Waste reuse solutions
Waste reuse solutions
Business Model Description
Provide landfill diversion solutions for organic and liquid waste, such as closed-loop waste-to-energy systems.
Expected Impact
Promote sustainable waste management and contribute to healthy environments and safe livelihoods.
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
- South Africa: Western Cape
- South Africa: Gauteng
Sector Classification
Infrastructure
Development need
South Africa faces significant challenges in achieving SDG 9 - Industry, Innovation and Infrastructure, with a score of 45.0. Scores for other goals include 48.7 for SDG 3 - Good Health and Wellbeing, 67.0 for SDG 6 - Clean Water and Sanitation, 79.0 for SDG 7 - Affordable and Clean Energy, and 77.9 for SDG 11 - Sustainable Cities and Communities.(1)
Policy priority
The National Planning Committee identified 9 primary challenges, 4 of which have infrastructure development needs and implications: the public health system cannot meet demand or sustain quality, the economy is unsustainably resource intensive, spatial divides hobble inclusive development, and infrastructure is poorly located, inadequate and undermaintained.(2)
Gender inequalities and marginalization issues
Poor infrastructure can exacerbate the gender gap. In low income countries, women collect over 70% of water and fuelwood. Women spend 200 million hours on water collection every day. Unsafe and low security transport also disadvantage women who are more affected by violence, which affects their wellbeing and workforce participation.(8)
Investment opportunities
President Ramaphosa has an investment drive to mobilise $100 billion for priority sectors, including the energy, water, transport and logistics, and data and ICT sectors.(4) The Sustainable Infrastructure Development Symposium South Africa organised by the Investment and Infrastructure Office within the Presidency seeks to create a $20.5 billion infrastructure fund.(5)
Key bottlenecks
High fixed costs, high levels of debt and low cash reserves may cause a liquidity crisis.(6) Construction was restricted during lockdown and sharp contractions of fixed investment can be expected as firms reconsider or postpone implementation.(7) Projects exposed to foreign currency risk foreign exchange fluctuations and further uncertainty if not previously hedged.(6)
Waste Management
Development need
Waste generation is expected to increase substantially over the next decade. Old landfills are closing, existing landfills are getting expensive to operate and maintain, and the cost of new landfills is challenging. If not managed effectively, this waste problem may degrade valuable land resources, and create human health hazards and long term environmental impacts.(10)
Policy priority
Programs are being implemented to reduce the volume of waste going to municipal landfills. For instance, in 2019 liquid waste was banned from landfill sites, and the cities of Cape Town and Johannesburg implemented an organic waste diversion plan that seeks to divert 50% of organic waste from landfill by 2022, and 100% by 2027.(3)
Gender inequalities and marginalization issues
A large number of people in South Africa including women and children, survive by collecting waste materials and rag picking. This sector has been severely affected, partly due to fear of the pandemic and the restrictions imposed, and partly due to community ostracization of these groups.(9)
Investment opportunities introduction
As landfill airspace dwindles and becomes a scarce commodity, the cost of waste disposal increases significantly. The business case for landfill diversion is increasing, as it becomes increasingly difficult and expensive to dump waste in landfills.(10)
Key bottlenecks introduction
Most major cities and local municipalities across South Africa have very little space left in landfills and are in serious trouble. Municipalities are facing crises of solid waste disposal and management, due primarily to the lack of landfill capacity.(11) As the population grows, land becomes scarce and landfill sites fill up more quickly.
Waste Management
Pipeline Opportunity
Waste reuse solutions
Provide landfill diversion solutions for organic and liquid waste, such as closed-loop waste-to-energy systems.
Business Case
Market Size and Environment
< USD 50 million
South Africa’s combined market value of municipal solid waste and commercial and industrial organics is estimated between R86 million and R162 million (14). At a municipal level, the Cape Town metropolitan area offers investors an attractive investment opportunity with an estimated market value of between R61 and R115 million.
The landfilling of the organic waste costs the commercial and industrial sector ~R138 million 39 in disposal overheads for 2019 (14). In 2017, the then national Department of Environmental Affairs (DEA) undertook its Operation Phakisa: Chemicals and Waste Economy.
The DEA identified initiatives to divert 20 million tonnes of waste from landfill. If realised, these initiatives were estimated to be able to unlock an additional R11.5 billion per year to help create 45 000 direct and 82 000 indirect jobs, and 4 300 small, medium and micro-sized enterprises (14).
Indicative Return
20% - 25%
A benchmark project, GreenCape, reported an internal rate of return of 18% - 25% for private biogas (waste-to-energy) projects in South Africa. (15).
Investment Timeframe
Medium Term (5–10 years)
GreenCape's benchmark Western Cape project has an expected payback period of 10 years.(12)
Waste management operations, such as biogas from solid organic waste, have the potential to produce cashflow shortly after project implementation (<5 years).
