Ship Waste Reception Facilities
Ship Waste Reception Facilities
Business Model Description
Engage in Public-Private Partnership (PPP) deals to offer waste disposal in Djibouti's ports according to the International Convention for the Prevention of Pollution from Ships (MARPOL) and local regulations to achieve high environmental standards amid increasing maritime trade. Recycling activities shall accompany waste disposal processes with possibility of biogas or energy production. Cost of waste collection services might be included in the harbour fee, hence collected indirectly, or with "polluters pay" principle, according to use of services by a certain container.
Expected Impact
Prevent marine pollution in Djibouti's coastline, favor waste-to-energy models and serve the region by protecting the resources of Red Sea and Gulf of Aden.
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
- Djibouti: Djibouti (City)
- Djibouti: Arta
- Djibouti: Tadjourah
Sector Classification
Transportation
Development need
Djibouti's growth is driven by maritime transportation and mega projects that envisage creating a major hub with multi-modal infrastructure in East Africa by 2035. Although the country's SDG 9 performance is low with a score slightly above 25 (out of 100) in 2021 (1), its Logistics Performance Index score rose to 2.63 out of 5 in 2018, up by 44 places compared to 2016 (2).
Policy priority
The Horn of Africa Initiative was launched during the World Bank / International Monetary Fund Annual Meeting 2019. Member States (Djibouti, Ethiopia, Kenya, Somalia and Eritrea) structure key programmes around four pillars, including "Interconnected Horn" (3). Djibouti plans to spend USD 15 billion over the next five years to build and improve its infrastructure network (4).
Gender inequalities and marginalization issues
Women's exposure to informal employment in non-agricultural employment is very high (84%) (5). Investment in transportation may lower the risk by providing increased and safer mobility as well as formal employment opportunities for women. Marginalization of youth is characterized by the age divide between population median age and age of people in leadership positions (6), and share of youth not in education, employment or training (31.8% in 2019) (7).
Investment opportunities introduction
Djibouti's Vision 2035 gives policy momentum to maximize the country's strategic position in the transportation sector. The Great Horn Investment Holding targets USD 15 billion investment in transportation (4). Regional Infrastructure Connectivity projects will attract USD 1.6 billion by 2021 to develop Economic Corridors in the region (26).
Key bottlenecks introduction
In order to promote accountable and sustainable development of the transportation sector, Djibouti requires to set clear monitoring processes for port authorities, support policymaking effort at national (and local) level and avoid customer concentration in port services (8). Active (or latent) conflicts in nearby regions pose a threat to continuity of trade services.
Marine Transportation
Development need
Djibouti's transportation sector traditionally accounts for 35% of GDP (9). Serving Ethiopia gives the Port of Djibouti a vast hinterland, and an increasing port traffic (30% growth in 2020) (10), both of which require supplementary facilities and diversified transportation services to manage contamination from maritime activity and ensure sustainable growth of maritime trade.
Policy priority
The Vision 2035 and Great Horn Investment Holding (GHIH) set Djibouti International Free Trade Zone to be the largest in Africa and forecast to receive USD 3.5 billion investment. Djibouti International Container terminal will boost investment by USD 635 million. Djibouti Shipping Company and Red Sea Bunkering extend services to revitalize Djibouti's role in global trade (11).
Gender inequalities and marginalization issues
Djibouti should sustain equal opportunities for women and men concerning trainings and jobs aimed at developing technical and mechanical skills in transportation sector. Developing transport infrastructure will improve women's access to education, health care, decent employment opportunities and economic resources (12). Djibouti is a member country in WOMESA, launched by International Maritime Organisation (IMO) in 2007 under Integration of Women in the Maritime Sector (13).
Investment opportunities introduction
The Government policy vests on Djibouti's main asset, its port, to sustain economic growth. The Djibouti Ports & Free Zones Authority and the Great Horn Investment Holding seek to attract USD 3.5 billion. The project covers the construction of a container terminal, ship repair yard, and development of port community system (11).
Marine Transportation
Pipeline Opportunity
Ship Waste Reception Facilities
Engage in Public-Private Partnership (PPP) deals to offer waste disposal in Djibouti's ports according to the International Convention for the Prevention of Pollution from Ships (MARPOL) and local regulations to achieve high environmental standards amid increasing maritime trade. Recycling activities shall accompany waste disposal processes with possibility of biogas or energy production. Cost of waste collection services might be included in the harbour fee, hence collected indirectly, or with "polluters pay" principle, according to use of services by a certain container.
