Innovative Partnerships for Resource Recovery & Reuse (RRR)


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Presentation given at Stockholm World Water Week 2013

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Innovative Partnerships for Resource Recovery & Reuse (RRR)

  1. 1. Innovative Partnerships for Resource Recovery & Reuse (RRR) WLE/IWMI 2013 World Water Week, Stockholm 1st September 2013
  2. 2. Agro-industrial waste - Energy Wastewater – Water (irrigation, aquaculture) MSW, Faecal sludge - Nutrients (ag. production) Innovative RRR initiatives – to close water, nutrient and energy cycle loop
  3. 3. Beyond ecological benefits.… • RRR offers significant opportunities for cost- recovery for the sanitation sector esp. in low-income countries • Business opportunities that can attract private capital and leverage donor investments Game-changing processes that can completely alter the current sanitation-agricultural landscape with the implementation of sustainable business models and innovative cross-sectorial partnerships
  4. 4. Stages of Business Life Cycle Time Phase I – Start-Up Output Phase II – Business Development Phase III – Up- and Out- Scaling
  5. 5. Phase I – Start-Up Time Output  Challenges • Buy-in of business concept by investors: capital investment • Access to inputs • Development of suitable technology • No proven market • Regulatory environment  Solution strategies and partnerships • Finance (donors, govt, fin. inst.) – model demonstration, info. • Inputs suppliers • Technology: • Business partners – technology transfer • Research institutes – innovation • Market strategy/entry – product awareness • Regulatory envt: incentives (tax breaks, subsidies) Proof of concept New period of growth New markets and dist. channels Larger market share New revenue streams
  6. 6.  Organizational type: PPP  Idea: Devt. and testing of innovative tech. for wastewater treatment (domestic/industrial); avert pollution of water bodies  Value offer: Potable treated water, filleted retail packaged fish, animal feeds  Business model: value-driven & cost-driven end-sales  Scale: 70.000 m3/day Case of Terraqua Barranca: Phyto-remediative wastewater treatment & fish production
  7. 7.  Buy-in of business concept by multiple entities  Cost of investment: $22 M  Investors (IADB through govt, equity–pilot phase/ 60% of capital reqts); rural campesinos invest land, municipality supply of ww  Returns/ownership: 75% - Terraqua, 15% - municipality, 10% - campesinos  Develop market niche via established distributors  Driving factors: Water scarcity, abundant ww polluting water bodies, land availability and conducive ownership structures. Municipality WSP Rural Campesinos Government WW Land Terraqua Finance Expertise, finance Export market Domestic market Fish Clean water $ $ $ Licensed Wholesaler/ distributor
  8. 8. Time Output  Revenues increasing  New market opportunities  Smooth running of business process – stabilization  Competition is surfacing  Fine-tuning business model Phase II – Business Development  Challenges • Increasing competition - Input procurement - Output market  Solution strategies and partnerships • Input procurement: - Incentives for consistent supply - Logistics – transportation • Output market: - Existing and established partner distribution systems – access new markets • Research: Tailor products to market needs ; fine-tune technology Fine-tuning business model results in growth and stability ; exploration of up- and out-scaling initiatives
  9. 9. Case of EcoFuel Africa, Uganda  Organization type: Private company  Idea: Alternative fuel sources to avert deforestation and burning of agro- waste  Value offer: Produce cheap and clean cooking fuel (briquettes)  Business model: Value-driven, micro- franchising scheme  Scale: 1000tons/yr  Form of financing: No subsidies, private equity, seed grant  Driving factors: unavailability of firewood, abundance of waste, low-cost & simple technologies  Increasing and stable sales and profits, however competition is growing (local & intl).
  10. 10. Households Institutions Briquette & Stoves Briquette & Stoves Transport Training $ Logistics company EcoFuel AfricaFarmers, Agricultural residue producers Research & Development Distributor Input Expertise $ Training, installation of stoves $ $ $ Compost $ Partnerships to mitigate competition effects: 1. Input procurement and delivery • sources ag. residue from various farmers • outsource collection 2. Fine-tune technology: increase industrial capacity (research partners -Makerere Univ.) 3. Output market : outsource distribution and marketing; sale of complementary goods
