Sewage treatment and sanitary services

Sewage treatment and sanitary services
Photo by Shutterstock
Sewage treatment and sanitary services
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

Construct and operate small-scale sewage treatment plants, and provide affordable services with sewage and sanitary trucks for solid waste extraction and public latrines in densely inhabited areas.

Expected Impact

Contribute to safe living conditions and improved livelihood opportunities.

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 ROI)
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.
Medium Term (5–10 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.
Less than 0.2% of Kigali's 370,000 households is served with reliable sewerage systems.
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
< USD 500,000
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
No Poverty (SDG 1) Good health and well-being (SDG 3) Clean water and sanitation (SDG 6)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Industry, Innovation and Infrastructure (SDG 9) Reduced Inequalities (SDG 10) Sustainable Cities and Communities (SDG 11)
Country
Regions
  • Rwanda: Kigali
  • Rwanda: Western Province
  • Rwanda: Northern Province
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) 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.(I) Rwanda faces high costs of logistics and long transport times due to its relatively poor supply chains.(1) As infrastructure improves overall productivity of the economy, it will be the key driver for enhancing Rwanda’s sustainable development and economic growth.(2)

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 is facing 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: Ensuring high standards of living for all citizens, improved quality of life, modern infrastructure and transformation for prosperity is an overarching goal of Rwanda's Vision 2050. The water and sanitation sector plays a critical role in its achievement.

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

Sewage treatment and sanitary services

Business Model

Construct and operate small-scale sewage treatment plants, and provide affordable services with sewage and sanitary trucks for solid waste extraction and public latrines in densely inhabited areas.

Critical IOA UnitDescribes a complementary market sizing measure exemplifying the opportunities with the IOA.
Less than 0.2% of Kigali's 370,000 households is served with reliable sewerage systems.

Of the 370,000 households in Kigali (9), less than 0.2% is served with reliable sewerage systems. At 2015, there were 3 low-scale sewerage systems in Kigali, which served approximately 700 households.(10)

Currently, the majority of the wastewater generated by Kigali’s 1.2 million inhabitants is disposed of in sceptic tanks or pit latrines. Kigali also has several modern housing or industrial estates that are equipped with small, decentralized waste stabilization ponds.(10)

Over 75% of water consumed in Rwanda ends up as waste, even though it can be purified and reused and therefore reduce pressure on the natural environment as well as on Rwandans' bills.(11)

ROIDescribes an expected return from the IOA investment over its lifetime.
15% - 20%

The estimated return rate for investor ranges from 17.1% to 21.1%. The rate provided is a benchmark based on a cost of equity with a country risk premium, reflecting an average return required by investors active in the water utilities subsector.

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.
Medium Term (5–10 years)

The payback period for an example from another context was 3 years. (13) Accounting for the construction period of the plant, the investment timeframe should be considered as medium.

Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
< USD 500,000
Business - Supply Chain Constraints
Lack of stable energy supplies and limited financial resources made conventional treatment processes rare.(14)
Business - Supply Chain Constraints
Limited infrastructure and old sewage systems - including traditional pit latrines with deep excavations and linings - worked for years with no need for further investments.(10)
Business - Business Model Unproven
Limited sewer collection may be a bottleneck for wastewater treatment.(14)
Business - Supply Chain Constraints
Water quality monitoring is often poor. Only few parameters such as turbidity, pH,and alkalinity are monitored. Capacity building activities may be necessary to unlock the full-scale potential and to implement innovative technologies for water treatment (powered e.g. by solar energy).(15)
Sustainable Development Need

At 2017, 66.6% of Rwanda's population was using at least basic sanitation services.(16)

Around 80% of diseases in Rwanda are water-borne and can be prevented through proper sanitation and access to clean, non-contaminated water.(5)

Discharge of wastewater into water basins causes dangerous contamination, which contributes to many fatal water-borne diseases.(7)

Gender & Marginalisation

Infrastructure projects in water and sanitation help reduce the time and labor burden of women and girls.(36)

Expected Development Outcome

Improved sanitary and water, sanitation and hygiene (WASH) conditions in highly populated areas, improved of clean water access., increased access to affordable sanitary services

Reduced pollution of the natural environment and reduced pollution of lakes and rivers due to improper disposable of sewage waste

Reduced cases of poisonings and diarrhea arising from drinking dirty water, and reduced spread of water-transferred diseases like cholera and typhoid fever

Gender & Marginalisation

Investments could reduce the time and labor burden of women who spend a lot of time accessing clean water

