The document discusses the growing waste-to-energy (WTE) projects across the Gulf Cooperation Council (GCC) region, emphasizing the importance of managing municipal solid waste to reduce environmental impact and generate renewable energy. It outlines various WTE facilities being developed, the technological options available, and the benefits of using waste as a fuel source. Additionally, it highlights the expected rise in waste production and the need for sustainable waste management practices to meet climate and energy recovery targets.

1. Energy From Waste Options

2. Waste!
Waste Management!
Waste IN GCC
GCC WtE Projects
Planning a WtE Project
PPP in WtE

3. Waste & Waste Management!
Waste affects our health, socio-economic conditions,
our coastal and marine environment and our climate.

4. THE BIG PICTURE – THE WORLD IN 2017

5. THE BIG PICTURE – THE WORLD IN 2050

6. 6
What are Wastes?
Basel Convention Definition
Wastes ; “substances or objects which are disposed of or are intended to be disposed of or are
required to be disposed of by the provisions of the law”
Disposal ; “any operation which may lead to resource recovery, recycling, reclamation, direct re-
use or alternative uses (Annex IVB of the Basel convention)”
Wastes can be;
Solid wastes: plastics, styrofoam containers, bottles, cans, papers, scrap iron, and other trash
Liquid Wastes: domestic washings, chemicals, oils, waste water from ponds, manufacturing
industries and other sources
Classification of Wastes according to their Properties;
Bio-degradable; can be degraded (paper, wood, fruits and others)
Non-biodegradable; cannot be degraded (plastics, bottles, old machines, cans, styrofoam
containers and others)
Wastes can also be classified according to their Effects on Human Health and the
Environment (Hazardous and Non-hazardous wastes)

7. Why WtE - Protect Human Habitat
 World Bank estimated, in 2025 the production of municipal solid waste will be
2.2 billion tones worldwide. With this amount, we are more and more polluting
our own environment. Seven to eight percent of the total greenhouse gas
emissions arise from continued landfilling.
 EfW (WtE) does not only decrease the volume of waste, it also protects natural
resources like land and water. There is no additional need for landfills, where
leakage can occur and pollute our tap water.
 It also protects air and climate because the regulations by law for EfW are more
stringent than for coal fired power plants or any other industry. EfW plants
decrease the greenhouse gases which come from landfill.
 Tthe energy from waste process fights the deforestation. Waste is a locally
available fuel in all industrialized areas – unlike biomass.

8. WtE Advantages
 Using waste as a combustion material can reduce landfill volumes by 80 - 90 percent.
 Less spending on developing and maintaining landfills,
 Saving subsidy that the government allocates on fuel sources with energy recovery
 Tackling the issue of potable water capacity (when combined with desalination)
 Waste to Energy prevents one ton of CO2 release for every ton of waste burned. C02 is
released to the atmosphere by the burning of fossil fuels, wood and solid waste.
Potential for earning carbon credits!
 Waste to Energy eliminates methane that would have leaked with landfill disposal. CH4
is emitted from the decomposition of organic wastes in landfills
 Best practices rely on the “FOUR Rs“ Reduce , Reuse, Recycle, Recovery”
 Plastics, glass, paper, metals, and wood can be recycled.
 kitchen refuse, bio waste, and commercial garbage are ideal for combustion.

9. Typical Incineration Plant

10. Integrated Waste Management
Reduce , Reuse, Recycle, Recovery

11. Waste Management Cycle

12. Sustainable Waste Management
Not only collection and separation…
• The first step of a waste management system is reduction and complete
collection of waste as well as separation for recycling of waste fractions which
have a market value.
• A modern waste management system does not only focus on protecting health
and environment, it also makes maximum use of the waste to reduce the
exploitation of our limited natural resources.
• This applies to densely populated and highly industrialized countries just as it
does to rural regions worldwide.
..but also thermal waste treatment
Recovery of materials and energy from waste by thermal & biological waste
treatment is an integral part of any modern waste management system
which does no longer focus on discarding waste but on maximized utilization of all
resources contained in the waste with minimized burden on society and
environment.

