pre-feasibility study of ‘integrated solid waste

Pre-feasibility Study of

‘INTEGRATED SOLID WASTE MANAGEMENT PROJECT’

(Janakpur Sub-Metropolitan City, Chhireshwarnath Municipality, Mithila

Municipality, Bardibas Municipality & Dhanusadham Municipality)

March 2019

New Baneshwor, Kathmandu, Nepal

2


INTEGRATED SOLID WASTE MANAGEMENT PROJECT

LIST OF ACRONYMS

ADB Asian Development Bank

BCR Benefit Cost Ratio

CBG Compressed Biogas

CBO Community Based Organization

CBS Central Bureau of Statistics

DESR Debt Equity Service Ratio

DFID Department for International Development

EIA Environmental Impact Assessment

EPC Engineering Procurement and Construction

EPR Environment Protection Rules

GON Government of Nepal

IEE Initial Environmental Examination

IRR Internal Rate of Return

ISWMP Integrated Solid Waste Management Project

MSW Municipal Solid Waste

NGO Non-Government Organization

NPV Net Present Value

OIBN Office of the Investment Board Nepal

PPP Public Private Partnership

SWM Solid Waste Management

SWMTSC Solid Waste Management Technical Support Centre

WTE Waste to Energy

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EXECUTIVE SUMMARY

Solid waste management is one of the major problem for municipalities in Nepal. Rapid

Urbanization, population growth, modern throwaway culture, reduced landfill capacity

and increasing disposal costs have made this issue a major challenge in recent years. This

is going to be worse in coming years. So, it is important that we recognize this challenge

and prepare ourselves for the future.

Office of the Investment Board (OIBN) is looking forward to attract investment in range of

projects by creating a common platform in upcoming Investment Summit (March, 2019).

One of the key areas identified for the foreign investment is the solid waste management

sector. The main purpose of the study on “integrated solid waste management project

(ISWMP)” is to reflect the current scenario of waste management in proposed locations

which includes Janakpur Sub-Metropolitan City, Chhireshwarnath Municipality, Mithila

Municipality, Bardibas Municipality, & Dhanusadham Municipality of Province 2 and to

document the technical and financial viability of the project. The study included both

primary and secondary data collection methods. Primary data were collected through

visiting each municipalities and speaking to the mayors and other local government

officials whereas the Secondary data was collected from different sources like published

reports, Journal articles and other verifiable and credible internet sources.

This project seems best suited to be developed in a public private partnership (PPP)

model where GON will help in facilitating to get the necessary land for the project which

includes the land for developing transfer stations, processing plant and landfill site. The

developer will then develop all the infrastructure necessary for the smooth

implementation of the project and will operate the project for 20 years which will then

be transferred to GON in good operating condition.

The study looked into the technical and financial aspects of this project and concluded

that the project is technically and financially viable with the total estimated cost to be

around 6.4 Million USD (including interest component during construction period) and

Equity IRR of 16.41%.

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TABLE OF CONTENTS

LIST OF ACRONYMS 2

EXECUTIVE SUMMARY 3

TABLE OF CONTENTS 4

LIST OF TABLES 6

LIST OF FIGURES 7

SALIENT FEATURES OF THE PROJECT 8

1. BACKGROUND 11

1.1. Introduction 11

1.2. Municipal Solid Waste Management in Nepal 11

1.3. Objectives 12

1.4. Scope of Work 13

1.5. Approach & Methodology 13

2. PROJECT DETAILS 15

2.1. Project Background and Description 15

2.2. Project Features 16

2.3. Overview of the Area 18

2.4. Developing a Business Case 20

Product Mix 20

2.5. Market Assessment 23

2.6. SWOT Analysis 24

2.7. Examination and evaluation of alternatives 25

2.8. Relevant case studies 27

Case Study 1 27

Case Study 2 28

3. FINANCIAL ANALYSIS 30

3.1 Pre-Feasibility Approaches & Assumptions 30

3.2 Financial Analysis 34

3.2.1 Basic Financial Results 34

3.2.2 Sensitivity Analysis 35

4. STATUTORY AND LEGAL FRAMEWORK 36

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4.1 Statutory and Legal Framework 36

5. PRELIMINARY ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT 39

6. PRELIMINARY RISK ANALYSIS 41

7. PROJECT STRUCTURE AND IMPLEMENTATION MODEL 45

8. FINDINGS AND RECOMMENDATIONS 46

8.1. Findings 46

8.2. Recommendations 46

9. ANNEX 48

9.1. Next Steps and Useful Contacts 48

9.2. Map of Janakpur Sub-Metropolitan City 49

9.3. Map of Chhireshwarnath Municipality 50

9.4. Map of Mithila Municipality 51

9.5. Map of Bardibas Municipality 52

9.6. Map of Dhanusadham Municipality 53

9.7. Annex- Financial Report 54

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LIST OF TABLES

Table 1: Salient Features of the Project

Table 2: Project Features

Table 3: Quantity and composition of Waste

Table 4: Revenue Sources from the Project

Table 5: Risk Factor Analysis

Table 6: Useful Contact information

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LIST OF FIGURES

Figure 1: Average composition of household waste of 60 municipalities

Figure 2: Population of the municipalities included in the package

Figure 3: Waste generation of the municipalities included in the package

Figure 4: Average Waste Composition of the municipalities included in the package

Figure 5: Project area location map

Figure 6: Components and end uses of an anaerobic digestion plant

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SALIENT FEATURES OF THE PROJECT

Table 1: Salient Features of the Project

S.N. Features Characteristics

GENERAL

1 Name of Project Integrated Solid Waste management Project

2 Type Waste management

3 Total Population1 Daily waste

generation

(ton/day)2

Janakpur Sub-

Metropolitan

City

177527 56.28

Chhireshwarnath 47358 15.01

Mithila 50279 15.94

Bardibas 73868 23.42

Dhanusadham 50836 16.12

Total 399868 126.76

Average Waste

Composition (%

by weight)3

Organic 71.53

Reusable/Recyclables 28.15

Others (Including Hazardous Waste) 0.41

PROJECT LOCATION

Province Province 2

Land Availability 20 bigha of Land available

Project Location Bardibas Municipality

1 Central Bureau of Statistics (CBS), 2011 (Population projected based on growth rate of Dhanusa District @ 1.4%). 2 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations (average per capita

waste generation taken 0.317 kg). 3 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations

9



PROJECT COMPONENT/TECHNOLOGY

1 Anaerobic

Digestion

• Mesophilic (35-38 degree Centigrade) / Thermophilic

(above 50 degree centigrade)

• The methane gas will be compressed, bottled and sold to

local market

• Compost will be formed and sold to the local market as

organic fertilizer

MARKET ASSESSMENT

1 Project Demand

Scenario

• There is a pressure on municipalities to Improve and

modernize the collection methods and disposal technology.

• There is a need to reduce the pressure on waste disposal

practices and prices

• 80% reduction in the current volume of waste going to landfill

site which will extend the life of landfill site in the future.

