Solid waste is inextricably linked to urbanization and economic development—as countries urbanize, and standards of living increase, consumption of goods and services increase, leading to more waste. Almost 1.3 billion tons of municipal solid waste are generated globally every year, and by 2050 this is expected to double. Poorly managed waste has an enormous impact on people’s health, the environment, and often results in higher costs for governments than if the waste was managed properly in the first place.
Solid waste management is often regarded as the most local of all public utilities. Since the first steps were taken to decentralize this service in developing countries, responsibility for it is increasingly falling to municipalities, as it has been the case in Europe for decades. Frequently subject to financial, material, and work force constraints, municipalities try to manage just the most urgent needs, such as removing waste from cities to keep them clean. Many focus their efforts on developing basic cleaning services— street sweeping, waste collection, gutter maintenance, and running landfills—with mixed results and high costs. In some cities in Sub-Saharan Africa, operating costs can account for 30 to 50 percent of a municipality’s total annual budget. Yet this approach, based on collecting and storing waste in open landfills, falls short of managing municipal solid waste on a long-term basis.
The public and private sector together need to assume much more responsibility for waste generation and disposal, specifically product design and waste separation. Formalizing these responsibilities through well-structured public-private partnerships (PPPs) can result in significant improvements in efficiency and quality of solid waste management. Success requires governments to consider the content and volume of the existing waste stream, the appropriate technologies, the imperative of stringent environmental standards and community engagement, who will pay for what, and the availability of experienced private partners.
As PPPs become accepted practice, investments in the waste sector have grown as governments attract private capital and technical expertise for the construction, operation, and management of waste projects. Most commonly, these projects include waste incineration, waste treatment, recycling, and energy from waste (EFW) projects.
Through a PPP, governments contract with private companies to construct, operate, and maintain waste facilities. PPP transactions have been widely applied in the delivery of waste treatment and EFW facilities in the past decade. Most of the volume generated between 2005 and 2013 was from public projects tendered as PPP concessions: a total of 68 deals in the waste sector, worth $17.3 billion. Over the past decade, the countries with most active PPP market have been the U.K., Spain, Singapore, Australia, Poland, Italy, and France. In 2013 alone, the U.K. saw nine deals reaching financing close in the waste sector, including the construction of waste treatment plants and EFW facilities, with a total investment of $3 billion.