Preparing Projects for the Long-Term: Understanding the Alliance

Overview

A more sustainable future starts with minimising the impact of the modern world on our surroundings. At the Alliance, we do this by investing in solutions in 4 key areas—infrastructure, innovation, education, and cleanup—to help end plastic waste leaking in the environment.

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That problem is monumental. When plastic waste is disposed of irresponsibly it becomes an enormous problem for the environment. Figures suggest that 72% of plastic packaging is not recovered: 40% is landfilled, and 32% is uncollected, or illegally dumped or mismanaged.

So how do we ensure our investments are able to face this huge task and create real change?

Phillippe Montagne, Chief Advisor, Project Implementation at the Alliance, says, “We are working in developing countries where the landscape is challenging. In some areas, it is not practical for the private sector to provide these solutions and be profitable. So we help to lower the barrier to entry for viable economics, and work with the community to provide the necessary infrastructure.”

Solutions are time- and capital-intensive. To ensure we balance effort to impact, and allocate resources accordingly, we first conduct a series of feasibility studies to assess the viability of proposed project in each location. According to Philippe, these studies determine the details of how the proposed solution⁠—such as new waste management facilities⁠—will be effective in addressing the challenges, as well as its potential longer-term viability.

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“Such studies need to assess and minimise the risks of financing a full-fledged project, especially in countries where no waste management solutions have been developed or even trialled,” he says. “Mapping, communicating with, and shaping the behavioural change of different stakeholders within the community is vital, as is ensuring the waste management infrastructure being proposed will be sustainable for at least 20 years.”

William Handjaja, a manager at Systemiq, worked with the Alliance on a feasibility study for a new waste management programme to serve 2.5 million residents in Malang, Indonesia—assessing its potential and incorporating learnings from earlier programmes, like Project STOP Jembrana in Bali, Indonesia. His aim when conducting a study was to first identify a suitable location, and then analyse aspects like the estimated cost of implementing the programme, the structure of the operation, and its goals.

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Scaling up the existing work in Jembrana was the goal and a challenge, William says. “Throughout the Malang programme’s feasibility analysis, we had to challenge our own preconceived notions again and again to make sure we would set up the right system in terms calculating the costs and finding efficiencies.”

“For example, we went from using the smaller, village-based model of maybe processing 50 tons of waste a day at a sorting facility for 1 or 2 villages, to talking about a 150 tons per day at a much larger facility that services multiple villages in an area. The centres we are now considering for Malang are much larger, in order to achieve economies of scale.”

Philippe, who also works on the Malang programme, says through their feasibility work, they realised we could halve the number of waste sorting facilities originally estimated by streamlining locations and operations, reducing the upfront implementation costs significantly.

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Another key area of the study was to ascertain reliable data on the scale of the current waste management in Malang. The team worked closely with the local government to identify hotspots for pollution, conduct waste characterisation studies to assess the sort of waste being generated by households, and understand how much is collected.

Dirayati Ardelia Djaya, who worked with William on the feasibility study, says waste collection is a big issue in a country like Indonesia. “Our data confirmed very low waste collection, only about 12% collected, and revealed communities normalised large amounts of waste being around them,” she says. “But the government is committed to improving the situation, and their support is key to develop a system that meets the needs on the ground.”

The programme is currently in development, in partnership with the Malang Regency, incorporating learnings from the feasibility study which concluded at the end of 2020.

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While infrastructure investments are always complex and challenging, testing out advanced solutions in a new environment can be even more so.

Take chemical recycling for example, which breaks down material into its component polymer parts to be used as a feedstock for future applications. As an emerging solution, the way forward is not always clearly mapped out, said Jean-Christophe Lesguillier, Senior Advisor, Project Development at the Alliance.

For example, during a feasibility study in Bandung, Indonesia, two issues arose that prevented the project from progressing further. First, the proposed locations lacked sufficient energy to power the machinery needed. Second was a lack of sufficient recyclable material, called feedstock, to be processed by the facility.

Both issues meant the upfront implementation costs of the facility and long-term running costs were unsustainable—and led the team deciding not to pursue the project.

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Insuring future impact

“Conducting a thorough feasibility study might cost some money up front, but it helps confirm whether initial assumptions are correct or not. This is better than compensating in the future for the whole project, when it is going to cost several times more,” says Jean-Christophe, “Equipped with our learnings from Bandung, we are working with our partners to find the next suitable location where this recycling technology can be implemented sustainably.”

Another feasibility study for a sorting and recycling plant in Mojokerto, Indonesia proved more encouraging with a suitable location and good supply of feedstock, says Jean-Christophe. “Together with support from local stakeholders, we are going to build a facility near a landfill, which will help turn the area’s plastic waste into a useful feedstock through chemical recycling.”

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Ensuring the long-term viability of the Mojokerto and other such infrastructure projects requires upfront capital, says Jean-Christophe, something which deters private investors. “But this is where the Alliance has role to play. We can go in and help cover the initial capital needed to set up and show that firstly, it is technically possible. Secondly, we can try to improve the economics by helping support some of the upfront costs, as well as creating more demand for the eventual recycled plastics. With these two elements, the economics would work much better and attract private investors for future schemes.”

For example, our Closing the Loop project with the ASASE Foundation was expanded in early 2021, with additional support from the European Commission in Ghana, aiming to open two more recycling facilities in Accra, Ghana.

“Our role is to pioneer financially sustainable solutions that can continue to scale and serve communities for the long term. By taking on early development risks, demonstrating that a model can work, and galvanising investment from the public or private sector—we believe we can find the solutions to end plastic waste in the environment.”