Plastic recycling and reprocessing

Plastic recycling and reprocessing
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Plastic recycling and reprocessing
SectorMost 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
Waste Management
Business Model Description

Establish and operate recycling plants for repurposing plastics.

Expected Impact

Mitigate against the negative environmental effects of waste and foster a circular economy especially with plastic.

Indicative ReturnDescribes 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).
15% - 20% (in IRR)
Investment TimeframeDescribes 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.
Long Term (10+ years)
Market SizeDescribes 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.
Half of Kigali's residents, forecast to be 2.5 million by 2032, have access to waste collection services.
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
USD 1 million - USD 10 million
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Good health and well-being (SDG 3) Clean water and sanitation (SDG 6) Responsible Consumption and Production (SDG 12)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Industry, Innovation and Infrastructure (SDG 9) Sustainable Cities and Communities (SDG 11) Life on Land (SDG 15)
Country
Regions
  • Rwanda: Kigali
SectorMost 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
IF

Development need: The country significantly underscored in SDG 9 - Industry, Innovation and Infrastructure, SDG 7 - Affordable and Clean Energy, SDG 11 - Sustainable Cities and Communities and SDG 6 - Clean Water and Sanitation.(1) Rwanda faces high costs of logistics and long transport times due to its relatively poor supply chains.(2) As infrastructure improves overall productivity of the economy, it will be the key driver for enhancing Rwanda’s sustainable development and economic growth.(3)

Policy priority: Rwanda's industrial sector accounts for approximately 15% of gross domestic product (GDP), making it a crucial component of the national economy.(4) The government recognizes the construction materials industry faces several constraints arising from the infrastructural gap, which makes building products relatively expensive.

Gender inequalities and marginalization issues: Developing a gender-responsive infrastructure is a key element to accelerate poverty reduction efforts and economic growth. Infrastructure projects in transport, energy, water and sanitation not only reduce the time and labor burden of women and girls, but can also improve their level of mobility, productivity and access to markets.(36)

Investment opportunities introduction: The growing population, accompanied by rural-urban migration, will require heavy investment in urban planning and development (sanitation, waste management, low cost housing, electric supply and information and communication technology (ICT) connectivity.(3)

Key bottlenecks introduction: Limited physical infrastructure, constrained by hilly and mountainous topography, remains a major challenge for producers and farmers in increasing their access to markets, enhancing competitiveness, and improving incomes and livelihoods. It also negatively influences the pace of structural transformation.(2)

SubsectorMost 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.
Waste Management
IF.4

Policy priority: Studies show Rwanda recognizes solid waste mismanagement as a major challenge to sustainable development, particularly considering the health and safety implications for citizens. The government aims for 40% of non-organic solid waste being recycled by 2029-30.(5)

IndustriesMost 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.
Waste Management
IF-WM
Investment Opportunity Area

Plastic recycling and reprocessing

Business Model

Establish and operate recycling plants for repurposing plastics.

Critical IOA UnitDescribes a complementary market sizing measure exemplifying the opportunities with the IOA.
Half of Kigali's residents, forecast to be 2.5 million by 2032, have access to waste collection services.

Estimates suggest only around half of households in Kigali have access to waste collection services.(5)

The Utilities and Amenities Thematic Report shows only 48.9% of waste in Kigali is disposed through public waste collection service, while 33.5% is thrown into the bushes or fields, 13.6% is composted and 0.7% is abandoned in water basins.(7)

Because of the single use plastic ban imposed by the Rwandan Government, the demand for recycled plastic is rising.(8),(9) From a non-existent market in 2008, 14 companies were already present in Rwanda in 2019.(10)

IRRDescribes an expected annual rate of growth of the IOA investment.
15% - 20%
ROIDescribes an expected return from the IOA investment over its lifetime.
20% - 25%

A case study suggests an estimated benchmark internal rate of return of 19%, assuming a fully integrated plastics recovery and reprocessing facility with a production capacity of 80,000 tons of plastics per year and a capital cost of around USD 37 million.(11)

The benchmark return on equity is 19% to 21%, based on cost of equity data for the subsector including a country risk premium.(12)

TimeframeDescribes 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.
Long Term (10+ years)

Based on a mixed plastics recycling case study, the positive 19% internal rate of return is calculated for a 10-year timeframe.(11)

The standard investment period is estimated to be 15 - 25 years, based on sectoral benchmark information.(12)

Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
USD 1 million - USD 10 million
Business - Supply Chain Constraints
Technical complexity of the process (13), different types of plastics cannot be mixed together (14)
Market - Highly Regulated
Future regulations changing the rules of waste segregation can affect business over time
Capital - CapEx Intensive
Capital expenditure required for this type of business is substantial, so external financing may be needed.(11)
Sustainable Development Need