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• The creation of renewable energy and other environmental

benefits

DEVELOPMENT MODALITY

1 Development modality Public Private Partnership

2 Role of Government of Nepal ▪ Facilitation

▪ Acquisition of land

▪ Security

▪ Project Monitoring

3 Roles Private Sector ▪ DPR

▪ Project Development

▪ Investment & Infrastructure development

▪ Operation and Management

▪ Project transfer after concession Period

4 Development Period

a. Pre-Construction Period

b. Financial Closure

c. Construction Period

d. Concession Period

▪ 6 Months

▪ 6 Months

▪ 3 Years

▪ 20 Years

FINANCIALS

1 Total Project Cost (Including IDC) 6.4 Million (USD)

2 Interest Rate 12%

3 Equity IRR 16.41

4 NPV Equity 1.08 Million (USD)

5 Debt Equity Ratio 70:30

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1. BACKGROUND

1.1. Introduction

Solid waste management is a growing problem around the globe. It is becoming one of

the major challenges for local bodies around the world. It is even a greater problem in

countries like Nepal where resources are limited and lack skilled manpower. Majority of

the Local government undertake these tasks internally with their own resources but some

local bodies manages it externally by outsourcing it to the private contractor. It is quite

evident that current population growth coupled with rapid urbanization and lack of

proper landfill facility will make solid waste management a major challenge in coming

days. So, it is important that we recognize this challenge and prepare ourselves for the

future.

1.2. Municipal Solid Waste Management in Nepal

In Nepal, solid waste management is one of the performance indicator and major

responsibility for municipalities. Urbanization and population growth together brings

major challenge of waste management. Cities like Kathmandu, Biratnagar, Birgunj,

Nepalgunj, Butwal, Janakpur, etc. are the main urban cities with industrial corridor and

importance of external trade. As a result, huge influx of people, changing lifestyle will

result in massive waste production. Though some of the major cities are practicing landfill

system of waste management, most of the places are deprived of sanitary waste

management techniques. This eventually will create the investment opportunity in waste

management sector along with collaboration with adjoining municipalities. More

amount of waste means more use of technological components.

ADB carried out a comprehensive study of Municipal Solid Waste of Nepal in 2013. It

analyzed the composition of solid waste in 58 Municipalities. The highest proportion on

Household waste was organic waste with 66% followed by plastics with 12%, and paper

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and paper products with 9%4. The average household per-capita waste generation of

those 58 municipalities of Nepal was 0.317 kg/capita/day5. A recent research

conducted by Engineering Study & Research Centre (P) Ltd. on behalf of Solid Waste

Management Technical Support Centre (SWMTSC) carried out the analysis of household

waste composition of 60 municipalities. The study found out that the organic matter,

which was around 68% of the total fraction, was the highest followed by plastics which

was 10%. Rest of the components are below 10% as Paper and paper products

constitutes 8% and rest of the components like Glass, metal, rubber and leather, textile,

etc. were at or below 6%6. This is represented graphically below by a pie chart (Fig. 1).

Figure 1: Average composition of household waste of 60 municipalities7

1.3. Objectives

Office of the Investment Board (OIBN) is looking forward to attract investment in range of

projects including projects on solid waste management by creating a common platform

4ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations 5 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations 6 D.R.Pathak, Engineering Study and Research Centre (P) Ltd., 2017, Solid Waste Management Baseline Study of 60 New Municipalities,

Accessed from:

https://www.researchgate.net/publication/313161363_Solid_Waste_Management_Baseline_Study_of_60_New_Municipalities

7 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations

Organic Waste 68%,Plastics 10%

Paper & Paper

Products 8%

Glass 4%

Metals 1%

Textiles 2% Rubber & Leather 1%Others 6%

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in upcoming Investment Summit (March, 2019). Hence, OIBN has prepared a possible

package for Integrated Solid Waste Management Project (ISWMP) incorporating at least

more than one municipalities based on their daily waste generation and other relevant

criteria. Ultimately, it aims to show case those relevant packages in Investment Summit

(2019) to find the relevant investors for the project. Hence some of the major objective

of the report are as follows:

1. To understand current status of Solid Waste Management in the proposed

Municipalities and their future plans

2. To study the technical and financial viability of the project in the proposed

location

1.4. Scope of Work

The pre-feasibility study aims to reflect the current scenario of waste management in

proposed location and to document the technical and financial feasibility of ISWMP.

Ultimately, study will help to get overall idea of possibilities of investment in this specific

sector and area. Some of the major scope of the study are:

- To collect primary data, secondary data and all the required information for the

development of the said project.

- Carry out the analysis of the gathered information for different aspects such as

technical, financial, social and environmental

- Develop the best suitable investment model i.e. Private or PPP or Blended

Finance

- And provide recommendations based on the findings

1.5. Approach & Methodology

The study included both primary and secondary data collection methods. Primary data

were collected through visiting each municipalities and speaking to the mayors and

other local government officials. Few generic questions were prepared to get all the

14



information as per guided by the objectives of the study. The questions were very

objective and open ended.

Secondary data was collected from different sources like published reports, Journal

articles and other verifiable and credible internet sources. Also, Financial, technical,

social and environmental analysis were carried out and a suitable investment model has

been recommended.

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2. PROJECT DETAILS

2.1. Project Background and Description

Solid waste management (SWM) is one of the major environmental issues in cities of many

developing countries, including Nepal. Urban population growth and economic

development lead to increasing generation of municipal solid waste (MSW). The use of

products that generate hazardous waste is another concern. Unmanaged disposal of

medical wastes from hospitals and clinics also contribute to pollution and public health

hazards in the localities. Therefore, SWM has become a major concern for the

municipalities of Nepal.

Current practice of solid waste management in the project area is very basic where the

municipalities or in some cases private contractors are collecting the waste and dumping

it along the river banks, low lying areas and other open spaces which possesses many

health and environmental risks. So, the idea is to develop an integrated solid waste

management plan where source separation will become an integral part of it.

Respective waste is taken to the transfer station and further segregated into recycling,

non-recycling and organic wastes which will then be processed using different

technology to develop different marketable products like organic fertilizer, cooking gas,

pesticide, etc.

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2.2. Project Features

Table 2: Project Features

Municipality Total Population8 Daily waste generation

(ton/day)9

Janakpur Sub-Metropolitan

City

177527 56.28

Chhireshwarnath 47358 15.01

Mithila 50279 15.94

Bardibas 73868 23.42

Dhanusadham 50836 16.12

Total 399868 126.76

Average Waste

Composition (% by weight)10

Organic 71.53

Reusable/Recyclables 28.15

Others (Including

Hazardous Waste)

0.41

Project Components Source Segregation

Collection

Transportation

Recycling

Processing

Disposal

The way we designed this project is that the potential developer is getting their raw

material (Waste) in excess of 100 tons per day and the cities are within the radius of 50

km. Also, the cities we have chosen are the ones with the high population numbers and

are the growing cities of Nepal which also presents huge growth potential.

