Egypt considers new waste management scheme to attract domestic and foreign investment for projects converting waste into energy.
The first phase of a project to turn waste into energy has been launched in Egypt with a focus on eight companies in eight governorates and investments ranging between $325 and $329 million.
The details of the project were announced following a meeting between the companies and Prime Minister Mustafa Madbouli, who ordered procedures for investors to be facilitated.
Yasmine Fouad, the minister of environment, met with Tarek Amer, governor of the Central Bank of Egypt (CBE), to discuss the financing of the project. "Its aim of turning waste into energy will be a qualitative shift in dealing with the country’s waste problem." she said.
Waste Management Finance
Companies investing in waste conversion are looking into financing packages after the ministry provided investment incentives for the private sector to access the field.
The ministry has created a new waste system, prepared various schemes for Egypt’s governorates, and taken into account investment guarantees made under the new law on waste prepared by the ministry and ratified by the president. The executive regulations of the new law are currently being drafted.
Fouad said it was important to provide adequate financing mechanisms for companies converting waste into energy because of the high investment costs of such projects. She added that obstacles should be removed to guarantee the sustainability of the system amid government efforts to establish infrastructure financed from the state budget.
The first phase of the project has so far cost LE3 billion, Fouad said, adding that the new waste scheme was three-pronged: establishing the infrastructure for the collection, transfer, and recycling system; establishing the legislative structure with the law on waste that regulates the financial resources of the scheme; and monitoring the results.
A supervisory role will be played by the Ministry of Environment through an authority that will regulate waste management, draft contracts between municipalities and waste companies, and implement operations systems.
The new law states that rubbish collectors should have a licence to join the waste management system, in the absence of which they risk fines, Fouad said. The ministry is helping them to join the system by launching a database in cooperation with the Ministry of Social Solidarity to provide them with insurance and the possibility to create NGOs.
The two ministries are also collaborating with the Ministry of Manpower to give them job titles, and they will provide them with insurance for the first year to encourage them to join the system.
Fouad said the steps had been a success, evident in the increase in the number of rubbish collectors who had enrolled to reach 2,200 over the last two months.
The project to support companies in converting waste into energy was beneficial to all parties, whether investors or citizens, and it was also profitable, said Ahmed Kamal Abdel-Moneim, executive director of the Environmental Compliance and Sustainable Development Office at the Federation of Egyptian Industries. The office has previously funded two factories to convert waste into energy at a cost of LE4.5 million each, he added.
Kamal said that the office could implement the technical aspects of such projects, having conducted studies with a number of clients in the field, particularly if the plan was adopted by the Ministry of Environment, the CBE, and the concerned authorities.
Magdi Allam, an environmental expert and secretary-general of the Union of Arab Environmental Experts, said that each governorate should have an industrial zone for recycling waste.
He said that there were two types of waste. The first is organic waste, which amounts to more than 50 per cent of all waste and comes from households. The most appropriate use of this is to turn it into organic fertiliser, especially for desert land. The second is solid waste, amounting to 40 per cent of the total, which can be used in industry and converted into energy.
The state is currently working to establish a complex to recycle waste, which is the system adopted in the majority of countries to convert plastic waste to plastic, bones to manufacture glue, leather to make leather products, and tin to make various items, Allam added. The project to convert waste into energy requires the cooperation of the ministries of the environment, military production, local development, and electricity.
Mohamed Al-Zarqa, an expert on the environment and hazardous waste, said it is necessary to coordinate with the Ministry of Electricity to ensure the electricity these companies produce will be sold, he added.
The ministry should pay LE1.4 per kilowatt for electricity-producing companies to cover operating cost and garner a margin of profit. However, in 2019 the ministry announced it cannot afford to pay more than LE1.03 per kilowatt.
Accordingly, the cabinet decreed that the Ministry of Electricity pays LE1.03 per kilowatt and the Ministry of Local Development, being the body responsible for waste treatment, to shoulder the remaining LE0.37 per kilowatt.
It was also decreed the Ministry of Finance would pay the Local Development Ministry its share in the price of electricity for three years starting 2019. This means that by the time the companies are established and commence electricity production, the three years will have passed.
Al-Zarqa noted another point which he said needs to be studied thoroughly before establishing companies that convert waste to energy: does Egypt need to produce electricity?
Egypt has recently exerted strenuous efforts to cover its electricity needs, building thermal, solar, and wind power stations, Al-Zarqa said.
Egypt’s total electricity production stands at 60,000 MW, whereas the maximum consumption is estimated at 32,000 MW, which means that the country has an electricity surplus, he concluded.