Business Case
Market Size and Environment
1.1 million TEU containers per year
Djibouti records significant container port traffic. It handles 1.1 million twenty-foot equivalent unit (TEUs) containers each year in its ports (10).
Indicative Return
20% - 25%
Based on estimates from feasibility studies in Southeast Asia, since regional examples are limited, indicate an IRR of approximately 20% (19).
Investment Timeframe
Medium Term (5–10 years)
Construction of port reception facilities takes less than five years, exemplified by the Haydarpasa facility in Istanbul, Turkey (37). Lease agreements for vessels to be used in waste collection, integration with waste-to-energy plants, and development of the project may increase the timeframe.
Ticket Size
USD 1 million - USD 10 million
Market Risks & Scale Obstacles
Business - Business Model Unproven
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
Ship-generated marine litter is the major source of marine litter worldwide, interfering with navigation and presenting a threat to human life and safety, as is the case in Djibouti with is vast sea access and long coastlines (30).
To address the problem of ship-generated marine litter, there is a strong need for the introduction of marine litter management policies and systems that cover issues from marine litter management onboard and reception of litter via reception facilities in ports and marinas to its final treatment (30).
Djibouti is a signatory of the Convention for the Prevention of the Pollution from Ships (MARPOL) requiring it to implement the capacity to treat waste from ship in accordance with convention standards (36).
Gender & Marginalisation
Coastal communities that are highly affected by marine pollution, limited participation of women in maritime sector and high youth unemployment require improvements in Djibouti's key maritime trade activity.
Expected Development Outcome
Djibouti ensures sustainable port activity based on global standards in transshipment and as required by the International Convention for the Prevention of Pollution from Ships (MARPOL), which serves regional cooperation with Horn of Africa Initiative Member States by protecting the sea.
Implementation of the MARPOL convention not only helps reduce the quantity of pollutants in the Red Sea and Gulf of Aden, but also supports the improvement of the quality of the air in the region through the ratification of Annex VI, which is aimed at preventing air pollution from ships (35).
The expected decrease in marine pollution resulting from maritime trade in Djibouti facilitates protection of marine ecosystem and biodiversity.
Gender & Marginalisation
Improvement of port reception facilities increases opportunities for women in maritime sector, as well as for youth. Coastal communities benefit from decreased marine pollution.
Primary SDGs addressed
8.5.2 Unemployment rate, by sex, age and persons with disabilities
Unemployment rate in Djibouti is 11.5% (of total labour force) in 2020 and has been above 10% since the 1990s, as per the International Labour Organisation (ILO). National estimates record significantly higher rates of unemployment, the latest being 26% in 2017 (35).
The Government's growth projection in Vision 2035 aims to create 200,000 new jobs between 2013 and 2035 (24).
9.1.2 Passenger and freight volumes, by mode of transport
Djibouti's container traffic grew by 30% in 2020 and reached 1.1 million TEUs (10). Its current port reception facilities and related services do not meet the know-how, equipment and vessels required by transhipment potential of the port.
Collection of garbage and waste from each vessel that visits the port.
14.1.1 (a) Index of coastal eutrophication; and (b) plastic debris density
There are at least 890 animal species and 17 plant species in Djiboutian waters (22).
Conservation of current marine ecosystem by avoiding waste via collection of garbage, oil and liquid substances outlined in International Convention for the Prevention of Pollution from Ships (MARPOL) convention.
Secondary SDGs addressed
Directly impacted stakeholders
People
Planet
Corporates
Public sector
Indirectly impacted stakeholders
Gender inequality and/or marginalization
Outcome Risks
Waste build up in the ship waste reception facilities due to operational failure may result in environmental hazards and health danger to people, if not managed.
Impact Risks
Limited operational experience and trained personnel in handling waste from vessels may limit expected impact.
Investors may refrain from new entrant costs associated with building a fleet with the capacity required to realise large-scale impact.
To date, collection facilities have not been adequate to support maritime activity and tourism opportunities, such as diving (29).
Impact Classification
What
Ship waste reception facilities prevent marine pollution in Djibouti's coastline, favor waste-to-energy models and serve the region by protecting the resources of Red Sea and Gulf of Aden.
Who
People and maritime ecosystems in and around Djibouti City, and along the country's 300 km coastline, benefit from protected maritime resources favouring habitats and creating opportunities.
Risk
While the model of ship waste reception facilities is proven, costs related to purchasing, lease and operational costs of running waste collection vessels require consideration.
