Sewage & Wastewater Treatment Plants
Sewage & Wastewater Treatment Plants
Business Model Description
Construct and operate sewage and waste-water treatment plants, water supply systems and sewerage networks to deliver sustainable solutions for improving water quality, protecting the environment and ensuring public health, while generating revenue through service fees and contracts with government entities or municipalities for the treatment and management of wastewater.
Expected Impact
Mitigate environmental pollution, improve public health, and support sustainable urban development.
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
- Albania: Korçë
- Albania: Durrës
- Albania: Tirana
- Albania: Vlorë
- Albania: Elbasan
Sector Classification
Infrastructure
Development need
Albania's critical infrastructure is susceptible to adverse impacts of climate change, and the process of climate-proofing proves both costly and technically complex. Solid waste and waste-water management lacks an organized system, where most generated wastewater remains untreated and only 10% of urban waste is recycled. Despite the increase in internet usage and penetration of broadband, access to fixed broadband networks remains low, serving 12.6% of the population (3, 4, 5, 6).
Policy Priority
The National Strategy for Development and European Integration 2022-2030, sets the infrastructure priorities as improving rural and urban infrastructure, promoting sustainability, and integrating with European networks, focusing on water supply, maritime transport, ICT, waste management and healthcare (1).
Gender inequalities and marginalization issues
In rural areas, only 57% of the population has access to water services, and a mere 19.6% of agricultural land benefits from irrigation. These water supply challenges and irregular waste collection disproportionately burden women and the Roman and Egyptian communities, leading to substantial losses in time, energy, and income (2, 10).
Investment opportunities introduction
The Albanian government lists the infrastructure sector as a key focus area for attracting foreign direct investments. Transport, telecommunication, infrastructure and urban waste are identified as sectors for strategic investments featuring fiscal and administrative incentives. The total investment for key infrastructure projects as per the Economic Reform Programme 2022-2024, amounts to a substantial USD 5.1 billion (ALL 51 billion) (7, 8, 9).
Key bottlenecks introduction
Limitations of the Public-Private Partnership (PPP) framework in Albania are hindering progress in crucial sectors such as air transport, roads, and Information and Communications Technology (ICT), where existing state of infrastructure is 70-80% behind the EU, ranking 110th of 160 globally on indicators of infrastructure adequacy (10,11).
Utilities
Development need
Albania grapples with significant infrastructure challenges, particularly in water supply, where coverage stands at 80% for both urban and rural areas, and sewerage coverage with treatment facilities remains at 13%. The sector also struggles with high non-revenue water at 67%, despite achieving an 82% collection rate, and of the 9 wastewater treatment plants built, 2 remain non-operational (1, 2).
Policy Priority
The National Strategy of the Water Supply and Sewerage Sector 2020-2030 sets specific targets to enhance water and waste management, aiming for 67.8% sewerage system coverage and 60% waste treatment plant coverage by 2030. The Economic Reform Programme for 2022-24 includes the reform on the water and waste water sector among its key measures (7, 13).
Gender inequalities and marginalization issues
A significant gap persists between rural and urban sewage and wastewater treatment services, where irrigation and drainage systems are hindered by inadequate funding and disjointed administrative management at various levels. Water supply and wastewater treatment deficiencies disproportionately burden women, leading to significant losses in time, energy and income, and exacerbating gender inequalities (2, 12).
Investment opportunities introduction
The Albanian government aims to improve water and wastewater services, encouraging private investment by developing Private Sector Participation models with a guide in progress and 1-2 pilot contracts planned by 2030. Government subsidies including for water supply and sanitation services reached ALL 1.55 billion (USD 16.3 million) in 2021 (7, 13, 14).
Key bottlenecks introduction
The water supply and sewage systems in Albania face significant challenges due to restricted service expansion, limited access to sewage facilities, and inefficient management. Insufficient funding, low tariffs, minimal local government participation, and the lack of economies of scale further exacerbate these issues, impeding the provision of essential services country-wide (1).
