CASE STUDY

Waste Capital Partners: Transforming Waste into Wealth

Initiative Description

In 2012, Waste Capital Partners joined the Business Call to Action with a commitment to employ 10,000 formerly independent waste pickers as collectors, composters and recyclers, tripling their income and offsetting 200,000 tons of carbon dioxide by 2017.

Waste Capital Partners’ goals by 2017:

• Create a daily direct door-to-door waste collection and segregation service for over 1 million Indian Business Model households; Waste Capital Partners trains Urban Urban India produces more than waste pickers to sort and • Create 10,000 jobs for waste 120,000 tons of garbage each day. In the process garbage. We recycle pickers and waste processors, 80 next 15 years, this number is expected the dry waste, compost the percent of them women; to quadruple. Only 50 percent of this organic waste and then sell the • Triple their incomes from US$1.50 trash is properly collected, and most recyclables to manufacturers to US$4.50 per day; and collected garbage is dumped in the open. and the compost to farmers. This decomposing waste has harmful • Reduce greenhouse gas It is a win-win situation for all environmental and social effects: it involved: the waste pickers, the emissions by 200,000 tons spreads disease, contaminates ground environment, the citizens and us. through composting and biomass water and releases methane gases that briquetting of organic waste. contribute to global warming. Recycling Parag Gupta is carried out by mostly female, socially Founder of Waste Ventures marginalized waste pickers who make their living collecting and selling dry recyclable scrap – earning less than US$2 where municipal workers already per day. collect garbage, WVI trains the workers in early waste separation and provides Waste Capital Partners provides efficient waste -processing services. In environmentally friendly waste places where garbage is not currently management services. Through its collected by the municipality, WVI hires subsidiary Waste Ventures India (WVI), waste pickers who pick up garbage the company works with low-income directly from households each day. communities, employing both waste pickers and processors. In communities WVI aims to improve the incomes

1.  Research Journal of Recent Sciences Vol.1(ISC-2011),348-351(2012) Available at: http://www.isca.in/rjrs/archive/iscsi/59.ISCA-ISC-2011-8EnvS-45.pdf and living conditions of waste pickers and Figure 1: Waste Ventures India’s business model processors by including them not only as employees, but as company shareholders. Doorstep Transportation Environmental Sale of Compost In addition to receiving equity in the Collection to Site Processing & Recyclables company, strong employees are groomed for career advancement. This will make WVI the first waste picker-run integrated solid waste management business in India.

In addition to the social benefits for waste pickers and other low-income workers, WVI’s business model addresses the environmental consequences of dumped Revenue Share to workers waste. While the company launched its Waste Ventures innovative and financially viable business Train waste collectors Ensures separation Employs pickers to Sells compost to model in India, there is a large potential to segregate compost/recycle farmers and to replicate it in other densely populated recyclables to wholesalers regions in the developing world. Municipality Employs collectors Employs contractor Provides facilities

How it works corruption, with waste management composting and recyclable materials are companies receiving delinquent or no separated and recovered. In this manner, WVI’s business model provides a payment. WVI turned this system upside the municipality is assured that WVI will blueprint for a sustainable enterprise that down: In areas where no waste collection carry out environmental processing while regularly collects waste from households was previously undertaken, households WVI ensures that the infrastructure is and contributes to environmental pay a monthly fee of 60 Indian Rupees available from the municipality before sustainability. To date, the company has (US$0.98) directly to WVI in exchange for processing begins. launched operations in five Indian cities daily doorstep garbage collection in lieu of and expects to have over 40 projects by Using low-cost technology that also has municipal payments. By working directly the end of 2017. low operating and maintenance costs with households and collecting a fee for the ensures that waste processing remains service, WVI reduces the risk of corruption affordable and economically viable in and is held accountable to customers for Working with local government the long term. WVI employs community the quality of service it delivers. for efficient and solid waste members to carry out this processing, management Where municipal workers already collect providing training and a fair salary for their waste, WVI trains municipal workers to work. WVI recognizes the inherent challenge separate the waste as they collect it from in municipalities’ traditional methods Monetizing garbage households. The ‘Community Connect’ of monthly payments for collecting and programme raises community members’ dumping waste. At best, this model has WVI bundles recyclables and sells them awareness about providing source encouraged waste management companies to large recycling shops for approximately -segregated waste to assist municipal to dump waste rather than process it. At US$117 per ton. Composted organic waste collectors. worst, it has enabled rampant municipal is sold to farmers for an average of US$75 per ton. WVI’s profit margin is therefore Organized, low-cost over four times greater than those of waste processing companies that simply collect and dump Innovations waste. WVI has created an innovative partnership model for processing waste in which all Since 2012, WVI has provided a capital is provided by the municipality – professional, timely and reliable collection that improve lives including the land, shed and processing and processing service to more than machinery – under a multi-year contract. 80,000 households. In areas where WVI WVI is responsible for covering operational conducts doorstep collection, customer expenditures through the creation satisfaction is high: WVI’s fee-for-service and sale of compost and recyclables. structure provides superior results and is Biodegradable waste undergoes aerobic less prone to corruption. In addition, WVI

