, however, the equipment and facilities were not fully utilized due to insufficient management capacity of municipality, improper waste separation, low awareness of the residents and inefficient market linkages. Furthermore, an organization for facility management was not decided among the related local 40 PUBLIC-PRIVATE PARTNERSHIPS FOR THE CIRCULAR BIO-ECONOMY IN THE GLOBAL SOUTH: LESSONS LEARNED governments, and a necessary budget for operation and maintenance was not secured. There are six compost plants under this project, which were not properly utilized due to an absence of a strategic plan for waste collection system. Besides that, forward linkage of the recovered resource (as compost) was not also established. All the facilities had little incoming waste. The facilities could not operate appropriately for the small amount of incoming waste. The plant in Konnagar did not provide a segregation service to collect valuable materials. Moreover, it was observed that there are organizational deficits in the operation. Handling of waste, temperature and moisture control, and turning were not appropriately maintained. The compost plant also did not have any schedule of activities and was not monitored. Despite these setbacks, specific initiatives by the JICA project team were able to turn around the project into an efficient resource recovery project. As a first measure, an institutional strengthening and sufficient awareness sensitization drive were undertaken. All chairpersons of those municipalities were encouraged to deliver the desired quantity of waste in a segregated manner. They were also handheld on the operational aspects of the compost plant. The importance of source segregation was highlighted. The JICA Project Team held a workshop for the promotion of compost sales in January 2017. Many stakeholders, such as chairmen, councilors of all ULBs, farmers, youth club, nursery owners, business associations and chemical fertilizer companies, were involved in the workshop. The possibility of testing the quality of the product, attracting compost packaging, implementing traveling sales, and collaborating with business associations to sell compost at the local market was considered. Around 300 retailers were contacted for the forward linkage of recovered products. Advertisements on the sale are spread through the newspapers and leaflets, and local canvassing was conducted. To compensate a part of the O&M cost for the compost plant, JICA Project Team has supported Uttarpara-Kotrung to sell compost by contacting retailers, and municipalities have taken good initiative for selling of compost with micro retailer. The JICA project team along with the municipalities, had strategized the following innovative steps — (i) Implementation of pilot project of mobile retailing fertilizer shop to household residents for their kitchen garden, (ii) promoting and advertising the sales through newspaper, leaflets and miking, (iii) coordination with public institutions in the municipality to use the compost for the fertilizer of the garden, (iv) organizing compost selling participatory promotional workshop and (iv) making municipality instrumental in negotiating with the retailers as they are potential heavy buyer. The project made efforts to invite as many visitors as possible to the compost plants site to motivate the site staff to be proud of their roles and to enhance the operation. As a result, sanitary inspectors of the Uttarpara-Kotrung and Baidyabati municipalities started taking responsibility on the activities of negotiation for compost sale, along with the buying stakeholders. Capacity development of staff and workers and cooperation from the residents are required to adequately utilize the facilities constructed by KSWMIP. The Project held site visits and workshops for the decision makers many times to enhance their involvement and understanding to KSWMIP. This project is a successful case study of establishing that an effective social mobilization activity, active participation of ULBs and stakeholders, and a strategic marketing linkage could be a triggering factor to reviving resource recovery project. It can also support to be a self-sustainable model (JICA Report 2017). Gianyar composting plant, Temesi, Indonesia — Gianyar composting plant in Indonesia was based on the commercial model of compost revenue and CDM. Nonetheless, reaching the project’s financial viability has been a challenge and there was a deficit of 68% to cover all costs. The main challenges cited by the organization are – (i) Absence of tipping fees, (ii) source segregation is lacking and they need to outsource segregation activity which is 42% of their total annual cost, (iii) decentralized composting is favorable for the organization than this centralized facility, (iv) subsidies for chemical fertilizers lead to an uneven playing ground and (v) the compost production is unable to tap the rice farmers which is the largest market. Therefore, the plant has not been a great success. The parameters mentioned above could be taken as lessons learned while developing a project from a commercial viability point of view. Tema co-composting plant, Ghana — The co-composting plant for organic waste from MSW and fecal sludge was set up between the Tema municipality and a local waste management company for a period of 25 years at Ghana. The operators encountered competition for feedstock which limited supply to the plant, and kept operations below 40% capacity. Insufficient marketing strategies affected revenues. These challenges were compounded by land tenure problems, resulting in a further decrease of operations. As a result, the generated resources from the plant could not reach commercial production level, thereby making the plant commercially non-viable and due to the land tenure problem, embroiled in a legal limbo. The PPP was facilitated by a third party with most initial funding covered by an external donor. Waste to energy plant at Timarpur, New Delhi, India — The first WTE plant came up in Timarpur in Delhi in 1987. It was designed to incinerate 300 TPD of mixed waste and produce 3.75 MW of electricity. It failed and was soon shut down. The reason most often cited for its failure was a mismatch between the plant’s waste input requirements and the quality of waste it received in terms of calorific value, moisture content and physical composition. Subsequently, in 1995, a Planning Commission High Powered Committee Report stated that, as Indian waste has low calorific value, it is usually unsuitable for self-sustained combustion. Hence, incineration-based technologies might be uneconomical in most cases. However, 41 RESOURCE RECOVERY & REUSE SERIES 22 in 2007, the apex court asked the ministry of New