8 Central Bureau of Statistics (CBS), 2011 (Population projected based on growth rate of Dhanusa District @ 1.35%). 9 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations (average per capita waste

generation taken 0.317 kg). 10 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations

17



Figure 2: Population of the municipalities included in the package11

Figure 3: Waste generation of the municipalities included in the package12

11 Central Bureau of Statistics (CBS), 2011 (Population projected based on growth rate of Dhanusa District @ 1.4%) 12 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations (average per capita waste generation

taken 0.317 kg)

177527

47358 50279

73868

50836

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

JANAKPUR CHHIRESHWARNATH MITHILA BARDIBAS DHANUSADHAM

Population

56.2815.01 15.94 23.42 16.12

126.77

Waste Generations Tons/Day

18



Figure 4: Average Waste Composition of the municipalities included in the package13

2.3. Overview of the Area

The project incorporates Janakpur Sub-Metropolitan City, Chhireshwarnath Municipality,

Mithila Municipality, Bardibas Municipality, & Dhanusadham Municipality of Province 2.

Janakpur is the headquarters of Dhanusa District located in Southern Part of Nepal. The

city is center for religious and cultural tourism and covers an area of 1180 Sq. Km. The

District comprises of one Sub-metropolitan city, eleven urban municipalities and six rural

municipalities. Among them one sub-metropolitan city and three municipalities as

mentioned above have been incorporated in this package. Bardibas municipality from

Mahottari district has also been included in this package. This package has been designed

primarily based on total population, waste generation, connectivity and individual

municipal needs. The main source of pollution in the area is the influx of large amount of

religious tourist, improper sanitation and lack of proper waste management system.

The total projected population for 2019 for the sub-metropolitan city and all other

municipalities included in this package is 399868. The projected population is based on

2011 census data with the growth rate of 1.35%14.

This project area lacks proper waste management system. So the importance of the

proposed project is immense for the area. The composition of the waste based on the ADB

13 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations (Waste composition is based on the

Janakpur Municipality data)

14 Central Bureau of Statistics (CBS),2011, Population Monograph,

71.5

3

28.1

5

0.3

2

O R G AN I C R E U S AB L E / R E C Y C L AB L E S O T H E R S ( I N C L UD I N G

H AZ AR D O U S WAS T E )

AVERAGE WASTE COMPOSIT ION

(% BY WE IGHT )

19



report15 published in 2013 shows that the Large portion of wastes are organic in nature

which either needs to be composted or converted into biogas.

Figure 5: Project area location map (Source: Google Earth)

15 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations

20



2.4. Developing a Business Case

Product Mix

The product mix for this package consists of following components:

• Source Segregation

• Collection

• Transportation

• Recycling

• Processing

• Disposal

The developer should take responsibility of collection of waste which are separated at

source. The waste will then be transferred to the transfer station and then to the

processing site where the recycling materials are separated and sold to the

manufacturer whereas the organic waste will be turned into the biogas, organic fertilizer

and possibly pest repellent. Rest of the waste which can’t be either recycled or

processed are sent to the sanitary landfill site. Developer is only allowed to take maximum

21



of 20% of collected waste to the landfill site as rest of the waste should be converted into

some sort of energy forms as mentioned above.

This project is going to be developed in a public private partnership (PPP) model. The

main objective of the ISWM-PPP is to promote sustainable, self-supporting partnerships

between micro and small enterprise and local authorities who, over time, improve lives

and livelihood of poor people in cities and municipalities of low-income countries. So for

this project the GON will facilitate in providing all the necessary land for the project

including the land for developing transfer station, processing plant and landfill site and

the developer will develop all the necessary infrastructure necessary for the smooth

delivery of all the project components mentioned above. The developer will own and

operate the project for 20 years and then transfer the project to the GON in good

operating condition.

On the basis of various factors such as overall level of waste management, composition

of waste, calorific value of waste, suitable quantities of waste, transportation time and

distance to the main processing plant, availability of land, availability of workers and

capacity, existing policies linked to waste management, marketing of product and

incentives for low carbon generation, anaerobic digestion is appropriate technology for

the proposed municipalities.

Anaerobic Digestion - Design and Technology

The proposed plant will be based on anaerobic digestion under Mesophilic (35-38

degree Centigrade) conditions. Similar to standard process of biogas generation, bio-

organic materials will be feed into a digester where anaerobic decomposition of the

organic materials takes place to produce biogas as a main product and compost as

byproduct. The gas thus generated will be then purified to increase the methane

concentration. The enriched biogas is then compressed using a suitable compressor and

filled into cylinders/cascades for distribution. Moreover, the digestate can be used as

organic fertiliser when the feedstock is source separated and non-contaminated organic

waste. The major components and end uses of an anaerobic digestion plant is shown

below;

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Figure 6: Components and end uses of an anaerobic digestion plant [Source:

https://biowaste-to-biogas.com/Download/biowaste-to-biogas.pdf]

Total land required:

According to the report by ADB in association with Australian Government Aid Program,

the land requirement for anaerobic digestion plant is 400–500 m2/ton (includes space for

drying of slurry)16. Hence, for our project to develop the processing site, the tentative land

required ranges from 29,016 m2 – 36,270 m2 (2.9 to 3.6 hectare). We have assumed that

only 80% of the biodegradable waste collected will be fed into the system to produce

biogas.

Based on the ongoing project of Ministry of Urban Development in cooperation with ADB

for project in Nepalgunj Sub Metropolitan City and Birgunj Metropolitan city, the tentative

land requirement for sanitary landfill site (based on comparison of the total waste

generation) for the proposed package is approximately 2.8-3.8 hectare.

16 Towards sustainable municipal organic waste management in south Asia, A guide book for policy makers and practitioners, ADB, 2011

https://biowaste-to-biogas.com/Download/biowaste-to-biogas.pdf

23



2.5. Market Assessment

The waste composition of our proposed municipality is as follows;

Municipality Total

Population

17

Total

Waste

generatio

n (Ton)18

organic matters

(Food waste, vegetable/fruit

waste, green leaves, animal

excreta, slaughter waste, Straw,

bamboo, woody waste, dry

leaves, etc.) [71.53%]19

Reusable/

recyclable

s (Metal, paper,

glass, plastic)

[28.15%]20

Others

(including

hazardous

waste)

[0.32%]21

Janakpur Sub-

Metropolitan City

109594 56.28 40.25 15.84 0.18

Chhireshwarnath 48699 15.01 10.74 4.23 0.05

Mithila 35151 15.94 11.40 4.49 0.05

Bardibas 41243 23.42 16.75 6.59 0.07

Dhanusadham 50105 16.12 11.53 4.54 0.05

Total 399868 126.76 90.67 35.68 0.41

Table 3: Quantity and composition of Waste

17 Central Bureau of Statistics (CBS),2011, Population Monograph (Growth rate @1.35) 18 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations (average per capita waste generation taken 0.317 kg) 19 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations 20 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations 21 ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations

24



The main products of our plant at 100 % capacity will be as follows;

Product Quantity/day Approximate rate

(NPR./KG)

Possible Market

/Area of use

Compressed Biogas

(Kg)

3373 85 Restaurants, Hotels,

etc.

