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Central Tian Shan, Kyrgyzstan

Wastewater Treatment Solutions

Photo by UNDP Kyrgyzstan

Wastewater Treatment Solutions

Compare IOA
Country
Kyrgyzstan
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Infrastructure
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Utilities
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
10% - 15% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
145 of wastewater treatment plants and 228 million cubic metres
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
< USD 500,000
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Clean water and sanitation (SDG 6) Good health and well-being (SDG 3)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Decent Work and Economic Growth (SDG 8) Responsible Consumption and Production (SDG 12)

Business Model Description

Design, construct and install individual small- to medium-scale Wastewater Treatment Plants (WWTP) in recreational areas and tourist sites, catering establishments, car washes, and food production facilities, generating revenue through direct sales of turnkey WWTPs. As a procurement method, (international) competitive bidding can be considered.

Expected Impact

Improve access to reliable and affordable sanitation, reduce the impact of untreated wastewater discharge on ecosystems, and increase tourist attractiveness of remote destinations.

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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Disclaimer

UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.

The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.

Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.

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Country & Regions

Explore the country and target locations of the investment opportunity.
Country
Kyrgyzstan
Region
  • Kyrgyzstan: Issyk-Kul Oblast
  • Kyrgyzstan: Chui Oblast
  • Kyrgyzstan: Osh Oblast
  • Kyrgyzstan: Jalal-Abad Oblast
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Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Infrastructure

Development need
In 2023, Kyrgyzstan ranked 89 out of 139 countries in trade and transport-related infrastructure score in the World Bank Logistic Performance Index. Low rail density and level of road pavement, depreciation of over 60% of all electricity assets, outdated water facilities, and costly digital infrastructure weaken the overall sector's resilience (1, 2, 3, 9).

Policy priority
The Program for the Development of Public-Private Partnership for 2022-2026 aims to use public-private partnerships to increase investments in the modernization of economic and social infrastructure. The National Development Programme for 2018-2040 envisages high-quality production infrastructure for economic development, including power engineering, water, and transport (4, 5).

Gender inequalities and marginalization issues
Due to the weak road and rail infrastructure, the rural population has limited access to trade and public services in regional centres. Waste management and sewerage infrastructure are also scarce in rural areas, while broadband installation is more difficult in the mountains (1).

Investment opportunities introduction
In 2023, foreign direct investments (FDI) to transport, water, and power infrastructure amounted to USD 19.6 million. In line with the government's objectives to develop high-quality production infrastructure, opportunities exist in road construction, multimodal freight hubs, waste recycling, water supply, and wastewater systems (10, 11).

Key bottlenecks introduction
Political instability and governance issues constrain the development of the sector. Additionally, the infrastructure sector lacks standardized project prioritization and is exposed to project overlap and duplication (1).

Sub Sector

Utilities

Development need
In 2020, only 17% of the households in Kyrgyzstan had access to district heating, and 93% of the population lacked sewerage systems. Low tariffs and lack of public awareness about the service pay financially strain the sector and hinder the provision of water services, leading to limited management capacity, uncompetitive salaries, and a lack of qualified personnel (1, 2).

Policy priority
The Program for the Development of Potable Water Supply and Wastewater Systems in Settlements until 2026 aims to develop water supply and sanitation systems, using modern water treatment systems. The National Development Strategy for 2018-2040 emphasizes decentralized heating systems and increased gasification for cleaner heating as solutions to improve utility services (2, 5).

Gender inequalities and marginalization issues
65% of villages in Kyrgyzstan remain without water supply due to obsolete water networks and poor water management. Sewerage systems are limited in rural areas and usually consist of pit latrines with decking without heating and hygienic facilities. This particularly affects rural women, both in terms of domestic workload and health (2, 12).

Investment opportunities introduction
As of 2019, at least USD 245 million in investment was directed towards water supply and sanitation projects. Opportunities exist in electricity transmission and distribution, natural gas pipelines, construction and rehabilitation of drinking water supply and sewerage, and wastewater management (6, 7).

Key bottlenecks introduction
Institutional challenges related to capacities to plan, operate and maintain utility services, mountainous topography and seismic activity, and consequences of climate change such as floods and landslides, can variously hinder the sector's development (8).

Industry

Water Utilities and Services

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Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Wastewater Treatment Solutions

Business Model

Design, construct and install individual small- to medium-scale Wastewater Treatment Plants (WWTP) in recreational areas and tourist sites, catering establishments, car washes, and food production facilities, generating revenue through direct sales of turnkey WWTPs. As a procurement method, (international) competitive bidding can be considered.

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Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

145 of wastewater treatment plants and 228 million cubic metres

In 2019, the Kyrgyz Republic had 145 active wastewater treatments plants (WWTPs), comprising 22 municipal plants and 123 departmental and private facilities. The total design capacities of biological WWTPs amount to 228 million cubic metres p.a (15).

