feasibility Study Solid Waste

Pre-feasibility Study of
INTEGRATED SOLID WASTE MANAGEMENT PROJECT
‘INTEGRATED SOLID WASTE MANAGEMENT PROJECT’

(Banepa Municipality, Dhulikhel Municipality, Panauti Municipality,
Namobuddha Municipality, Panchkhal Municipality)
March 2019
New Baneshwor,
Kathmandu, Nepal
1
LIST OF ACRONYMS
ADB Asian Development Bank

BCR Benefit Cost Ratio
CBG Compressed Biogas
CBO Community Based Organization
CBS Central Bureau of Statistics
DESR Debt Equity Service Ratio
DFID Department for International Development
EIA Environmental Impact Assessment
EPC Engineering Procurement and Construction
EPR Environment Protection Rules
GON Government of Nepal
IEE Initial Environmental Examination
IRR Internal Rate of Return
ISWMP Integrated Solid Waste Management Project
MSW Municipal Solid Waste
NGO Non-Government Organization
NPV Net Present Value
OIBN Office of the Investment Board Nepal
PPP Public Private Partnership
SWM Solid Waste Management
SWMTSC Solid Waste Management Technical Support Centre
WTE Waste to Energy
2
EXECUTIVE SUMMARY
Solid waste management is one of the major problem for municipalities in Nepal. Rapid
Urbanization, population growth, modern throwaway culture, reduced landfill capacity
and increasing disposal costs have made this issue a major challenge in recent years. This
is going to be worse in coming years. So, it is important that we recognize this challenge
and prepare ourselves for the future.
Office of the Investment Board (OIBN) is looking forward to attract investment in range of
projects by creating a common platform in upcoming Investment Summit (March, 2019).
One of the key areas identified for the foreign investment is the solid waste management
sector. The main purpose of the study on “integrated solid waste management project
(ISWMP)” is to reflect the current scenario of waste management in proposed locations
which includes Banepa Municipality, Dhulikhel Municipality, Panauti Municipality,
Namobuddha Municipality, Panchkhal Municipality of Province 3 and to document the
technical and financial viability of the project. The study included both primary and
secondary data collection methods. Primary data were collected through visiting each
municipalities and speaking to the mayors and other local government officials whereas
the Secondary data was collected from different sources like published reports, Journal
articles and other verifiable and credible internet sources.
This project seems best suited to be developed in a public private partnership (PPP)
model where GON will help in facilitating to get the necessary land for the project which
includes the land for developing transfer stations, processing plant and landfill site. The
developer will then develop all the infrastructure necessary for the smooth
implementation of the project and will operate the project for 20 years which will then
be transferred to GON in good operating condition. The study looked into the technical
and financial aspects of this project and concluded that the project is technically and
financially viable with the total estimated cost to be around 4.3 Million USD (including
interest component during construction period) and Equity IRR of 15.43%.
3
TABLE OF CONTENTS
LIST OF ACRONYMS 2
EXECUTIVE SUMMARY 3
TABLE OF CONTENTS 4
LIST OF TABLES 6
LIST OF FIGURES 7
SALIENT FEATURES OF THE PROJECT 8
1. BACKGROUND 11
1.1. Introduction 11
1.2. Municipal Solid Waste Management in Nepal 11
1.3. Objectives 13
1.4. Scope of Work 13
1.5. Approach & Methodology 14
2. PROJECT DETAILS 15
Project Background and Description 15
Project Features 16
Overview of the Area 18
Developing a Business Case 20
Product Mix 20
Market Assessment 23
SWOT Analysis 24
Examination and evaluation of alternatives 25
Relevant case studies 27
Case Study 1 27
Case Study 2 28
3. FINANCIAL ANALYSIS 30
3.1 Pre-Feasibility Approaches & Assumptions 30
3.2 Financial Analysis 34
3.2.1 Basic Financial Results 34
3.2.2 Sensitivity Analysis 35
Project Cost Increase/Decrease by 5% 35
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4. STATUTORY AND LEGAL FRAMEWORK 36