Impact Thesis
Prevent marine pollution in Djibouti's coastline, favor waste-to-energy models and serve the region by protecting the resources of Red Sea and Gulf of Aden.
Enabling Environment
Policy Environment
Vision Djibouti 2035, 2014: As the strategic framework for development planning by the Government of the Republic of Djibouti, the key premises of the country's development trajectory are analyzed with respect to being a regional maritime outlet (24).
Strategy for Accelerated Growth and Employment Promotion (SCAPE) 2015-2019, 2015: Accentuates the prominent role of transportation in the country's economy and growth strategy (25).
Horn of Africa Initiative Ministerial Roundtable, 2021: Joint Presentation by the African Development Bank, the European Union and the World Bank covers key messages and pillars for the regional development scheme, which includes infrastructure and marine waste management (26).
Financial Environment
Financial incentives: The World Bank announced support of USD 2 billion to the Horn of Africa through a lending programme under IDA19, which is the World Bank’s concessional financing window that provides low or no-interest loans and grants to the world’s poorest countries (33).
Fiscal incentives: Djibouti's Investment Code specifies three preferential regimes: Regime A, Regime B and Free Zone Code. The latter favours 100% foreign ownership, free repatriation of capital and profits, exemption from corporate and income tax, and flexibility to employ foreign nationals (32).
Regulatory Environment
International Convention for the Prevention of Pollution from Ships (MARPOL) 73/78, 1983: One of the key international conventions covering maritime pollution, which is ratified by Djibouti (27).
Plan Polmer, 2010: National Oil Spill Contingency Plan Against Accidental Marine Pollution by Hydrocarbons and Hazardous and Potentially Hazardous Substances (28).
Law No. 45, 2004: Explores creation of marine protected areas (31).
Law No. 186, 2017: Establishes Djibouti's Public-Private Partnership Act, following the Executive Decision No. 045 of 2016 to establish a Committee on the creation of a national legal and regulatory framework of 2016 (8).
Marketplace Participants
Private Sector
Great Horn Investment Holding (GHIH), Oil Spill Preparedness and Response Consultants (OTRA).
Government
Djibouti Ports & Free Zones Authority (DPFZA).
Multilaterals
African Development Bank (AfDB), European Union (EU), World Bank (WB), International Maritime Organisation (IMO), Agence Française de Développement (AFD).
Target Locations
Djibouti: Djibouti (City)
Djibouti: Arta
Djibouti: Tadjourah
References
- (1) Djibouti in Sustainable Development Report. 2021. https://dashboards.sdgindex.org/static/profiles/pdfs/SDR-2021-djibouti.pdf.
- (2) World Bank LPI Country Score Card: Djibouti. 2018. https://lpi.worldbank.org/international/scorecard/radar/254/C/DJI/2018#chartarea.
- (3) Horn of Africa Initiative, Key Priority Projects to Deepen Regional Integration. 2020. https://hoainitiative.org/wp-content/uploads/2020/11/HoA-Initiative-KEY-PRIORITY-PILLARS-Brochure_FINAL.pdf.
- (4) Great Horn Investment Holding. Chairman's Speech. 2020. http://www.ghih.dj/about-ghih.
- (5) UN Women Country Profile, SDG 8. 2021. https://data.unwomen.org/country/djibouti.
- (6) Financial Times. June 2021. https://www.ft.com/content/b9198e0f-379c-4c80-9171-58e1c820e655.
- (7) ILOSTAT. ILO Modelled Estimates, 2019. https://www.ilo.org/shinyapps/bulkexplorer55/?lang=en&segment=indicator&id=EAP_2WAP_SEX_AGE_RT_A.
- (8) World Bank Group and UKAid, December, 2018. Port Development in East and Southern Africa: Prospects and challenges. Volume 2: Country and Port Fact Sheets and Projections. 2018. https://documents1.worldbank.org/curated/en/963231561663013431/pdf/Country-and-Port-Fact-Sheets-and-Projections.pdf.
- (9) World Trade Organisation (WTO). Trade Policy Review on Djibouti. 2014. https://www.wto.org/english/tratop_e/tpr_e/s305_e.pdf.
- (10) The Africa Report. 2021. https://www.theafricareport.com/71258/djibouti-is-sailing-along-without-dp-world.
- (11) Djibouti Ports & Free Zones Authority & Great Horn Investment Holding, Worldwide Connection, Presentation. July 2021.