Sale of fertilizer (Kg) 1450.72 15 Agro market

Pesticides (liter) 12084.50 8 Agro Market

Reusable &

recyclables (Kg)

30328 8 Scrap collection

center and

Industry

Table 4: Revenue Sources from the Project

2.6. SWOT Analysis

SWOT analysis enables identification of factors characterizing an entity or enterprise

under consideration in the context of a specified purpose, as well as classification of such

factors into four groups. Two of these comprise positive, and the other two negative

elements as shown in the table:

SWOT analysis for integrated solid waste management

Strength Weakness Opportunities Threats

- Improved hygiene and

cleanliness

- Source of Income for

Sub-

Metropolitan/Municipality

(as some royalty has to

be paid by the

developer)

- Lack of

awareness

- Misconception

about landfill site

- Lack of

environmental

knowledge

- Technical

deficiency

- Appropriate

legislative

framework for

proper

integrated solid

waste

management

- Compliance

with

- Opposition

from the local

people

because of

the lack of

understanding

to differentiate

between

25



- There will be no annual

solid waste management

cost for concerned

authority

- The partner municipalities

have one kind of informal

consent among

themselves to develop

the project

- Source Segregation

- Land Availability

- Stable Government

- Lack of funding environmental

objectives

- Cost recovery of

solid waste

management

related services

- effective

establishment of

market for

different end

products

- Possibilities of

integration of

other nearby

municipalities

and rural

municipalities

- Financial

Viability

processing

and landfill.

- Lack of

investment in

infrastructure

due to

economic

crisis

- Poor

management

- Workers Strike

2.7. Examination and evaluation of alternatives

On the basis of various factors such as overall level of waste management, composition

of waste, calorific value of waste, suitable quantities of waste, existing policies linked to

waste management, etc. Anaerobic digestion is appropriate technology for the

proposed package. However we also looked into the following options:

Composting:

Composting of waste is a method of decomposing solid wastes. The process involves

decomposition of organic waste into humus known as compost which is a good fertilizer

for plants. Due to shortage of space for landfill in bigger cities, the biodegradable yard

26



waste (kept separate from the municipal waste) is allowed to degrade or decompose in

a medium. A good quality nutrient rich and environmental friendly manure is formed

which improves the soil conditions and fertility. Organic matter constitutes high proportion

of the municipal solid waste generated in Nepal. This waste can be recycled by the

method of composting, one of the oldest forms of disposal. It is the natural process of

decomposition of organic waste that yields manure or compost, which is very rich in

nutrients. Composting is a biological process in which micro-organisms, mainly fungi and

bacteria, convert degradable organic waste into humus like substance. This finished

product, which looks like soil, is high in carbon and nitrogen and is an excellent medium

for growing plants. The process of composting ensures the waste that is produced in the

kitchen is not carelessly thrown and left to rot. It recycles the nutrients and returns them

to the soil as nutrients. Apart from being clean, cheap, and safe, composting can

significantly reduce the amount of disposable garbage. The organic fertilizer can be used

instead of chemical fertilizers and is better specially when used for vegetables. It

increases the soil’s ability to hold water and makes the soil easier to cultivate. It helped

the soil retain more of the plant nutrients.

Waste to Energy

The proposed technology is based on waste to biogas which will be treated further to

enhance the methane content followed by its compression and bottling. The other

alternatives could be Waste to Energy (WTE), is a term that is used to describe various

technologies that convert non-recyclable waste into usable forms of energy including

Heat, Fuels and electricity. There are number of processes which convert waste to energy

like gasification, pyrolysis, in-vessel composting, etc. As our technology is based on waste

to biogas its use as a fuel for combustion engines, which convert it to mechanical energy,

powering an electric generator to produce electricity. The design of an electric

generator is similar to the design of an electric motor. Moreover, the compressed

methane gas can be used as fuel in the vehicle.

27



2.8. Relevant case studies

Case Study 1

Project Type: Commercial Biogas Plant

Developer: Gandaki Urja Pvt. Ltd.

Location: Majuwa, Pokhara Lekhnath Metropolitan city, Ward No. 32, Kaski District.

Total Capital Investment: NPR. 166,650,038.54

Total Operation and Maintenance Cost: NPR. 80,751,375.35

The proposed 45TPD Compressed Biogas Bottling and Fertilizer plant is to produce high

quality Compressed Biogas and Organic Fertilizer. A continuous flow stirred tank reactor

type digester is selected to decompose the organic materials in anaerobic conditions.

The plant shall consume about 45 tonnes of substrate per day including cow/buffaloes

dung, pig manure and poultry litter to generate 1600kg of Compressed Biogas (CBG) and

11000 kgs of organic fertilizer.

The proposed project site is at Majuwa, Pokhara Lekhnath Metropolitan city, Ward No.

32, Kaski District. The site is about 20 km from the Pokhara and about 30 km from Damauli,

about 500m north east along the Prithivi Highway. The developer has leased 15 ropanis

of land for setting up the plant. The proposed site is located in an area which receives

ample sunlight throughout the day. In addition, there are a few households on only one

side of the proposed plant (north western side) and thus this project will have minimal

social impact due to sparse population density.

The developer has partnered with SLPP RE-NEW, a reputed technology provider from

India with 15 years of experience in the field to develop and operate the plant. The

technology provider shall provide Engineering Procurement and Construction (EPC)

service and also be responsible for overall performance of the plant and machineries.

The technology provider shall also train the staffs and operators of the plant to have an

effective transition while handing over the project to the developers.

The primary produce of the plant shall be compressed biogas and other produce would

be organic fertilizers. The compressed biogas shall be supplied to the nearby hotels,

28



restaurants, etc. as a substitute of LPG at about 10% reduction of the prevailing rate of

LPG/kg. Similarly, the organic fertilizers shall be supplied to various farms nearby the plant

and also throughout the country.

This project is financially viable as reflected by the key financial indicators. The internal

rate of return of the project is 14.93% and the project payback period is 8 years.

Case Study 2

Project Type: Waste to Energy Project through Anaerobic Digestion (Biogas) Technology

Developer: Venture Waste to Energy P. Ltd. (Vw2E)

Location: Panmara, Ward-6, Dharan Sub-Metropolitan City

Total Capital Investment: NPR. 24,85,02000

Venture Waste to Energy P. Ltd. (Vw2E) is a private limited company with the aim to

develop waste to energy project through Anaerobic Digestion. One of the major product

of the project is bio-methane gas which they aims to sell it to the domestic and industrial

consumers in Nepal.

The project aims to manage municipal solid waste from Dharan Municipality and use

organic waste as energy source through Anaerobic Digestion. The capacity of the plant

is 30TDP (Ton Per Day) and the project site is located at Panmara , Ward-6 of Dharan Sub

–Metropolitan City of Sunsari District in Province 1.

This project is using the SERI Organic Fuels Technology which is a multi-stage variable

hydraulic and solid retention, microbe incubated Bio-Reaction system. This technology

uses the “microbe incubated Bio-Reactors (MIBR) with stabilized incubation system and

laboratory cultured feed specific microorganisms and related biotechnology and fast

breeder media”. This technology can process any organic feedstock like fruits and

vegetables waste. Not only organic feedstock, it also processes agricultural waste, oil

effluents, poultry and fish remains etc. One of the major advantages of this technology is

that it processes 100% of waste processed.