13. Municipal Waste Processing Cycle
Processing can reduce waste disposal by 80 % THUS reducing pressure on scarce land
Refuse
derived
fuel

14. EXAMPLE; Hierarchy for Reducing and
Recycling Organic Materials

15. Sustainable Waste Cycle

16. Municipal Waste-to-Energy
Combustion / Incineration
Waste is used as a fuel
for generating power
The burning fuel heats water into steam
that drives a turbine to create electricity.

17. Municipal Combustion / Incineration Process

18. 18
Municipal Waste-to-Energy Flow Chart
Ash
Recycling
plant
Gases
Ferrous
metals
extracted
Household
Rubbish
Mixing
Chamber
Furnace
Incinerator
Bottom Ash
Heat and
Electricity
Filter to
Landfill
Recycling
Gases
cleaned
Ash
Recycling
plant
Gases
Ferrous
metals
extracted
Household
Rubbish
Mixing
Chamber
Furnace
Incinerator
Bottom Ash
Heat and
Electricity
Filter to
Landfill
Recycling
Gases
cleaned

19. Incineration Plant Components

20. Waste IN GCC
Kuwait ranks among the highest global producers
of solid waste @1.4 kg per capita daily.

21. Introduction to ME WTE Market
• The market of waste-to-energy (WTE) is growing at an unprecedented
rate, with the global industry expected to grow to at least $30 billion by
2022.
• ME countries are expected to produce around 27% more solid waste by
2017; making 29 million tons in all for the year 2017.
• The GCC states rank among the highest per-capita producers of
municipal solid waste in the world with the majority of waste dumped in
landfills using valuable land and resulting in quantified environmental
damage.
• Kuwait ranks among the highest global producers of solid waste and
noted that it produces 1.4 kg of solid waste per capita daily.
• Following the good example made by Qatar, the rest of the Gulf region
states are already starting to develop WTE capabilities of their own.
• UAE goal for 2021 is to divert 75 percent of solid waste from landfills to
WTE and produce 7% of its energy from WTE.

22. GCC WtE Projects
Low-cost landfills are no longer the economically
sound process that it used to be a few years ago

23. Oman - Dhofar
700,000 Ton / Yr. WTE
Plant
 Oman produces around 1.8 million tons annually, a figure
that has risen by 25% over the last decade due to its growing
population.
 Many of Oman’s 350 landfills and dumpsites are close to
residential areas, causing further environmental issues.
 To improve its solid waste management capacity,
government-owned Oman Environmental Services Holding
Company (Be’ah) has begun feasibility studies with the
Dhofar plant were 2,100 tons per day of recycled calorific
would be converted into Refuse Dried Fuel for use as an
industrial fuel source in place of natural gas.
 The plant will be able to supply sufficient energy to the
proposed South Al Batinah desalination plant via Reverse
Osmosis technology, planned to produce 73 million cubic
meters of potable water annually, which is around 30% of
Oman’s total installed desalination capacity.
 A smaller plant in Sharqiya based on, say 500 - 1000 tons of
waste per day is also being considered.
 Location: Oman
 Project Investment:
$600-$700 million
 Key Stakeholders:
Be’ah
 Project Initiation
date: April 2015
 Estimated Project
Completion: TBC
(Project is at
feasibility stage)

24. Kuwait - Kabd
1,000,000 Ton / Yr.
WTE Plant (DBOFT)
 Having started off with 18 waste landfills a few decades ago,
the authorities have been forced to close down 14 of them
before their scheduled time of closure due to rampant growth
of residential buildings in their immediate surroundings.
 With only three operating landfill sites, the rising flow of solid
waste is becoming increasingly difficult to manage Kuwait
produced 2.1 million tons of solid waste in 2015 and is
expected to produce 2.75 million tons by 2025.
 Kuwaiti Government tasked Partnerships Technical Bureau
(PTB) in collaboration with Kuwait Municipality with
developing a construction agenda for a one million ton
capacity (household, commercial and agricultural waste) WTE
plant located in the Kabd area, 35 km from Kuwait city, with
an area of 500,000 square meters that will be able to produce
650 Giga watt hours per year.
 The recovery of slag and flue gas residues is to be disposed
into separate sanitary landfills on the Site.
 The term of the design, build, finance, operate and transfer
structure (DBOFT) Agreement will commence on financial
close and expire 25 years after the anticipated date for the
commencement of operations. Construction period estimated
to be four years.
 Location: Kuwait
 Project Investment: $1.5
Billion
 Key Stakeholders:
Partnerships Technical
Bureau (PTB)
 Project Initiation date: 17
November, 2013
 Estimated Project
Completion: TBA,
preferred bidder will be
announced Q3 2016