  11. 11. Phase III: Up- and Out-Scaling Time Output  Challenges • Adaptation of business model o Entry into new markets o Adaption of tech. to context • Funds and resource mobilization (R&D, pilots, infrast., land…) • Market information • Regulatory environment Choice of entity New period of growth New markets and dist. channels Larger market share New revenue streams Increased impact/beneficiaries
  12. 12. Phase III: Up- and Out-Scaling Time Output Solution strategies and partnerships  Funds: • Devt. partners, local fin. inst. – proven concept, lower investment risk, impact  Resource mobilization: public, private • Land, access to waste.. • Technical support for H/E mitigation measures  Market info: Private marketing companies, ag. prod. org.  Regulatory envt: policy makers • Formulate and enact policy measures – interest rates, tax breaks, subsidies – market entry; single window clearances for H/E & business licenses  Research partners: • Cutting-edge tech. new pdt. devt; pilot  Model adaptation: Licensing agencies – brand, distribution and marketing partners Choice of entity New period of growth New markets and dist. channels Larger market share New revenue streams Increased impact/beneficiaries
  13. 13. Case of Waste Concern, Bangladesh • Organizational type: Research-based NGO • Value offer: Address waste challenge by transforming MSW into high quality and safe compost • Business model: Decentralized community private-public partnership model • Scale: 1 – 5 tons/day of waste processed • Driving factors: low-cost and labor- intensive tech. and prod. processes, huge demand for compost, strong community ownership, inst. support • Plans: Replication for impact – increased beneficiaries, CDM process
  14. 14. Private sector CommunityPublic sector Compost Donor (supply of funds) Community-based organizations allowed to operate, monitor collection activities DCC, PWD (allocation of land) Waste Concern $ Fertilizer company $ CBO CBO CBO Buy compost, enrich and sell to farmers Technical assistance Compost $ MoEF $ Land Carbon Emission Reduction market Carbon credit $ Decentralized multi-partnership community based model
  15. 15. Strategic partnerships Adaptation of business model: 4 management models • Mucpl. owned – mucpl. Operated, Mucpl. owned – comm. operated, Mucpl. owned – priv. operated, priv. owned – priv. operated  Fund and resource mobilization • Cost of investment: $50K to $100K; self-sustaining after 3 years – private sector, intl devt agencies, local govt • Physical resources: land (MoEF, local govt); marketing (private sector), laboratory testing and quality assurance of pdt (academia)  Community ownership: Motivated community participation through model demonstration; proven concept, benefits  Market: entry – private sector (fertilizer companies); new markts – carbon credits  Regulatory environment: Formulated and enacted 27 policies , incl. single window clearances for H/E & business licenses
  16. 16. Summary – Partnerships as solution strategies for RRR businesses Business Phase Type of challenges Description of challenges Solutions requiring strategic partnerships Phase I and III Funds and resource mobilization  Lack of financial resources for pilot projects  Lack of adequate funds for R&D  Lack of access to credit facilities  Scarcity of resources Model demonstration and supply of information - investor buy-in; diversified revenue streams; piggyback on existing relationships with high-level officials. Phase I, II and III Market Information  Lack of information about related product market  No market niche Product awareness, private marketing company partnerships, product innovation. Phase I and III Knowledge and skills  Lack of proper understanding from concerned govt. agencies and communities  Negative attitude of govt. agencies Model demonstration; Education/ awareness building campaigns Phase I and III Regulatory environment  Greater no. of permits required than usual no. for general projects  Limited incentives to catalyze business development Formulate and enact policies (e.g. interest rates, tax breaks, subsidies – market entry; single window clearances for H/E & business licenses
  17. 17. Conclusions 1.Strategic partnerships are imperative for business development in the RRR sector. 2.What is required and can work is highly location, context and business phase dependent. 3.Much more research needed to understand nature of partnerships to enable up-scaling specific to RRR subsectors (i.e. nutrient, energy and water).
  18. 18. Thank you. Miriam Otoo, Krishna Rao, Jasper Buijs and Pay Drechsel IWMI, Colombo
  19. 19. Innovative Partnerships for Resource Recovery & Reuse (RRR) WLE/IWMI 2013 World Water Week, Stockholm 1st September 2013