4.1 STATUTORY AND LEGAL FRAMEWORK 36
5. PRELIMINARY ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT 39
6. PRELIMINARY RISK ANALYSIS 41
7. PROJECT STRUCTURE AND IMPLEMENTATION MODEL 45
8. FINDINGS AND RECOMMENDATIONS 46
Findings 46
8.2 Recommendations 46
9. ANNEX 48
9.1 Next Steps and Useful Contacts 48
9.2 Map of Banepa Municipality 49
9.3 Map of Dhulikhel Municipality 50
9.4 Map of Panauti Municipality 51
9.5 Map of Namobuddha Municipality 52
9.6 Map of Panchkhal Municipality 53
9.7 Annex- Financial Report 1
5
LIST OF TABLES
Table 1: Salient Features of the Project
Table 2: Project Features
Table 3: Quantity and composition of Waste
Table 4: Revenue Sources from the Project
Table 5: Risk Factor Analysis
Table 6: Useful Contact information
6
LIST OF FIGURES
Figure 1: Average composition of household waste of 60 municipalities
Figure 2: Population of the municipalities included in the package
Figure 3: Waste generation of the municipalities included in the package
Figure 4: Average Waste Composition of the municipalities included in the package
Figure 5: Project area location map
Figure 6: Components and end uses of an anaerobic digestion plant
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SALIENT FEATURES OF THE PROJECT

Table 1: Salient Features of the Project
S.N. Features Characteristics

GENERAL
1 Name of Project Integrated Solid Waste management Project
2 Type Waste management
3 Total Population1 Daily waste
generation
(ton/day)2
Banepa 61927 19.63
Municipality,
Dhulikhel 36561 11.59
Municipality,
Panauti 57292 18.16
Municipality,
Namobuddha 32862 10.42
Municipality,
Panchkhal 42578 13.50
Municipality
Total 231220 73.30
Average Waste Organic 74
Composition (% Reusable/Recyclables 20
by weight)3 Others (Including Hazardous Waste) 6
PROJECT LOCATION
Province Province 3
1
Central Bureau of Statistics (CBS), 2011 (Population projected based on national growth rate @ 1.35%).
2
ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations (average per capita
waste generation taken 0.317 kg).
3
ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations (The composition for
Namobuddha and Panchkhal is assumed to be similar that of Panauti)
8
Land Availability Banepa : Land available within 8 km distance from the city centre
Panauti: Around 9 ropanies of land available in ward 10
Project Location
PROJECT COMPONENT/TECHNOLOGY
1 Anaerobic • Mesophilic (35-38 degree Centigrade) / Thermophilic
Digestion (above 50 degree centigrade)
• The methane gas will be compressed, bottled and sold to
local market
• Compost will be formed and sold to the local market as
organic fertilizer
MARKET ASSESSMENT
1 Project Demand • There is a pressure on municipalities to Improve and
Scenario modernize the collection methods and disposal technology.
• There is a need to reduce the pressure on waste disposal
practices and prices
• 80% reduction in the current volume of waste going to landfill
site which will extend the life of landfill site in the future.
9
• The creation of renewable energy and other environmental

