Circular Economy Solutions: A Multi-

Stakeholder Approach

Rochi Khemka Global Partnerships Coordinator and Asia WRM Specialist 2030 Water Resources Group, World Bank Group May 22, 2018

About 2030 WRG

2008-2012 | World Economic Forum

Ideation, preparation and incubation

2012-2017 | International Finance Corporation

Demonstration

2018-2023 | World Bank Water Global Practice

Getting to scale

Mission Help countries achieve water security by 2030 by facilitating collective action on water between

government, the private sector, and civil society.

Overview of MSP Results

3

Analyze Convene Transform

Key Outputs:

• Hydro-Economic Analysis

• Targeted sector analysis

• Macro water challenges analysis

Key Outcomes:

• Demonstration projects

• Large-scale programs

• Policy reform

• Financing mechanisms

Key Impacts

• m3 freshwater abstraction avoided

• m3 untreated wastewater discharge

avoided

• m3 cost-effective water storage

• $ financing facilitated

2030 W

RG

Glo

bal

Partn

ers

2019

Multinational

companies

Bilateral donors

Development banks

INGOs and IGOs

Incubated within Hosted by

Par

tners

hip

pro

gress

in 2

018

11

61 PROGRAMS UNDER

IMPLEMENTATION

OPERATIONAL

MULTI-STAKEHOLDER

PLATFORMS

14 ENGAGEMENTS IN

COUNTRIES / STATES

ACTIVE PARTNERS IN STEERING BOARDS & WORKING GROUPS

Private | Public | Civil Society | Total

2014

2015

2016

2017

2018

101

121

212

293

308

47

74

123

131

154

29

102

170

218

284

177

297

505

642

746

2030 W

RG

Lead

ers

hip

A

reas

Promoting

circular

Economy

Transforming

value chains

Water security

and resilience

planning

• Improving water efficiency

within value chains, especially

in agriculture

• Using a combination of

solutions, e.g. infrastructure

development, local water

governance, and creating

market linkages

• Identifying PPP opportunities for

wastewater treatment and reuse

• Enhancing government spending

capabilities

• Bringing in best practices in

technology and financing

• Fostering collaborative action,

particularly by overcoming legal,

regulatory, and institutional

barriers

• Helping countries develop water

security and resilience planning

capabilities

• Supporting reforms in water

allocation regimes

• Integrating nature-based

solutions in water resources

management to support climate

adaptation

• Supporting private sector to

develop better water risk and

water stewardship practices

Exam

ple

s of Par

tners

– K

arnat

aka

Government

1. Chief Secretary, Government

of Karnataka (Chair of MSP)

2. Principal Secretary, Water

Resources

3. Principal Secretary, Finance

4. Principal Secretary, Urban

Development

5. Principal Secretary, Industries

and Commerce

6. Principal Secretary, Agriculture

Private Sector/ Industry

Associations

1. CEO, Volvo India (rep of

Confederation of Indian Industries

(CII))

2. Chairman & MD, BASF

(representative of WBCSD)

3. GM, Syndicate Bank (convener of

State Level Bankers Committee)

4. President, Federation of Karnataka

Chambers of Commerce and

Industry

5. Representative, Information

Technology Association

6. Representative, World Business

Council for Sustainable

Development

Civil Society

1. Chair, Asia Pacific Water Forum

(Co-Chair of MSP)

2. Arghyam Trust

3. KLE Technical University, Hubli

4. Center for Public Policy, Indian

Institute of Management

5. Indian Institute of Science

Karnataka MSP Steering Board

Steering Board Chaired by Chief Secretary,

senior-most bureaucrat

Meets every 3-4 months

Agri Water Efficiency

Workstream Chaired by Principal Secretary, Water

Resources

Drip Finance Task

Force

Drip-to-Market

Agro Corridor

Task Force

Wastewater

Reuse Policy Task

Force

Policy and

Incentives Task

Force

Industrial

Mapping Task

Force

Reuse

Resource

Center Task

Force

Urban Water Workstream Chaired by Additional Chief Secretary,

Urban Development

Industrial Water Work Stream Chaired by Additional Chief Secretary,

Industries and Commerce

MSP

Str

uct

ure

– K

arnat

aka, India

Program Examples

Ganga: Paradigm shift towards sustainable PPP-based wastewater

treatment

First 3 PPP concessions signed for Mathura,

Varanasi and Haridwar

Complementary efforts of the World Bank Group unlocked first

PPPs for wastewater treatment in the Ganga

• $1 billion ongoing loan

• Technical assistance on policy and regulatory framework for environmental management

• PPP policy framework

• Pilot PPP project preparation

• Private sector and civil society engagement for PPP structuring

• Institutional arrangements

• M&E framework

• PPP Transaction advisory and project structuring for first 3 towns

• PPP advisory for rollout in additional towns

• The Ganga Basin is home to 450 million people

• An estimated 3 billion liters of untreated wastewater flow into the Ganga daily

• Government of India approved Namami Gange program in 2015 for rejuvenation, protection and

clean-up of the River Ganga, with a budget allocation of $3 billion

World Bank

2030 WRG

IFC

Additional PPPs

developed by

government on same model

Outcomes and

Impacts

Ganga

Basin

Hybrid Annuity Model

• Concessionaire to mobilize 100% investment of which 40% reimbursed during construction and upon commissioning

• 60% of remaining capex paid in annuities during the concession period, along with O&M expenditure

• Payment security by setting up of a separate account

Ganga PPPs Transaction Structure

PROJECT SPV

(Selected Bidder) Term Loan/ WC

NMCG

BANKERS /FIs

Design, build, finance, operate,

maintain and transfer

Escrow Account

Appointed by

NMCG

JAL NIGAM

Land and ROW

Project Engineer Wastewater Treatment

Plant(s)