25. UAE, Sharja - Sajja
300,000 Ton / Yr. WTE
Plant
 Be’ah currently collects around 2.3 million tons of
waste from nearly 1 million households in Sharjah
annually, with 70% of all waste being diverted its
Waste Management Center (WMC) converting
facilities - organic fertilizer facilities, and advanced
metal recycling facilities
 The ambitious Sajja thermal-based WTE facility, in
partnership with Masdar, shall incinerate as much as
300,000 tons of solid waste from landfill each year
amounting to 37.5 tons of solid waste per hour to
create 30 megawatts (MW) of energy. This will add
more power to what is produced by Bee'ah's auxiliary
waste-to-energy project, which will eventually
produce a total of 90MW.
 The WTE system at the plant will use a combination of
the gasification and pyrolysis systems to produce gas
as fuel, as well as heat to turn water into steam to
generate 80MW of clean energy every year.
 Location: Sajja, Sharjah
 Project Investment:
$505 million
 Key Stakeholders:
Sharjah Environment
Company (Be’ah),
Chinook Sciences
 Project Initiation date:
May 2014
 Estimated Project
Completion: TBA,
construction due to start
in 2016

26. UAE, Dubai - Warsan
700,000 Ton / Yr. WTE
Plant  Dubai aims to be the leading emirate in the UAE to
achieve the highest rate of solid waste-to-energy
management while also reducing landfill waste by 75
per cent over the next five years.
 Construction has already begun on a Dh 2 billion
facility ($545m) in Warsan district and once the first
phase of operations begins by 2020, the plant will be
able to convert 2,000 metric tons municipal solid
waste per day to produce 60 megawatts of power.
 Location: Al Warsan
2, Dubai
 Project Investment:
$545 Million
 Key Stakeholders:
Dubai Municipality
 Project Initiation
date: June 2016
 Estimated Project
Completion: 2020

27. UAE - Northern
Emirates 500,000 Ton /
Yr. WTE Plant  The UAE’s Ministry of Climate Change and
Environment is planning to invite private-sector
bidders to run a huge project to handle waste in the
Northern Emirates, capable of processing between
1,000 and 1,500 tons per day.
 Location: Northern
Emirates
 Project Investment :
TBA
 Key Stakeholders:
 UAE’s Ministry of
Climate Change and
Environment

28. UAE, Abu Dhabi -
Mussaffah 1,000,000
Ton / Yr. WTE Plant
 With more than 1.5 million tons waste per year, this
facility will help Abu Dhabi to reach its ambitious 80%
land fill diversion target and reduce CO2 emissions by
more than one million tons per year and generate at
least 7% of its power from renewable energy by 2020.
 The Abu Dhabi, National Energy Company (TAQA), has
developed a facility near the sea port in Mussaffah
that has an annual capacity of 1 million tons of solid
waste which can be converted into 100 MW of energy,
sufficient to power around 20,000 Abu Dhabi homes.
 The proposed plant would be up and running by 2017,
its size is around 200 meters by 500 meters costing
near $850m project
 Location: Near
Mussaffah, Abu
Dhabi
 Project Investment:
$859 million
 Key Stakeholders:
TAQA, Ramboll
 Project Initiation
date: Feb 2013
 Estimated Project
Completion: Project
on hold