The country significantly underscored in SDG 9 - Industry, Innovation and Infrastructure, SDG 7 - Affordable and Clean Energy, SDG 11 - Sustainable Cities and Communities and SDG 6 - Clean Water and Sanitation.(1)

Between 2011 and 2019, the amount of solid waste generated in Kigali has doubled from 400 tons per day to 800 tons per day. Currently, it is estimated that around only half of households in Kigali have access to waste collection services.(5)

Nearly half of the households in Kigali have access to waste collection services, indicating the country's inefficient waste management.(5)

Gender & Marginalisation

Developing a gender-responsive infrastructure is a key element to accelerate poverty reduction efforts and economic growth. Infrastructure projects in transport, energy, water and sanitation not only reduce the time and labor burden of women and girls, but can also improve their level of mobility, productivity and access to markets.(36)

Expected Development Outcome

Reduced pollution and environmental degradation

Reduced need for imports of plastic, improved aesthetics, improved environment

Facilitation of responsible consumption and production

Gender & Marginalisation

Investments could reduce the time and labor burden of women who are largely occupied with waste management.

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

3.9.3 Mortality rate attributed to unintentional poisoning

Current Level

1.32 per 100,000 individuals (31)

Target Level

N/A

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

6.3.2 Proportion of bodies of water with good ambient water quality

Current Level

15% (32)

Target Level

N/A

12 - Responsible Consumption and Production
Responsible Consumption and Production (SDG 12)

12.4.2 (a) Hazardous waste generated per capita; and (b) proportion of hazardous waste treated, by type of treatment

12.5.1 National recycling rate, tons of material recycled

Current Level

N/A

N/A

Target Level

N/A

N/A

Secondary SDGs addressed
9 - Industry, Innovation and Infrastructure
Industry, Innovation and Infrastructure (SDG 9)
11 - Sustainable Cities and Communities
Sustainable Cities and Communities (SDG 11)
15 - Life on Land
Life on Land (SDG 15)
Directly impacted stakeholders
People
Households benefitting from new employment opportunities and waste collection options
Gender inequality and/or marginalization
Women due to reduced time burden from waste management
Planet
Natural environment due to less harmful waste practices and reuse of resources
Corporates
Small and medium enterprises in the waste management sector
Public sector
Public institutions with reduced waste burden
Indirectly impacted stakeholders
Corporates
Businesses using repurposed material
Outcome Risks

Without proper filtration, harmful compounds may be released into the atmosphere or cause health problems due to exposure to chemicals.(15),(16)

Waste recovery sites may become unhygienic. Hazardous chemicals in waste can pollute water and soil, and harm plants and fish. Mixing with rainwater creates leachate, a poisonous compound.(17)

Recycling may contribute to linear consumption instead of circular economy, by justifying the industrial system of production as it is and preserving a growing consumption pattern.(18),(19)

Impact Risks

Execution risk if waste management processes are not set up through careful planning

Unexpected impact risk given increasing greenhouse gas emissions from waste management activities

What

Upscaling of plastic recycling is likely to have a positive impact because it contributes to reducing waste and pollution and provides reusable materials.

Who

Overall population that is aggrieved due to increasing levels of pollution and plastic waste as well as companies that cannot access recycled materials.

Risk

Changing regulations in plastic usage can affect the business model, forcing companies to modernize their production lines (either input or output).

Impact Thesis

Mitigate against the negative environmental effects of waste and foster a circular economy especially with plastic.

Policy Environment

Policy document: The policy environment for plastic recycling is favorable. Law No. 17/2019 prohibits manufacturing, importing, using and selling plastic carry bags and single-use plastic items.(8)

National Sanitation Policy Implementation Strategy 2016: This strategy determines the government's goals and targets for properly disposed waste and waste recycling.(20)

Water and Sanitation Sector Strategic Plan 2018-2024: This plan establishes a strategic framework for implementing waste management services, recycling and composting.(21)

National e-Waste Management Policy for Rwanda: This policy provides a framework for efficient and effective management of e-waste. It is achieved by providing appropriate legislation and regulations that promote green growth and sustainable development in Rwanda.(22)

Financial Environment

Fiscal incentives: A 7-year tax holiday is available for investments in the manufacturing sector, provided the investment is at least USD 50 million and the investor contributes a minimum of 30% of this investment in form of equity.(29)

Other incentives: Investors registered with the Rwanda Development Board (RDB) can apply for certification making them eligible for benefits, such as corporate income tax reductions, value added tax exemptions on raw materials and vehicles imported for themselves and their foreign employees, and a duty exemption on plant, machinery and equipment.(30)

