Sewage treatment and sanitary services
Sewage treatment and sanitary services
Business Model Description
Construct and operate small-scale sewage treatment plants, and provide affordable services with sewage and sanitary trucks for solid waste extraction and public latrines in densely inhabited areas.
Expected Impact
Contribute to safe living conditions and improved livelihood opportunities.
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
- Rwanda: Kigali
- Rwanda: Western Province
- Rwanda: Northern Province
Sector Classification
Infrastructure
Development need
The country significantly underscored in SDG 9 - Industry, Innovation and Infrastructure, SDG 7 - Affordable and Clean Energy, SDG 11 - Sustainable Cities and Communities and SDG 6 - Clean Water and Sanitation.(1) Rwanda faces high costs of logistics and long transport times due to its relatively poor supply chains.(2) As infrastructure improves overall productivity of the economy, it will be the key driver for enhancing Rwanda’s sustainable development and economic growth.(3)
The country significantly underscored in SDG 9 - Industry, Innovation and Infrastructure, SDG 7 - Affordable and Clean Energy, SDG 11 - Sustainable Cities and Communities and SDG 6 - Clean Water and Sanitation.(I) Rwanda faces high costs of logistics and long transport times due to its relatively poor supply chains.(1) As infrastructure improves overall productivity of the economy, it will be the key driver for enhancing Rwanda’s sustainable development and economic growth.(2)
Policy priority
Rwanda's industrial sector accounts for approximately 15% of gross domestic product (GDP), making it a crucial component of the national economy.(4) The government recognizes the construction materials industry is facing several constraints arising from the infrastructural gap, which makes building products relatively expensive.
Gender inequalities and marginalization issues
Developing a gender-responsive infrastructure is a key element to accelerate poverty reduction efforts and economic growth. Infrastructure projects in transport, energy, water and sanitation not only reduce the time and labor burden of women and girls, but can also improve their level of mobility, productivity and access to markets.(36)
Investment opportunities introduction
The growing population, accompanied by rural-urban migration, will require heavy investment in urban planning and development (sanitation, waste management, low cost housing, electric supply and information and communication technology (ICT) connectivity.(3)
Key bottlenecks introduction
Limited physical infrastructure, constrained by hilly and mountainous topography, remains a major challenge for producers and farmers in increasing their access to markets, enhancing competitiveness, and improving incomes and livelihoods. It also negatively influences the pace of structural transformation.(2)
Waste Management
Policy priority
Ensuring high standards of living for all citizens, improved quality of life, modern infrastructure and transformation for prosperity is an overarching goal of Rwanda's Vision 2050. The water and sanitation sector plays a critical role in its achievement.
Waste Management
Pipeline Opportunity
Sewage treatment and sanitary services
Construct and operate small-scale sewage treatment plants, and provide affordable services with sewage and sanitary trucks for solid waste extraction and public latrines in densely inhabited areas.
Business Case
Market Size and Environment
Less than 0.2% of Kigali's 370,000 households is served with reliable sewerage systems.
Of the 370,000 households in Kigali (9), less than 0.2% is served with reliable sewerage systems. At 2015, there were 3 low-scale sewerage systems in Kigali, which served approximately 700 households.(10)
Currently, the majority of the wastewater generated by Kigali’s 1.2 million inhabitants is disposed of in sceptic tanks or pit latrines. Kigali also has several modern housing or industrial estates that are equipped with small, decentralized waste stabilization ponds.(10)
Over 75% of water consumed in Rwanda ends up as waste, even though it can be purified and reused and therefore reduce pressure on the natural environment as well as on Rwandans' bills.(11)
Indicative Return
15% - 20%
The estimated return rate for investor ranges from 17.1% to 21.1%. The rate provided is a benchmark based on a cost of equity with a country risk premium, reflecting an average return required by investors active in the water utilities subsector.
Investment Timeframe
Medium Term (5–10 years)
The payback period for an example from another context was 3 years. (13) Accounting for the construction period of the plant, the investment timeframe should be considered as medium.
