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5. World Bank Advantage: Why to Participate in a Project financed by the World Bank
6 Best Business Opportunities for Stream Companies in the World Bank Projects
Annexes
Annex 1: Resources
The solid waste management is an urban issue. In developing countries it is also a major public health
issue and a growing environmental problem. Recent outbreak of SARS epidemic in East Asia and the
plague in Algeries in last December highlighted the issue. In both cases the cause of the outbreak was
poorly managed urban solid waste. Environmentally open dumping and inadequately controlled
landfills threaten already scarce water resources and contaminate surface and groundwater in most of
the developing countries.
Through the years the developing countries have collaborated with multilateral aid agencies such as the
World Bank to improve and finance solid waste management projects. Bilateral aid agencies are also
active in the waste management sector, e.g. Finland has financed dumpsite upgrading in the Philippines
and pollution control in Egypt.
For many reasons solid waste projects have not been successful in the developing countries. Although
countries handle their waste problems very differently, their approaches are governed by the following
common constrains:
• solid waste management is a very low priority in developing countries except in capital cities
and large urban areas. Water and waste water projects are the current priority.
• financial constrains including difficulty to generate income, e.g. lack of dumping or collection
fees, make these projects financially unsustainable,
• most countries lack a domestic industry capable of producing affordable equipment for waste
management. Most developing countries depend on expensive imported equipment, which are
difficult to maintain and often unsuitable for local conditions
• recycling of solid waste is not feasible, as there is no local industry capable of receiving and
recycling the collected material, e.g. recycling paper is only feasible if there is a paper mill ready to
use waste paper
• the social status of solid waste workers is especially low in developing countries. Dumpsites,
transfer stations and landfills are frequented by scavengers, which creates its own problems
However demographic and economic developments will increase the waste generation dramatically
over the next twenty years:
• Rising incomes in developing countries will lead to greater use of resources and therefore
more waste; especially as Asian countries are more likely adopt American consumer habits
instead of somewhat more conservative European attitude. United Nations Environmental
Program, UNEP, estimates that municipal waste will increase more than 150 per cent by 2032 in
South Asia, Southeast Asia and Central Asia.
• As Asia urbanizes, solid waste production will increase since urban residents generate 2-3 times
more solid waste than their rural counterparts. Urban areas in Asia today generate about 760.000
tons waste per day, and by 2025 will produce about 1.8 million tons per day.
• Emerging Mega cities will increase solid waste production. By 2015 there will be 21 cities in
the world with population of 10 million or more, ten of them will be in Asia,
The above mentioned development drivers will lend new urgency to urban environment problems.
Solid waste management business and solid waste markets will expand as
• spending on solid waste increases dramatically: presently the urban areas in Asia spend about
US$25 billion dollars on solid waste per year. Spending will increase to about US$47 billion in 2025
• trends in solid waste change: with population increases and urbanization the municipal waste will
change from predominantly compostable organic waste into waste streams consisting of packaging
waste, paper, plastic, glass etc. It has been calculated that if the per capita consumption of Coca
Cola goes up by just one serving a year in China, India and Indonesia, 2.4. billion containers will be
added to the waste stream
• increased waste will raise demands on municipal governments’ capacity: they will need more
sophisticated equipment and management tools including IT applications to provide adequate
waste management services. Currently , Manila produces more than 6500 tons of solid waste when
its landfills can barely manage half of that amount.
These developments signal a booming waste market in the developing countries with growing business
opportunities for Finnish companies.
The first municipal waste project financed by the World Bank was for Singapore in 1973. Since then
the lending has slowly risen to 72 projects totaling over one billion dollars. The distribution of projects
and the funds by region active and under implementation in 2004 is presented in the table below.
Few of these projects focus specifically on the improvement of municipal solid waste management.
Most solid waste management projects have been components of the larger municipal development
projects. There are also solid waste components in water supply, urban development and urban
environment projects. Regionally the World Bank has been most active by far in East Asia and least
active in South Asia.
The pipeline for the solid waste projects expected to be approved in the next two years includes 15 new
projects, with total estimated value about US$660 million. The majority of the lending will go to Asia.
