16_W. Pfaff-Simoneit_KfW Development Bank_Development of solid waste projects in the frame of German...

Bank aus Verantwortung

Development of solid waste projects in the

frame of German Financial Cooperation

Wolfgang Pfaff-Simoneit Senior Technical Expert

Department ‘Water and Solid Waste Management MENA Region’

2nd Alternative Fuels Symposium | Duisburg – Germany

14 - 15 October 2015

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Outline

KfW Development Bank – How we work

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1 KfW Development Bank – Who we are

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KfW Development Bank – Why we support solid waste management

Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation


KfW Development Bank – Who We Are

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A bank with a wide array of functions

We promote

development

Promotion of

developing and

transition countries

International business

We promote Germany

Promotion of housing construction

and refurbishment, improved

accessibility and education

Financing of municipal infrastructure

and global loans

Promotion of SMEs,

business founders,

start-ups

Domestic promotion

We support

internationalisation

International

export and project finance

Promotion of environmental and climate protection

Mittelstandsbank Kommunal- und

Privatkundenbank/Kreditinstitute

KfW IPEX-Bank KfW Development Bank,

DEG


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International business: We ensure internationalisation International Export and project finance (KfW IPEX-Bank)

We finance projects of German and European companies so they can compete in

global markets.

Target group Large and medium-sized companies conducting international business (PEAs for

large-scale investments in infrastructure, environmental and climate protection

Volume of

commitments

2014

EUR 16.6 billion

Financing

priorities

Medium and long-term structured financings for

› Export finance (incl. trade finance) and other financing for specific purposes of

export companies

› Maintenance and expansion of German and European infrastructure including

corresponding means of transport

› Climate and environmental protection projects

› Securing German and European raw material supplies

› Foreign investments of German companies


Promoting development at the KfW Group

Financial

Cooperation

Entrepreneurial

Cooperation

Governments and public companies Partners/clients Private enterprises

Fiduciary funds (German federal budget)

and own funds (capital market) Funds Mainly own funds

Grants and loans, as well as advisory

services for project preparation and

support

Instruments Participations and loans as well as

advisory services

EUR 7,4 billion

Volume of

commitments

2014

EUR 1,47 billion

Promoting

development

Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 6


International business: We promote development KfW Development Bank

We promote economic and social progress in developing and emerging

countries to improve people's lives.

Task

› As the development bank of the German Federal Government, we provide

support and advice for reform processes and investments in developing and

emerging countries

Objectives

› Sustainably improve economic and social conditions

› Poverty reduction

› Climate and environmental protection

› Promote the financial sector

Partners › Governments, other governmental and non-governmental institutions in

developing and transition countries, and bilateral and multilateral donors

Promotional

business

volume 2014

EUR 7.4 billion


International business: We promote development DEG

Since more than 50 years DEG has been financing entrepreurial initiatives.

We provide long-term investment capital to private companies.

Task › As the development finance institution for the private sector we promote

promising business initiatives in developing and emerging countries

Objectives

› Expand private sector structures through investment financing and provision

of long-term investment capital

› Economic growth and sustainable improvement of living conditions

› Reduce poverty

Partners › Companies investing in developing and emerging markets

Promotional

business

volume 2014

EUR 1.5 billion

Organisation of KfW Development Bank

Executive Board FC Evaluation Unit

Africa/Middle East Europe/Asia

Latin America

and the Caribbean

Policy, Promotional

Instruments, Planning

Development and

Sector Policy

West Africa

East Africa and African

Union

North Africa and the

Middle East

Southern Africa and

Regional Funds

Southeast Europe and

Turkey

South Asia

East Asia and

Pacific

Eastern Europe,

Caucasus

Central Asia

Policy /

Latin America

East Asia and Pacific

Urban Development and

Mobility

Regional Team

East Asia and Pacific

Natural Resources

Energy

Sustainable Economic

Development

Award of Contracts,

Contract/Loan

Coordination

Afghanistan,

Pakistan


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Headquarters of KfW in Frankfurt http://campus.kfw.de

Founded 1948 on the basis of the KfW Law

Approx. 3,576 employees in Frankfurt in own as well as leased facilities

KfW Group Palmengartenstrasse 5-9

60325 Frankfurt

Germany


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Worldwide presence about 80 representative offices