Increased quality of life and wellbeing of unserved areas

Primary SDGs addressed
1 - No Poverty
No Poverty (SDG 1)

1.4.1 Proportion of population living in households with access to basic services

Current Level

Food market: 50.0 (min) Primary school: 25.4 (min) Secondary school: 35.7 (min) Health center: 49.9 (min) (32)

Target Level

N/A

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

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 Level

82.4 deaths per 100,000 people (33)

Target Level

N/A

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

6.1.1 Proportion of population using safely managed drinking water services

6.3.1 Proportion of domestic and industrial wastewater flows safely treated

6.3.2 Proportion of bodies of water with good ambient water quality

Current Level

87.4% (34)

N/A

15% (34)

Target Level

100% (35)

N/A

N/A

Secondary SDGs addressed
9 - Industry, Innovation and Infrastructure
Industry, Innovation and Infrastructure (SDG 9)
10 - Reduced Inequalities
Reduced Inequalities (SDG 10)
11 - Sustainable Cities and Communities
Sustainable Cities and Communities (SDG 11)
Directly impacted stakeholders
People
Urban population and society as a whole benefitting from regular and safe sanitary options
Planet
Natural environment due to less harmful sanitation practices
Corporates
Logistics companies
Indirectly impacted stakeholders
Public sector
Municipal authorities with formalised sewerage systems
Outcome Risks

If a chemical water filtration method is applied, disinfection byproducts may contaminate the environment.(17)

The lifecycle of a new water purification system may have a negative environmental impact. Precautionary measures should be taken during the project planning and execution phase.(18)

The risk micro-organisms present in wastewater (e.g. Escherichia, Salmonella) get in to sewage sludge and survive up to few months should be addressed.(19)

Impact Risks

Unexpected impact risk given the negative implications of wastewater if required precautions are not taken

What

Construction of sewage treatment facilities, which limits spread of water-borne diseases and ensures higher environmental and living standards for Rwanda's population.

Who

Urban population, municipal authorities and the national environment which can positively benefit from this type of investment, and indirectly Rwandan citizens.

Risk

Without necessary precautions, investment may cause health hazards and environmental degradation. Centralized sewage facilities require financial, material and human resources.

Impact Thesis

Contribute to safe living conditions and improved livelihood opportunities.

Policy Environment

National Sanitation Policy Implementation Strategy 2016: This strategy determines the government's goals and targets regarding sanitation and identifies implementing sewerage systems as a strategic action.(20)

Water and Sanitation Sector Strategic Plan 2018-2024: This plan establishes a strategic framework for implementing sludge emptying services and sewerage systems.(6)

Vision 2050: This policy states that modern sanitation sewer and management services (including connection to sewer networks) for all households in urban areas shall be established by 2050. In rural areas, households will be provided with access to standardized on-site sanitary systems.(21)

WATSAN 2019-20 Forward Looking Joint Sector Review: This review prioritizes increased households access to basic sanitation (from 66% to 75%) and increased percentage of urban households using safely managed sanitation services (by 5% compared with the baseline) by 2019-20.(22)

National Strategic Transformation (NST 1): This strategy identifies scaling up access to sanitation and hygiene for all citizens to 100% (including constructing Kigali's centralized sewerage system and faecal sludge treatment plant) as a key strategic intervention.(23)

Financial Environment

Fiscal incentives: Registered investors are exempt from the capital gains tax. Imported machinery and raw materials are exempt from duty tax in line with East African Community Customs Management Act Regulation. The tax authority can issue a Withholding Tax Certificate to avoid double taxation of investors.(31)

Other incentives: Investors receive an accelerated depreciation rate of 50% in the 1st year of operations, if they invest in business assets worth at least USD 50,000 each and construction projects of at least USD 1.8 million. If they invest at least USD 250,000, they can recruit 3 foreigners without a labor test.(31)

Regulatory Environment

Law N°48/2018 of 13/08/2018 on Environment: This Act governs utilization and protection of water resources, liquid waste management, management of toxic and hazardous waste, water and sanitation. It also lists prohibited acts and sanctions for non-compliance with environmental regulations.(24)

Organic Law n° 04/2005 of 08/04/2005: This law determines the modalities for protecting, conserving and promoting environment in Rwanda.(25)

Regulation N°004/R/SAN-EWS/RURA/2016 of 10/11/2016 Governing Decentralized Waste Water Treatment Systems: This regulation provides the procedure for licensing of operators, requirements of water systems, obligations of operators, and sanctions for non-compliance with the regulation.(26)