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Business - Supply Chain Constraints
Business - Business Model Unproven
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
At 2017, 66.6% of Rwanda's population was using at least basic sanitation services.(16)
Around 80% of diseases in Rwanda are water-borne and can be prevented through proper sanitation and access to clean, non-contaminated water.(5)
Discharge of wastewater into water basins causes dangerous contamination, which contributes to many fatal water-borne diseases.(7)
Gender & Marginalisation
Infrastructure projects in water and sanitation help reduce the time and labor burden of women and girls.(36)
Expected Development Outcome
Improved sanitary and water, sanitation and hygiene (WASH) conditions in highly populated areas, improved of clean water access., increased access to affordable sanitary services
Reduced pollution of the natural environment and reduced pollution of lakes and rivers due to improper disposable of sewage waste
Reduced cases of poisonings and diarrhea arising from drinking dirty water, and reduced spread of water-transferred diseases like cholera and typhoid fever
Gender & Marginalisation
Investments could reduce the time and labor burden of women who spend a lot of time accessing clean water
Increased quality of life and wellbeing of unserved areas
Primary SDGs addressed
1.4.1 Proportion of population living in households with access to basic services
Food market: 50.0 (min) Primary school: 25.4 (min) Secondary school: 35.7 (min) Health center: 49.9 (min) (32)
N/A
3.9.2 Mortality rate attributed to unsafe water, unsafe sanitation and lack of hygiene (exposure to unsafe Water, Sanitation and Hygiene for All (WASH) services)
82.4 deaths per 100,000 people (33)
N/A
6.1.1 Proportion of population using safely managed drinking water services
6.3.1 Proportion of domestic and industrial wastewater flows safely treated
6.3.2 Proportion of bodies of water with good ambient water quality
87.4% (34)
N/A
15% (34)
100% (35)
N/A
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Planet
Corporates
Indirectly impacted stakeholders
Public sector
Outcome Risks
If a chemical water filtration method is applied, disinfection byproducts may contaminate the environment.(17)
The lifecycle of a new water purification system may have a negative environmental impact. Precautionary measures should be taken during the project planning and execution phase.(18)
The risk micro-organisms present in wastewater (e.g. Escherichia, Salmonella) get in to sewage sludge and survive up to few months should be addressed.(19)
Impact Risks
Unexpected impact risk given the negative implications of wastewater if required precautions are not taken
Impact Classification
What
Construction of sewage treatment facilities, which limits spread of water-borne diseases and ensures higher environmental and living standards for Rwanda's population.
Who
Urban population, municipal authorities and the national environment which can positively benefit from this type of investment, and indirectly Rwandan citizens.
Risk
Without necessary precautions, investment may cause health hazards and environmental degradation. Centralized sewage facilities require financial, material and human resources.
Impact Thesis
Contribute to safe living conditions and improved livelihood opportunities.
Enabling Environment
Policy Environment
National Sanitation Policy Implementation Strategy 2016: This strategy determines the government's goals and targets regarding sanitation and identifies implementing sewerage systems as a strategic action.(20)
Water and Sanitation Sector Strategic Plan 2018-2024: This plan establishes a strategic framework for implementing sludge emptying services and sewerage systems.(6)
Vision 2050: This policy states that modern sanitation sewer and management services (including connection to sewer networks) for all households in urban areas shall be established by 2050. In rural areas, households will be provided with access to standardized on-site sanitary systems.(21)
WATSAN 2019-20 Forward Looking Joint Sector Review: This review prioritizes increased households access to basic sanitation (from 66% to 75%) and increased percentage of urban households using safely managed sanitation services (by 5% compared with the baseline) by 2019-20.(22)
National Strategic Transformation (NST 1): This strategy identifies scaling up access to sanitation and hygiene for all citizens to 100% (including constructing Kigali's centralized sewerage system and faecal sludge treatment plant) as a key strategic intervention.(23)
Financial Environment