29. Qatar - Messaieed
800,000 Ton / Yr.
DSWMC
 Qatar is the only Gulf region country to have a fully completed and
operational large-scale WTE facility.
 Qatar Domestic Solid Waste Management Centre (DSWMC) located
near Messaieed is capable of processing 2,300 tons of mixed solid
domestic waste every day around 95% of which is recycled (producing
solid and liquid organic fertilizers) or converted to energy producing
around 50 megawatt (MW) of clean energy 8 of which will be used to
run the center. The remaining 5% goes for landfill in the form of ash.
 Qatar has invested (funded) around QR 4bn for the center, with QR2bn
to be spent on designing and building while QR2bn will be for
operating it for 20 years averaging around QR 100m annual
expenditure.
 The center is composed of five sections, including areas for waste
segregation, landfill, a compost area, an area for construction and
demolition materials, and staff accommodation. The center was
executed by Singaporean company, Keppel Seghers.
 Further Qatar is putting in place measures that enhance the capacity of
its DSWMC from 2,300 to 5,300 tons of waste a day to gain full
capacity by 2022 with the aim to integrate all recycling facilities in one
place such as incinerators, composting plant, segregation areas, as well
as landfill and energy recovery facilities. Also within three to four
years, another 3,000 tons a day WTE plant is planned on an area of 3
sqkm in the north.
 Location: Near
Mesaieed, Qatar
 Project Investment:
$1.7 billion
 Key Stakeholders:
Keppel Integrated
Engineering (KIE)
 Project Initiation
date: Early 2007
 Project Completion:
June 2012

30. Bahrain - 390,000
Ton / Yr. WTE Plant
(BOT)  Earlier , Bahrain planned to construct a 390,000 tons
per year waste to energy facility on a Build Own
Transfer (BOT) basis under a 25 Year Public-Private
Partnership Concession.
 Although originally posted as a waste processing
project, an alternative “Waste to Water Facility” bid
from a consortium including ACWA Water, local waste
management company Beatona and Spanish
infrastructure firm, FCC, has been submitted to the
Ministry of Works, Municipalities Affairs and Urban
Planning.
 Currently Bahrain studies having a full strategy of
solid waste management such as Construction waste
recycling , Green compost , Sludge to energy plant
 Location: Bahrain
 Project Investment:
 Key Stakeholders:
Ministry of Works,
Municipalities Affairs
and Urban Planning
 Project Initiation
date: TBA
 Project Completion:
TBA

31. Planning a WtE Project
Survey of waste characteristics, calorific value,
amount of waste and Waste stream are paramount

32. WtE Project Planning - Feasibility
 Research of Technical Feasibility
– Survey of waste characteristics, CV (calorific value) and amount of
waste. Calorific value in GCC usually from 2000 – 2500 Kcal due to non
uniform norms of segregation.
– Waste stream
– Proposal of suitable waste treatment system
– Estimation of electricity output
 Evaluation of Environmental and Social Impacts
– GHG Emission Reduction Effect
– Research of legal system and procedure related to Environmental
Assessment
 Site Location & Size
 Power Purchase Price
 Technology Options & Costs (including O&M)
 Financial and Economic Model
 Financing Options (Funded, Subsidy, PPP, Etc.)
 Terms of Contract

33. Global Purchase Prices & PPP Terms

34. WtE Project Planning - Technology
A Number of technologies are currently available for Waste to Energy (WtE);
• Thermal Treatments
– Combustion / Incineration
– Autoclaving
– Thermal Treatment
• Gasification
• Pyrolysis
• Biological Treatments
– Composting
– Anaerobic Digestion
• Mechanical Biological Treatments (MBT) and Mechanical Heat Treatments
The optimum combination of technologies depend on the following parameters:
– Landfill diversion targets
– CO2 reduction / Environmental targets
– Energy recovery and material recovery targets
– Affordability targets (Capex, Opex, household levy /gate fee)
– Procurement, ownership & financing strategy (risk allocation)
NOTES!
– A 1,000 ton-per-day WTE plant produces enough electricity for 15,000
households.
– Each ton of waste can power a household for a month. 34

35. Combustion
/Incineration
Typical fuels
• Municipal Solid Waste (MSW)
• Commercial & Industrial Waste (C&I)
• Refuse derived fuel (RDF) or Solid Recovered
Fuel (SRF)
Outputs
• Electricity or Heat – or both together if a
Combined Heat and Power Plant (CHP)
• Bottom ash - This is what is left after combustion
and it can be used as an aggregate or road bed
material.
• If metal was not removed pre-combustion, it is
recycled at this point.
• Fly ash - This is the material collected by the
pollution control equipment.
 Combustion plants are
often referred simply as
EfW plants.
 The residual waste is burned
at 850 C and the energy
recovered as electricity or
heat.
 They have a boiler to
capture and convert the
released heat into electricity
and steam, and extensive air
pollution control systems
that clean the combustion.
 These plant typically use
between 50 – 300 thousand
tons per year of fuel.

