Recovery Facilities for Solid Waste
Recovery Facilities for Solid Waste
Business Model Description
Investments in Building and Operating Recovery Facilities for Solid Waste
Expected Impact
The IOA can reduce pollution stemming from the dumping of non-biodegradable and toxic waste into landfills.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
Disclaimer
UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.
The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.
Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.
Country & Regions
- Turkey: Mediterranean Region
- Turkey: Black Sea Region
Sector Classification
Infrastructure
Development need
Turkey's performance on SDG 9 (Industry, Innovation and Infrastructure) exhibits major challenges, and significant challenges still remain for SDG 12 (Responsible Consumption and Production) according to the Sustainable Development Report 2020. (1)
Policy priority
The New Economy Program covering 2020-2022 emphasizes that projects on the "Zero Waste Initiative" will be extended. (2)
Gender inequalities and marginalization issues
Within the infrastructure sector, there is a high rate of informality among solid waste collectors. Workers in this area suffer from poor working conditions and a lack of social security. In terms of the provision of utilities, households with lower income levels face the risk of energy poverty. Fair employment practices and pricing mechanisms need to be implemented to address the issues of marginality within this sector. Investments in this area need to generate job opportunities within the green economy and promote energy-efficiency measures to decrease the household consumption costs.
Investment opportunities
The government has planned the following public investment amounts for urban infrastructure areas for 2020: 198 million TRY (29 million USD) for urbanization, 152 million TRY (22 million USD) for communication infrastructure, 71 million TRY (10 million USD) for environment and 67 million TRY (10 million USD) for municipal services. (3)
Key bottlenecks
Given high investment and operations costs, human capital and technology resources and governance needs, some urban infrastructure services such as wastewater treatment facilities cannot reach the desired efficiency levels. New models are needed to improve efficiency in urban infrastructure. (4)
Waste Management
Development need
SDG 9 is identified as one of the priority SDGs in the context of Turkey and as one of the most relevant SDGs for Turkey to achieve the Global Goals acording to the VNR 2019 report. (5)
Policy priority
The government has a main objective to improve urban infrastructure with a focus on provision of clean drinking water, treated wastewater and an active solid waste management system. (6)
Gender inequalities and marginalization issues
There is a high rate of informality in the waste management sector of Turkey. Waste-pickers suffer from poor working conditions and a lack of social security. It is estimated that the informal recycling sector could be responsible for up to 30% of solid waste management. This is a key area of income for the urban poor and ethnic minorities. (14) (15)
Investment opportunities
Turkey's Private Participation in Infrastructure (PPI) figures show that infrasture in ICT, integrated MSW (municipal solid waste) and treatment and disposal still needs a higher private sector engagement. (7)
Key bottlenecks
Given high investment and operations costs, human capital and technology resources and governance needs, some urban infrastructure services such as wastewater treatment facilities cannot reach the desired efficiency levels. New models are needed to improve efficiency in urban infrastructure. (4)
Waste Management
Pipeline Opportunity
Recovery Facilities for Solid Waste
Investments in Building and Operating Recovery Facilities for Solid Waste
Business Case
Market Size and Environment
> USD 1 billion
The total municipal waste is estimated to reach 33 million tonnes by 2023. (8)
The investments necessary to build recycling and recovery facilities and sanitary landfills in alignment with national standards varies between 1.7-2.9 billion EUR with sanitary landfills accounting for 370-618 million EUR. (8)
Indicative Return
20% - 25%
"Investors already active in the construction of waste recovery facilities in Turkey estimate an IRR between 20-25%. Investors engaging in the operation of waste recovery facilities estimate an IRR between 5-7%."
Investment Timeframe
Medium Term (5–10 years)
The usual timeframe for investments in constructing and operating recovery facilities for solid waste is limited with the duty periods of municipalities, which is 5 years.
