The Economics of Wastewater, by Dr. Jochen Eckart
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Transcript of The Economics of Wastewater, by Dr. Jochen Eckart
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The Economics of Wastewater
African Water WeekDakar 27th May 2014
Dr. Jochen EckartVisiting Assistant Professor
Patel College of Global Sustainability
UNIVERSITY OF SOUTH FLORIDA
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~2.5 Billion without improved sanitation
~780 Million without improved water supply
Bad News: Sanitation is Lacking Behind
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Economic AssessmentBenefit-Cost Ratio for Sanitation 5.5
WHO 2012
Costs $1 Benefits $5.5
Benefit-Cost Ratio Water Supply 2.0
Benefits for whole society – economic value does not reflect direct financial impact for
households, business or ministries.
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Copyright © 2009 International Water Association
0%
20%
40%
60%
80%
100%
BOD5 Nitrogen Phosphorus Potassium
Pe
rc
en
t
Laundry/Bath
Kitchen
Feces
Urine
Uncontaminated
Energy
Nutrients
We Need an Integrated Perspective on Sanitation - Beneficiation
Is the revenue big enough to fund the implementation of sanitation?
Is beneficiation financial only viable with existing infrastructure?
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Benefits from Wastewater
Fertilizer from Feces
BiogasGreywater Reuse
Humanur/Sludge
≈5.7 $/capita/yr
≈2.8-8.8$/capita/yr
≈2.5 $/capita/yr
≈8.2-9.3 $/capita/yr
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Financial Cost-Benefit Analysis
Costs Expenditure
Potential Revenue
Financial assessment – costs and revenues as the financial performance for households or business
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Sludge
Loan $180
Sanitation Co.
Farmers
$180
Cost Transp. 8 $/hh/yrCost Proces. 5 $/hh/yrTotal Costs 13 $/hh/yr
Payback 15 $/hh/yr
Total Interest $140
Sanitation as a Business – Rural Malawi
Water for People
Profit Trans. 9 $/hh/yrBanks Households
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Sludge
Sanitation Co.
Farmers
Cost Transp. 8 $/hh/yrCost Proces. 5 $/hh/yrTotal Costs 13 $/hh/yr
Households
Sanitation as a Business – Rural Malawi
Water for People
Profit Transp. 9 $/hh/yr
15 $/hh/yr
After Payback of Investment
Banks
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Financial Viability Depends on Development of Resources Prices
Cordell & White 2011
Phosphate Price
Projections
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Billions
Less Developed Regions
More Developed Regions
Durham Advanced Wastewater Treatment Plant
Cost Effective within Existing Infrastructure
Investment Costs $2,500,000Finance Costs $550,000Total Costs $3,050,000
250t/yr*$800 -
$1170
$2,5Million
O&M Costs Savings $207,500Income Crystal Green $292,500
Annual Profit $500,000
Return of Investment 6 years
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Cost-Effective Compared to Alternative Technologies
Investment Costs $102,800O&M Costs $62,400
Income Product -$18,700Total Annual Costs $146,500
Disposal Costs $177,100Total Annual Costs $177,100
LaDePaLandfill
Annual Savings $30,600
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Quick growing
emerging town
Importance of Benefits from Wastewater for IUWM
ARUA
UGANDA
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Upgrade existing WW
Demand Supply Gap (1000m3/d)
Un
it C
ost
s ($
/m3
)
New
GW
Surface Water (long distance
transfer)
DEWATS &Greywater
Reuse
Unit costs without revenueUnit costs with revenue
Revenue Biogas
Revenues from Wastewater can make the Difference
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The Economic Benefits of Integrated Urban Water Management
Is the revenue big enough to fund the implementation of sanitation?
Is beneficiation financial only viable with existing infrastructure?
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Technology Selection
Building Effective Institutions
Stakeholder Engagement
Economics and Finance
GWP IUWM
IUWM Diagnostics
Water Balance Model
Training Program for IUWM Needs to Consider Economics and Finance
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• Revenue analysis frameworks
• Planning and economic regulatory tools
• Economic assumptions and evaluations that influence project selection
• Innovative capital acquisition approaches
Training Program for IUWM Needs to Consider Economics and Finance
Economics and Finance