Review and construction

supervision, monitoring of KPIs

Tripartite agreement to be executed between the Jal Nigam, NMCG and the identified private developer

12

Bangladesh

13

Challenge: • Toxic industrial wastewater discharge polluting waterbodies & food chain

• Inefficient industrial processes resulting in GW decline

• Lack of industrial wastewater treatment hindrance for export growth (particularly textile)

• 100 Economic Zones to be developed in the next few years possess enormous challenge to water

security

The work-stream is focusing on: • Industrial Wastewater Treatment and Re-use in Economic Zones

• Policy and institutional strengthening of Bangladesh Economic Zones Authority (CETP FMU* setup)

• Promoting PPPs in CETP implementation

• Exploring Special Purpose Vehicle (SPV) and Guarantee Fund setup with IFC

• Groundwater availability study for industrial clusters around Dhaka City

Impacts: First PPP launched, estimated to reduce untreated wastewater discharge by ~40

million m3 and reduce freshwater abstraction by ~35 million m3

PPPs for Central Effluent Treatment

Plants (CETP) in Economic Zones In

dust

rial

Was

tew

ater

* Central Effluent Treatment Plant (Facilitation and Monitoring Unit)

Legal Reform to introduce Polluter Pays Principles Mongolia

Protection of Mongolian water resources from contamination

Those discharging polluted water must apply for permission

(Discharge Permit)

All discharging polluted water must pay two fees:

Water Pollution Fee, if discharge meets standards

Water Pollution Compensation Fee, if discharge exceeds standards

Pollution Fee and Compensation embed costs of contaminating

water from its natural (fresh) state

Amendments to the Water Pollution Fee Law intended to

facilitate implementation of Law

Government Priority:

Provisions of Mongolian Water Law:

Mongolia Principles for Fixing Pollution Fee and Compensation

Fee and Compensation to follow Polluter Pays Principle

There is limited laboratory capacity in Mongolia

There is limited administrative capacity

Method for estimating extent of pollution to be simple and implementable:

By remedial action through on-site treatment facility

Focus on incentivizing large polluters (industry) to mitigate extent of water contamination

Every industry unit pays pollution compensation at a rate as per pollution caused

Maximum pollution caused by effluent discharge by industry in UB

44 large units discharge 76% of wastewater Mongolia

Industry

Analysis

High polluters

Most of the industry segments having large dischargers are also highly polluting (i.e., have high pollution load)

Spirits, Vodka, Wool and Cashmere, Tanneries

On-site treatment

Such large units can afford own treatment plants

Higher Pollution Fee & Compensation rates to incentivize treatment

Up to 76% of the wastewater may be treated before discharge to sewers

Small polluters

• Small, but polluting, units will bear high rate, but impact will be small

Mongolia - National Standards for Treated Wastewater Reuse

• 2030 WRG supported standards for treated wastewater reuse based on

private sector demand for reuse

• Guiding principle : Treatment level for reuse depends on the end use

• Ensures cost-effective wastewater treatment and fit-for-purpose reuse

• Standards developed through an iterative process:

I. Review of standards in Mongolia and internationally

II. Stakeholder discussions, including Ministry of Environment, large

industrial units, industrial associations and civil society

III. Identification of quality parameters relevant for industrial wastewater

IV. Appropriate standards development for different reuse applications

• Standard officially approved for implementation by:

• Mongolian Technical Committee of Environmental Standards (June 15,

2018)

• Mongolian National Technical Committee on Standardization (June 21,

2018)

• Reuse of municipal wastewater • Efficient resource use • Environmental protection • Water scarcity reduction • Economic output promotion

18

Karnataka Urban Wastewater Reuse Policy Enabling environment improvements for reuse of treated municipal

wastewater

Overall Goals

Coverage Principles

All Class I and Class II urban

centers in Karnataka

At least 10 major

cities/towns adopt

wastewater reuse by 2020

(a) Equity and fairness

(b) Sustainability of operations of

the wastewater treatment plant

Karnataka

Wastewater

Reuse Policy

Industrial estates/ zones within [30 km] of a sewage treatment plant (STP) mandatorily examine, as a first option,

available secondary treated wastewater (STW) from the STP;

Reuse of not less than 20% STW is targeted, as a combined average across sectors, by 2020;

Tariff proposed (in Rs/KL) is applicable at the plant gate, or at in-city locations en-route of the sewerage network.

Off-taker is responsible for meeting additional cost of conveyance to a specified location;

Industry to bear cost of tertiary treatment, if required

19

Wastewater Reuse – Resource Center

Facilitation of pre-feasibility for wastewater reuse

• Target: ULBs; potential offtakers of treated wastewater

Business/ environmental case

Models for project development and execution

Cost-effective options

Awareness and Capacity Building

• Assistance to ULBs to liaise with wastewater reuse customers

Integrated Urban Water Resources Management plans

Viable wastewater reuse projects

Project structuring

Outreach and engagement with off-takers

Transaction support

Tariff setting

Monitoring implementation of wastewater reuse projects

Project Assistance

Projects Kudgi/ Bijapur: 2030WRG-financed pre-feasibility by Tata Capital Cleantech Limited for offtake

of Bijapur wastewater by NTPC

3 towns pre-feasibility to be undertaken by KUWSDB Resource Center

Karnataka

Wastewater

Reuse Policy

20

Thank you

Rochi Khemka Global Partnerships Coordinator and Asia Water Resources Specialist, 2030 WRG

rkhemka@worldbank.org