Urbanization in low-income countries—which typically takes place against a backdrop of poverty and food insecurity—strains the allocation and use of land, water, and nutrients in peri-urban and urban areas. One of the resulting challenges is what to do with the daily generation of millions of cubic meters of solid and liquid waste. Sanitization of this waste is seen traditionally as a public sector obligation, and consumes a large part of municipal budgets. Until recently, private sector participation has been limited to the extraction, treatment, or conveyance of solid waste or fecal sludge from on-site sanitation systems to disposal sites.

Now, an emerging set of innovative entrepreneurs are recognizing the opportunities in waste. Private companies can profitably transform nutrients, water, energy, or organic fertilizers from the waste streams into vital agricultural resources. In Ghana, for example, Waste Enterprisers contracted with a municipality to transform the existing wastewater stabilization ponds into thriving aquaculture facilities. Fish, well fed on the nutrients from the waste, are then sold by the company for a profit. Part of the income is being spent on maintaining the wastewater treatment ponds, guaranteeing a share of the spoils for all partners.

Waste Enterprisers’ business model works, according to Founder and CEO Ashley Murray, because it is built around harnessing economic value from human waste. “By rebranding human waste as a needed input instead of a waste output, our waste-based businesses create both a physical and financial demand for waste, completely reinventing the economics of sanitation,” Murray said.

Wastewater from agro-industrial applications is also being reused to generate energy to meet the internal thermal and electric power requirements of the industries and to sell to the local electric company. For example, plants run by the Thai Biogas Energy Company convert wastewater from the processing of cassava and other agricultural commodities into biogas. This then fires the turbines that generate electricity for the internal requirements of the agro-industries and distribution in the local grid. Any excess can then be sold to the local grid. The purified waste water is used for irrigation or returned to the public canals.

Energy recovery is another evolving part of the reuse equation, as it can provide the economic leverage for the recovery of nutrient or water resources to address soil fertility depletion and water stress.

New role for PPPs

Public-private partnerships (PPPs) have an important emerging role in transforming waste into a business opportunity because of the potential cost leverage for sanitation services. Until now, the magnitude of waste resource recovery has remained very limited and largely restricted to the informal sector, even though the agricultural value of these waste resources is well recognized.

The Resource Recovery & Reuse program led by the International Water Management Institute (IWMI-CGIAR) is hoping to change this situation. In partnership with the International Fund for Agricultural Development, the Swiss Agency for Development and Cooperation, and the Bill & Melinda Gates Foundation, the new program is identifying innovative enterprises in low-income countries that reuse domestic and agro-industrial waste resources, including fecal sludge. Data analysis will allow testing of a variety of scalable business models.

IWMI’s initial research has found that entrepreneurial initiative and well-crafted PPPs are vital to the success of these new waste entrepreneurs. There are limits in public capital and a need to leverage private capital and entrepreneurial talent to bring about change. Therefore, emphasis must be placed on analyzing the role of entrepreneurship and PPPs in relation to the sustainability and up-scaling potential of existing and prospective waste reuse businesses.

Though potential opportunities for business in waste reuse are clear, it has also become apparent that public and private actors must work together to ensure scaling-up and sustainability of such businesses. For example, composting of solid organic waste into organic fertilizer is recognized as a reuse system with multiple benefits, especially in areas where resources for agricultural production are limited or fertilizer prices are increasing. However, most composting plants set up by researchers or nongovernmental organizationions remain biased toward technical results and hardly survive their pilot phase.

Successful organic fertilizer producers, on the other hand, have leveraged key strategic partnerships with the public sector as well as community-based organizations and other private entities. These relationships reduce risk associated with high capital investments and optimize the allocation of resources and activities while increasing market access. This opens the door to profit—and the sustainable solutions that profits ensure.