Water Utilities and Services
Pipeline Opportunity
Sewage & Wastewater Treatment Plants
Construct and operate sewage and waste-water treatment plants, water supply systems and sewerage networks to deliver sustainable solutions for improving water quality, protecting the environment and ensuring public health, while generating revenue through service fees and contracts with government entities or municipalities for the treatment and management of wastewater.
Business Case
Market Size and Environment
> 25%
Only 50% of households connected to sewerage system, 12 active wastewater treatment plants.
The annual turnover of the volume of water supply, sewerage, waste management and remediation activities increased by 31.3% from 2021 to 2022 and production volume increased by 28.5% during the same period (41).
More than 80% of households in cities and municipalities are connected to the drinking water supply network, compared to barely half of rural households. 50% of households are connected to the sewage system. Only a fraction of the collected wastewater is treated by 12 wastewater treatment plants (42).
Indicative Return
> 25%
The Internal Rate of Return (IRR) for the Water Sector Investment Project of the World Bank in Durres in form of a concessional loan amounting to USD 85.3 million to the Republic of Albania was estimated at 31% (21).
Investment Timeframe
Short Term (0–5 years)
The payback period for the Water Sector Investment Project of the World Bank in Durres, calculated positive returns based on the baseline of 4.1 years, however as this is a concessional arrangement commercial financing can produce longer payback periods expanding to the medium term (21).
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Capital - Requires Subsidy
Business - Supply Chain Constraints
Market - Highly Regulated
Impact Case
Sustainable Development Need
Approximately half of all Albanian households are linked to the sewage system. However, only a small portion of wastewater is treated by 12 wastewater treatment plants, the remainder is discharged untreated into rivers, lakes and the sea (42).
Delayed sewerage system development and inadequate maintenance, combined with small pipes lead to frequent leaks, posing a significant threat to the drinking water network. To safeguard new investments in the sector, addressing the increased frequency of severe flooding and prolonged droughts, attributed to climate change, through adaptation measures is imperative (2, 9, 23).
Albania's PPP legislation is well-established, yet a lack of experience in engaging the private sector, notably in the water sector, has led to past project failures. Urgent action is needed to develop skills and knowledge for successful PPP navigation, ensuring future initiatives in the sector thrive (32).
Gender & Marginalisation
Urban-rural sewage treatment disparities persists; where less than 50% of rural households have drinking water access. Insufficient investment and administrative misalignment plague irrigation and drainage systems (12, 42).
Deficiencies in water supply and wastewater treatment disproportionately affect women, imposing a burden on their time, energy, productivity, and income, particularly for those in rural areas and economically disadvantaged positions (2).
The Roma and Egyptian communities in Albania face significant challenges related to access to basic amenities. A substantial portion of their dwellings lacks access to potable water and proper sanitation facilities, with a considerable percentage living without indoor running water or toilets (2).
Expected Development Outcome
Investments in sewage and wastewater treatment plants will expand Albania's sewerage treatment coverage and elevate public health standards by improving sanitation for the larger population and mitigating the spread of waterborne diseases, fostering a healthier society.
Increased investments in wastewater and sewage treatment facilities will address issue of leaky pipes safeguarding potable water supply and enhance effectiveness of EU-funded infrastructure projects while proactive adaptive measures will ensure the sector's long-term sustainability, fostering climate-resilient water management.
Wastewater and sewage plant investments will reduce the release of wastewater from industrial sites and households, enhancing water and food security and improving public health and overall quality of life.
Gender & Marginalisation
Investments in sewage and wastewater treatment plants will promote equal access to water services across communities, streamlining irrigation and drainage with improved investment and coordination, fostering regional development and agricultural productivity.
Alleviating water supply and treatment challenges through investments in water treatment plants will empower women, especially in rural zones, by saving time and energy, boosting income opportunities, and advancing gender equality through improved health and economic conditions.
Investments in treatment plants will enhance water and sanitation access for Roma and Egyptian communities in Albania, improving their living conditions, reducing health risks and fostering social inclusion for some of the most vulnerable populations in the nation.