Fiscal incentives: Registered investors are exempt from the capital gains tax. Imported machinery and raw materials are exempt from duty tax in line with East African Community Customs Management Act Regulation. The tax authority can issue a Withholding Tax Certificate to avoid double taxation of investors.(31)
Other incentives: Investors receive an accelerated depreciation rate of 50% in the 1st year of operations, if they invest in business assets worth at least USD 50,000 each and construction projects of at least USD 1.8 million. If they invest at least USD 250,000, they can recruit 3 foreigners without a labor test.(31)
Regulatory Environment
Law N°48/2018 of 13/08/2018 on Environment: This Act governs utilization and protection of water resources, liquid waste management, management of toxic and hazardous waste, water and sanitation. It also lists prohibited acts and sanctions for non-compliance with environmental regulations.(24)
Organic Law n° 04/2005 of 08/04/2005: This law determines the modalities for protecting, conserving and promoting environment in Rwanda.(25)
Regulation N°004/R/SAN-EWS/RURA/2016 of 10/11/2016 Governing Decentralized Waste Water Treatment Systems: This regulation provides the procedure for licensing of operators, requirements of water systems, obligations of operators, and sanctions for non-compliance with the regulation.(26)
Regulations No 005/R/SAN-EWS/RURA/2016 Governing Liquid Waste Collection and Transportation: These regulations establish a licensing regime for waste collectors and transporters and requirements for waste collection and transportation. They also provide modalities for reporting, monitoring, compliance and sanctions.(26)
Ministry of the Environment is the main regulatory body responsible for legislation relating to protecting water resources and environment in general.(23)
The Rwanda Water and Forestry Authority regulates issues related to managing water resources, and establishes policies to support the segment.(21)
Rwanda Utilities Regulatory Authority issues licenses for utilities operators and establishes guidelines for operators.(30)
Marketplace Participants
Private Sector
KAMPS, Water and Sanitation Corporation (WASAC), European Investment Bank (EIB), African Development Bank (AfDB), KfW Development Bank
Government
Rwandan Ministry of Infrastructure (MININFRA), Rwandan Ministry of Health (MOH), Rwanda Development Board (RDB)
Multilaterals
World Bank (WB)
Non-Profit
United Nations Human Settlement Programme (UN Habitat), United States Agency for International Development (USAID), German Corporation for International Cooperation (GIZ)
Target Locations
Rwanda: Kigali
Rwanda: Western Province
Rwanda: Northern Province
References
- (1) 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.
- (2) Ministry of Infrastructure. Draft Final Transport Sector Strategic Plan for the National Strategy for Transformation (NST1) 2018
- (3) Gatete, C. (2016). The Rwanda we want: Towards ‘Vision 2050’. https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Speeches/Hon_Gatete_Umushyikirano_Presentation_2016.pdf
- (4) Ministry of Infrastructure. Housing Sub-Sector. https://www.mininfra.gov.rw/index.php?id=269&L=4%22
- (5) International Network on Household Water Treatment and Safe Storage. Water Safety and Related Impacts in Rwanda. http://hwts.web.unc.edu/files/2014/08/2011Entebbe_Day1_06_Nsagiyaomba.pdf
- (6) Ministry of Infrastructure. Water and Sanitation Sector Strategic Plan 2018 - 2024. https://www.mininfra.gov.rw/fileadmin/user_upload/WATSAN_SSP_2018_-2024.pdf
- (7) United Nations International Children's Emergency Fund. Water, sanitation and hygiene. https://www.unicef.org/rwanda/water-sanitation-and-hygiene
- (8) UN Water. SDG 6 Data. https://www.sdg6data.org/country-or-area/Rwanda
- (36) African Development Bank (2008). Gender assessment: progress towards improving women’s economic status. https://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/rwanda.pdf
- (9) Bower, J. and Murray, S. (2019). Housing need in Kigali: Findings and policy reflections. https://www.theigc.org/wp-content/uploads/2019/07/Bower-Murray-2019-Policy-brief.pdf
- (10) Rwirahira, R. (2018). Can Rwanda’s government avert Kigali’s sewage time bomb? Equal Times. https://www.equaltimes.org/can-rwanda-s-government-avert?lang=en#.X7finmhKhPa
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- (12) World Bank (2017). Implementation completion and results report on Sarajevo waste water project. http://documents1.worldbank.org/curated/en/904151521734042116/pdf/implementation-completion-and-results-report-icr-document-P090675-var26-03192018.pdf
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