Regulations No 005/R/SAN-EWS/RURA/2016 Governing Liquid Waste Collection and Transportation: These regulations establish a licensing regime for waste collectors and transporters and requirements for waste collection and transportation. They also provide modalities for reporting, monitoring, compliance and sanctions.(26)

Ministry of the Environment is the main regulatory body responsible for legislation relating to protecting water resources and environment in general.(23)

The Rwanda Water and Forestry Authority regulates issues related to managing water resources, and establishes policies to support the segment.(21)

Rwanda Utilities Regulatory Authority issues licenses for utilities operators and establishes guidelines for operators.(30)

Private Sector

KAMPS, Water and Sanitation Corporation (WASAC), European Investment Bank (EIB), African Development Bank (AfDB), KfW Development Bank

Government

Rwandan Ministry of Infrastructure (MININFRA), Rwandan Ministry of Health (MOH), Rwanda Development Board (RDB)

Multilaterals

World Bank (WB)

Non-Profit

United Nations Human Settlement Programme (UN Habitat), United States Agency for International Development (USAID), German Corporation for International Cooperation (GIZ)

country static map
urban
Rwanda: Kigali
Kigali is the most densely populated region (1.2 million inhabitants) and most of the sewage is currently left untreated.(10) This creates a pressing need for sanitary services and public latrines.
semi-urban
Rwanda: Western Province
Construction of centralized sewerage systems for the City of Kigali and four faecal sludge treatment plants in Rusizi, Karongi, Rubavu and Musanze Towns has been specified on the Rwanda Water Portal (the WATSAN).(22)
semi-urban
Rwanda: Northern Province
Construction of centralized sewerage systems for the City of Kigali and four faecal sludge treatment plants in Rusizi, Karongi, Rubavu and Musanze Towns has been specified on the Rwanda Water Portal (the WATSAN).(22)
Sector Sources
  • 1) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G., Woelm, F. (2020). The Sustainable Development Goals and COVID-19. Sustainable Development Report 2020. Cambridge: Cambridge University Press. 2) Ministry of Infrastructure. Draft Final Transport Sector Strategic Plan for the National Strategy for Transformation (NST1) 2018 3) 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 4) Ministry of Infrastructure. Housing Sub-Sector. https://www.mininfra.gov.rw/index.php?id=269&L=4%22 5) International Network on Household Water Treatment and Safe Storage. Water Safety and Related Impacts in Rwanda. http://hwts.web.unc.edu/files/2014/08/2011Entebbe_Day1_06_Nsagiyaomba.pdf 6) Ministry of Infrastructure. Water and Sanitation Sector Strategic Plan 2018 - 2024. https://www.mininfra.gov.rw/fileadmin/user_upload/WATSAN_SSP_2018_-2024.pdf 7) United Nations International Children's Emergency Fund. Water, sanitation and hygiene. https://www.unicef.org/rwanda/water-sanitation-and-hygiene 8) UN Water. SDG 6 Data. https://www.sdg6data.org/country-or-area/Rwanda 36) 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
  • 9) 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 10) Rwirahira, R. (2018). Can Rwanda’s government avert Kigali’s sewage time bomb? Equal Times. https://www.equaltimes.org/can-rwanda-s-government-avert?lang=en#.X7finmhKhPa 11) d'Amour Mbonyinshuti, J. (2017). Why wastewater treatment should be the way to go. https://www.newtimes.co.rw/section/read/225525 12) World Bank (2017). Implementation completion and results report on Sarajevo waste water project. http://documents1.worldbank.org/curated/en/904151521734042116/pdf/implementation-completion-and-results-report-icr-document-P090675-var26-03192018.pdf 13) Peralta-Suárez, L.M. and Busto Yera, Y. (2013). Development of a Technology for Treating Wastewater Contaminated with Nitric Acid. https://doi.org/10.1155/2013/278618 14) Wang, H., Li, F. and Zhang, B. (2014). Water and Wastewater Treatment in Africa – Current Practices and Challenges. CLEAN - Soil, Air, Water. https://www.researchgate.net/publication/259536701_Water_and_Wastewater_Treatment_in_Africa_-_Current_Practices_and_Challenges 15) Andiva, Y. (2019). Challenges And Solutions In The Water And Wastewater Treatment Industry In Africa. Construction Review Online. https://constructionreviewonline.com/2019/04/challenges-and-solutions-in-the-water-wastewater-treatment-industry-in-africa/ 16) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G., Woelm, F. (2020). The Sustainable Development Goals and COVID-19. Sustainable Development Report 2020. Cambridge: Cambridge University Press. 