benefits
DEVELOPMENT MODALITY
1 Development modality Public Private Partnership
2 Role of Government of Nepal ▪ Facilitation
▪ Acquisition of land
▪ Security
▪ Project Monitoring
3 Roles Private Sector ▪ DPR
▪ Project Development
▪ Investment & Infrastructure development
▪ Operation and Management
▪ Project transfer after concession Period
4 Development Period
a. Pre-Construction Period ▪ 6 months
b. Financial Closure ▪ 6 Months
c. Construction Period ▪ 3 Years
d. Concession Period ▪ 20 Years (Up to 30 Years)
FINANCIALS
1 Total Project Cost (Including IDC) 4.3 Million (USD)
2 Interest Rate 12%
3 Equity IRR 15.43
4 NPV Equity 0.5 Million (USD)
5 Debt Equity Ratio 70:30
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1. BACKGROUND
1.1. Introduction
Solid waste management is one of the major challenges for municipalities in Nepal. Not
only in Nepal, waste management is an international problem and it has been a major
problem for local governments around the globe. It is even a greater problem in countries
like Nepal because it lacks necessary skills and resources to manage this problem.
Majority of the Local Authorities undertake these tasks in-house with their own resources
but in a few cases, part of the work is contracted out to private enterprises. Urbanization,
population growth, modern throwaway culture, reduced landfill capacity and increasing
disposal costs will bring major challenge of waste management in coming days. So, it is
important that we recognize this challenge and prepare ourselves for the future.
1.2. Municipal Solid Waste Management in Nepal
In Nepal, solid waste management is one of the performance indicator and major
responsibility for municipalities. Urbanization and population growth together brings
major challenge of waste management. Cities like Kathmandu, Biratnagar, Birgunj,
Nepalgunj, Butwal, Janakpur, etc. are the main urban cities with industrial corridor and
importance of external trade. As a result, huge influx of people, changing lifestyle will
result in massive waste production. Though some of the major cities are practicing landfill
system of waste management, most of the places are deprived of sanitary waste
management techniques. This eventually will create the investment opportunity in waste
management sector along with collaboration with adjoining municipalities. More
amount of waste means more use of technological components.
ADB carried out a comprehensive study of Municipal Solid Waste of Nepal in 2013. It
analyzed the composition of solid waste in 58 Municipalities. The highest proportion on
Household waste was organic waste with 66% followed by plastics with 12%, and paper
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and paper products with 9%4. The average household per-capita waste generation of
those 58 municipalities of Nepal was 0.317 kg/capita/day5. A recent research
conducted by Engineering Study & Research Centre (P) Ltd. on behalf of Solid Waste
Management Technical Support Centre (SWMTSC) carried out the analysis of household
waste composition of 60 municipalities. The study found out that the organic matter,
which was around 68% of the total fraction, was the highest followed by plastics which
was 10%. Rest of the components are below 10% as Paper and paper products
constitutes 8% and rest of the components like Glass, metal, rubber and leather, textile,
etc. were at or below 6%6. This is represented graphically below by a pie chart (Fig. 1).
2% 1% Organic Waste
1%
4% 6% Plastics
Paper & Paper Products
8%
Glass
10% Metals
68% Textiles
Rubber & Leather
Others
Figure 1: Average composition of household waste of 60 municipalities7
4
ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations
5
6
D.R.Pathak, Engineering Study and Research Centre (P) Ltd., 2017, Solid Waste Management Baseline Study of 60
New Municipalities
7
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1.3. Objectives
Office of the Investment Board (OIBN) is looking forward to attract investment in range of
projects including projects on solid waste management by creating a common platform
in upcoming Investment Summit (March, 2019). Hence, OIBN has prepared a possible
package for Integrated Solid Waste Management Project (ISWMP) incorporating at least
more than one municipalities based on their daily waste generation and other relevant
criteria. Ultimately, it aims to show case those relevant packages in Investment Summit
(2019) to find the relevant investors for the project. Hence some of the major objective
of the report are as follows:
1. To understand current status of Solid Waste Management in the proposed
Municipalities and their future plans
2. To study the technical and financial viability of the project in the proposed
location
1.4. Scope of Work
The pre-feasibility study aims to reflect the current scenario of waste management in
proposed location and to document the technical and financial feasibility of ISWMP.
Ultimately, study will help to get overall idea of possibilities of investment in this specific
sector and area. Some of the major scope of the study are:
- To collect primary data, secondary data and all the required information for the
development of the said project.
- Carry out the analysis of the gathered information for different aspects such as
technical, financial, social and environmental
- Develop the best suitable investment model i.e. Private or PPP or Blended
Finance
- And provide recommendations based on the findings
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1.5. Approach & Methodology
The study included both primary and secondary data collection methods. Primary data
were collected through visiting each municipalities and speaking to the mayors and
other local government officials. Few generic questions were prepared to get all the
information as per guided by the objectives of the study. The questions were very
objective and open ended.
Secondary data was collected from different sources like published reports, Journal
articles and other verifiable and credible internet sources. Also, Financial, technical,
social and environmental analysis were carried out and based on the analysis, a suitable
investment model has been recommended.
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2. PROJECT DETAILS
Project Background and Description
Solid waste management (SWM) is one of the major environmental issues in cities of many
developing countries, including Nepal. Urban population growth and economic
development lead to increasing generation of municipal solid waste (MSW). The use of
products that generate hazardous waste is another concern. Unmanaged disposal of
medical wastes from hospitals and clinics also contribute to pollution and public health
hazards in the localities. Therefore, SWM has become a major concern for the
municipalities of Nepal.
Current practice of solid waste management in the project area is very basic where the
municipalities or in some cases private contractors are collecting the waste and dumping
it along the river banks, low lying areas and other open spaces which possesses many
health and environmental risks. So the idea is to develop an integrated solid waste
management plan where source separation will become an integral part of it.
Respective waste is taken to the transfer station and further segregated into recycling,
non-recycling and organic wastes which will then be processed using different
technology to develop different marketable products like organic fertilizer, cooking gas,
pesticide, etc.
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Project Features
Table 2: Project Features
Municipality Total Population8 Daily waste generation