KfW employees

Tiflis

Jerewan

Damascus Amman

Kampala

Windhoek

Pretoria

Lusaka

Skopje Ankara

Kiev Belgrad

Priština Sarajevo

Tirana

Berlin

Frankfurt

Istanbul

London

Brussels

Cologne

Podgorica

Bonn

Juba

Cairo

Al-Bireh

Addis Abeba

Kigali

Rabat

Dakar

Accra

Ouagadougou

Jaunde

Bamako

Cotonou

Kinshasa

Niamey Manila

Baku Beijing

Jakarta

Kabul

Islamabad

Ulan Bator

Hanoi Dhaka

Bishkek Tashkent

Dushanbe

Bangkok

Phnom Phen

Kathmandu New Delhi

Mumbai

Moscow

Lima

La Paz Brasilia

Managua

Tegucigalpa

Mexico-City

São Paulo

Quito

Bogotá

Guatemala-City

New York

Sanaa

Maputo

Daressalam

Lilongwe

Abu Dhabi

Johannesburg

Nairobi

San Salvador

Singapore

Tunis

Rangoon

Bujumbura

Vientiane

Mazar-e-Sharif

5,518


http://kfw-intranet/public/fz/publish/bueros/lo_15.html

12 Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation

KfW Development Bank - How we work

› Preventing crises

and conflict

› Reconstruction

› Emergency relief and

transitional aid

› Reintegration

› Renewable energies/

energy efficiency

› Water/sewage/waste

› Transport

› Urban development

› Agriculture

› Preserving biodiversity

› Reforestation

› Anti-erosion measures

› Microfinance

› Promoting SMEs

Priorities and sectors

Infrastructure Social development/

governance

Financial system

development

Rural development/

conservation of

natural resources

Peace and security

› Education

› Health

› Decentralisation

› Good governance


EU

Commission

Other

government

departments

Our clients

BMZ German Federal

Ministry for

Economic

Cooperation and

Development

German

Federal

Foreign Office Other

bilateral and

multilateral

donors

BMUB German Federal Ministry

for the Environment,

Nature Conservation,

Building

and

Nuclear Safety


Organisation of German bilateral DC

Political framework: German federal government (BMZ and other government departments) Definition of the goals, guidelines, concepts and long-term strategies of German DC

Imp

lem

en

ting

org

an

isa

tio

ns

Implementation of Financial and Technical Cooperation projects

KfW Development Bank

Task

Promoting public investment and reform processes

Services

› Providing grants as well as concessionary and

market-based loans

› Financing supporting consulting services

GIZ

Task

Boosting the performance capacity of people,

organisations and societies

Services

› Advisory and material support

› Assignment of specialists

› Instruments designed to complement each other

› Close cooperation at institutional, specialist and operating levels

› Shared implementation of joint DC programmes on behalf of the German federal government

Financial Cooperation Technical Cooperation


Our principles

Ownership Alignment

Guiding principles

Sustainable impacts

Reinforcing the partner

country's responsibility

for itself

Alignment

towards the partner

country's national

development strategies

and structures

Supporting partners in

the preparation,

implementation and

operation of projects by

providing advisory

services

Assessing the impact of

projects by means of

independent

evaluation

Shared responsibility

Target


Financial Cooperation – a four-way interaction

= International law = German law

KfW Project-executing agency

Germany (represented by the German

federal government)

Partner country (represented by its

government)

= Law of the partner country

General contract/

negotiation mandate Onlending agreement

Intergovernmental agreement

and/or exchange of notes

Loan/financing agreement

Separate agreements


Project cycle

Basis: development

potential

of the partner country

Intergovernmental

negotiations

Mutual agreement on sectors and

projects to be promoted

Drafted by BMZ, negotiated and

ratified with partner country

Country/priority area

strategy

Project/programme

preparation

Collective, based on what was

agreed during the

intergovernmental negotiations

Project/programme

appraisal

Carried out in partner

country by KfW

Financing agreement

Between partner country

and KfW

Financing decision by

BMZ

Implementation

Project-executing agency in

partner country (supported by

consultant), monitoring by KfW

Carried out by partner country,

final review by KfW

Outcome assessment,

ex post evaluation

Start-up of operation


Sources of funds and financing instruments in 2014

Grants, delegated funds and

budget fund loans


KfW funds

FC development loans

FC promotional loans

(Loans using own funds)

EUR 1,658 million (incl. interest

subsidies)

EUR 340 million EUR 5,358 million

EUR 1,913 million EUR 2.847 million EUR 2,596 million

Delegated funds

Budget funds

(mainly loans with interest subsidies)


DEG's financing offer

Tailor-made capital for foreign investments

Risk-taking

by DEG

Equity

Loans

Guaranteed

loan

Subordinated loan

Quasi-equity loan

Hedged equity

participation

Risk participation

Locally

secured

loan


Special programmes

Special programme Co-financed measures Partner

develoPPP.de Developmentally and economically feasible projects

Feasibility studies External feasibility and market studies in preparation of a specific investment

measure in a DEG partner country

Technical assistance Measures with specific structural effects

Example: increased energy efficiency or optimised production processes

Climate partnerships

with the private sector Measures in the field of climate protection

Example: pilot plants, qualification measures, introduction of innovative climate

protection technologies etc.