36. Gasification &
Pyrolysis
Typical fuels
• Municipal Solid Waste (MSW)
• Commercial & Industrial Waste (C&I)
• Refuse derived fuel (RDF) or Solid Recovered Fuel (SRF)
• Non-waste fuels, e.g. wood / other forms of biomass
Outputs
• Electricity or Heat – or both together if a Combined Heat
and Power Plant (CHP)
• Syngas, which can be purified to produce “biomethane”,
• biofuels, chemicals, or hydrogen
• Pyrolysis oils – these can be used to fuel engines, or
turned into diesel substitute
• Feedstocks for the chemical industry – allowing biomass to
substitute for oil in the production of plastics for example
• Bottom ash, Char, or Slag – by-products which can be used
for beneficial purposes such as aggregates or road bed
material
• Fly ash - produced by some but not all plants
 Sometimes referred to as
ATTs (Advanced Thermal
Treatments).
 The fuel is heated with little or
no oxygen to produce
“syngas” which can be used to
generate energy or as a
feedstock for producing
methane, chemicals, biofuels,
or hydrogen.
 They are typically smaller and
more flexible than combustion
plants
 Typically they consume
between 25 and 150
thousand tons of waste per
year, although some can
consume up to 350 thousand
tons per year.

37. Anaerobic
Digestion (AD) /
Biogas
Typical fuels
• Food wastes
• Some forms of industrial and commercial waste,
e.g. abattoir waste
• Agricultural materials and sewage sludge
Outputs
• Biogas, which can be used to generate electricity
and heat – CHP is the norm for such plants
• Biomethane for the gas grid, with the
appropriate gas scrubbing and injection
technologies
• Digestate - a material which can be used as a
useful fertiliser / soil conditioner on agricultural
land in lieu of chemical fertilisers
• Biogas/AD plants operate at
low temperature, allowing
microorganisms to work on
organic or food waste,
turning it into biogas.
• The biogas is a mixture of
carbon dioxide and methane
that can be combusted to
generate electricity and heat
or converted to bio methane.
The other output is a bio
fertilizer.
• They are typically much
smaller than the combustion
or gasification plants.

38. Notes On Technologies for Waste to Energy
(WtE).
• Lack of standardization of the complete waste disposal
cycle is a major constraint.
• Best technology should fulfill the following criterion;
– Lowest life cycle cost
– Least land area requirement
– Meets air , water and land pollution standards.
– Produce more power with less waste
– Result in Maximum volume reduction.
• The EU issued (BAT) - Best Available European Technologies
for WtE

39. WTE Combustion / Incineration Process

40. The grate transports the waste through the
combustion chamber. Unburnable material is
left as bottom ash at the end of the grate.
The boiler recovers over 80% of the
energy contained in the waste and
makes it usable as steam.
The energy recovered is
usable as electricity and/or
heat.
Pollutants contained in the waste and
transferred into the flue gas through
combustion are eliminated

41. For Efficient Combustion
 Waste material is received in an enclosed receiving area, where it is more thoroughly mixed
in preparation for combustion.
 Mixed waste enters the combustion chamber on a timed moving grate, which turns it over
repeatedly to keep it exposed and burning.
 Highly efficient superheated steam powers the steam turbine generator. The cooling steam
is cycled back into water through the condenser or diverted as a heat source for buildings
or desalinization plants. Cooled stream is reheated in the economizer and super heater to
complete the steam cycle.
 Although fly ash is captured throughout the process, the finest airborne particulates are
removed in the filter bag house. Ash is generated at a ratio of about 10 percent of the
waste’s original volume and 30 percent of the waste’s original weight.
 The acidic combustion gasses are neutralized with an injection of lime or sodium hydroxide.
The chemical reaction produces gypsum. This process removes 94 percent of the
hydrochloric acid.
 The bottom ash are passed by magnets and eddy current separators to remove both
ferrous and other non ferrous metals. The remaining ash can be used as aggregate for
roadbeds and rail embankments. Activated carbon (charcoal treated with oxygen to
increase its porosity) is injected into the hot gases to absorb and remove heavy metals,
such as mercury and cadmium.
 Nitrogen oxide in the rising burn gases is neutralized by the injection of ammonia or urea.