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Market - Highly Regulated
Capital - CapEx Intensive
Capital - Limited Investor Interest
Impact Case
Sustainable Development Need
According to OECD, Turkey still faces insufficient recovery and recycling of municipal solid waste. Despite some progress in waste treatment infrastructure, 90% of municipal waste is sent to landfills. Only 6% of municipal waste was collected seperately in 2016. (9)
According to the Ministry of Environment and Urbanization, 6% (1.5 million tonnes) of municipal waste goes to recovery plants, while 64% (17.5 million tonnes) is kept at sanitary landfills and 30% (8.1 million tonnes) goes to irregular landfills. (8)
11.9% of municipal waste such as glass, metal, paper, plastic, etc. that are collected seperately by municipalities and sent to recovery facilities and other wastes sent to biogas and composting facilities. (10)
Gender & Marginalisation
The waste collection and management sector heavily involves informal workers with no access to social protection
Expected Development Outcome
The IOA can reduce environmental pollution stemming from dumping of non-biodegradable and toxic waste into landfills.
The IOA can rehabillitate wild dumping sites by increasing the share of recovery and sanitary landfills in waste disposal to 35% and 65%, respectively by 2023. (8)
This IOA can increase resource efficiency by increasing share of recovery and recycling in the waste disposal processes and reduce waste generation through prevention, reduction, recycling and reuse.
Gender & Marginalisation
This IOA can reduce waste release to air, water and soil in order to minimize their adverse impacts on human health and the environment, which is heavily concentrated around peripheral settlements.
Primary SDGs addressed
9.4.1 CO2 emission per unit of value added
0.41 kg of CO2 per constant 2010 US$ (11)
11.6.1 Proportion of municipal solid waste collected and managed in controlled facilities out of total municipal waste generated, by cities
11.6.2 Annual mean levels of fine particulate matter (e.g. PM2.5 and PM10) in cities (population weighted)
41.97 mgr/m^3 (11)
41.97 mgr/m^3 (11)
12.5.1 National recycling rate, tons of material recycled
12.4.2 (a) Hazardous waste generated per capita; and (b) proportion of hazardous waste treated, by type of treatment
151,505.1 tonnes (11)
(b) 6,623,186 tonnes (11)
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Public sector
Indirectly impacted stakeholders
People
Outcome Risks
Increasing recycling investments without proper circular economy and waste prevention incentives might reduce resource costs for companies, driving mass consumption further.
Impact Risks
Efficiency Risk given the heavy involvement of local authorities in waste management
Endurance Risk given that the investment timeframes are heavily dependent on the duty terms of municipalities
Impact Classification
What
Reduced waste levels and increased recovery.
Who
Investments in solid waste recovery are expected to directly serve vulnerable communities living close to wild dumping sites, and indirectly serve industry's clean energy and resource needs.
Risk
High involvement of municipalities in solid waste management expose investments to uncertainty in terms of governance and leaves little governance capability for firms to maximize impact.
Impact Thesis
The IOA can reduce pollution stemming from the dumping of non-biodegradable and toxic waste into landfills.
Enabling Environment
Policy Environment
(11th Development Plan): 2.4.5. Urban Infrastructure, 696. An active solid waste management system that help reducing harmful effects on human health and negative environmental impacts and ensuring eliminating, recycling and recovery present the sector’s another main objectives.
(11th Development Plan): 2.4.5. Urban Infrastructure, 699. Implementation tools, particularly PPP, will be developed to ensure resource efficiency and environmental responsibility in solid waste management.
11th Development Plan, 2.4.5. Urban Infrastructure, 699. By enabling solid waste management, waste reduction, resource separation, separate collection, transportation, recovery, disposal phases and rehabilitation of irregular/wild dump areas will be developed technically and financially as a whole.
11th Development Plan, 2.4.5. Urban Infrastructure, 700. Domestic solid waste recovery and disposal facility projects and transfer station projects that local administrations with inadequate financial power have difficulty in financing will be supported within the scope of a program.
Financial Environment
Financial incentives: The Development and Investment Bank of Turkey signed a 3-year-nonrecourse 20-year loan agreement with KfW to finance infrastructure projects targeting sustainability. (12)
Investments in waste recovery and disposal facilities over 5 million TRY in these areas are eligible for Region 5 incentives regardless of location, which include VAT exception, customs duty exemption, tax deduction, land allocation, interest/profit share support and so on (13)
Other incentives: Investments over 1 million TRY in regions 1 and 2, and over 500,000 TRY in regions 3, 4, 5 and 6 are eligible for "Regional Investment Incentives": VAT exemption, tax deduction, social security premium support, income tax withholding support, land allocation etc. (13)
Regulatory Environment
(Regulation): The ultimate regulator of waste management in Turkey is the Ministry of Environment and Urbanization, while other public bodies such as the Ministry of Interior and Ministry of Health are also involved as per their respective mandates.
