Industrial wastewater treatment
Industrial wastewater treatment
Business Model Description
Invest in self-sufficient private water treatment plants adjacent to or embedded into large institutional facilities like social housing, hospitals and schools.
Expected Impact
This initiative intends to improve sanitary conditions and provide a wider access to drinking clean water.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
Sector Classification
Infrastructure
Development need
15% lower government budget than needed to solve the infrastructure needs of the country (1). According to the World Bank's logistics index Colombia ranked 72/160 in infrastructure in 2018 (1). Poor infrastructure has long stopped the country from realising economic potential (1).
Policy priority
The ANI has in place a 5G infrastructure plan in place to make investment on road, air and water infrastructure with Capex of around COP18,030bn. Furthermore, the central government has a plan of reaching 17.9% of solid waste reuse by 2030. (2)(3)(4)
Gender inequalities and marginalization issues
Rural and vulnerable households are the most affected by poor conditions in transport infrastructure, water sanitation and communication barriers. Only 54.5% of households led by rural women have access to aqueduct, 21% sewerage and 30.2% waste collection. (6)
Investment opportunities
Investment opportunities through auctions of infrastructure projects (roads, air and river) as well as waste treatment plants (5).
Key bottlenecks
The country has many bottlenecks when it comes to infrastructure, logistics and road transport are one of the major problems hindering economic development.
Waste Management
Development need
22M tons of solid waste produced in Colombia per year (0.5 tons hab / year), an alarming figure compared to other countries, one of the main causes of the depletion of authorized land-fill sites.(7) 17% of wastes are recovered while the remaining 83% ends up in sanitary landfills.(8)
Policy priority
National Development Plan: Implement strategies and instruments to achieve sustainability, innovation and reduce environmental impacts, with a circular economy approach. (9)
Gender inequalities and marginalization issues
Only 54.5% of households led by rural women have access to aqueduct, 21% sewerage and 30.2% waste collection. (6)
Investment opportunities
The environmental industry in Colombia faces great challenges and opportunities in terms of waste treatment with several actores investing in new technologies to consolidate better practices (10).
Key bottlenecks
Linear economy systems prevail in the country, dominated by an extraction logic, the main bottleneck of the subsector is the transition towards a circular economy.
Water Utilities and Services
Pipeline Opportunity
Industrial wastewater treatment
Invest in self-sufficient private water treatment plants adjacent to or embedded into large institutional facilities like social housing, hospitals and schools.
Business Case
Market Size and Environment
> USD 1 billion
> According to IDEAM the average demand for water is 36.000Mm3(1). At an average price per m3 of US $ 0.2, the potable water service is a US $ 7.2bn market.
Indicative Return
> 25%
Accoring to local investors interviewed, they expect IRRs of around 35% for water treatment infrastructure.
Investment Timeframe
Medium Term (5–10 years)
Accoring to local investors interviewed, expected holding periods for water treatment infrastructure are around 7 to 12 years
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Capital - Requires Subsidy
Impact Case
Sustainable Development Need
> 97.4% water service coverage for urban areas and 73.2% for rural areas (total of 92.4%) (8).
> 86% of urban and 42% of rural population with access to drinking water (9).
> 1,209 deaths were caused by waterborne diseases in 2016 (10).
Gender & Marginalisation
> As a result of the pandemic, 2 million Colombians part of ethnic groups are currently without safe access to drinking water (11).
> Only 54.5% of households led by women in rural areas have access to aqueduct services (6).
Expected Development Outcome
> Provide clean water to millions of individuals through independent, localized water treatment systems within facilities providing key public services.
> Reduce rates of water-borne and other infectious diseases by keeping these places water free of untreated wastewater improving people's livelihood.
Gender & Marginalisation
> Reduce inequality in access to public services of water treatment in rural areas, targeting households led by women.
> Increase access to drinking water to rural population and ethnic groups.
Primary SDGs addressed
6.1.1 Proportion of population using safely managed drinking water services
6.2.1 Proportion of population using (a) safely managed sanitation services and (b) a hand-washing facility with soap and water
Current level of access to drinking water services (2018): 92.9% (12).
Current level of access to safely managed sanitation services (2018): 88.6% (12).
Target level of access to drinking water services (2030): 100% (12).
Target level of access to safely managed sanitation services (2030): 92.6% (12).
Secondary SDGs addressed
Directly impacted stakeholders
People
Public sector
People
Indirectly impacted stakeholders
Planet
Outcome Risks
>Companies might end up using cheaper technology with poor results due to higher costs of proper equipment.
>Health and environmental impacts may be caused by improper handling of water wastes - chemical risks.
Impact Risks
Execution risk: > unequal infrastructure development in urban vs peri urban areas, creating inequalities and vulnerabilities.
Drop off risks: >technology not adopted or used properly can lead to reduced positive impacts and even health hazards for workers. >companies taking too long to hire waste management services due to lack of education and high costs reducing potential impact.