The regional distribution of the pipeline is shown below:
The objectives of the World Bank in these projects is to demonstrate modern management of solid
waste, promote environmental sustainable management, address the pollution sources and ensure the
satisfactory service. The projects deal mostly with municipal waste in urban areas with occasional
hazardous waste component, mostly hospital and animal waste.
• World Bank lends to governments, not municipalities, which makes solid waste project
financing with the WB loan cumbersome, as solid waste is mostly a municipal activity
• For each loan financed by the World Bank the Bank’s share is only about half of the loan.
The other half is financed by the borrowing country, commercial bank, aid agency etc. In practice
the final loan sum is approximately twice the Bank’s share. It also doubles the business
opportunities offered by the loan
• The Bank does not finance incinerators in the waste management sector. Water content of
municipal waste is too high in developing countries to make incineration practical or financially
feasible. There are also some technical, human capacity and environmental concerns. For now the
preferred mode of waste disposal is a landfill as there is ample land available and the landfill
method is cost effective.
• The World Bank does not finance recycling plants as they are regarded as private sector activity
• lending will increase: the World Bank approved a new infrastructure action plan in 2003
which strongly supports substantial increases in infrastructure lending including solid waste
• in the future the Bank will finance more stand alone waste management projects instead
of broad projects with waste management component
• new environmental awareness in borrowing countries will increase the demand for
World Bank loans. The emergence of strong environment ministries is pushing solid waste
management into national agendas rather than treating it as a solely municipal activity.
• Asian urbanization will also drive the Bank’s lending program – waste management lending
in the region will increase
The structure of the solid waste management project or solid waste component financed by the World
Bank is always the same. A project offers companies business opportunities in equipment procurement
construction, consulting and engineering services.
All the procurement in the Bank projects is carried out according to the World Bank’s Procurement
Guidelines. Consultants are selected through the Bank’s consultant selection process. Business
opportunities are all publicly advertised
IFC, the private sector arm of the World Bank, has been interested in financing municipal projects. The
latest example is IFC’ s participation in a municipal fund in Johannesburg, South Africa. The fund will
finance priority infrastructure projects including solid waste management throughout the city. IFC’s
exposure is US$50 million, and the fund is expected to raise 1-2 billion dollars.
IFC’s Environmental Finance Group has conducted feasibility studies of solid waste disposal options
for Durban South Africa and solid waste processing centers for the Greater Moscow area.
These feasibility studies have not yet led to investments.
In six moths ago the IFC established a joint pilot department in cooperation with the World Bank,
Municipal Finance Group. The group lends to municipalities and is ready to finance
• loans
• public private partnerships
• management contracts
The following chapter deals with existing solid waste management projects in the regions financed by
the Bank. Latin America is not discussed as the Bank is only marginally involved in the sector.
Currently there are two active solid waste management projects in the region, one in Uzbekistan
and the other in Bosnia Herzegovina. The projects in Latvia and Lithuania are winding down.
In Russia the Bank has financed occasional oil clean up and air pollution mitigation projects.
Russia’s large Municipal Water project does not include solid waste components. There is a
municipal development project in preparation in Kazan, but its components are still in the planning
stage.
Moscow and St.Peterburg have constructed new waste processing facilities, and on a regional level
Toms has long term waste management programs. However these facilities meet no more that 30
per cent of their processing requirements
Although there is obvious need for large scale municipal waste projects in Russia and in the other
CIS countries there is presently no political will or environmental awareness among general public
that supports solid waste initiatives.
Interestingly the US Commercial Service reports in their Russian market surveys that solid waste
management and recycling is developing into competitive private markets in Russia. Solid waste
management is considered as a “ Klondike of waste”. There are more than 100.000 hectares of
landfills in Russia, 200.000 hectares polluted by various solid waste.
________________________________________________________________________
Examples of solid waste projects in ECA Region
• Uzbekistan Tashkent Solid Waste Management Project. Project is aimed at the restoration
of Taskent’s basic solid waste collection. The objective is to ensure adequate collection
infrastructure (collection bins,vehicles) and upgrade existing landfill. The project also
investigates recycling options.Communal collection bins,landfill equipment, trucks and
compactors will be purchased.
Project total: US$ 20 million. Contract for transfer stations was won by German company Max
Aicher GMBH
.