42. WtE – Technology Issues
 Scale Of Operations : Smaller WtE Projects 3 to 24 MW, resulting in higher
cost per MW.
 Fuel Preparation : Full scale pre-processing plant for conversion to Good
quality waste derived fuel involves higher capital cost.
 Boiler : Waste derived fuel being low density fuel, generates more fly ash
during combustion. Fly ash acts as catalyst for production of dioxins &
Furans. THUS fly ash should be removed before gases cool which results
in a bigger boiler size.
 Flue Gas Treatment: Flue gases from WtE Plants have many pollutants
which need to be treated before discharge through stack.
 Manpower To Operate: WtE Plant is manpower intensive. Skill
Development of the workers is necessary.
 Corrosive Nature Of Fuel : Heterogeneous nature of Waste and emissions
being corrosive in nature, the equipment used in pre-processing has
typically 7 years life and needs to be replaced.

43. Associate Members
European Suppliers of Waste to Energy
Technology - ESWET Members

44. The Leading Companies in WtE in 2015 / 2016
 A2A
 AEB Amsterdam
 Attero
 AVR
 Babcock & Wilcox / B&W Vølund
 China Everbright
 Chongqing Iron & Steel Company (CISC) /
 Chongqing Sanfeng Covanta
 EDF / TIRU
 EQT / EEW Energy from Waste
 GCLPoly
 Grandblue Environment
 Hunan Junxin Environmental Protection
 China Metallurgical Group (MCC) / ENFI
 MVV Energie / MVV Umwelt / MVV Environment
 Shenzhen Energy
 National Environment Agency of Singapore
 Suez Environnement / SITA
 Tianjin Teda
 Clean Association of Tokyo 23
 Veolia
 Viridor
 Wheelabrator / Energy Capital Partners

45. To Get The Municipal Waste-to-Energy Market
Up And Running
• Low-cost landfills will need to be addressed as “Land Filling of
Waste” is no longer the economically sound process that it
used to be a few years ago.
• A secondary recycling market need to open up with the by-
products from these plants being used in areas such as road
construction.

46. PPP in WtE
Most often absence of capacity is the hurdle in
rationalizing Tariff and user charges in PPP.

47. Public Private Partnership (PPP)
• A PPP is a long-term public & private sector partner relationship to deliver
public services. It Makes optimal use of public and private sectors’
expertise, resources and innovation;
– More value for money public services
– Meet public needs effectively and efficiently
• PPP Shifts most risks to private sector; Public sector focus on acquiring
services at most cost-effective basis.
• Project bankability depends on; tenure, tariff adjustment, transparency,
private sector risk exposure.
• Implementation of PPP project can be complex and requires specialist
financial, legal, and contracts expertise that are not readily available in the
public sector. Thus selection of Transaction Advisors is important.
• Also , a proactive top level management on both sides and close
partnership approach in needed to reach a win-win implementation.

48. PPP in Waste to Energy (WtE).
• The rationale for bringing in private sector participation in this
sector is primarily to; leverage private sector efficiency, expertise
and technology and gauge the commercial potential of the
operation and viability of tipping fee as O&M cost.
• Significant cost reduction can be done with private sector
participation in MSW service delivery.
• Step-in agreements by financers or Government are key feature in
most WtE PPP’s.
• Most often absence of capacity is the hurdle in rationalizing Tariff
and user charges in PPP.
• The collection is usually undertaken by private companies other
than the consortium.