Up-Scaling Pioneering investments of SMEs planning to further develop innovative

business models

Co-financings for entrepreneurial measures and pilot projects



Why we support solid waste management

Why is Solid Waste Management so important for KfW?

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› Significant employment opportunities for unskilled employees (informal sector).

› Largest cost factor for most municipal budgets in developing countries.

› Core environmental problem in many regions.

› Third largest potential to reduce greenhouse gases (after energy & forest protection).

› Many linkages to other priority sectors (focal areas) of German Development Cooperation.

› Increasing demand from partner countries.

Global trends: Political trends:

› Population growth. * G7 topics 7./8. June 2015 Elmau / Germany

› Urbanization. - Resource efficiency

› Resource scarcity. - Protection of marine environment -> Marine Litter


Dump Sites - Examples

Kicevo / Mazedonien

Korca / Albanien Rustenburg / Südafrika

Trabzon / Türkei


Waste collection and transport - examples


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Portfolio Solid Waste Management Projects

Implementation

Planing/Preparation

Part of program - implementation

Part of program: Planning/Preparation

Finalised

Chile

Marokko

Tunesien

Ägypten

China

Vietnam

Philippinen

Albanien

Palästinensische

Gebiete

Türkei Russland

Indonesien

Südafrika

El Salvador

Georgien

Aserbeidschan

Jordanien

Armenien

Peru

Serbien

Liberia

Indien

Äthiopien

Active Portfolio:

427 Mio. EUR


Framework conditions for waste management in developing countries

› Absence of competent service utilities

› Insufficiently qualified personnel

› Inadequate legal and regulatory framework

› Lack of appropriate technical and environmental standards

› Absence of professional authorities and institutions for regulation, permission, supervision and enforcement

› Lack of adequate financing and cost recovery systems

› Less developed willingness / tense capability of beneficiaries to pay for services

› Shortfalls of appropriate education, training and research institutions

› Lacking of civil society participation


Framework of FC Projects From Intergovernmental Agreement to Project Implementation

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KfW Project executing

agency

Partner country BMZ Intergovernmental Agreement

Public funds and political

guidelines

Supply and Service Contracts Project monitoring,

Evaluation

Consultant/Engineer Contractor

Financing/Loan Agreement

On-lending or Grant Agreements

Supervision


Focal points of project appraisal

Economic viability /

affordability

Capacities of PEA

Framework conditions

(legal, institutional, financial)

Project

Project objectives

Risks

Impacts

Socio-economic,

environment, climate


Conclusions / Theses for discussion - I

› Revenues for recyclables and energy from waste have to contribute to cost coverage -> no ‚cherry-picking‘ by private companies

› Objectives for SWM must include also other than economic aspects (e.g. waste-picker interests, acceptance of technologies and facilities…)

SWM happens between public interest and private business opportunities

Private activities in must be embedded in a public SWM concept / strategy

› SWM is a system / not just a technology:

* SWM consits of different interrelated processes and technologies /

* there is no ‚one-fits-for-all‘ solution

› Clear objectives, roles and frame conditions / standards required

SWM investments are predominantly long-term investments

› Long-term investments require long-term funding and long-term contracts

› SWM concepts under way require flexible contracts

› Private companies can not bear the long-term risks

› Private companies will have difficulties to find funding and insurances


Conclusions / Theses for discussion - II

› Unqualified contracting authorities are not able to assess the appropriateness

of proposed solutions / concepts

-> susceptible for unqualified / poorly conceived solutions / profiteers

› Unqualified contracting authorities are are not able to rate and remunerate

fairly the delivered services

› Unqualified contracting authorities are not able to understand the cost

calculation of private companies

Private sector participation requires professional contracting authorites

Private sector participation requires clear regulations and reliable partners

› Abiding by contract stipulations

› Clear definition and common understanding of the services to deliver

› Reliable remuneration of delivered services

› Reliable cost coverage system


Contact


Palmengartenstrasse 5 – 9

60325 Frankfurt am Main

Visitors Adress:

Senckenberganlage 30 - 36

60325 Frankfurt am Main

Phone: 069 7431–4145

Fax: 069 7431-3279

www.kfw-entwicklungsbank.de

Dr.-Ing. Wolfgang Pfaff-Simoneit

Technical Expert

Phone: +49 69-7431-4145

E-Mail: [email protected]


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