Indicative Return

IRR
Describes an expected annual rate of growth of the IOA investment.

10% - 15%

Based on a wastewater treatment project with a capacity of 4,200 cubic metres per day in Balykchy City financed by the Asian Development Bank, the Economic Internal Rate of Return (EIRR) for wastewater treatment plant is 12.3% (16).

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Medium Term (5–10 years)

Based on a project financed by a USD 100,000 loan from the Kyrgyzstan Sustainable Energy Financing Facility (KyrSEFF), the payback period of a wastewater treatment plant for a hotel that serves around 500 guests is 10 years (17).

According to estimations of private companies, individual wastewater treatment projects can have a payback period between 5 to 10 years (18).

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

< USD 500,000

Market Risks & Scale Obstacles

Market - Highly Regulated

Institutional barriers, including lengthy approval procedures by oversight agencies and lack of coordination between water supply companies, may restrain the business model from timely achieving the expected outcome (19).

Capital - Limited Investor Interest

The private companies report limited interest from private investors. Foreign investors are more interested in opening production areas than providing financing for wastewater treatment (20).

Private companies indicate a shortage of skilled professionals in the wastewater treatment sector (20).
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Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

Many existing wastewater systems in Kyrgyzstan have been in operation for over 30 years, resulting in declining sewerage service quality and highlighting the urgent need for renovation and upgrades at numerous facilities (7).

Malfunctioning wastewater treatment facilities with primitive chlorination units contaminate drinking water sources causing more than 20% of the samples examined to be of inadequate quality (7).

Tourism continues growing in Kyrgyzstan, with international tourist arrivals projected to reach 5 million by 2033, creating an additional strain on the sewerage systems (16, 21).

Gender & Marginalisation

Wastewater treatment plants serve only 64.1% of the urban population and 10% of rural communities, leaving many households unconnected to the network (7).

Expected Development Outcome

Investing in wastewater treatment solutions modernizes outdated sewerage infrastructure and decreases water loss during transportation to the population.

Wastewater treatment solutions contribute to decreased contamination of water sources and health hazards associated with it.

Wastewater treatment solutions alleviate the overload of the sewerage system resulting from the growing tourism in Kyrgyzstan.

Gender & Marginalisation

Wastewater treatment solutions expand access to sewage infrastructure for remote and rural communities by providing sewerage services to guest houses, which are also private.

Primary SDGs addressed

Clean water and sanitation (SDG 6)
6 - Clean water and sanitation

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

Current Value

In 2018, the proportion of the population using safely managed sanitation services and a hand-washing facility with soap and water (indicator 6.2.1) was 96.3% but the proportion of the population with sustainable access to sanitation facilities (indicator 6.2.1.1) was only 42.62% in 2022 (22, 23).

In 2023, the proportion of domestic and industrial wastewater flows safely treated in Kyrgyzstan reached 96.97%, with Jalal-Abad and Chui oblasts significantly lagging behind, at only 62.29% and 58.09% level respectively (24).

Target Value

The program for the development of drinking water supply and sanitation systems in populated areas of the Kyrgyz Republic until 2026 sets a target to provide sewerage systems services to at least 70% of the population living in regional centres with village status (7).

Good health and well-being (SDG 3)
3 - Good Health and Well-Being

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)

Current Value

In 2023, the mortality rate attributed to unsafe water, unsafe sanitation and lack of hygiene amounted to 0.7%. However, the mortality rate in Naryn and Jalal-Abad oblasts in 2023 reached 1.3% and 1.1% accordingly (25).

Secondary SDGs addressed

Decent Work and Economic Growth (SDG 8)
8 - Decent Work and Economic Growth
Responsible Consumption and Production (SDG 12)
12 - Responsible Consumption and Production

Directly impacted stakeholders

People

The general population benefits from the improved sewerage service in public places such as recreational areas and tourist sites, catering establishments, and car washes.

Gender inequality and/or marginalization

The rural population engaged in tourism and residing near tourist sites, who usually lack adequate sanitation, benefits from improved sanitation services.

Planet

The planet benefits from reduced harmful impacts on ecosystems, water resources, and soil due to untreated sewage.

Corporates

Tourism-oriented businesses such as recreational facilities, catering services, food facilities and others benefit from improved access to reliable, sustainable, and affordable wastewater treatment at tourist sites.

Indirectly impacted stakeholders

People

The general population benefits indirectly from improved quality of drinking water, usually contaminated but inadequate water treatment.

Outcome Risks

The discharge of various effluents, if not purified, can contaminate watercourses and reservoirs and pose a significant danger to human life (26).

Impact Risks

The high vulnerability of the country to climate change effects can affect service delivery and damage the water infrastructure.