(Regulation): Turkish Law on Environment no. 2872 creates the basis of the legal framework for waste management practices in Turkey.
(Regulation): The "Waste Management Regulation" published in the Official Gazette issue no. 29314 of 02.04.2015 aims to ensure an environmentally harmless waste disposal process.
According to the Law on Environment, municipalities are responsible for the municipal waste management processes. According to the Law on Metropolitan Municipalities no. 5216 and the Law on Municipalities no. 5393, local governments are in charge of waste management.
Collection/sorting and recycling facilities are required to obtain environment licenses.
Marketplace Participants
Private Sector
İSTAÇ, Anel Doğa Entegre Geri Dönüşüm Endüstri A.Ş., Süreko A.Ş.
Government
Municipalities are legally responsible for the municipal waste management processes. Ministry of Environment and Urbanization also supports investments in solid waste management. İlbank.
Multilaterals
EBRD, World Bank, EU through IPA funding
Non-Profit
ÇEVKO, TAYÇED.
Target Locations
Turkey: Mediterranean Region
Turkey: Black Sea Region
References
- (1) Bertelsmann Stiftung & SDSN, 2020. Sustainable Development Report Dashboards 2020. https://dashboards.sdgindex.org/#/TUR
- (2) Presidency of Strategy and Budget, The New Economy Program 2020-2022. http://www.sbb.gov.tr/wp-content/uploads/2019/10/YeniEkonomiProgrami_OVP_2020-2022.pdf
- (3) Presidency of Strategy and Budget, 2020 Investment Program, http://www.sbb.gov.tr/wp-content/uploads/2020/03/2020_Yatirim_Programi.pdf
- (4) Presidency of Strategy and Budget, 2020 Annual Presidency Program. http://www.sbb.gov.tr/wp-content/uploads/2019/11/2020_Yili_Cumhurbaskanligi_Yillik_Programi.pdf
- (5) Presidency of Strategy and Budget, Turkey's SDGs 2nd VNR 2019. https://sustainabledevelopment.un.org/content/documents/23862Turkey_VNR_110719.pdf
- (6) 11th Development Plan, Presidency of Strategy and Budget, http://www.sbb.gov.tr/wp-content/uploads/2020/03/On_BirinciPLan_ingilizce_SonBaski.pdf
- (7) World Bank. Turkey PPI Snapshot. https://ppi.worldbank.org/en/snapshots/country/turkey
- (8) Ministry of Environment and Urbanization National Waste Management and Action Plan 2023. https://webdosya.csb.gov.tr/db/cygm/haberler/ulusal_at-k_yonet-m--eylem_plan--20180328154824.pdf
- (9) OECD Environmental Performance Reviews Turkey 2019. http://www.oecd.org/env/country-reviews/Highlights-Turkey-2019-ENGLISH-WEB.pdf
- (10) TUIK, 2019. Disposal/recovery methods and amount of municipal waste. http://www.tuik.gov.tr/UstMenu.do?metod=temelist
- (11) UNStats. SDG Indicators Database. https://unstats.un.org/sdgs/indicators/database/
- (12) Statement by DBIT CEO, 2019. https://www.hurriyet.com.tr/ekonomi/bolgesel-kalkinma-fonu-ile-teknoloji-ve-inovasyon-fonu-kuruldu-41404794
- (13) Ministry of Industry and Technology, 2020. The Framework of Investment Incentives Program in Turkey. https://www.sanayi.gov.tr/destek-ve-tesvikler/yatirim-tesvik-sistemleri/md0403011615
- (14) ILO, https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---coop/documents/publication/wcms_715845.pdf
- (15) European Environment Agency, 2013. https://www.eea.europa.eu/publications/managing-municipal-solid-waste/turkey-municipal-waste-management/view
- (16) Ministry of Environment and Urbanization, National Waste Management Action Plan of 2023.