Recycling facilities
Recycling facilities
Business Model Description
Operate recycling facilities to recover and repurpose especially plastic waste.
Expected Impact
Avoid negative environmental impacts and extensive energy consumption by recycling and repurposing plastic waste.
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
- Uganda: Central
- Uganda: East Central
Sector Classification
Infrastructure
Development need
Inadequate infrastructure was one of the 5 key areas ‘problematic to Uganda’s progression’.(II) Accessible and modern infrastructure is crucial for developing other sectors of the economy. Thus the government will strengthen the link between infrastructure development and growth of those sector to attain the synergy effect.(III)
Policy priority
The Third National Development Plan III 2020/21 – 2024/25 prioritizes investment in resilient urbanization with affordable houses and proper waste management as well as transport infrastructure. The aim is to enhance transformation, improve living standards of citizens of Uganda and create workplaces to keep pace with the country's rapid population growth.(III)
Waste Management
Development need
Uganda's urbanization needs more investment to support physical planning and low cost houses with proper services such as waste management and sanitation for middle income earners in urban and peri-urban settlements, and to upgrade informal settlements.(III)
Policy priority
Uganda’s long term goals include ensuring all stakeholders address climate change, as well as promoting green growth and sustainable development. This comprises reducing vulnerability and increasing investments in infrastructure with a special emphasis on settlements, social infrastructure, transport, sanitation, power and disaster risk management.(III)
Waste Management
Pipeline Opportunity
Recycling facilities
Operate recycling facilities to recover and repurpose especially plastic waste.
Business Case
Market Size and Environment
2,300 tons of waste are generated in Kampala daily, of which 15% is recyclable.
Currently, an estimated 600 tons of plastic are disposed of in Uganda every day.(2)
Waste generated in Uganda's capital city exceeds 2,300 tons daily, with collection rate of 50%. Of this, approximately 15% is classified as recyclable including plastics, paper, metal and glass. However collected, waste is usually left untreated at the city’s official dump site, Kiteezi, where it decomposes.(3)
One-third of collected waste is managed by private contractors, with further government initiatives to extend the partnerships.(3)
Indicative Return
10% - 15%
The benchmark internal rate of return (IRR) for waste management is estimated between 12% and 18%.(20)
This business idea is premised on producing 36,400 plastic products per month, which translates into 436,800 products per year. The revenue potential is estimated at USD 21,331 per month which translates into USD 255,975 per year. Net profit is estimated at 72%.(11)
Investment Timeframe
Long Term (10+ years)
Given the time required for constructing the facility and high initial capital expenditure, the business model is expected to take up to 15 years to generate positive cashflow.
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Market - Highly Regulated
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
Even though Uganda is on track to achieve SDG 12 – Responsible Consumption and Production, the waste management problem will increase with rapid population growth.(4)
The waste sector is Kamapla's second biggest contributor of greenhouse gas emissions - 28% is generated from landfill, waste incineration and solid waste management collectively.(3) With sustainable investments in recycling, this negative effect can be diminished.
Much of the uncollected waste ends up in one of Kampala’s 59 illegal dump sites, 133 unofficial temporary storage sites or 35 official temporary waste storage locations, or is simply burnt or carried away in waterways. This possibly leads to diseases because people often use the same water sources.(3)
89 million masks, 76 million gloves and about 1.6 million goggles are required globally for the COVID-19 response each month.(1) While this is a short term supply challenge, it also shows that the epidemic greatly contributed to increase in plastic waste generated each day.
Gender & Marginalisation
Women are an important part of the workforce collecting garbage. Some women work in a formal setting for recycling plants (22), and some work informally in the legal and illegal landfill sites.(23)
Expected Development Outcome
Reduce waste. Save energy and prevent greenhouse gas emissions, etc. Recycling provides a cleaner environment and improves the country's aesthetics, which will promote tourism and foreign direct investment.
Recycling keeps many tons of plastic out of the waste stream and prevents plastics from getting to the ocean.
Promote a circular economy. Recycling plastic reduces the dependency on importing virgin raw materials from other countries.
