The CCAC's Waste Finance Programme Helps Cities Tackle Barriers to Transforming Their Urban Waste

With over half of the world’s population living in cities, urbanites will be central to tackling the health and environmental problems created by the over two billion tonnes of garbage humans produce every year.

“Waste should be a priority in every city because it is a strong indicator of health, quality of life, and wellbeing of the population,” said Tathiana Seraval, the Environmental Sustainability Project Coordinator at Comlurb, the company responsible for municipal solid waste management in Rio de Janeiro, Brazil. “It’s a critical issue that can directly affect other sectors and severely impact the economy, the environment, and people.”

The 32 cities participating in the Climate and Clean Air Coalition’s (CCAC) Waste Finance Programme are already taking major steps to do so. The programme, launched in January 2019, is being delivered by C40 on behalf of the CCAC's Waste Initiative.  Its goals are twofold: develop the capacity of participating cities to finance their waste projects and help them implement new waste infrastructure.

“I participated in many of the conferences and workshops financed by the CCAC where we met people from other countries and exchanged experiences. This was very, very important,” said Jose Henrique Penido, former Chair of the Environmental Sustainability Office at Comlurb. He traveled to cities like Nairobi in Kenya and Ho Chi Minh in Vietnam to exchange ideas about waste management as part of the partnership. “This was very useful and hopeful to us.”

Each city came to the programme with a specific waste project in mind. Each project had to have the potential to reduce short-lived climate pollutants and identify finance or implementation challenges. The programme takes place in a variety of formats, including webinars, in-person meetings, information-sharing trips, informative newsletters, and WhatsApp groups— all to help tackle each city’s challenges each city faced.

Examples of activities include a group question and answer conference call to help explain Sao Paulo’s school and household composting programmes and their cooperation with the informal sector. Peer exchanges were also organized, including a trip to Addis Ababa by representatives from Nairobi to learn about waste incinerator operating challenges and a trip to Durban by Accra representatives to learn about landfill operations. 

The programme has hosted numerous webinars (see below), including on attracting private sector investment and generating revenue for new waste infrastructure. Participating cities shared reports about their activities, for example on Durban’s experience in managing a sanitary landfill and on their assessment of incineration opportunities in Africa.

“The CCAC and C40 helped us by connecting people and technology, getting us together, and opening doors for us. I often say that C40 and the CCAC have a very special ability to open many doors, doors that would be very difficult to open otherwise,” Penido said, referencing the companies and universities the partnership helped them access.

Challenges and Misconceptions

One important aim of the programme is upending the immense challenges and misconceptions that exist in the waste sector.

“There are a lot of barriers to finance. Sometimes cities don't have the revenue to keep a project going, sometimes they don’t have a good credit rating, sometimes they don't get help from their national government; it varies from city to city,” said Federico Di Penta, Program Manager at C40, on the challenges by many cities in the programme.

Di Penta says there are widespread misconceptions, not just among waste departments but also amongst finance departments, that waste projects could be profitable.

“There is no money to be made from waste,” says Di Penta. “The biggest mistake that cities make is they get a grant or a loan to build waste infrastructure and then they don’t have the money to run it.”

One of the most important lessons for participating cities is the significant and ongoing costs of new waste infrastructure. In virtually every case, the development of new infrastructure requires an increase in the municipal waste budget—not just for construction costs but also ongoing maintenance costs.

This means that cities must value the social, health, and climate costs of waste, which far outweigh the costs of implementing sustainable waste infrastructure. It also means that cities must have financial plans for these costs in advance so they don’t end up with infrastructure they can’t maintain— a problem in many global south cities, according to Di Penta.

As a result of this advice, many cities revised their proposed infrastructure to make projects more feasible within the city’s municipal budget.

Developing Rio’s First Biomethanation Plant

After participating in the CCAC Waste Initiative for over six years and learning how diverting organic waste from landfills helps reduce methane emissions, Rio de Janeiro built the city’s first biomethanation plant in March 2019. It’s a small pilot plant, which would be adequate for a city of about 200,000 people, but the city hopes it will inspire future projects.

Biomethanation plants have both economic and environmental benefits. They take organic waste and in just a few days convert it into biogas to be used for energy production and heat generation. By collecting and using the methane produced by waste instead of releasing it into the atmosphere, these plants help reduce air pollution and climate change. Their small size makes them perfect for an urban setting.

Rio de Janeiro has two larger biomethanation plants in the works. Comlurb’s Penido says that lessons from the CCAC Finance Programme helped shape plans for the upcoming plants and the operation of the pilot plant. The city hopes that the pilot plant also acts as a proof of concept and inspires private sector companies to build their own versions.

The Biomethanation plant was not the only way Rio de Janeiro benefitted from participating in CCAC waste-related activities. The city now has 16 electric garbage collection trucks, some of the first in the region. According Penido the idea for them came from a CCAC-C40 meeting in Bogota, Colombia where he learned about the city’s electric buses and was inspired to implement a similar idea in Rio de Janeiro. In June 2013 – with support from the US Environmental Protection Agency, on behalf of the CCAC – Penido participated in a conference on waste collection, in Indianapolis, United States where he saw firsthand electric waste collection trucks. These experiences made him recommend electric garbage trucks for Rio de Janeiro.

“It’s so important to have these meetings,” he says. “It’s fantastic to exchange all the information.”

Financing Waste Projects

Another major lesson for cities is how to best finance waste projects— a challenge Rio de Janeiro struggled with on the biomethanation plant. At the beginning many cities hoped to obtain funds from international finance institutions. But through the Finance Programme they learned that the average timeline for a loan or grant from these institutions is 4-6 years. This is too long for many cities, which experience regular leadership turnovers. This helped cities refine their funding plans, either forgoing international finance institutions or approaching them with more realistic expectations.

Participating cities are also looking at private-public partnerships as a finance option. This comes with its own challenges. Examples of this type of funding are limited and most private sector companies are looking to recoup their initial investment, which can be difficult given the cost of waste infrastructure.

Other recommendations included introducing household user fees or taking a small amount out of property taxes or utility bills. Cities were also encouraged to calculate their “full cost,” including things like savings from reduced transportation and disposal costs from building decentralized organic waste management facilities, like a composting facility, and the revenue potential of selling the products, like the compost. This way, while waste projects may be pricey, the financial burden can also be reduced, potentially making them more attractive to political higher-ups.

These types of lessons are exactly what cities gained from the international city-to-city exchanges.

“For me the most important thing is learning what people spent money on but didn’t work. This is what you can really learn from talking to other cities,” Penido said. “Now, when I need information, I can call someone somewhere in the world. This is very useful, the friendships I made around the world.”

These friendships go two ways: Rio’s experience can be used as a template for other cities, meaning these waste achievements will have ripple effects far beyond the city limits.

Resources

Below are webinars from the CCAC Finance Programme. These can be accessed through the Municipal Solid Waste Knowledge Platform:

• Overview of waste finance, main financing and funding options for global south cities
• Integrating the informal sector through policies and space allocation in transfer stations in Accra
• Attracting private sector investment for new waste infrastructure
• OrganEcs training
• Generating revenue/income for ensuring financial sustainability of new waste infrastructure
• The financial implications of developing an integrated waste management plan