Wastewater Treatment
Wastewater Treatment
Business Model Description
Construct, operate and install wastewater treatment plants and provide accessible services associated with the management of wastewater and sanitary trucks in areas with high population density and industrial clusters.
Expected Impact
Improve sanitary situation and address health and environmental risks of wastewater in communities and industries.
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: Tadjourah
- Djibouti: Obock
- Djibouti: Arta
- Djibouti: Ali Sabieh
- Djibouti: Djibouti (City)
Sector Classification
Infrastructure
Development need
Sanitation is among the key infrastructural challenges for Djibouti. Poorly maintained systems cause spontaneous sewage overflows in the capital (1). The cost of sanitation services is high (2). Solid waste management is one of the main challenges for improving living conditions in urban areas (2).
Policy priority
The Vision Djibouti 2035 includes large-scale infrastructure investments focused on public projects, such as the construction of a railroad and a water pipeline (1). The Horn of Africa Initiative also prioritizes infrastructure, allocating USD 12.5 billion to develop cross-border regional infrastructure (3).
Gender inequalities and marginalization issues
Gaps in access to good infrastructure affect women disproportionately, with lack of access to water and electricity presenting larger opportunity costs for women. Poor urban transport also impacts rural communities' and women's access to key services and employment opportunities (4).
Key bottlenecks introduction
Challenges in the infrastructure sector include limited access to water rendering road construction and compaction work difficult, high costs related to imported construction material, and the lack of proven-in-marked business models in Djibouti.
Utilities
Development need
Only 16.5% of Djibouti's population has access to the sanitation network (1), which results in health dangers for both people and planet.
Policy priority
Djibouti's Vision 2035 emphasises the importance of providing sanitation services to its population (5). The Government seeks to improve access to clean water in order to improve food security and the socio-economic development of the country (4).
Gender inequalities and marginalization issues
There is a significant urban-rural divide in terms of access to sanitation services in Djibouti: 41.48% of the urban population uses safely managed sanitation services, a number that stands at only 18.93% for rural populations (10).
Investment opportunities introduction
Only 11 % of household wastewater in Djibouti is currently safely treated, which shows the need for diverse investment opportunities for the private sector in wastewater management services (9).
Water Utilities and Services
Pipeline Opportunity
Wastewater Treatment
Construct, operate and install wastewater treatment plants and provide accessible services associated with the management of wastewater and sanitary trucks in areas with high population density and industrial clusters.
Business Case
Market Size and Environment
4 out of 5 Djiboutians are not served by the sanitation network
Only 16.5% of Djibouti's population are currently served by the collective sanitation network (1), which provides significant opportunities for additional services to unserved groups.
The cost of obtaining sanitation services is high in Djibouti. Requesting and receiving water and sewage connection costs around USD 500 and takes around 60 days (20), which presents opportunities for more cost effective and efficient service delivery.
Indicative Return
ROE of 15% - 20%
The estimated return rate for investors in wastewater treatment is 15-20%. This rate is a benchmark calculated as a cost of equity, reflecting an average return required by investors active in the water utilities subsector (6).
Investment Timeframe
Medium Term (5–10 years)
Based on benchmark projects from enterprises active in wastewater treatment, the investment should be treated as capital intensive with the break-even point occurring after 5-10 years (7).
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
Only 16.5% of Djibouti's population has access to the collective sanitation network (1). Only 37% of the population in Djibouti use safely managed sanitation services (9), exposing large parts of the population to health hazards.
17% of Djiboutians go out into the open to defecate in urban regions, while 83% of those living in rural areas have no access to sanitary latrines and toilets (8).
The common improper disposal of sewage waste leads to high levels of pollution of the natural environment, especially lakes and rivers, and the resultant deterioration of surface water quality.
Gender & Marginalisation
With 18.93%, rural populations have lower access rates to safely managed sanitation services, compared to 41.48% in urban areas (10).
Marginalised and low-income communities without appropriate sanitation coverage are exposed to threats of diseases and infections.
Expected Development Outcome
Wastewater treatment reduces cases of poisoning and diarrhea arising from drinking dirty water, and decreases the spread of water-transferred diseases like cholera and typhoid fever.
