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A presentation made by Dr. Jochen Eckart at Africa Water Week, 27 May 2014, in Dakar, Senegal.
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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
~2.5 Billion without improved sanitation
~780 Million without improved water supply
Bad News: Sanitation is Lacking Behind
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.
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?
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
Financial Cost-Benefit Analysis
Costs Expenditure
Potential Revenue
Financial assessment – costs and revenues as the financial performance for households or business
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
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
Financial Viability Depends on Development of Resources Prices
Cordell & White 2011
Phosphate Price
Projections
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
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 $30,600
Quick growing
emerging town
Importance of Benefits from Wastewater for IUWM
ARUA
UGANDA
Upgrade existing WW
Demand Supply Gap (1000m3/d)
Un
it C
ost
s ($
/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
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?
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
• 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