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Market - Highly Regulated
Market - Highly Regulated
Market - High Level of Competition
Impact Case
Sustainable Development Need
South Africans generate roughly 54.2 million tons of general (municipal, commercial, and industrial) waste per year.(18) Currently, South Africa disposes of most of the waste it generates in landfills.
Research by the Council of Scientific and Industrial Research (CSIR) shows that about 90% of South Africa’s waste is disposed of in landfills and about 40% of all waste going to landfills is organic.(19) Only 10% is recycled or recovered for other uses.(19)
The Institute of Waste Management of Southern Africa (IWMSA) indicates that most major cities and local municipalities across South Africa have very little space left in their landfill sites and are in serious trouble.
Gender & Marginalisation
A large number of people in South Africa including women and children, survive by collecting waste materials and rag picking. This sector has been severely affected, partly due to fear of the pandemic and the restrictions imposed, and partly due to community ostracization of these groups.(20)
Expected Development Outcome
Reduce the impact of waste on the environment and hence the burden on municipalities seeking to divert 50% of organic waste from landfill by 2022, and 100% by 2027
Promote business and job creation by unlocking an additional R11.5 billion per year to help create 45,000 direct and 82,000 indirect jobs, and 4,300 small, medium and micro-sized enterprises (21)
Provide green infrastructure investment opportunities
Gender & Marginalisation
Generate jobs for women who survive by collecting waste materials. This investment opportunity area aims to create 1,600 jobs and unlock R1.3 billion from the recyclable waste sitting in landfill.
Primary SDGs addressed
11.6.1 Proportion of municipal solid waste collected and managed in controlled facilities out of total municipal waste generated, by cities
Percentage recycled municipal waste: 2.1% (2015). Generated: 12,395,919.4 tons. Recycled: 259,529.7 tons (2015) (25)
N/S
12.5.1 National recycling rate, tons of material recycled
Annual mean levels of coarse particulate matter (PM10) in South Africa: 35.2% micrograms/m3 (2015) (25)
By 2023, an estimated R11.5 billion per year could be generated by diverting up to 20 million tons of waste. The National Development Plan includes targets to address South Africa’s waste challenges: reduce the total volume of waste disposed to landfills each year; increase waste recycling; and increase the development of green products and services.(26)
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
Public sector
Outcome Risks
Job losses at landfill sites and for existing waste management handlers due to decreased use of landfills
If not managed properly, processes may pollute the environment.
Unintended consequences could adversely affect existing industries and businesses.
Remanufacturing plants that use recycled waste compete with traditional manufacturers, and recycled products are generally cheaper than new products.
Gender inequality and/or marginalization risk
Impact Risks
Drop-off risk due to the changing regulatory environment
Evidence risk due to insufficient high-quality data to know what impact is occurring
Gender inequality and/or marginalization risk
Impact Classification
What
Development opportunities within the waste management sector, diverting waste from landfills and promoting job creation and sustainability
Risk
Medium risk (Potential impact of changing government regulations and strict standards and regulations)
Impact Thesis
Promote sustainable waste management and contribute to healthy environments and safe livelihoods.
Enabling Environment
Policy Environment
The National Environmental Management: Waste Act 59 and the 2011 National Waste Management Strategy: This framework requires local municipalities to implement alternative waste treatment to divert waste from landfill and minimise environmental degradation.(13)
The Department of Environment, Forestry and Fisheries' Working for Energy (Biomass Energy) focuses on the sustainable acquisition, processing and use of biomass to produce various forms energy for various applications.(22)
Bans on certain waste entering landfill (liquid and organic waste) will divert waste from landfill, promote reuse and open up more business opportunities in the waste management sector.(14)
Financial Environment
Financial incentives: Grants and subsidies such as (i) the Municipal Infrastructure Grant, (ii) the Green Fund and (iii) the Grant for Social Services.
Regulatory Environment
The National Pricing Strategy for Waste Management, 2016 (GN. No. 904)
National Environmental Management: Waste Act (Act No. 59 of 2008) (NEMWA)
National Waste Management Strategy 2011
The National Domestic Waste Collection Standards 2011 (GN No. 21)
Municipal Systems Act (32 of 2000): Sections 76 to 78 of this Act outline the key steps needed before municipalities are able to partner with the private sector.