• Bosnia Herzegovina Solid Waste Management Project
The project is the first phase of Bosnia-Herzegovina’s National Solid Waste Management
Strategy which was funded by the EU. The strategy recommends environmental standards that
will be required for eventual EU accession. The project covers rehabilitation of existing disposal
site, collection infrastructure. Also transfer stations in Tuzla, Banja Luca and Mostar.
The World Bank has two active solid waste projects in the region: one in Tehran and another Algeria,
which is a natiowide program. The Bank also has pollution control projects in Algeria and Egypt,
which Finland has partly co-financed as Finland’s development aid to Egypt.
In addition to the projects the Bank finances Mediterranean Environmental Technical Assistance
Program, METAP. A Finnish environmental expert is a member of METAP team in Washington.
In the World Bank terms the countries in the region are middle income countries. They are mostly oil
producing countries with rising income levels. The World Bank will be slowly phasing out the loan
programs, which will be replaced by private investments. Finland is currently reviewing its
environmental aid program to Egypt. In the future the program will focuse on private sector activities.
There is a pressure in the region to spend more on waste management. The region has lacked behind in
investments in infrastructure. The approximity of Europe and the demands of the EU, even if undirect,
will push for investments. Cairo and Istanbul are the region’s Mega cities. Tehran is fastly moving into
that category.
____________________________________________________________________________
Examples of solid waste projects in MENA Region
• Algeria Municipal Waste Management Project. It will develop solid waste management
capabilities on a national level. Two pilot municipalities, Annaba and Tlemcen are selected for
application of integrated waste management. Purchase of equipment for collection, transport,
transfer and treatment of solid waste will be included. Total cost: US$ 35 million
• Iran Tehran Solid Waste Project. Tehran has estimated population of 10.5 million and its
generates about 2,5 million tons of waste per year. The project covers the Greater Tehran area.
Project finances a new safe disposal site for solid waste. it improves transfer system. Technical
assistance will focus on reduction-reuse-recycling strategies. Pilot project covers health waste
disposal. Equipment will be purchased. Total cost: US$ 105.
___________________________________________________________________________
The World Bank’s waste management/urban environment portfolio is the largest in China: nine urban
environment projects have been implemented and six projects are starting or in planning stage. The
value of the project portfolio is about US$3 billion.
The Bank has been most active in Shanghai. The Shanghai Municipal Government has adopted the
Urban Environment Management Plan with the financing needs minimum of US$ 4.85 billion.
According to the Bank’s report “ …. no other large city in China or in the developing world has
adopted a strategy that so explicitly links environmental progress with the long-term economic
growth.”
• APLI covers mostly domestic and food waste (high priority because of SARS).
• APL2 will tentatively cover large quantities of construction and industrial waste and
hazardous waste.
• Finpro Beijing Trade Center has on-going solid waste management project in Shanghai
Source: Shanghai Urban Environment Program, Project Appraisal Document, World Bank, 2004
• Guangdong Pearl River Delta Urban Environment. The project covers Guangzhou and
Shenzhen cities and includes the first phase of a hazardous solid waste treatment center..The major
componets are: hazardous waste landfill, hazardous transferring center, physical/chemical
treatment workshop, stabilization/solidification workshop and wastewater treatment system.
Tentative plans for future hazardous waste, reuse and recycling facilities. Total cost: US$160
million of which the hazardous waste component is about 20 per cent. The Bank has a project
pipeline of US$ 1 billion for Guangdong Pearl River Delta.
• Zhejiang Urban Environment Project. The project covers three municipalities of Ningbo,
Shaoxing and Hanzhou. It consists of a mixture of investments and services including waste
collection and Hangzhou landfill expansion. However, the main emphasis of the project is on
wastewater treatment. Total amount: US$ 133 milion.
• Hunan Urban Environment Project. The objective of the project is to promote sustainable
development in the city region of Changsta, Zhuzhou and Xiangtan in Hunan Province. The
project is in early preparation stage. There is no information of project components. Total cost:
US$ 300 million. Sichuan Second Urban Environment and Taiyuan Urban Environment have
no other information available than the loan totals: US$105 million and US$ 150 million
respectively.