Wasterwater treatment reduces the pollution of the environment, as a result of improper disposal of sewage waste, and addresses the deterioration of surface water quality.
Gender & Marginalisation
Wastewater treatment solutions address sanitation needs of rural populations who have lower access rates and poorer quality of service.
Primary SDGs addressed
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)
31.3 deaths per 100,000 people (2016) (18).
N/A
6.3.1 Proportion of domestic and industrial wastewater flows safely treated
6.2.1 Proportion of population using (a) safely managed sanitation services and (b) a hand-washing facility with soap and water
10.93% (2020) (18).
Population using at least basic sanitation services reached 63.1% in 2017 (19)
N/A
100% (globally) (19).
11.6.2 Annual mean levels of fine particulate matter (e.g. PM2.5 and PM10) in cities (population weighted)
47.42 in 2019 (19)
100% (globally) (19).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
Planet
Outcome Risks
Disinfection byproducts from applying a chemical water filtration method in wastewater management may contaminate the environment.
Negative health and environmental impacts may be caused by improper handling of wastewaters.
Impact Risks
Limited uptake of the wastewater management services due to low awarness of health and environmental risks in sanitation among parts of Djibouti's population may limit the expected impact, which is being addressed thorugh awareness raising activities (13) (16).
Insufficient adoption of the effective methods and technologies for wastewater management, for example due to higher prices, may limit scale of impact especially in low-income communities.
Impact Classification
What
Innovative methods and technologies in wastewater management improves the sanitary situation and addresses health and environmental risks.
Risk
While the model of wastewater management is proven, limited awareness of risks associated with wastewater and unsafely practiced alternative sanitation processes require consideration.
Impact Thesis
Improve sanitary situation and address health and environmental risks of wastewater in communities and industries.
Enabling Environment
Policy Environment
Strategy for Accelerated Growth and Employment Promotion (SCAPE) 2015-2019, 2014: Highlights wastewater treatment and sanitation as a priority area (21).
Financial Environment
Financial incentives: Djibouti's Government provides subsidies related to waste management to local governments, which amounts to nearly USD 4 million year (13). Public tenders announced by local governments constitute contracting opportunities for private actors.
Regulatory Environment
Law No. 106, 2000: Constitutes the framework law on the environment in Djibouti; targeting industrial type by stipulating that any waste from industrial or semi-industrial unit processing must either be treated before discharge or stored in compliance with the guidelines of the Ministry (22).
Law No. 51, 2009: The Environmental Code lays down the basic rules and fundamental practices of the national environmental policy to ensure sustainable development, in line with multilateral environmental agreements. Accordingly, every citizen has the right to a healthy environment (23).
Law No. 93, 1996: Constitutes the Code on Water, which aims to preserve common water resources, and balanced exploitation of aquatic resources, including for energy, agriculture and industry usage, as well as guaranteeing the supply of safe drinking water (24).
Marketplace Participants
Private Sector
CESP Africa, Ecomaji.
Government
Government: Ministry of Agriculture, Water, Fisheries, Animal Breeding and Hydraulic Resources; Ministry of Environment; Office National De L'Eau et de L'assainissement De Djibouti (ONEAD).
Multilaterals
European Union (EU), African Development Bank (AfDB), UNICEF.
Non-Profit
Japan International Cooperation Agency (JICA), French Development Agency (AFD), USAID WASH-FIN, Action Contre la Faim, Norwegian Refugee Council, Association pour le Developpement Intégré de Mabla (ADIM).
Target Locations
Djibouti: Tadjourah
Djibouti: Obock
Djibouti: Arta
Djibouti: Ali Sabieh
Djibouti: Djibouti (City)
References
- (1) Ministere des affaires sociales et de solidarite. 2018. Strategie nationale de protection sociale. http://extwprlegs1.fao.org/docs/pdf/dji200233.pdf.
- (2) European Union. 2017. Note a l'attention des membres du comité FED. https://www.gtai.de/resource/blob/33630/f8ed69650e30cbb247c9831544b849d0/pro201706065009-data.pdf.