Marketplace Participants
Private Sector
Development Bank of Southern Africa, Verda, Okran, Agriprotein, Athlone, SA Waste Holdings, Earth Probiotic, Ibert Zandam, New Horizons Energy (Pty) Ltd, Interwaste, Zero to Landfill Organics, Global Energy, Organic Matters, Waste-Mart, WastePlan, Tnergy (Pty) Ltd
Non-Profit
GreenCape, Institute of Waste Management of Southern Africa, Organics Recycling Association of South Africa
Target Locations
South Africa: Western Cape
South Africa: Gauteng
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. https://dashboards.sdgindex.org/#/ZAF
- (2) National Science and Technology Forum (2019). The National Development Plan. http://www.nstf.org.za/wp-content/uploads/2019/04/All-The-NDP-1.pdf
- (3) Organization for Economic Development and Cooperation (2010). Environmental Performance Reviews. https://www.oecd.org/environment/country-reviews/OECD_Environmental_Performance_Reviews.pdf
- (4) Industrial Development Corporation (2019). The Case For Investing in South Africa. https://sainvestmentconference.co.za/wp-content/uploads/2019/11/The-case-for-investing-in-South-Africa-2019-Executive-summary-31-October-2019.pdf
- (5) Sustainable Infrastructure Development Symposium (2020). Sustainable Infrastructure Development Symposium South Africa. https://sidssa.org.za/
- (6) Deloitte (2020). The Impact of COVID-19 on infrastructure projects and assets. https://www2.deloitte.com/content/dam/Deloitte/ng/Documents/finance/ng-the-Impact-of-COVID-19-on-Infrastructure-project-and-assets_27052020.pdf
- (7) Arndt, C., Davies, R., Gabriel, S., Harris, L., Makrelov, K., Modise, B., Robinson, S., Simbanegavi, W., van Seventer, D. and Anderson, L. (2020). Impact of Covid-19 on the South African economy. https://sa-tied.wider.unu.edu/sites/default/files/pdf/SA-TIED-WP-111.pdf
- (8) Organization for Economic Cooperation and Development (2019). Gender Equality and Sustainable Infrastructure. http://www.oecd.org/governance/gender-equality-and-sustainable-infrastructure-paris-march-2019.htm
- (9) United Nations Development Programme (2020). South Africa 2020 Report: Covid-19 Rapid Emergency Needs Assesment for the Most Vulnerable Groups. https://www.za.undp.org/content/south_africa/en/home/library/rapid-emergency-needs-assessment.html
- (10) GreenCape (2020). Waste Market Intelligence Report. https://www.greencape.co.za/assets/Uploads/WASTE_MIR_20200331.pdf
- (12) GreenCape (2017). The business case for biogas from solid waste in the Western Cape. https://www.greencape.co.za/assets/Uploads/GreenCape-Biogas-Business-Case-Final.pdf
- (13) Western Cape Government (2017). Western Cape Integrated Waste Management Plan 2017-2022. https://www.westerncape.gov.za/eadp/files/atoms/files/Western%20Cape%20Integrated%20Waste%20Management%20Plan%202017-2022.pdf
- (14) GreenCape (2020). Waste Market Intelligence Report. https://www.greencape.co.za/assets/Uploads/WASTE_MIR_20200331.pdf
- (15) GreenCape (2019). Waste Market Intelligence Report. https://www.greencape.co.za/assets/Uploads/WASTE-MARKET-INTELLIGENCE-REPORT-WEB.pdf
- (16) South African Government (2018). Waste Exclusion Regulations Set Down. https://legal.sabinet.co.za/articles/waste-exclusion-regulations-set-down/
- (17) Godfrey, L. and Oelofse, S. (2017). 'Historical Review of Waste Management and Recycling in South Africa', Resources, 6(4), 57. https://www.mdpi.com/2079-9276/6/4/57/htm
- (18) Department of Environmental Affairs (2018). South Africa State of Waste Report (SoWR) Second draft. https://remade.co.za/wp-content/uploads/2020/01/South-Africa-State-of-Waste-Report.pdf
- (19) Council of Scientific and Industrial Research (2014). Our future through science. https://www.csir.co.za/sites/default/files/CSIR%20ANNUAL%20REPORT%202013_14%20FINAL_LOW%20RES.pdf
- (20) Organization for Economic Cooperation and Development (2019). Gender Equality and Sustainable Infrastructure. http://www.oecd.org/governance/gender-equality-and-sustainable-infrastructure-paris-march-2019.htm
- (21) Department of Environmental Affairs (2011). National Waste Management Strategy. https://www.environment.gov.za/sites/default/files/docs/nationalwaste_management_strategy.pdf
- (22) Department of Forestry, Fisheries and the Environment (2019). Biomass energy. https://www.environment.gov.za/projectsprogrammes/biomassenergy
- (23) Aurecon (2017). City of Johannesburg: Feasibility study for alternative waste treatment technology https://www.joburg.org.za/documents_/Documents/Intergrated%20Development%20Plan/idp%20documents/Summary.pdf
- (24) Sabinet African Journals: Resource. 2020. Volume 22 Number 1, Feb 2020, p.19.
- (25) Statistics South Africa (2017). Sustainable Development Goals: Baseline Report (2017). www.statssa.gov.za
- (26) United Nations Development Programme (2020). South Africa SDG Investor Map. https://www.za.undp.org/content/south_africa/en/home/library/sa-sdg-investor-map-2020-.html