Gender & Marginalisation
Income generation opportunities and managing health challenges for women, as an integral part of the waste collection and processing workforce
Primary SDGs addressed
12.4.2 (a) Hazardous waste generated per capita; and (b) proportion of hazardous waste treated, by type of treatment
12.5.1 National recycling rate, tons of material recycled
14.1.1 (a) Index of coastal eutrophication; and (b) plastic debris density
15.3.1 Proportion of land that is degraded over total land area
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Indirectly impacted stakeholders
People
Corporates
Outcome Risks
Without proper filtration, a lot of harmful compounds may be released into the atmosphere.
Because a lot of debris is collected everyday for recycling, the recovery sites can become unhygienic. Abandoned dump sites can severely damage the surrounding environment.(26)
In the process of bleaching, harsh chemicals are used that can cause health problems.(5)
The quality of recycled plastic may be substandard and lead to consumers purchasing native plastic.
Impact Classification
What
Recycling facilities, particularly plants to melt and reuse plastics to limit plastic waste and pollution.
Risk
Uganda already has several recycling plants. Moreover, the quality of the recycled plastic is usually poorer and may have limited usability.
Impact Thesis
Avoid negative environmental impacts and extensive energy consumption by recycling and repurposing plastic waste.
Enabling Environment
Policy Environment
Micro, Small and Medium Enterprise Policy: This policy evaluates the situation of micro, small and medium enterprises (MSMEs), their opportunities and challenges as well as policy responses and strategies to overcome bottlenecks.(11)
Uganda National Climate Change Communication Strategy (UNCCCS) 2017 - 2021: This strategy provides an informational structure and establishes a framework for climate-smart use of resources.(15)
National Climate Change Policy: This policy focuses on adaptation, mitigation, research and observation of climate-related issues and risks, arising from, among other things, the use of natural resources.(16)
Clients Charter 2018 - 2022: This charter sets out the framework for cooperation between the Ministry of Water and Environment and private sector actors.(17)
National Environment Act: This Act establishes controls over coordinating, monitoring, regulatory and supervisory activities relating to the environment, and regulations for environment protection and hazard mitigation, including responsibilities and obligations of private sector actors.(19)
Financial Environment
Other incentives: Kampala Capital City Authority provides grants or non-financial support to formal private waste management initiatives, for example through providing the land that they can use to sort and treat waste.(7)
Regulatory Environment
Local Government Act (LGA) of 1997: This Act specifies that responsibility for segregating, collecting and disposing of waste lies with municipal authorities.(8)
Kampala City Act of 2010: This Act determines Kampala City Authority's responsibilities and duties in terms of waste management.(9)
Marketplace Participants
Private Sector
Aquila Investments, CocaCola, Takataka Plastics
Government
Uganda Waste Management and Administration Confederation, National Environment Management Authority
Multilaterals
African Development Bank (AfDB), World Bank, International Finance Corporation (IFC)
Non-Profit
WasteAid
Target Locations
Uganda: Central
Uganda: East Central
References
- (I) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G., Woelm, F. (2020). The Sustainable Development Goals and COVID-19. Sustainable Development Report 2020. Cambridge: Cambridge University Press. (II) Schwab, K. (2016). The Global Competitiveness Report 2015–2016. http://www3.weforum.org/docs/gcr/2015-2016/Global_Competitiveness_Report_2015-2016.pdf (III) National Planning Authority. National Development Plan III (NDPIII) 2020/21 – 2024/25. (IV) Government of Uganda. Uganda Vision 2040. https://consultations.worldbank.org/sites/default/files/materials/consultation-template/materials/vision20204011.pdf (V) Ministry of Works and Transport. Works and Transport Sector Development Plan (WTSDP) 2015/16 – 2019/20. (VI) Ministry of Finance, Planning and Economic Development. Strategic Plan 2016-2021. https://www.finance.go.ug/sites/default/files/Publications/MOFPED%20STRATEGIC%20PLAN%202016_2021%20printed.pdf
- (2) Asiimire. Plastic Waste Is Choking Kampala City.