29



The output of this projects are biogas, organic fertilizer, pest repellant and recycling

scraps. The project is technically and financially viable based on their key financial

indicators.

The information provided above are all based on the Detail Project report submitted by

Venture Waste to Energy P. Ltd to Office of Investment Board.

30



3. FINANCIAL ANALYSIS

3.1 Pre-Feasibility Approaches & Assumptions

Project cost

Total cost of the Project amounted to Dollars 5,659,740 Excluding Interest during

Construction. The Total cost including interest amounted to Dollars 6,406,705.96. Costs

are assumed to occur evenly in construction period.

Particulars

Amount in

Dollars

Land

-

Civil Structure

565,974

Machinery

5,037,169

Others

56,597

Interest During Construction 746,966

Total Project cost

6,406,706

The portion of the interest during construction is capitalize in the individual assets on

proportionate basis.

Capital Structure

The Projects is proposed to be finance in a 70:30 debt equity ratio on the total cost of

the project including Interest during construction (IDC). The requirement of Working

capital would be finance by internal resources itself. Based on the Structure, The total

Investment pattern has been tabulated below:

Component Percentage Amount In Dollars

Equity

30.00%

1,922,012

Debt

70.00%

4,484,694

Total 6,406,706

Civil

Structure

9%

Machinery

78%

Others

1%

Interest During Construction

12%

31



Solid Waste Generation & Composition

The overall Financial Analysis is based on the total generation of the solid waste on the

various Municipalities included in this package. The areas that has been included in

Integrated Solid Waste Management Project (ISWMP), Janakpur Package are listed

below:

Total Waste Collection in Janakpur Package has been calculate to be 126.76 Tons per

day. Based on the information and data, composition of the total Solid waste collection

of Janakpur Package is tabled below:

Composition of the waste (At 100% capacity) In Tons % of

Composition

Organic

91

71.53%

Reusable/Recyclables

36

28.15%

Others (Including Hazardous Waste) 0.4

0.42%

Collection Efficiency

Based on the various studies conducted by international agencies and prevailing market

tendency, collection of the Solid waste has been assumed as follows

Household Collection Efficiency

From To Efficiency

0 year

3 year

0%

4 year

13 year

50%

14 year 23 year 60%

Out of the total collected solid waste component, it has been estimated that the

following output could be realized from the project. Details of output quantity has been

computed based on the efficiency as elaborated in table above

The output is assume to increase at the rate of 1.35% per annum, which is based on the

population growth rate.

Areas Included

Janakpur Sub metropolitan, Chhireshwarnath Municipality, Mithila

Municipality, Bardibas Municipality, Dhanusadham Municipality

32



Output Per day Output in KGS

Output- Gas

3373

Output - organic fertilizer

1450.72

Output- Reusable/Recycles

30328

Output – Pesticide 12084.5

Project Construction and Operation Period

The Project is assumed to build in the period of 3 Years. And the total operation period

after the construction period would be 20 Years. The project would be hand over to the

government after the completion of the operation period.

Tax, staff Bonus, and Depreciation Assumptions

The tax rate for the Project is assume at 25% on profit earned during the year. Further the

loss carryforward has been taken for 12 years in due consonance with the provision of

Income tax Act 2058. Further, the Staff bonus is assume at 10% on taxable income earned

during any year of the operation as required by The Bonus Act.

Also, the rate depreciation and basis of depreciation is in due adherence to the

provisions of the Income tax Act as Follows:

Particulars Depreciation Method Rate of Depreciation

Land SLM 5.0%

Civil Structure

WDV

5.0%

Machinery

WDV 15.0%

Others SLM 20.0%

However, 1/3 of the additional Depreciation has not been taken into consideration as

facilitated by income tax Act.

Basis of Revenue and Inflation

The Project has mainly two streams of Revenue Module:

1. Collection from Household &

33



2. Revenue from sale of Output from Organic Digestion.

Followings are the rates of sales of the output generated from Organic & Reusable Solid

wastes collected.

Sales Rate in

Dollars/KG

Sales Rate in Dollars/KG Sales Rate in

NPR

Gas 0.75 85

organic fertilizer 0.13

15

Reusable/Recycles 0.07

8

Pesticide 0.07 8

Further, each house hold is charged at the rate of Dollars 0.44 as Monthly Charges. Total

Number of Household in the beginning of the period is 73,200 families. The increase rate

of the number of family is based on the growth rate in Population and Output as

discussed above. The sales inflation rate is assumed to increase at the rate of 3% Per

annum and which would be capped at 180%

Other Cost of operations

The project is estimated to have total operating cost of 7% based on the project initial.

The Operations cost are Inclusive of all staff salary, Vehicle Maintenance but don’t

include Interest cost and depreciation cost component It is further Assumed that the

total operation expense is likely to increase at the rate of 4% With the cap of 200%. As

discussed in earlier Paragraph, the project would be financed by 70% Debt. The Interest

rate that has been taken into the calculation is12% which would be repaid in four equal

installment In the period of 12 Years.

Working capital and other Assumptions used

It has been assumed that the overall working capital requirement would be financed by

the equity holders. The working capital has been assumed on following basis.

Receivable & advance 30 Days

Payable and liabilities 15 Days

34



Total number of working days has been assumed to be 330 Days and 12 working months.

The total population living in project area of Janakpur Package is 399868 Persons

3.2 Financial Analysis

3.2.1 Basic Financial Results

The project cost for Integrated Solid Waste Management Project (ISWMP), Janakpur

package has taken from desk study report prepared by IBN. It is assume that all the cost

present are in line with current cost structure. It is also assumed that the project

development cost was prepared based on the district rates and prevailing marked rates.

The total Cost of the project is 6,406,705.96 Dollars of Which 746,965.64 Dollars is interest

Component during Construction. The total project excluding Working capital has been

financed by 70% debt and remaining by Equity.

In analysis of the Pre-feasibility of the project, projections are made using different

techniques. Based on the analysis, Project Net Present Value (NPV) was calculated to

1,083,689.70 Dollars.

Also, the Project IRR is calculated to be 14.81% which exceed the required rate of return

of the project. Equity IRR of the Project is at 16.41%. Project IRR & Equity IRR substantiate

the feasibility of the Project. Project Benefit Cost Ratio (BCR) is 1.19 Times whereas Equity

BCR is 1.56 Times.

The Project Payback Period & Equity Payback Period are 6.51 years and 13.12 years

respectively. Considering the specific nature of business and overall industry, the pay-

back period seems to be satisfactory.

The average DSCR is computed at 1.42 Times. Although DSCR is low in initial years, it has

been gradually increased.

Indicators Results

Firm IRR

14.81%

Equity IRR

16.41%

NPV- Equity

1,083,689.70 Dollars

35



Debt Equity Service Ratio (average) 1.42 Times

Project BCR

1.19 Times

Equity BCR

1.56 Times

Simple Payback Period 6.51 Years

Discounted Payback Period 13.12 Years

3.2.2 Sensitivity Analysis

Sensitivity Analysis has been carried out on three different components: Interest Rate, O

& M Cost and Project cost.