and Renewable Energy (MNRE) to set up five plants on a pilot basis. MNRE took up five pilot projects with an aggregate capacity of 57 MW under its ‘Programme on Energy Recovery from Urban, Industrial and Agricultural Wastes/Residues’. Under these five pilot projects, one plant each in Timarpur-Okhla and Ghazipur is operational; the remaining three, however, could not be operationalized because of the paucity of funds and other technical reasons. The capacity planned was conversion of 1,300 TPD MSW to Refuse Derived Fuel (RDF) at Okhla and 650 TPD at Timarpur (for a total capacity 1,950 TPD), along with a 23 MW power plant at Okhla. The project was conceptualized on PPP Build-Own-Operate-Transfer with 25 years concession period. A Special Project Vehicle (SPV) was signed between the private contractor and New Delhi Municipal Council while IL&FS conceptualized the project. A Power Purchase agreement for 25 years was signed with BSES Rajdhani Power Limited for 50% of the electricity generated, while the remaining 50% was sold through open access. The waste-to-energy plants have regularly faced disputes from residents and societies in the neighborhood. Residents of the Sukhdev Vihar colony near the Okhla plant in New Delhi, have protested the plant since 2003, for alleged toxic emissions. The Okhla WTE plant has been allowed to run despite its proximity to residential areas, three major hospitals and a significant green cover. The emission from waste to energy power plant has long been a great social and environmental concern. The overriding concern is whether the WTE plants are intended to treat mixed waste of one city alone rather than of a cluster of cities. The combustible, non-recyclable fraction of waste in one city is too little to feed a single plant. Also, the ‘not in my backyard’ effect is prevalent for WTE plants. Notably, almost all WTE projects in India have faced public protests and some have even been subjected to public litigations. Incineration-based WTE plants have not been successful in India mainly because of poor systems for source segregation, seasonal variations in waste composition and characteristics, inappropriate technology selection as well as operational and maintenance issues. The presence of inert MSW delivered for processing makes the operation difficult and expensive. In most cases, the issue of non-supply of committed quantity/ quality of waste to the plant by the municipal authority is a critical factor. WTE plants continue to face public outcry and protests. The sufficiently high-calorific value of the waste in Western countries makes incineration an effective means of waste disposal. In India, on the other hand, domestic waste has high moisture (47% on average) and inert content (as high as 25%). As per the World Energy Council Report, capital and O&M costs are significantly higher in the case of WTE. India’s experience with WTE has been less than satisfactory in this context. WTE is a sophisticated technology with high associated costs. Since the feed for the plant can vary, a study of the composition, waste generation and collection patterns, and plant location should be undertaken before considering a WTE plant. Similarly, socio-economic conditions concerning waste must be evaluated before planning for incineration plants. 42 RESOURCE RECOVERY AND REUSE SERIES 22 Public-Private Partnerships for 21 Gender dimensions of solid and 20 Safe and sustainable business the Circular Bio-Economy in the liquid waste management for reuse models for water reuse in aquaculture Global South: Lessons Learned in agriculture in Asia and Africa in developing countries https://doi.org/10.5337/2023.205 https://doi.org/10.5337/2021.223 https://doi.org/10.5337/2021.212 19 Business models for urban food 18 (Special Issue) Business 17 Introducing co-composting waste prevention, redistribution, models for fecal sludge to fecal sludge treatment plants recovery and recycling management in India in Benin and Burkina Faso: A https://doi.org/10.5337/2021.208 https://doi.org/10.5337/2020.209 logistical and financial assessment https://doi.org/10.5337/2020.206 Free access is provided to all reports in the Resource Recovery and Reuse series. http://www.iwmi.org/publications/resource-recovery-reuse/ International Water Management Institute (IWMI) The International Water Management Institute (IWMI) is an international, research-for-development organization that works with governments, civil society and the private sector to solve water problems in developing countries and scale up solutions. Through partnership, IWMI combines research on the sustainable use of water and land resources, knowledge services and products with capacity strengthening, dialogue and policy analysis to support implementation of water management solutions for agriculture, ecosystems, climate change and inclusive economic growth. Headquartered in Colombo, Sri Lanka, IWMI is a CGIAR Research Center with offices in 14 countries and a global network of scientists operating in more than 30 countries. Resource Recovery & Reuse Series The Resource Recovery and Reuse (RRR) Series originated in 2014 under the CGIAR Research Program on Water, Land and Ecosystems (WLE), and continues since 2021 under the CGIAR Initiatives on Resilient Cities and Nature-Positive Solutions. The aim of the RRR series is to present applied research on the safe recovery of water, nutrients and energy from domestic and agro-industrial waste streams. IWMI’s research on RRR aims to create impact through different lines of action research, including (i) developing and testing scalable RRR business models, (ii) assessing and mitigating risks from RRR for public health and the environment, (iii) supporting public and private entities with innovative approaches for the safe reuse of wastewater and organic waste, and (iv) improving rural-urban linkages and resource allocations while minimizing the negative urban footprint on the peri-urban environment. IWMI works closely with the World Health Organization (WHO), Food and Agriculture Organization of the United Nations (FAO), United Nations Environment Programme (UNEP), United Nations University (UNU), and many national and international partners across the globe. The RRR series of documents present summaries and reviews of the research and resulting application guidelines, targeting development experts and others in the research for development continuum. International Water Management Institute (IWMI) Headquarters 127 Sunil Mawatha, Pelawatte, Battaramulla, Sri Lanka Mailing address: P. O. Box 2075, Colombo, Sri Lanka Tel: +94 11 2880000 Fax: +94 11 2786854 ISSN 2478-0510 (Print) Email: iwmi@cgiar.org ISSN 2478-0529 (Online) www.iwmi.org ISBN 978-92-9090-950-7 Photo: Gabrielle Joly