- (3) Lucy Oates et al. (2019). 'Supporting Decent Livelihoods through Sustainable Service Provision: Lessons on Solid Waste Management from Kampala, Uganda', Coalition for Urban Transitions. https://urbantransitions.global/en/publication/supporting-decent-livelihoods-through-sustainable-service-provision-lessons-on-solid-waste-management-from-kampala-uganda/
- (5) Baltimore Urban Debate League (2012). Recycling. http://budl.org/wp-content/uploads/2012/07/Recycling-Supporting-Docs.pdf
- (6) WasteAID (2018). Mapping the future of waste management in Uganda. https://wasteaid.org/mapping-the-future-of-waste-management-in-uganda/
- (7) Lucy Oates et al. (2019). 'Supporting Decent Livelihoods through Sustainable Service Provision: Lessons on Solid Waste Management from Kampala, Uganda', Coalition for Urban Transitions. https://urbantransitions.global/wp-content/uploads/2019/08/CUT19_frontrunners_kampala_waste_rev.pdf
- (8) Government of Uganda (1997). Local Governments Act of 1997. https://www.ilo.org/dyn/natlex/docs/ELECTRONIC/94558/110993/F966556790/UGA94558.pdf
- (9) Government of Uganda (2010). Kampala Capital City Act 2010. http://extwprlegs1.fao.org/docs/pdf/uga169855.pdf
- (11) Uganda Invest (2016). Micro, Small and Medium Enterprise Policy. https://www.ugandainvest.go.ug/wp-content/uploads/2016/02/Final-MSME-Policy-July-2015.pdf
- (12) WRAP (2009). A financial assessment of recycling mixed plastics in the UK. https://archive.wrap.org.uk/sites/files/wrap/WRAP%20A%20financial%20assessment%20of%20recycling%20mixed%20plastics%20in%20the%20UK.pdf
- (13) Takata Plastics (2019). Drowning in Plastic Waste. https://www.takatakaplastics.com/blog/drowning-in-plastic-the-state-of-plastic-waste-recycling-in-uganda
- (14) Government of Uganda (2018). National Climate Change Communication Strategy 2017 - 2021. http://ccd.go.ug/wp-content/uploads/2018/09/NATIONAL-CLIMATE-CHANGE-COMMUNICATION-STRATEGY_2018.pdf
- (15) Government of Uganda (2020). National Environment (Waste Management) Regulations 2020. https://nema.go.ug/sites/all/themes/nema/docs/National%20Environment%20(Waste%20Management)%20Regulations%20S.I.%20No.%2049%20of%202020.pdf
- (16) Ministry of Water and Environment (2015). National Climate Change Policy 2015. https://www.mwe.go.ug/sites/default/files/library/National%20Climate%20Change%20Policy%20April%202015%20final.pdf
- (17) Ministry of Water and Environment (2018). Clients Charter 2018. https://www.mwe.go.ug/sites/default/files/library/CLIENTS%20CHARTER%202018-2022_0.pdf
- (18) Government of Uganda (2014). Environmental Impact Assessment Regulations 2014. http://faolex.fao.org/docs/pdf/gam177743.pdf
- (19) Government of Uganda (2019). National Environmental Act 2019. https://nema.go.ug/sites/all/themes/nema/docs/National%20Environment%20Act,%202019%20(1).pdf
- (20) PwC analysis based on Prof. A. Damodaran data, 2020.
- (21) Thomson Reuters (2020). Ugandans melt plastic waste into coronavirus face shields. https://news.trust.org/item/20200611002521-u8gf1
- (22) Uganda Water and Juice Manufacturers Association (2018). Vow to amplify plastic recycling in Uganda. https://mushroomincbiz.wordpress.com/2018/02/09/uganda-water-juice-manufacturers-association-visit-plastic-recycling-industries-pri-vow-to-amplify-plastic-recycling-in-uganda/
- (23) Cox, L.C. and De Jong, J. (2020). The 'Garbage Lady' Cleans Up Kampala. https://static1.squarespace.com/static/5984acf0893fc0dc4b2fe0cf/t/5ec446edcbaccc41106cf16c/1589921520727/0026TC+Garbage+Lady+Cleans+Up+Kampala.pdf
- (24) Okwoko, P. (2020). Drowning in Plastic - The State of Plastic Waste Recycling in Uganda. Taktataka Plastics. https://www.takatakaplastics.com/blog/drowning-in-plastic-the-state-of-plastic-waste-recycling-in-uganda
- (25) Ouma, P. (2010). Poor waste management, a challenge to city council. https://www.newvision.co.ug/news/1286519/poor-waste-management-challenge-city-council
- (26) Naveen, B.P., Sumalatha, J. and Malik, R.K. (2018). 'A study on contamination of ground and surface water bodies by leachate leakage from a landfill in Bangalore, India', International Journal of Geo-Engineering. https://link.springer.com/article/10.1186/s40703-018-0095-x