Rate Increase/Decrease by 5%

Percentage of change Impact on Equity IRR % of change

0.00% 16.41%

5.00% 15.91% -3.05%

-5.00% 16.92% 3.06%

O & M Increase/Decrease by 5%

O&M cost Impact on Equity IRR % of change

0.00% 16.41%

5.00% 15.90% -3.11%

-5.00% 16.93% 3.13%

Project Cost Increase/Decrease by 5%

Project Cost Impact on IRR % of change

0.00% 16.41%

5.00% 14.96% -8.85%

-5.00% 18.00% 9.64%

Based on the analysis, It seems that the project cost is highly sensitive as compared with

O&M Expenses and Interest rates. The special focus to provide to project cost ensuring

the cost remains as the as projected.

The Financial Statement of first 10 years of operation has been separately annexed in the

report.

36



4. STATUTORY AND LEGAL FRAMEWORK

4.1 Statutory and Legal Framework

There are number of legislations on solid waste management which governs all the

activities related to its operation. Major ones are given below:

1. Solid Waste Management National Policy, 1996

The first Solid Waste Management National Policy was formulated in 2053 BS

(1996AD) to tackle the emerging solid waste management problems due to

urbanization. The policy emphasized on waste management in municipal and

urban areas. This policy is still in force.

2. The Environment Protection Act, 1996

Sub-article 7.1 of The Environment Protection Act (1996) prohibits haphazard waste

disposal, which will have an adverse impact on environment or civic health. This is

an overarching act on environmental protection from which all other

environmental related legislations are guided including waste management.

3. The Local Self-Governance Act, 1999

The act was issued within the context of decentralization. It stipulates that all

responsibilities for solid waste management (SWM) including collection,

transportation and final disposal have been transferred over to the municipalities,

together with other duties and authority to protect the local environment.

4. Solid Waste Management Act, 2011

The Government of Nepal enacted the Solid Waste Management Act of 2011

effective from 15 June 2011. The objectives of the act include maintaining a clean

and healthy environment by minimizing the adverse effects of solid waste on

public health and the environment. The local bodies, such as municipalities, have

37



been made responsible for the construction, operation, and management of

infrastructure for collection, treatment, and final disposal of MSW. The act

mandates local bodies to take the necessary steps to promote reduce, reuse, and

recycle (3R), including segregation of MSW at source. It also provides for the

involvement of the private sector, community-based organizations (CBOs), and

nongovernment organizations (NGOs) in SWM through competitive bidding.

Procedures for bidding, selection of the successful bidder, and authority of the

bidder in collecting tipping fees (tariffs) against SWM services are provided. In

addition, the act authorizes the imposition and collection of service fees against

SWM services, and prescribes the basis for fixing such fees and procedures for their

collection and usage. It also authorizes the local bodies to formulate rules, by-laws,

and guidelines, with the approval of the municipal board.

5. Solid Waste Management Regulation 2013

Government of Nepal in 2013 published Solid Waste Management Regulation

under the rights of Solid Waste Management Act, 2068. This regulation has

emphasized the segregation of hazardous waste at source and mentioned that

the responsibility of proper disposal and management of segregated hazardous

waste belongs to the producers themselves. The regulation has also given priority

for the segregation and minimization of waste at source. And this has emphasized

the role of local authority for creating mass awareness for managing the waste

accordingly.

6. Investment Board Act 2068 (2011):

As per section 9 (1) ( C ) of the Investment Board Act, 2011 (2068 BS), OIBN has

been facilitating investment in solid waste management projects in Urban Areas.

The law states that “Irrespective of whatever stipulation made in existing laws, the

investment required for implementation of any project for Solid Waste

Management and Treatment in urban areas should be mobilized based on this

Act”. So, any projects of this nature should get approval from the Investment Board

before they start implementing the project.

38



Managing solid waste has been accorded a low priority mainly because the demand is

higher for other public services in many municipalities in Nepal. Local bodies are

experiencing difficulties in developing management plans due to the lack of SWM

baseline information and data related to the functional elements of SWM. It is essential

to know the quantity and composition of MSW when designing and implementing proper

waste management plans that include resource recovery through appropriate methods.

39



5. PRELIMINARY ENVIRONMENTAL AND SOCIAL IMPACT

ASSESSMENT

Environment assessment of waste processing and management facilities is required to be

undertaken with the objective of providing services to the population of the area. Existing

law in Nepal have provision of carrying out Initial Environmental Examination (IEE) or

Environmental Impact Assessment (EIA) depending upon the extent, duration and

magnitude of environmental impacts. As mentioned in Environment Protection Rules

(EPR), following projects requires IEE:

1. For municipal waste,

a. Filling of land with One thousand to Five Thousand tons of waste a year.

b. Activities relating to transfer stations and resource recovery areas spread over

from 5 to 10 hectares.

c. Selecting, picking, disposing, and recycling waste through chemical,

mechanical or biological techniques in an area from 5 to 10 hectors.

d. Activities relating to compost plants in an area ranging between 5 to 10

hectares.

e. Operations of sewerage schemes more than Five millions.

Similarly, following projects should conduct Environmental Impact Assessment, if

required,

1. Waste management activities to the undertaken with the objective of providing

services to a population of more than Ten Thousand.

2. Following activities relating to waste emitted from houses and residential areas: -

a. Filling of land with more than 5,000 tons of waste per year.

b. Activities relating of transfer station and resources recovery areas spread over

an area of more than 10 hectares.

c. Selecting, picking, disposing and recycling wastes through chemical,

mechanical or biological techniques' in an area spread over more than 10

hectares.

40



d. Activity relating to compost plants spread over an area of more than 10

hectors.

e. Burying of waste emitted from an urban area with a population of at least

Ten Thousand.

41



6. PRELIMINARY RISK ANALYSIS

A set of risk factors which are cross cutting all technologies pertain to due diligence and

transparency at the time of initial project development, selection of plant location and

conducting environmental and social impact assessment. Several plants across the world

have closed down when the above aspects are not addressed appropriately at the right

stage of project evolution. Some of the major risks are highlighted as follows;

• Opposition by the community regarding sanitary landfill site

• Municipal solid waste to be treated and thereby receive value addition needs to

be considered not just as waste but as ‘feedstock’ from the point of view of the

plant operator. Hence, shortfall in the quantity of waste can lead to ineffective

operation of the plant.

• The tariff rate might not be accepted by the community

• Lack of availability of land for processing plant and sanitary landfill site

The risk should be shared by the municipality and provincial government. The detailed

framework should be decided while developing project development agreement.