Sichuan 105 NA NA NA
Urban 2
Taiyuan 150 NA NA NA
Urban Env.
Beijing has been in the news lately with its plans to invest US$ 400 million in new garbage treatment
facilities. The plan includes 15 new garbage treatment facilities, three incineration facilities, seven
comprehensive garbage treatment plants and two garbage transfer stations. Beijing encourages foreign
investments on municipal waste. So far there is no World Bank involvement with these plans.
South Asia Region is under presented in the World Bank urban environment portfolio: the region has
20 per cent of the total urban population of the developing countries but it receives only 9 per cent of
the Bank’s urban enviroment investments. Currently there are few projects with waste management in
the region. One of the constrains on municipal lending has been the lack of capacity of municipalities
to handle large complex urban enviroment projects.
The situation might be slowly changing. The World Bank has started solid waste sector review in South
Asia. The report will be available later this year. The sector reviews usually lead to investment
programs. In discussions with the Bank’s experts especially India and Indonesia emerged as a very
difficult but promising solid waste management markets comparable only to China.
So far the World Bank has not commited to finance solid waste or hazaedous waste projects in the
region.
_________________________________________________________________________
Examples of Solid Waste Projects in SA Region
• Indonesia: Western Java Jakarta Environmental Management Project. Project is APL or
Adaptable Program Loan which will be carried out in three trances. Project covers Jakarta, West
Java and Banten Project. It has an solid waste component. Project emphases minimization of
waste and composting. Equipment will be purchased. Total amount: US$ 88.
5. World Bank Advantage: Why to Participate in the World Bank Financed Project
There are number of reasons why a company should consider cooperation with the World Bank as
an essential factor in a company’s internationalization strategy:
• The projects financed by the World Bank are large,usually between US$ 20- 800. They
are carefully planned, complex and present considerable international knowledge.
• The projects offer a variety of business opportunities. The lifespan of an average project is
about five years. The projects often evolve into decade long investment programs. The Bank is
also open to new technologies and ideas.
• The projects act as a catalyst for further sector investments in the country. The Bank is
frequently the first investor in the sector
• The projects provide a market entry into rapidly growing countries. The World Bank has
a project or projects in all Mega cities in the developing countries.
• The World Bank’s presence provides a comfort factor against political risk and
payment risk in the developing markets.
6. Best Business Opportunities for Stream Companies in the World Bank Financed Waste
Projects
The World Bank’s activities in the developing countries offer numerous opportunities for
Stream companies. In the solid waste management sector the opportunities are in
• China, although the World Bank’s portfolio in China is large, it is only a fraction of investment
activity in the country. Investments are not only fuelled by population growth and urbanization
but also upcoming events like Beijing Olympics and Shanghai Exhibition. The World Bank
projects provide market entry beyond Beijing and Shanghai.
• India and Indonesia, new promising solid waste markets, riskier to enter than China, the
World Bank projects would provide the market opening.
• Private sector investments with the IFC in Russia, Ukraine and other non EU accession
countries in Eastern Europe. Finnish companies have long experience working with the IFC
in Russia and Eastern Europe. IFC is very willing to discuss any investment plan companies
might have.
Finpro Washington proposes to Stream companies the following actions to futher their interests
in solid waste management markets in the developing countries:
• Investigate possibility of using Finnish export credits and Nordic Environmental Fund
financing in solid waste investments
The export credits could be used in connectin with the World Bank loan.
• Visit to China
The purpose of the visit would be to market Stream companies to World Bank projects. In
cooperation with Finpro Trade Centers in China visit could be extended to include additional
Chinese companies.
Annex 1. Resources.
Low Income Countries: Nepal, Bangladesh, Myanmar, Lao PRD, India, Sri Lanka, China
Type of Waste:
Compostables 41.0 60
Paper 4.6 15
Plastic 3.8 6
Glass 2.1 3
Metal 1.0 4
Others 47.5 12
Type of Waste:
Compostables 57.5 50
Paper 14.9 20
Plastic 10.9 9
Glass 2.4 3
Metal 3.1 5
Others 11.1 13
Type of Waste:
Compostables 27.8 33
Paper 36.0 34
Plastic 9.4 10
Glass 6.7 7
Metal 7.7 5
Others 12.2 11