- (12) Task Force on Transport and Connectivity. Towards an enhanced Africa-EU. 2020. https://africa-eu-partnership.org/en/stay-informed/publications/report-task-force-transport-and-connectivity.
- (13) Women in the Maritime Sector in East and Southern Africa (WOMESA). Kenya Chapter. 2021. http://ke.womesa.org.
- (14) National Environment Agency (Singapore), Power Plant Brochure. 2020. https://www.nea.gov.sg/docs/default-source/our-services/tip-brochure.pdf.
- (15) National Environment Agency (Singapore), Power Plant Brochure. 2020. https://www.nea.gov.sg/docs/default-source/our-services/tip-brochure.pdf.
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- (17) Istanbul Metropolitan Municipality. ISTAC. 2020. https://www.istac.istanbul/en/clean-istanbul/our-services/ship-waste-disposal.
- (18) Istanbul Metropolitan Municipality, ISTAC. Annual Report. 2020. https://istac.istanbul/contents/11/raporlar_132720163791782236.pdf.
- (19) ASRO Journal. Feasibility Study of the Reception Facility Development of Tanjung Perak Branch Surabaya. 2019. http://www.asrojournal-sttal.ac.id/index.php/ASRO/article/view/87.
- (20) International Maritime Organisation (IMO). Status of Conventions. 2021. https://www.imo.org/en/About/Conventions/Pages/StatusOfConventions.aspx.
- (21) Regional Organization for the Conservation of the Environment of the Red Sea and Gulf of Aden (PERSGA). About Us. 2021. http://persga.org/about-us.
- (22) UNDP, Centre De Presse. 2021. https://www.dj.undp.org/content/djibouti/en/home/news-centre/news/Environnement.html.
- (23) The Permanent Mission of the Republic of Djibouti to the United Nations. Country Facts. 2020. https://www.un.int/djibouti/djibouti/country-facts.
- (24) Republic of Djibouti. Vision Djibouti 2035. 2014. http://ccd.dj/w2017/wp-content/uploads/2016/01/Vision-Nationale.pdf.
- (25) Strategy of Accelerated Growth and Promotion of Employment (SCAPE), 2015-2019. 2014. https://economie.gouv.dj/wp-content/uploads/SCAPE-en-anglais.pdf.
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- (27) International Convention for the Prevention of Pollution from Ships (MARPOL) 73/78. Ratifying Countries.2021. https://treaties.un.org/pages/showDetails.aspx?objid=0800000280291139
- (28) Plan Polmer, March. 2010. https://www.informea.org/sites/default/files/imported-documents/Djibouti_Oil_Cont_Plan.pdf.
- (29) World Bank. Transport and logistics in Djibouti: contribution to job creation and economic diversification. 2013. https://openknowledge.worldbank.org/bitstream/handle/10986/13245/751450ENGLISH00t0Logistics0P127403.pdf?sequence=1&isAllowed=y.
- (30) UNEP and IMO. Guidelines for providing and improving port reception facilities and services for ship-generated marine litter in the Northwest Pacific region. N.D. https://wedocs.unep.org/bitstream/handle/20.500.11822/26160/guidelineprovideportrec.pdf?sequence=1&isAllowed=y.
- (31) Loi n°45/AN/04/5ème. 2004. https://www.presidence.dj/PresidenceOld/LES%20TEXTES/loi45an04.htm.
- (32) Republic of Djibouti. Free Zone Code Incentives. 2020. https://dpfza.gov.dj/facilities/Free-trade-area/djibouti-free-zone,detailed in https://research.hktdc.com/en/article/MzU3MDc0MTQw.
- (33) Horn of Africa Initiative, June 2021. World Bank prioritizes the Horn of Africa in its approach for regional integration in Africa. 2021. https://hoainitiative.org/world-bank-prioritizes-the-horn-of-africa-in-its-approach-for-regional-integration-in-africa.
- (34) International Maritime Organisation (IMO). 2021. https://www.imo.org/en/MediaCentre/Pages/WhatsNew-1632.aspx.
- (35) World Bank. Unemployment Rate, Djibouti. 2021. https://data.worldbank.org/indicator/SL.UEM.TOTL.NE.ZS?locations=DJ.
- (36) Japan International Cooperation Agency (JICA). The Preparatory Survey on the Project for Reinforcement of Maritime Transport Capacity Between Djibouti and Tadjourah. 2019. https://openjicareport.jica.go.jp/pdf/12325890.pdf.
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