17) Barjoveanu,G. and Teodosiu,C. (2019).Environmental Performance Evaluation of a Drinking Water Treatment Plant: a Life Cycle Assessment Perspective. Environmental Engineering and Management Journal. https://www.researchgate.net/publication/332268536_Environmental_performance_evaluation_of_a_drinking_water_treatment_plant_a_life_cycle_assessment_perspective 18) Whitehead, P. (2020). Minimizing Environmental Impacts Of Water Purification | ELGA Labwater. Elgalabwater.com. https://www.elgalabwater.com/blog/minimizing-environmental-impacts-water-purification 19) Adamus-Białek, W., Wawaszczak, M. and Świercz, A. (2015). Impact Of Sewage Treatment Plant On Local Environment. ECOpole. http://tchie.uni.opole.pl/PECO15_2/EN/AdamusBialekWawszczak_PECO15_2.pdf 20) National Sanitation Policy Implementation Strategy. https://rura.rw/fileadmin/Documents/Water/Laws/NATIONAL_SANITATION_POLICY_IMPLEMENTATION_STRATEGY__DECEMBER_2016.pdf 21) Ministry of Finance and Economic Planning (2015). VISION 2050. Republic of Rwanda. http://www.minecofin.gov.rw/fileadmin/templates/documents/NDPR/Vision_2050/Vision_2050_-Full_Document.pdf 22) Ministry of Infrastructure (2019). WATSAN 2019/20 Forward Looking Joint Sector Review Report. Republic of Rwanda. http://www.minecofin.gov.rw/fileadmin/templates/documents/NDPR/Joint_Sector_Review/Forward_Looking_JSRs/Forward_Looking_JSR_2019-20/WATSAN_2019-20_FLJSR.PDF 23) Ministry of Finance and Economic Planning (2017). 7 Years Government Programme: National Strategy For Transformation (NST1). Republic of Rwanda. http://www.minecofin.gov.rw/fileadmin/user_upload/MINECOFIN_Documents/NST_A5_booklet_final_2.04.19_WEB.pdf 24) Ministry of the Environment. Law N°48/2018 of 13/08/2018 on Environment. https://www.environment.gov.rw/fileadmin/user_upload/Moe/Publications/Laws/Law_on_environment.pdf 25) Ministry of the Environment. About. https://www.environment.gov.rw/about 26) Rwanda Utilities Regulatory Authority. Regulation N°004/R/SAN-EWS/RURA/2016 of 10/11/2016 Governing Decentralized Waste Water Treatment Systems. https://rura.rw/fileadmin/Documents/Water/RegulationsGuidelines/Regulation__Governing_Decentralised__Waste_Waste__Water_Treatment_Systems.pdf 27) Rwanda Utilities Regulatory Authority. Regulations No 005/R/SAN-EWS/RURA/2016 Governing Liquid Waste Collection and Transportation. https://rura.rw/fileadmin/Documents/Water/RegulationsGuidelines/Regulations_Governing__liquid_waste_collection_and_transportation.pdf 28) Republic of Rwanda. Organic Law n° 04/2005 of 08/04/2005. https://repositories.lib.utexas.edu/bitstream/handle/2152/4960/4063.pdf;sequence=1 29) Rwanda Water and Forestry Authority. Water Laws and Policies. http://www.rwfa.rw/index.php?id=33 30) Rwanda Utilities Regulatory Authority. About RURA. https://rura.rw/index.php?id=45 31) Rwanda Development Board. Investment Incentives. https://rdb.rw/investment-opportunities/infrastructure/#tab-1-3 32) Republic of Rwanda (2019). Voluntary National Review Rwanda 2019. https://sustainabledevelopment.un.org/content/documents/23432Rwanda_VNR_Document__Final.pdf 33) SDG Tracker (2021). Measuring progress towards the Sustainable Development Goals. https://sdg-tracker.org/ 34) Republic of Rwanda (2019). Voluntary National Review Rwanda 2019. https://sustainabledevelopment.un.org/content/documents/23432Rwanda_VNR_Document__Final.pdf 35) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G., Woelm, F. (2020). The Sustainable Development Goals and COVID-19. Sustainable Development Report 2020. Cambridge: Cambridge University Press. https://dashboards.sdgindex.org/profiles/RWA