- (3) Ecomaji. 2021. Waste management systems. https://ecomaji.com.
- (4) CESP Africa. 2021. Waste water treatment. http://www.cespafrica.com.
- (5) Republic of Djibouti. 2014. Vision Djibouti 2035. http://ccd.dj/w2017/wp-content/uploads/2016/01/Vision-Nationale.pdf.
- (6) PwC / UNDP Analysis, based on Prof. A. Damodaran data, 2020. Not publicly available.
- (7) UNDP / PWC. 2020. Stakeholders Interviews.
- (8) The Borgen Project. 2020. Ten facts about life and sanitation in Djibouti. https://borgenproject.org/sanitation-in-djibouti.
- (9) United Nations. 2021. SDG 6 snapshot in Djibouti. https://www.sdg6data.org/country-or-area/djibouti#anchor_6.2.1a.
- (10) Index Mundi. 2019. Djibouti - Access to safely managed sanitation services. https://www.indexmundi.com/facts/djibouti/access-to-safely-managed-sanitation-services.
- (11) Nations Unies Djibouti. 2018. PNUAD 2018-2022. https://www.undp.org/sites/g/files/zskgke326/files/undp/library/corporate/Executive%20Board/2018/First-regular-session/DPDCPDJI3_UNDAF%20Final.pdf.
- (12) Republic of Djibouti. 2017. Plan de development rural de Tadjourah. https://www.academia.edu/37693836/PLAN_DE_DEVELPPEMENT_RURAL_TADJOURAH_final_08_03_2017_pdf?auto=download.
- (13) Republic of Djibouti. 2017. Plan de development rural de Obock. https://www.academia.edu/37693835/PLAN_DE_DEVELPPEMENT_RURAL_OBOCK_final_08_03_2017_pdf.
- (14) Republic of Djibouti. 2017. Plan de development rural de Arta. https://www.academia.edu/37693833/PLAN_DE_DEVELPPEMENT_RURAL_ARTA_final_08_03_2017_pdf.
- (15) Republic of Djibouti. 2017. Plan de development rural de Ali Sabieh. https://www.academia.edu/37693832/PLAN_DE_DEVELOPPEMENT_RURAL_ALI_SABIEH_final_08_03_2017_pdf.
- (16) Republic of Djibouti. 2014. SDAU Djibouti. https://www.adds.dj/wp-content/uploads/2016/03/DOSSIER-DU-SDAU-2014-12-23.pdf.
- (17) AfricanCleanCities. June 2019. Djibouti - City of Djibouti. https://africancleancities.org/assets/data/Organization/Djibouti_EN.pdf.
- (18) UN Global SDG Database. 2021. SDG Indicators. https://unstats.un.org/sdgs/indicators/database.
- (19) Sustainable Development Report. 2021. Country Profiles: Djibouti. https://dashboards.sdgindex.org/profiles/djibouti.
- (20) World Bank. 2020. Doing Business 2020 - Economy Profile Djibouti. https://www.doingbusiness.org/content/dam/doingBusiness/country/d/djibouti/DJI.pdf.
- (21) Republic of Djibouti. 2015. Strategie de croissance accelere et de croissance d'emploie. https://planipolis.iiep.unesco.org/sites/default/files/ressources/djibouti_scape-francais.pdf.
- (22) Republic of Djibouti. 2003. Plan de Gestion des Déchêts Sanitaires Rapport Final. http://www.ministere-finances.dj/Publications/DECHETS.pdf.
- (23) Food and Agricultural Organization. 2009. Loi n°51/AN/09/6ème L portant Code de l’Environnement. https://www.fao.org/faolex/results/details/en/c/LEX-FAOC092357.
- (24) Food and Agricultural Organization. 1996. Loi n° 93/AN/95/3e L du 04 avril 1996 portant Code de l'eau. https://www.fao.org/faolex/results/details/en/c/LEX-FAOC038207/#:~:text=Loi%20n%C2%B0%2093%2FAN,de%20tous%20des%20diff%C3%A9rents%20usages.