Risk Matrix:

Score

S

e

v

e

ri

t

y

Catastrophic 10 10A 10B 10C 10D 10E

9 9A 9B 9C 9D 9E

Hazardous 8 8A 8B 8C 8D 8E

7 7A 7B 7C 7D 7E

Major 6 6A 6B 6C 6D 6E

5 5A 5B 5C 5D 5E

Minor 4 4A 4B 4C 4D 4E

3 3A 3B 3C 3D 3E

Negligible 2 2A 2B 2C 2D 2E

1 1A 1B 1C 1D 1E

Extremely

Impossibl

e

Impossible Remote Occasio

nal

Frequen

t

A B C D E

Likelihood

42



ACCEPTABLE LOW

REVIEW MEDIUM

NEED OF

CRITICAL

ANALYSIS

HIGH

The above risk matrix has been designed and colour coded on the basis of severity and

likelihood of the risk factor. Severity scale has been given from Negligible to catastrophic

from 1 to 10 respectively whereas the likelihood has been graded from extremely

impossible to Frequent with the alphabet being assigned from A to E respectively. For

example if a risk factor has the score of 4B then it is interpreted as minor on a severity

scale and impossible in terms of likelihood. This will fall under the green colour which

implies the risk is at low acceptable level whereas if the risk factor has the score of 10E

then that implies the severity of catastrophic level with the likelihood of happening as

frequent and it will fall under Red Zone. This implies that this risk factor need careful and

critical analysis prior to the project implementation.

S.N. Possible Risks

Description

Risk

Scor

e

Risk bearing

in % Possible

Mitigation Remarks

Gov

.

Devel

oper

1 MoU signing

Understandi

ng between

two parties

5C 50% 50%

• Regular

engagement

with all the

stakeholders

• Transparent

and

Agreeable

document

2 Land

Acquisition

Land

Availability 5C

100

% 0%

• There are land

available but

not committed

for the project

yet

43



• Early

communicatio

n with the

municipalities

to find the

appropriate

land and get

an early

commitment

3

Local

Opposition

(Land fill Site)

Local

Community

Opposition

6D 90% 10%

• Finding land

away from the

local

settlement

• Following

international

practices for

the landfill

design

• Developing

effective

compensation

package for

the affected

people

4 Financial

Closure

Developer

should have

all the

necessary

financial

documents

5C 0% 100%

• Regular

communicatio

n with the

developer

• Making sure all

the financial

documentatio

n are correct

and verifiable

5

Infrastructure

development

(Time)

Time of

construction 6C 0% 100%

• Sticking to the

original plan

• Contingency

plan should be

incorporate in

the overall

planning

6

Recruitment

and

management

of work force

Staffs and

labor issues 5D 0% 100%

• Structured

Training and

development

plan should be

in place

44



• Provide

incentive to

the existing

workforce for

retaining them

7 Collection and

Segregation

Source

Segregation 1C 0% 100%

• Ensure

education

and outreach

program in

place for

awareness

raising prior to

the beginning

of the project

8 Tariff Rate Finalizing the

rate 5D 50% 50%

• Develop a

scientific

method for

calculating

the tariff rate

• Regular

communicatio

n with all the

relevant

stakeholders

Table 5: Risk Factor Analysis

45



7. PROJECT STRUCTURE AND IMPLEMENTATION MODEL

PUBLIC-PRIVATE PARTNERSHIPS (PPP)

Public-Private Partnership is an agreement between public and private entities for a fixed

period, private entities shall make arrangements to own the potential risks that may arise

partially or fully from all or some portion of financing, building, operation, repair and

maintenance of projects under the PPP model. Such entity provides public services

directly or indirectly through construction and/or operation and/or repair and

maintenance and/or use of public or private assets and shall be entitled to earn

reasonable profit. Public entities shall create environment that facilitates the private

sector’s investments through policies, legal, institutional and economic arrangements22.

It will be appropriate to design a project based on PPP model where Public and Private

Entities are involved. When resources allocated from national treasury fall short, assets of

public utility and operation of public services less costly as well as resources, skills and

technology available with the private sector must be attracted towards development

works of the nation based on the concept of PPP.

In the present context of Janakpur Sub-metropolitan and its adjoining municipalities, PPP

model is suitable. The preliminary study conducted in these municipalities gave the

information that the land will be provided by local government for the development of

integrated solid waste management projects.

22 World Bank, 2072, Public-Private Partnership Policy

46



8. FINDINGS AND RECOMMENDATIONS

8.1. Findings

Some of the major findings of the study are listed as follow:

1. The project incorporates Janakpur Sub-Metropolitan City, Chhireshwarnath

Municipality, Mithila Municipality, Bardibas Municipality, & Dhanusadham

Municipality in province 2 were incorporated in the package based on their daily

waste generation and other relevant criteria.

2. Based on the study, the most suitable and relevant waste to energy plant that has

been taken into consideration is Anaerobic digestion, where the methane gas will

be compressed, bottled and can be sold to local market. Also 2% of the organic

input can be generated as a fertilizer and 16.66% of organic input can be

generated as bio-pesticide.

3. Public-Private Partnership business model was found to be suitable for the project.

4. The project can be completed with the total cost of 6,406,706 USD (including

interest component during construction period) and Equity IRR of 16.41%

5. Payback period has been calculated as 6.51 years.

8.2. Recommendations

Based on the findings, the project sounds to be technically as well as financially viable

for developer to invest. Whereas, study of environmental and social aspect as well as in-

depth study of all other components needs to be further considered in the next stage.

47



Disclaimer:

This project profile is based on preliminary study to facilitate prospective developers to

assess possible scope. It is, however, advisable to get a detailed feasibility study

prepared before taking a final investment decision.

48



9. ANNEX

9.1. Next Steps and Useful Contacts

As part of further development of project, the potential developer who might be

interested to develop this project will be identified. Afterwards, communication channel

will be formulated for the effective execution of this project. The useful contacts of all

the municipalities incorporated in this are highlighted as follows;

Table 6: Useful Contact information

S.N District Municipality Chief Administrative

officer

Mayor

1 Dhanusa Janakpur Sub-

Metropolitan City

Umesh Dhungana Lal Kishor Shah

2 Dhanusa Chhireshwarnath Yogendra Pajiyar 3 Dhanusa Mithila Basudev Regmi Hari Narayan

Mahato 4 Mahottari Bardibas Agni Prasad Adhikari Bidur Kumar Karki

5 Dhanusa Dhanusadham Baleshwor

Mandal

49



9.2. Map of Janakpur Sub-Metropolitan City

50



9.3. Map of Chhireshwarnath Municipality

51



9.4. Map of Mithila Municipality

52



9.5. Map of Bardibas Municipality

53



9.6. Map of Dhanusadham Municipality

54



9.7. Annex- Financial Report

Projected Profit and Loss statement for initial 10 years of operation

Amount In

Dollars

Particulars 4 years 5 years 6 years 7 years 8 years 9 years 10 years 11 years 12 years 13 years

Household Collection

fees

194,336

208,988

218,159

227,691

237,600

247,898

258,927

270,394

282,316 294,710

Output- Gas

424,292

471,183

499,878

530,321

562,617

596,881

633,231

671,794

712,707 756,110

Output - organic

fertilizer

32,728

35,763

37,941

40,251

42,702

45,303

48,062

50,989

54,094 57,388

Output-

Reusable/Recycles

359,057

398,738

423,022

448,784

476,115

505,110

535,871

568,506

603,128 639,858

Output - Pesticide

143,070

158,881

168,557

178,822

189,713

201,266

213,523

226,527

240,322 254,958

Total Income

1,153,482

1,273,553

1,347,556

1,425,869

1,508,747

1,596,458

1,689,614

1,788,210

1,892,567 2,003,025

Depreciation

900,142

770,246

659,674

565,536

485,374

404,286

346,122

296,558

254,312 218,290

O & M Expenses

466,408

485,065

504,467

524,646

545,632

567,457

590,155

613,761

638,312 663,844

Operating Profit

(213,068)

