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Towards a New Paradigm for Financing Sustainable Waste Management Infrastructure in Developing Countries

Wednesday, 22 November 2023

Jiao Tang, Catalytic's COO, is a waste management finance expert. In our first “Humble Op-Ed”, she proposes a new way to finance waste management infrastructure in developing countries; using concessional capital to cover OPEX instead of CAPEX.

Money spent on infrastructure that doesn’t deliver its promise is never a good use. This is especially the case when such money is intended for the development of lower-income countries funded by taxpayers of high-income countries.

In international development finance going towards waste management, it’s often the case that grant and concessional loans are used to make plans, studies and purchase equipment and build facilities (CAPEX). Such waste treatment facilities, often in the form of sorting plants, anaerobic digestion plants, composting plants, and waste-to-energy plants, when operated properly, serve a range of environmental and social benefits: diverting waste from dumpsites and landfills thus reducing methane emissions along with other gaseous and liquid pollutants, utilizing recyclable and recoverable materials and energy, reducing nuisances to the public and creating a clean and liveable environment for local residents. Additionally, proper waste management relieves pressure on natural ecosystems (for example, we cut down trees to make paper or grow food on the land, then waste the paper and food, resulting in more deforestation). They contribute to climate and many other sustainability impacts. However, more often than not, those facilities don’t manage to live their life to the end, stopping operation already at its early years. I have seen a few projects that do, but not all are taking full advantage of available proven technologies to deliver environmental, social and economic benefits to stakeholders.