49. WTE Key Features of DBOO/BOT Schemes
• Client buys services for incineration of refuse, instead of
owning an incineration plant.
• Take-or-Pay payment structure with guaranteed refuse
amount or conversion coefficient from MSW to grid-
connected power is needed to make the project bankable.
• Long term contract : 20 - 30 years from commencement of
plant operation
• Private sector financing : both equity and debt financing for
the scheme provided by the private sector

50. WTE Key Performance Indicators of a Typical
DBOO/BOT Scheme
• Clear and measurable outcomes specified for
performance;
– Quantity: Available Plant Capacity; Contracted Unit of
Electricity Export
– Quality: water quality to meet contractual
requirements ; flue gas to meet emission standards
– Plant Service Level : EHS, turnaround time
• Penalty imposed for non-conformance of quality
and quantity requirements

51. Typical DBOO/BOT Structure for
Waste-to-Energy Project

52. State Grid
Corporation
Private Sector
(Equity) Consortium
Project
Company
Residents
Treatment
Subsidy /
Contribution
Fees & Subsidies in WtE Transaction
*Government Treatment Subsidy / Contribution depends on the transaction

53. Evolving Model: Direct Business to Business
Scheme w/ Commercial Areas
Applies when Local Government / Municipality Does not Collect
Waste from Commercial / Industrial Areas

54. Key PPP Agreements in WtE
Incineration Services Agreement (ISA)
• Provides for the delivery of refuse incineration service by the BOT
contractor to the Client, based on agreed prices, terms and conditions.
• Contains technical, commercial , environmental and legal terms and
conditions for refuse incineration services to be rendered.
• Its a long-term ‘take-or-pay’ agreement to purchase 100% of capacity.
The Tripartite Agreement
• Signed between SPV, Financier and Client
• Financier reserves the right to step-in and take over the plant and
/or its operation when the SPV is in default.
• Client may at any time, step in if in the reasonable opinion of the
Client, there is a real and immediate risk that the SPV’s ability to
render service is affected due to an insolvency event.
Power Purchase Agreement (PPA)
• Export of electricity to grid
• Technical, commercial and legal terms & conditions

55. Typical Cost & Revenue Structure for WtE

56. Typical Tariff Indexation for WtE

57. Key Commercial Risks in WtE
• Equitable Risk Allocation
• Fixed + Variable Tariff Structure
• Partial indexation on tariff
• Contractual review at agreed interval
Risk Allocation
/Tariff
Adjustment
• Refuse quality and quantity
• Plant service level
• Appropriate construction and
operations insurances
Non-
Conformance/
Penalty

58. Key Long Term Risks in WtE
• Capital Investments are sizeable and are with
long term horizon
• Built-in Indexation for tariff adjustment,
mismatch in Inflation Index; Fuel oil price index.
• Foreign Exchange exposure and mismatch in
foreign exchange exposure for foreign suppliers.
Financial
Exposure
• Long term (20 - 30 years) performance commitment
with penalty clauses, However, supplier warranty
are short term, hence mismatch in
warranty/guarantee
• Mismatch in exposure: SPV risk exposure is much
higher than subcontractors/suppliers which are
limited to size of contract.
Long-
Term
Risk
Exposure

59. Key Management Risks in WtE
• Fostering of good Multi-parties (Procurer, Public
and Service Provider) relationship to encourage
improvements and quality of services provided
• Active role of Client
Management of Client-
Contractor Relationship
• Levels of Communications (Strategic, Business and
Operational)
Continuous monitoring
of quality relationship
and management
process
• Mechanism needs to be in place for change in
scope and basis for payment without need for
tariff re-negotiation, new financial modeling,
contract change, or supplemental agreements
Flexibility in Contracts

60. PPP Financial/Commercial Learning Points
 Choice of payment structure important for viability of project.
 DBOO (Design, Build, Own, Operate) scheme is common.
 Step-in agreements by financers or Government are key feature
in most WtE PPP’s.
 USUALLY Government to enter into ‘take-or-pay’ agreement
with developer to buy 100% of incineration capacity at a price
determined through the tender).
 Two-part payment structure
 Fixed payment (available incineration capacity) and
 Variable payment (consumables).
 Developers unable to bear the demand risks owing to
 Uncertain waste growth; and
 Waste stream for plant not guaranteed
 Project Tenure : should be long enough for capital recovery by
the private sector.

61. 61
Loay Ghazaleh, MBA, BSc. Civil Eng.
loay.ghz@gmail.com, +973-36711547
Advisor, Undersecretary Office,
Ministry of Works, Bahrain