18,243

183,415

335,687

477,741

624,715

753,337

877,890

999,944 1,120,891

-

-

-

-

-

-

-

-

- -

Interest Expenses

530,276

507,722

482,337

453,766

421,610

385,417

344,682

298,834

247,232 189,153

Profit

(743,344)

(489,479)

(298,922)

(118,079)

56,131

239,298

408,655

579,056

752,711 931,738

Provision for Staff

Bonus

-

-

-

-

5,103

21,754

37,150

52,641

68,428 84,703

Inome Tax

-

-

-

-

-

-

-

-

50,237 211,759

Net profit

(743,344)

(489,479)

(298,922)

(118,079)

51,028

217,544

371,504

526,415

634,046 635,276

55



Projected Balance Sheet for Initial 10 years of Operation

Amount In Dollars

Particulars 4 years 5 years 6 years 7 years 8 years 9 years

10

years

11

years

12

years

13

years

Shareholders Fund

Share Capital

1,922,012 1,922,012 1,922,012 1,922,012 1,922,012 1,922,012

1,922,012

1,922,012

1,922,012

1,922,012

Reserve and Surplus (743,344) (1,232,823) (1,531,746) (1,649,825) (1,598,796) (1,381,253)

(1,009,748

)

(483,334)

150,712

785,988

Loan Fund - - - - - - -

-

-

-

Term Loan

4,304,993 4,102,738 3,875,098 3,618,888 3,330,521 3,005,961

2,640,666

2,229,523

1,766,778

1,245,955

Short Term Loan - - - - - - -

-

-

-

Total

5,483,661 4,791,927 4,265,365 3,891,075 3,653,736 3,546,720

3,552,929

3,668,201

3,839,502

3,953,954

Particulars

Fixed Assets (Net)

5,506,564 4,736,318 4,076,643 3,511,107 3,025,732 2,621,446

2,275,325

1,978,766

1,724,455

1,506,165

Investment - - - - - - -

-

-

-

Current Assets

(3,469) 75,820 209,741 401,829 650,739 948,918

1,302,195

1,715,008

2,141,644

2,475,450

Sundry Debtors 104,862 115,778 122,505 129,624 137,159 145,133

153,601

162,565

172,052

182,093

Advances - - - - - - -

-

-

-

Cash & Bank Balance

(108,331) (39,957) 87,236 272,204 513,580 803,785

1,148,593

1,552,444

1,969,592

2,293,357

Less: Current Liabilities 19,434 20,211 21,019 21,860 22,735 23,644

24,590

25,573

26,596

27,660

Net Current Assets

(22,903) 55,609 188,722 379,968 628,004 925,274

1,277,605

1,689,435

2,115,047

2,447,790

Total

5,496,157 4,963,779 4,705,866 4,716,592 4,977,948 5,468,199

6,181,908

7,123,791

8,149,386

8,932,514

The cash balance is seen as negative in initial years, the amount has to be injected by the equity

holders

56



Cash Flow Statement For Initial 10 years of Operation

Amount In

Dollars

Particulars 4 years 5 years 6 years 7 years

8

years

9

years

10

years

11

years

12

years 13 years

Cash flow from operating

activity -

-

-

-

-

- -

-

- -

Net profit before interest and

tax

(743,344)

(489,479)

(298,922)

(118,079)

51,028

217,544

371,504

526,415

684,283 847,034

Add: Depreciation

900,142

770,246

659,674

565,536

485,374

404,286

346,122

296,558

254,312 218,290

Add: interest

530,276

507,722

482,337

453,766

421,610

385,417

344,682

298,834

247,232 189,153

Operating cash flow before

working capital change

687,074

788,489

843,089

901,224

958,012

1,007,247

1,062,308

1,121,807

1,185,827 1,254,478

Increase/Decrease in Current

Assets

(104,862)

(10,916)

(6,728)

(7,119)

(7,534)

(7,974)

(8,469)

(8,963)

(9,487) (10,042)

Increase/Decrease in Current

Liabilities

19,434

777

808

841

874

909

946

984

(24,096) (79,697)

Payment of Tax -

-

-

-

-

- -

-

(25,119) (130,998)

Net Cash flow from operating

activity

601,646

778,351

837,170

894,945

951,352

1,000,182

1,054,785

1,113,827

1,127,125 1,033,741

-

-

-

-

-

- -

-

- -

Cash flow from Investing

Activity -

-

-

-

-

- -

-

- -

Purchase of Fixed Assets

(6,406,706)

-

-

(0)

-

(0)

0

-

- (0)

Increase/Decrease in

Investment -

-

-

-

-

- -

-

- -

Less: Payment of Dividend -

-

-

-

-

- -

-

- -

Net Cash flow from Investing

Activity

(6,406,706)

-

-

(0)

-

(0)

0

-

- (0)

-

-

-

-

-

- -

-

- -

Cash flow from Financing

Activity -

-

-

-

-

- -

-

- -

Increase in Share Capital

1,922,012

-

-

-

-

- -

-

- -

57



Increase in Borrowing Fund

(Long Term Loan)

4,484,694

-

-

-

-

- -

-

- -

Increase in short Term Loan -

-

-

-

-

- -

-

- -

Less: Repayment of Long Term

Loan

(179,701)

(202,255)

(227,640)

(256,211)

(288,367)

(324,560)

(365,295)

(411,143)

(462,745) (520,823)

Less: Payment of interest on

Short Term Loan -

-

-

-

-

- -

-

- -

Less: Payment of Interest on

Long Term Loan

(530,276)

(507,722)

(482,337)

(453,766)

(421,610)

(385,417)

(344,682)

(298,834)

(247,232) (189,153)

Net Cash flow from Financing

Activity

5,696,729

(709,977)

(709,977)

(709,977)

(709,977)

(709,977)

(709,977)

(709,977)

(709,977) (709,977)

-

-

-

-

-

- -

-

- -

Increase/Decrease in Cash

and Cash Equivalent

(108,331)

68,374

127,193

184,968

241,376

290,205

344,808

403,850

417,148 323,764

-

-

-

-

-

- -

-

- -

Cash & Bank Balance at the

beginning of the period -

(108,331)

(39,957)

87,236

272,204

513,580

803,785

1,148,593

1,552,444 1,969,592

-

-

-

-

-

- -

-

- -

Balance at the end of period

(108,331)

(39,957)

87,236

272,204

513,580

803,785

1,148,593

1,552,444

1,969,592 2,293,357

The Equity shareholders needs to inject additional cash for serving Working capital in initial years as assumed in the report Earlier

pre-feasibility study of ‘integrated solid waste

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