Regulatory Environment

Regulations No 002/EWASTAN/SW/RURA/2015 Governing Solid Waste Recycling in Rwanda: These regulations provide information on licensing, technical requirements, operational requirements, monitoring and sanctions for a solid waste recycling plant.(23)

Law No 17/2019-Relating to the Prohibition of Manufacturing, Importation, Use and Sale of Plastic Carry Bags and Single-Use Plastic Items: This Act provides a framework for exceptional consent to manufacture, import, export/use of plastic disposables. It also defines prohibited items and lists sanctions imposed for breaches.(8)

Regulations No 005/R/SAN-EWS/RURA/2016 Governing Liquid Waste Collection and Transportation: These regulations cover licensing, transportation, reporting, monitoring and compliance. They also list the sanctions imposed for breaching the regulations.(24)

Organic Law No 04/2005 of 08/04/2005 determining the modalities of protection, conservation and promotion of environment in Rwanda): This Act defines substances and processes, provides principles for protecting the environment and defines responsibilities of actors, and lists the sanctions imposed for breaches.(25)

Organic Law related to the Land Policy in Rwanda N°08/2005 of 14/07/2005: This Act regulates land ownership issues, provides the rules for management, exploitation and organisation of land, defines rights and obligations of the landlords and lists the penalties.(26)

Law N°57/2008 of 10/09/2008 relating to the prohibition of manufacturing, importation, use and sale of polythene bags in Rwanda: This Act provides a framework for obtaining exceptional consents to manufacture, import, export or use polythene bags. It also regulates the sanctions for breaching the regulation.(9)

Law N° 63/2013 of 27/08/2013 determining the mission, organization and functioning of Rwanda Environment Management Authority (REMA): This Act specifies REMA's scope of work.(27)

Law Nº16/2012 of 22/05/2012 determining the organization, functioning and mission of the National Fund for Environment (FONERWA): This Act specifies FONERWA's scope of work.(28)

Private Sector

AGRUNI Company Ltd, COPED Group Rwanda, Ubumwe Cleaning Services Ltd, COCEN Ltd, Baheza General Services Ltd

Government

Rwanda Environment Management Authority (REMA), Rwanda Development Board (RDB)

Multilaterals

World Bank, European Investment Bank, African Development Bank, Rwanda Green Fund (FONERWA), Global Green Growth Institute (GGGI), United Nations Development Programme (UNDP)

Non-Profit

Watoto Vision on Africa (WVA), Rural Development Interdiocesan Service (RDIS)