If wastewater treatment plants are not designed to treat sludge in accordance with discharge standards, the development of wastewater treatment will fail to reach the expected outcome.

Impact Classification

C—Contribute to Solutions

What

Wastewater treatment solutions offer accessible, autonomous sanitation, mitigating discharge pollution and enhancing the appeal of remote tourist destinations.

Who

Rural population engaged in tourism and residing near tourist sites, the planet, and tourism-oriented businesses benefit from accessible, affordable, and autonomous sanitation solutions.

Risk

High vulnerability to climate change and improper design of wastewater treatment plants can reduce the impact of this business model.

Contribution

Wastewater treatment plants deliver quality, safe, autonomous services, addressing gaps left by latrine toilets, as only 29.1% of the population has access to centralized sewerage (2).

How Much

This business model can contribute to the provision of sewerage systems to at least 70% of the population living in regional centres with village status (27).

Impact Thesis

Improve access to reliable and affordable sanitation, reduce the impact of untreated wastewater discharge on ecosystems, and increase tourist attractiveness of remote destinations.

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Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

National Water Strategy until 2040, 2023: sets an objective to ensure safe and high-quality water supply, sanitation, and drainage, and to create a sustainable water resources management system in the Kyrgyz Republic (28).

Program for the development of drinking water supply and sanitation systems in settlements of the Kyrgyz Republic until 2026, 2020: defines actions for sustainable systems, minimizing environmental impact, addressing risks from climate change, and ensuring monitoring, and corrective measures (7).

National Development Strategy 2018-2040, 2018: aims at creating an economically sustainable, accessible service for safe and quality water supply and sanitation in every locality; promotes the use of modern water purification systems (5).

National Development Program until 2026, 2021: aims to create economically sustainable, affordable safe and quality water supply services; focuses on the construction and rehabilitation of physical infrastructure to bring water to 95% of the country's settlements (11).

Financial Environment

Financial incentives: Dos Credobank, Bailyk Finance, and Kyrgyzstan Bank offer loans between KGS 10,000 (USD 114) and KGS 8 million (USD 91,000) at 17-33% for up to 60 months for the development of resource-saving technologies in the tourism sector, including wastewater treatment plants (33).

Regulatory Environment

Resolution of the Cabinet of Ministers No. 445, 2022: provisions that all resort facilities in the Issyk-Kul region, including holiday homes, cottage villages, guest houses, and hotels, must have adequate utilities and infrastructure to operate, regardless of ownership or affiliation (29).

The Water Code of the Kyrgyz Republic, 2005: governs water use, protection, and resource development to ensure safe, sufficient water supply, environmental protection, and sustainable management of the nation's water resources (30).

Regulation on the procedure for providing land plots in state ownership, 2019: guarantees the direct provision of land plots owned by the state for the construction of socially significant facilities, including tourism, with investments of over KGS 1 billion (USD 11.4 million) (31).

Sanitary-Epidemiological Rules and Regulations, 2016: establishes the concept of a Sanitary Protection Zone around the wastewater treatment plants based on the sanitary classification of enterprises and the sources of atmospheric air pollution or from the borders of the industrial site (19, 32).

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Marketplace Participants

Discover examples of public and private stakeholders active in this investment opportunity that were identified through secondary research and consultations.

Private Sector

Bintek, Ecostart, Bioworks Verfahrenstechnik of Hassan Allam Holding, Sky-tunuk, Aquaplast.

Government

Ministry of Water Resources, Agriculture, and Processing Industry, Ministry of Finances, National Investments Agency under the President.

Multilaterals

United Nations Development Programme (UNDP), UNICEF, Asian Development Bank (ADB), European Investment Bank (EIB), Islamic Development Bank (IsDB), European Bank for Reconstruction and Development (EBRD).

Non-Profit

Aga Khan Foundation, Regional Environmental Centre for Central Asia (CAREC).

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Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
country static map
rural

Kyrgyzstan: Issyk-Kul Oblast

The Resolution of the Cabinet of Ministers No. 445 requires the Issyk-Kul region to have adequate sanitation and wastewater treatment facilities near tourist sites (29).
rural

Kyrgyzstan: Chui Oblast

In 2022, 30% of the population in the Chui region did not have sustainable access to sanitation facilities (34). The growing tourism potential of the Chui region can put additional strain on the sewerage system.
rural

Kyrgyzstan: Osh Oblast

Osh oblast has a strong tourism potential, receiveing the second-highest gross revenue from tourism in 2023, yet only 9.72% of the regional population had access to sanitation facilities in 2022 (34, 35).
rural

Kyrgyzstan: Jalal-Abad Oblast

While Jalal-Abad oblast is the fourth highest industrially-developed region, accounting for 11% of total industrial production in Kyrgyzstan, only 10.72% of the population had access to sustainable sanitation services in 2022 (34, 36).
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References

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