68389 Success Stories public-private partnerships This series provides an overview of successful public-private partnerships in various infrastructure sectors, where IFC was the lead advisor. IFC Advisory Services in Public-Private Partnerships 2121 Pennsylvania Ave. NW Solid Waste Washington D.C. 20433 Photo © Divya Singh/IFC ifc.org/ppp Maldives: Solid Waste The Republic of Maldives, a nation consisting of over 1,000 coral islands in the Indian Ocean, is known for its white-sand beaches, pristine environment, and thriving marine ecosystem. But its waste management practices were threatening both the environment and its tourism industry—garbage was either dumped in the ocean or burned off with diesel fuel. To address this problem, the munici- pal government of Malé turned to IFC to introduce best practices in solid waste management, with participation from private-sector investors. The transaction closed in May 2011. Tatva Global Renewable Energy (Maldives) Private Limited, an Indo-German consortium, won a 20-year concession to build and operate an integrated waste management system for the Greater Malé region. The transaction mobilized $50 million in private investment that will improve waste collection, transportation and disposal; reduce marine and air pollution; and generate power through a 2.7MW waste-to-energy plant. The project will benefit 120,000 people, process up to 70 percent of the country’s solid waste, and reduce annual greenhouse gas emissions by 16,000 tons. The advisory work was supported by DevCo, the Public-Private Advisory Infrastructure Facility (PPIAF), and the South Asia Infrastructure Facility (SAIF). DevCo, a multi-donor program affiliated with the Private Infrastructure Development Group, is funded by the United Kingdom’s Department for International Development, the Dutch Ministry of Foreign Affairs, the Swedish International Development Agency, and the Austrian Development Agency. SAIF is supported by the Netherlands-IFC Partnership Program. BACKGROUND Solid waste has become a serious environmental and social problem In order to ensure adherence to global environmental standards, the in the Maldives, an archipelago of over 1,000 islands in the Indian project will follow United States Environmental Protection Agency Ocean that is economically dependent on tourism. Waste is collected requirements. in an ad-hoc manner and dumped at the shore, disposed of in the ocean, or transported to Thilafushi Island, where it is burnt openly. This combination of dumping and open burning destroys the marine BIDDING environment, pollutes the air, and puts the health of the country’s Fifteen firms initially expressed interest in the project; three 300,000 people at risk. As one official put it, the existing system has international firms submitted final bids. The concession was awarded created a “waste bomb� that could devastate the country. to Tatva Global Renewable Energy (Maldives) Private Limited, an Indo-German consortium consisting of UPL Environmental In 2008, the government of Maldives introduced a national solid Engineers Limited and Mittledeutsche Sanierunds-Und Entsorgungs waste management framework to address these issues. Recognizing Gesellschaft mBH. The award was based on both technical and that it lacked both funds and technical expertise, the government financial considerations and took the environmental and social decided to turn to the private sector through a public-private impact of the project into account. The consortium, the Maldives partnership to introduce best practices in waste management at a government and the Malé City Council signed the concession reasonable cost and in an environmentally sustainable way. agreement in May 2009. This approach also supported the government’s ambitious plan to The consortium has proposed building a 2.7 MW waste-to-energy fight climate change by making the Maldives the world’s first carbon- plant at the project island of Thilafushi to replace the diesel-based neutral country by 2020. power generation on the island, saving nearly 12,000 tons of carbon emissions annually. IFC’S ROLE IFC, the lead transaction advisor, helped the government develop an integrated waste management strategy and implementation plan for the entire country. To ensure a fair and transparent bidding process, POST-TENDER RESULTS IFC conducted a diagnostic review, identified strategic options, and conducted an environmental and social baseline study so that bidders • When the project is completed, IFC will have helped would have the information necessary to design effective solutions. the Maldives promote private sector investment in IFC also ensured that key stakeholders would have input, including the solid waste management sector by mobilizing citizens, local businesses, and resorts. Because bidders proposed capital worth $50 million. widely different technologies, IFC required them to demonstrate • The project will improve the solid waste manage- solid experience in waste management and disposal, as well as commit to developing environmental management plans. Site visits of the ment infrastructure and services in the catchment final bidders were required to enable better comparisons of widely area for around 120,000 people, representing different technical proposals. Finally, IFC helped the government nearly 40 percent of the total population. The with its communications strategy so that the entire process would be system will manage up to 70 percent of the nation’s transparent. solid waste. • The practice of dumping and burning waste on TRANSACTION STRUCTURE Thilafushi Island will cease, which will reduce air The transaction was structured as a 20-year concession to build, operate and transfer an integrated waste management system. The and marine pollution that has caused considerable total project cost was approximately $1 million, including donor degradation of the island’s ecological system. contributions, which generated an investment of $50 million. The • 120 hectares of land on Thilafushi Island will be concessionaire will provide 100 percent of the required financing. At reclaimed and made available for other uses, such the end of the concession period, the government will either assume as an industrial park and possibly a port. management of the waste management system or extend the operating period. • The project supports the Maldivian government’s The concessionaire will be responsible for the collection, goal to become a carbon-neutral country by 2020 transportation, storage, recycling and treatment of solid waste for the while helping it comply with good global practices country’s prime waste generation geography. This includes the capital on the treatment and disposal of solid waste. island of Malé, the three islands of Huluhullé, Hulhumalé, and Villingili, and the neighboring resorts, which in total generate nearly 60 to 70 percent of the waste in Maldives (around 300 tons of waste per day). A landfill and a treatment plant will replace the current method of open burning of waste at Thilafushi Island. 7/2011