country static map
urban
Rwanda: Kigali
Rwanda's capital city generates the largest quantities of waste. Kigali also has a significant part of the country's potential workforce and features well-developed road infrastructure, allowing for transporting recyclables efficiently.(5)
Sector Sources
  • 1) United Nations Development Programme (2020). Sustainable Development Report 2020. https://unstats.un.org/sdgs/report/2020/The-Sustainable-Development-Goals-Report-2020.pdf 2) Gatete, C. (2016). The Rwanda we want: Towards ‘Vision 2050’. https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Speeches/Hon_Gatete_Umushyikirano_Presentation_2016.pdf 3) National Institute of Statistics of Rwanda (2012). Fourth Population and Housing Census 2012. http://www.statistics.gov.rw/publication/rphc4-population-projections 4) Rajashekar, A., Bowers, A. and Sebarenzi Gatoni, A. (2019). Assessing waste management services in Kigali. International Growth Centre. https://www.theigc.org/wp-content/uploads/2019/11/Rajashekar-et-al-2019-paper.pdf] 5) Rajashekar, A., Bowers, A. and Sebarenzi Gatoni, A. (2019). Assessing waste management services in Kigali. International Growth Centre. https://www.theigc.org/wp-content/uploads/2019/11/Rajashekar-et-al-2019-paper.pdf] 33) African Development Bank (2008). Gender assessment: progress towards improving women’s economic status. https://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/rwanda.pdf
IOA Sources
  • 6) Bower, J. and Murray, S. (2019). Housing need in Kigali: Findings and policy reflections. https://www.theigc.org/wp-content/uploads/2019/07/Bower-Murray-2019-Policy-brief.pdf 7) National Institute of Statistics of Rwanda (2018). Utilities and Amenities Thematic Report. 8) Republic of Rwanda. Law No 17/2019 - Law Single Plastic Use Ban. https://elaw.org/plastic/RW_PlasticLaws 9) Republic of Rwanda. Law N°57/2008 of 10/09/2008 relating to the prohibition of manufacturing, importation, use and sale of polythene bags in Rwanda. http://extwprlegs1.fao.org/docs/pdf/rwa93800.pdf 10) Dsilva, E. (2019). Going surgical on plastics in Rwanda, 2019. https://www.downtoearth.org.in/news/waste/going-surgical-on-plastics-in-rwanda-68446 11) Waste and Resources Action Program (2009). A financial assessment of recycling mixed plastics in the UK, https://archive.wrap.org.uk/sites/files/wrap/WRAP%20A%20financial%20assessment%20of%20recycling%20mixed%20plastics%20in%20the%20UK.pdf 12) PwC analysis based on Prof. A. Damodaran data, 2020. 13)Kazoora, J. (2019). Exploring the future of plastic recycling industries in Uganda. http://dissertations.mak.ac.ug/handle/20.500.12281/7252 14) Cumberland County Pennsylvania. Frequently asked questions - plastics. https://www.ccpa.net/DocumentCenter/View/5384/Plastic_FAQs? 15) Baltimore Urban Debate League (2012). Recycling - Supporting Documents. http://budl.org/wp-content/uploads/2012/07/Recycling-Supporting-Docs.pdf 16) Baltimore Urban Debate League (2012). Recycling - Supporting Documents. http://budl.org/wp-content/uploads/2012/07/Recycling-Supporting-Docs.pdf 17) Radhakrishnan, S. (2015). Environmental Implications Of Reuse And Recycling Of Packaging. Singapore: Springer-Verlag. https://www.researchgate.net/publication/286453969_Environmental_Implications_of_Reuse_and_Recycling_of_Packaging 18) Lemille, A. (2019). For a true circular economy, we must redefine waste. https://www.weforum.org/agenda/2019/11/build-circular-economy-stop-recycling/ 19) Westervelt, A. (20120. Can Recycling Be Bad for the Environment? https://www.forbes.com/sites/amywestervelt/2012/04/25/can-recycling-be-bad-for-the-environment/#44d5642d3bec 20) Republic of Rwanda. National Sanitation Policy Implementation Strategy. https://rura.rw/fileadmin/Documents/Water/Laws/NATIONAL_SANITATION_POLICY_IMPLEMENTATION_STRATEGY__DECEMBER_2016.pdf 21) Republic of Rwanda. Water and Sanitation Sector Strategic Plan 2018 - 2024. https://www.mininfra.gov.rw/fileadmin/user_upload/WATSAN_SSP_2018_-2024.pdf 22) Republic of Rwanda. National e-Waste Management Policy for Rwanda. https://environment.gov.rw/fileadmin/Environment_Subsector/Laws__Policies_and_Programmes/Policies/E-waste_policy_-_FINAL.pdf 23) Republic of Rwanda. Regulations No 002/EWASTAN/SW/RURA/2015 of 24th/April/2015 Governing Solid Wastes Recycling in Rwanda. https://rura.rw/fileadmin/Documents/Water/RegulationsGuidelines/CLEANED_FINAL_SOLID_WASTES_RECYCLING_REGULATIONS.pdf 24) Republic of Rwanda. Regulations No 005/R/SAN-EWS/RURA/2016 Governing Liquid Waste Collection and Transportation. https://www.rura.rw/fileadmin/Documents/Water/RegulationsGuidelines/Regulations_Governing__liquid_waste_collection_and_transportation.pdf 25) Republic of Rwanda. Organic Law Determining the Modalities of Protection, Conservation and Promotion of the Environment in Rwanda. https://repositories.lib.utexas.edu/bitstream/handle/2152/4960/4063.pdf;sequence=1 26) Republic of Rwanda. Organic Law determining the use and management of land in Rwanda. https://urbanlex.unhabitat.org/sites/default/files/organic_law_determining_the_use_and_management_of_land_in_rwanda.pdf 27) Republic of Rwanda. Law N° 63/2013 of 27/08/2013 determining the mission, organization and functioning of Rwanda Environment Management Authority (REMA). http://extwprlegs1.fao.org/docs/pdf/RWA131807.pdf 28) Republic of Rwanda. Law Nº16/2012 of 22/05/2012 determining the organization, functioning and mission of the National Fund for Environment (FONERWA). http://extwprlegs1.fao.org/docs/pdf/rwa114654.pdf 29) PwC. Corporate - Tax credits and incentives. https://taxsummaries.pwc.com/rwanda/corporate/tax-credits-and-incentives 30) Africa Legal Network (2015). Investment Guide - Rwanda. https://www.africalegalnetwork.com/wp-content/uploads/2015/12/Rwanda-Investment-Guide-2015.pdf 31) SDG Tracker (2021). Measuring progress towards the Sustainable Development Goals. https://sdg-tracker.org/ 32) Republic of Rwanda (2019). Voluntary National Review Rwanda 2019. https://sustainabledevelopment.un.org/content/documents/23432Rwanda_VNR_Document__Final.pdf 34) Coped (2020). Our services. http://www.copedgroup.com/services