2. All figures are calculated based on an exchange rate of US$1 = INR61,06 Results Achieved

has created more than 150 jobs and has directly improved the living conditions of 750 people through its innovative model of solid waste management.

The company was recently recognized by the Indian Government for its project in the municipality of Miryalaguda in the state of Andhra Pradesh.

Business Impact With a new business model that mitigates dependence on government payments while reducing costs to strictly operational expenses, WVI expects its future projects to be profitable within the first 13 months of operation. Based on current capital expenditure projections, an internal rate of return of 23 percent is expected.

This is possible because WVI monetizes waste instead of allowing its value to be buried in landfills. WVI recovers up to 85 percent of household waste and makes a gross profit of US$2.62 per ton from collection. WVI than sells the recyclables to manufactures for a gross profit per ton of US$2.47, and the compost to farmers for 64 cents per ton. The company is now looking to sell its carbon credits to corporations on the Voluntary Emissions Reduction market as it averts the formation of methane gas (23 times as harmful as CO2) in its aerobic composting process. Development Impact WVI provides cities with cleaner streets, improves the living conditions of waste pickers and mitigates climate change by reducing greenhouse gas emissions. Communities benefit from the garbage collection service through reduced waste, which is otherwise thrown in front of houses and in dumpsites across the city. This reduces health hazards from provides professional training and offers of polluting the environment, nearby ground water contamination, improving career development opportunities to low- farmers use the processed compost as residents’ living conditions. income workers. an inexpensive, organic soil conditioner, which rejuvenates soil that has been WVI’s business model creates new By composting organic waste, WVI reduces subject to chemical fertilizer overuse. employment for waste pickers and waste approximately 2,500 tons of greenhouse processors. By promoting the use of gases per project, per year and saves up protective gear, WVI is also improving to 80 percent of landfill space, tripling waste pickers’ health. In addition, WVI the average landfill’s lifespan. Instead

3. UN News Centre (10/29/2006): Rearing cattle produces more greenhouse gases than driving cars, UN report warns. Available at: http://www.un.org/apps/news/ story.asp?newsID=20772#.VB_v2hJwXjI Key Success Factors Next Steps and Spin Off Effects Pilot projects to validate the revenue model and potential for social impact WVI is the core business model for South Asian national governments – as In the four and a half years since WVI Waste Capital Partners. With an well as investors – have expressed an was established in India, it has validated Indian market of over US$2 billion, the interest in exporting the model. In fact, its revenue model, affirmed its potential challenge lies in achieving rapid scale WVI has already aligned government for social impact and incorporated to meet the demand for better waste partnerships and investors to begin lessons learned into new projects using a services. operating in another country before minimum viable product approach to test the end of 2014. out business strategies. The company’s model of solid and inclusive waste management has In the future, WVI will continue to recently been adopted by the state encourage the replication of its model government of Andhra Pradesh. by other players, who can adapt Achieving scale through In the state of Telangana, WVI was it to other developing countries’ building the sector mandated to take over operations in contexts. WVI’s long-term vision Rather than hoard techniques or 44 municipalities and provide training includes influencing government intellectual property, WVI actively in solid waste collection and processing policies to facilitate implementation encourages adoption of its model to create across all municipalities. of its business model across emerging a critical mass of players that practice markets. waste picker -inclusive, environmentally While WVI’s model has been designed -friendly waste management. In fact, WVI for global replication, it is currently only founder Parag Gupta created a non-profit implemented in India. However, other organization to build this ecosystem and the Waste Ventures Consortium is now establishing a Development Impact Bond for waste to align development finance with outcome -based investment.

Creating benefits for all stakeholders WVI’s business model increases profits for businesses, carries less risk for municipalities, improves the living conditions of waste pickers and households, and benefits the environment.

Special thanks to Parag Gupta for his inputs, review and time spent on this case study.

Contact the Business Call to Action E: [email protected] T: +1 212 906 5695 www.BusinessCalltoAction.org

Written by Christian Pirzer, Endeva Reviewed by Aline Krämer, Endeva and Tatiana Bessarabova, Business Call to Action