Stakeholder risk: > Citizen and company participation and thus education is required for innovations to cause expected impact, awareness and safe water treatment practices must be encouraged.
Impact Classification
What
Positive and significant outcome due to increased access to drinking water and better waste management.
Risk
Failing to find a solution for drinking water and water treatment could lead to problems in public health.
Impact Thesis
This initiative intends to improve sanitary conditions and provide a wider access to drinking clean water.
Enabling Environment
Policy Environment
(National Development Plan): plans to increase water coverage and close gaps in access to public services by through the implementation of Departmental Water Plans (regional schemes).(12)
(Colciencias program "Ideas for change" ):seeks to improve quality in the country's communities in conditions of poverty and vulnerability through innovative science and technology solutions and the use of wastewater treatment technologies.(13)
(Covid 19 emergency measures): in order to aid the crisis, special measures have been taken such as reconnecting access to drinking water to around 1M users who had not paid, freezing tariffs for users and import products for water purification (14).
Financial Environment
Financial incentives: Colombian government will invest more than COP 1.8Bn for water and sanitation projects in 2020 for 1.4M people to have access to drinking water for the first time.(18) The Colombian government acquired a credit for COP 181,759M for La Guajira drinking water program from the IADB (19).
Subsidies: Water and sewage tariffs in Colombia are subsidized. There is a supply-side subsidies aimed to assist companies in covering the cost of production or service provision to make service payment it more affordable to consumers.
Regulatory Environment
(Tasa retributiva): is a tax that encourages behaviour change among agents, that internalizes the cost of the environmental damage caused (e.g. wastewater discharge).(16)
(Law 373 of 1997): creation of the program for water saving and efficiency (17).
(Law 788 of 2002): establishes fiscal benefits for companies providing public services related to water (17).
Marketplace Participants
Private Sector
Companies performing water treatment services such as Atica and Pure Water.
Government
MinVivienda and DNP structured project guidelines (proyectos tipo) for the implementation of rural water treatment and sanitation facilities based on pre-manufactured materials.(4)
Multilaterals
The IADB has provided the Colombian government with financial alternatives for water purification programs to increase access to drinking water (19).
Non-Profit
The Colombian government was also offered grants from Swiss coperation to support countries with heavy migration flows (19).
Target Locations
References
- (1) El Nuevo Siglo (2020) -Requieren $342 billones para cubrir necesidades de infraestructura. Accessed February 8th 2021 (https://www.elnuevosiglo.com.co/articulos/07-2020-se-requieren-342-billones-para-cubrir-necesidades-de-infraestructura)
- (2) Financial Times (2020) - Colombia pushes ahead with ambitious infrastructure plan. Accessed February 8th 2021
- (3) ANI (2020) Audiencia Pública de Rendición de Cuentas
- (4) DNP (2018) Objetivos de desarrollo sostenible. Accessed February 8th 2021
- (5) Procolombia (2019)OPPORTUNITIES TO INVEST IN INFRASTRUCTURE IN COLOMBIA. Accessed February 8th 2021
- (6)DANE (2018) Mujeres Rurales en Colombia
- (7)USAID (2016) – Análisis sectorial del agua en Colombia. Accessed May 3rd 2020 (link) "8) CONPES 3918 (2017) - Estrategia para la implementación de los Objetivos de Desarrollo Sostenible (ODS). Accessed Jun 10 2020 "
- (9) MinVivienda (2018) – Plan director de agua y saneamiento báscio. Accesado Junio 12 2020
- (10) Instituto Nacional de Salud (2016) – Carga de enfermedad ambiental en Colombia. Accessed June 15 2020
- (11) DNP (2018) Objetivos de desarrollo sostenible. Accessed February 8th 2021
- (12) DNP (2017) – Plan Nacional de Desarrollo 2018-2022. Acceso Mayo 2, 2020 (link)
- (13) MinCiencias (2015) - Colciencias entrega proyectos innovadores de agua potable en Risaralda. Accessed June 2nd 2020
- (14) Iagua (2020) Colombia anuncia nuevas medidas desde el sector de agua potable para prevenir el coronavirus. Accessed February 8th 2021
- (16) FuturoSostenible (2016) – Tasas Retributivas por vertimientos puntutales. Accessed August 15th 2020
- (17) DNP (n.d.) Agua Normatividad. Accessed February 8th 2020
- (18) MinVivienda (2019) – El Gobierno de Colombia aprueba inversiones para proyectos de agua y saneamiento en Cundinamarca. Accessed June 10 2020
- (19) Semana (2020) Colombia contrató crédito para el Programa de Agua Potable de La Guajira. Accessed February 8th 2020
- (28) Gualteros (2019) - Cobertura saneamiento básico en municipios de Colombia. Accessed June 2nd 2020 (link)