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
6.3.1 Proportion of domestic and industrial wastewater flows safely treated
6.4.1 Change in water-use efficiency over time
6.4.2 Level of water stress: freshwater withdrawal as a proportion of available freshwater resources
Proportion of population using safely managed drinking water services reached 70.74% in 2022 (33).
Increasing access of the population to be connected to the sewerage system is projected to reach 60.9% by the end of 2025 and 67.8% by 2030 (13).
In 2021, the proportion of safely treated domestic wastewater flows was 19.47% (33).
In 2020, the Water Use Efficiency was 12.1 USD per cubic meter (33).
In 2020, the level of water stress in Albania, as measured by freshwater withdrawal as a proportion of available freshwater resources, was 4.72% (33).
The ultimate target is to ensure safe and sustainable drinking water services for all citizens by the year 2030 (13).
The goal is to increase access to safe and high-quality water supply for the population, with a target of reaching 81.4% by 2025 and 85.5% by 2030 (13).
N/A
N/A
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)
In Albania in 2019, the mortality rate attributed to unsafe water, unsafe sanitation, lack of hygiene, and related causes, including diarrhoea, intestinal nematode infections, malnutrition, and acute respiratory infections, was 3.23 deaths per 100,000 population (33).
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Outcome Risks
Wastewater management's environmental impacts depend on chosen technology and methods. Inadequate treatment can cause pollution, soil contamination, and harm aquatic ecosystems (24).
Certain wastewater treatment methods are energy-intensive, potentially raising greenhouse gas emissions. Energy needs, especially in large systems, can create environmental and economic risks (24).
Sludge treatment in wastewater management involves concerns such as heavy metal contamination, disposal, and potential landfill gas emissions, posing health and environmental risks (24).
Impact Risks
The water sector in Albania, both nationally and locally has challenges such as deficiencies in the capacity of managerial staff to run utilities efficiently, regulatory framework weaknesses and the absence of comprehensive asset documentation (21).
Aging infrastructure, inadequate investments and poor maintenance, pose risks to service quality and long-term sustainability. Partial rehabilitation of wastewater networks can result in frequent blockages at pumping stations, and lead to flooding (13, 21).
Low household water metering at 45% encourages wastage and complicates billing accuracy. Consumers often dispute norm-based bills, preferring actual usage charges, affecting utility revenues and resource management (21).
The effects of climate change, such as extreme weather events, including floods, can damage infrastructure and lead to the disruption of water supply and hygiene services (1).
Gender inequality and/or marginalization risk: Inadequate gender diversity in the water sector, with few women in technical roles and biased recruitment practices, hinders perspectives, sector potential, and fosters inequalities, limiting workforce effectiveness (36).
Impact Classification
What
Wastewater and sewerage sector development in Albania aims to improve water quality, sanitation, and environmental protection.
Who
Residents, especially in rural areas, benefit from clean water and sanitation. Workers in the sector gain employment opportunities.
Risk
Inadequate funding and management pose challenges. Climate change impacts threaten infrastructure.
Contribution
Enhanced sanitation and access to clean water improve public health and environmental sustainability in line with the targets of the National Strategy of the Water Supply and Sewerage Sector (13).
How Much
The sector aims to expand coverage from 13% to 67.8%, fostering economic growth and environmental protection (13).
Impact Thesis
Mitigate environmental pollution, improve public health, and support sustainable urban development.
Enabling Environment
Policy Environment
National Strategy of the Water Supply and Sewerage Sector, 2020-2030, 2018; sets specific targets to enhance water and waste management, aiming for 67.8% sewerage system coverage and 60% waste treatment plant coverage by 2030 (13).
National Strategy of Water Resources Integrated Management, 2018-2027, 2018; prioritizes balanced water consumption aligned with EU and national laws, ensuring good water quality, addressing water-related risks for all stakeholders, providing reliable water information through trusted institutions, and optimizing overall water management with a focus on long-term benefits and environmental considerations (28).
