Context
Today, a third of India’s 1.2 billion people live in urban areas. Together, they generate approximately 62 million tonnes of municipal solid waste (MSW) annually. This amount is expected to reach 165 million tonnes per year by 2030. As a result, the already-massive annual greenhouse gas (GHG) emissions from MSW are expected to double totalling at 41 MtCO2e by 2030.
Until now, most MSW is disposed of at landfills or unmanaged dumpsites, which not only causes greenhouse gas emissions and other environmental, social and economic problems, but also disturbs operations of existing composting facilities, Material Recovery Facilities (MRFs), biomethanation and refuse-derived fuel (RDF) plants. The barriers in the sector include an absent waste segregation-at-source, deficient management capacities, a lack of data regarding waste composition as well as insufficient financing and enforcement of existing regulations and policies.
Goals and approach to transformational change
The project “India – Waste Solutions for a Circular Economy” aims to achieve a low-carbon transformation of the Indian waste sector by scaling up and de-risking investments and strengthening the regulatory framework, thus ensuring uptake of the Reduce, Reuse, Recycle concept and leveraging the strengths of the informal recycling sector. In addition, the project facilitates the implementation of extended producer responsibility (EPR) through platforms for the coordinated engagement of various stakeholders.
The project is implemented in five model cities: Bengaluru, Patna, Tiruchirappalli, Varanasi and Goa (state), and additional cities creating model Source Segregation Systems for MSW, setting up semi-mechanised MRFs and upscaling existing recycling facilities. Currently the project is geographically expanding through its replication cities, which includes State of Uttar Pradesh, State of Himachal Pradesh, State of Tamil Nadu, Muzaffarpur in Bihar, Sri Vijaya Puram and Gangtok in Sikkim.
Organic waste treatment is addressed too either through constructing new plants or by updating the existing composting facilities.
Components and support mechanisms
The Financial Cooperation (FC) component consists of a Grant Funding Mechanism (GFM) and a Risk Sharing Facility (RSF). The purpose of GFM and RSF is to increase availability of capital for capital investments (CAPEX) and working capital (OPEX) requirements of large and/or small waste management companies.
The RSF is providing partial loan guarantees for MSWM projects reducing collateral requirement and increasing confidence of financial institutions in lending to MSWM projects. GFM in turn helps to address the need in a viability gap funding for MSWM projects in India. Grants are to be disbursed annually being capped at 30% of the CAPEX or INR 63 per tonne of waste processed.
The Technical Cooperation (TC) component covers support to national ministries in the formulation of quality standards or guidelines for Material Recovery Facility (MRF), recycling and bio-methanation; support for the development of packaging waste regulation, such as Extended Producer Responsibility (EPR), implementation plans at the sub-national level; the implementation of source segregation programmes and informal sector integration in five lighthouse locations. The TC component also includes the introduction of capacity-building programmes for ULBs, households, businesses, the informal sector, etc. on low-carbon waste management solution
Long-term impact
The project is expected to lead to direct GHG emission reductions of more than 1 MtCO2e during the project implementation reaching cumulatively about 7 MtCO2e ten years after the end of the project.