National Strategy for Development and European Integration 2022-2030: envisions a reliable nationwide supply for water supply, waste water removal and treatment that meets the needs for economic development while preserving and protecting the environment, and human health and safety (1).
Economic Reform Programme 2022-2024, 2022: includes reform on the water and waste water sector among the key reform measures until 2023, while projecting expenditures for subsidies partially directed to support the water and sanitation sector having reached ALL 1.55 billion (USD 16.3 million) (7).
Financial Environment
Financial incentives: The Water Sector Performance and Investment Programme phase V requires an investment of approximately USD 5.38 billion by 2040 to enhance water infrastructure in up to 10 municipalities. The initiative is backed by grants totalling around USD 51.67 million, alongside a KfW loan of about USD 86.02 million. Albania's contribution to the project is approximately USD 6.45 million (29).
Other incentives: The Greater Tirana Sewerage Project, supported by JICA, aims to upgrade the area's sewerage system to reduce Lana River pollution and improve local sanitation and living conditions (30).
Regulatory Environment
Law no. 8102, On the Regulatory Framework of The Water Supply Sector and the Removal and Processing of Wastewaters, 1996: sets rules for water supply in Albania, creates a regulatory agency, and encourages private investments while applying to all water-related activities (14).
Law No.111/2012, On the Integrated Management of Water Resources, 2012; aims to safeguard and enhance the water environment and resources, promoting their responsible utilization, equitable allocation, prevention of contamination, and the creation of necessary central and local institutions to enforce national management and administrative policies (27).
Law no. 125/2013 On Concessions and Public Private Partnership, April 2013 (amended 2019): abolishes the 2006 Law no. 9663 on Concessions, provides that changes in the ownership or the management of the Special Purpose Vehicle (SPV) are subject to the approval of the contracting authority and the Ministry of Finance, unless such changes are due to trading of shares in a regulated capital market (26).
Law No. 9115, On the Environmental Treatment of Polluted Waters, 2003; aims to protect the environment and human health from the negative impacts of polluted waters, establishing environmental treatment regulations and obligations for polluters, addressing urban polluted waters, industrial polluted waters, agricultural land runoff waters, and polluted waters of all kinds (13).
Marketplace Participants
Private Sector
Alba Konstruksion Ltd, Gener 2, Berlin Wasser, AquaMundo, AlbStar, Vatek Environmental Technologies, Ecoplast, Albesol, Tirana Water Company, GPG Company, Sterkaj, Joint Stock Company Water Supply and Sewerage Korce JSC.
Government
Water Resource Management Agency, The National Water Council, Ministry of Infrastructure and Energy, Ministry of Tourism and Environment, Ministry of Health, Water Regulatory Authority, Ministry of Health and Social Protection, Water Basin Councils, The National Agency of Water Supply, Sewerage and Waste Infrastructure.
Multilaterals
The World Bank, Western Balkans Investment Framework (WBIF), KfW Development Bank, The Swiss State Secretariat for Economic Affairs (SECO), European Investment Bank (EIB), European Environment Agency (EEA), European Bank for Reconstruction and Development (EBRD), UNECE, UNDP, Japan International Cooperation Agency.
Non-Profit
EcoAlbania, Sustainable Environment Albania (SEA), The Water Supply and Sewerage Association of Albania (SHUKALB).
Public-Private Partnership
In 2002, Berlin Wasser International, with support from KfW Bankengruppe, was granted a concession contract by the Elbasan city as the water provider, which concluded after two years. Subsequently, in 2003, AquaMundo secured a management contract for Kavaja city (37).
Target Locations
Albania: Korçë
Albania: Durrës
Albania: Tirana
Albania: Vlorë
Albania: Elbasan
References
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- (2) European Commission. 2014. Support to Water Management. https://neighbourhood-enlargement.ec.europa.eu/system/files/2017-04/ipa_2016-038718-5_support_to_water_management.pdf
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