(ton/day)9
Banepa Municipality, 61927 19.63
Dhulikhel Municipality, 36561 11.59
Panauti Municipality, 57292 18.16
Namobuddha Municipality, 32862 10.42
Panchkhal Municipality 42578 13.50
Total 231220 73.30
Average Waste Composition Organic 74
(% by weight)10 Reusable/Recyclables 20
Others (Including 6
Hazardous Waste)
Project Components Source Segregation
Collection
Transportation
Recycling
Processing
Disposal
The way we designed this project is that the potential developer is getting their raw
material (Waste) in excess of 70 tons per day and the cities are within the radius of 50 km.
8
9
waste generation taken 0.317 kg).
10
ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations (The composition
for Namobuddha and Panchkhal is assumed to be similar that of Panauti)
16
Also the cities we have chosen are the ones with the high population numbers and are
the growing cities of Nepal which also presents huge growth potential.
Population
61927
57292
42578
36561
32862
Banepa Municipality, Dhulikhel Panauti Municipality, Namobuddha Panchkhal

Municipality, Municipality, Municipality
Figure 2: Population of the municipalities included in the package11
Waste Generations Tons/Day
73.3
19.63 18.16
11.59 10.42 13.5
BANEPA DHULIKHEL PANAUTI NAMOBUDDHA PANCHKHAL TOTAL

MUNICIPALITY, MUNICIPALITY, MUNICIPALITY, MUNICIPALITY, MUNICIPALITY
Figure 3: Waste generation of the municipalities included in the package12
11
12
waste generation taken 0.317 kg)
17
AVE RAG E WASTE CO M PO SITIO N

( % BY WE IG HT)
74
20
6
ORGANIC REUSABLE/RECYCLABLES OTHERS (INCLUDING
HAZARDOUS WASTE)
Figure 4: Average Waste Composition of the municipalities included in the package13
Overview of the Area
The project incorporates Banepa Municipality, Dhulikhel Municipality, Panauti

Municipality, Namobuddha Municipality, Panchkhal Municipality of Province 3.
Kavrepalanchok District, located near Kathmandu valley in the mid hills of Nepal and
comprises of 13 municipalities altogether. Among 13 municipalities, Banepa, Dhulikhel,
Panauti, Namobuddha and Panchkhal Municipalities have been incorporated in a
package based on Total population, waste generation, consent and requirement of the
Municipality and various other factors. The main sources of pollution in the area are the
aggravation of physical infrastructure, large amount of tourist influx, lack of proper waste
management and improper sanitation. The total population of these five Municipalities
13
ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations (The composition
for Namobuddha and Panchkhal is assumed to be similar that of Panauti)
18
was 201901 in total (2011 census) which is expected to be 231220 by 2019 as per national
growth rate (1.35%)14.
The project area has comparatively good coverage of waste collection (73.30 ton/day)
with respect to other municipalities of Nepal but it is still lacking for proper final disposal site.
Also rapid economic growth in the area shows scope of waste management projects to
manage increasing amount of waste. Large portion of wastes are organic in nature which
either needs to be composted or converted into biogas. If waste is converted into compost
or biogas, there is high prospects of creating the project area as an eco-city with urban
agriculture for producing local food and greenery in the city.
Figure 5: Project area location map (Source: Google Earth)
14
Central Bureau of Statistics (CBS), 2011 Population Monograph
19
Developing a Business Case
Product Mix
The product mix for this package consists of following components:
• Source Segregation
• Collection
• Transportation
• Recycling
• Processing
• Disposal
The developer should take responsibility of collection of waste which are separated at
source. The waste will then be transferred to the transfer station and then to the
processing site where the recycling materials are separated and sold to the
manufacturer whereas the organic waste will be turned into the biogas, organic fertilizer
and possibly pest repellent. Rest of the waste which can’t be either recycled or
processed are sent to the sanitary landfill site. Developer is only allowed to take maximum
20
of 20% of collected waste to the landfill site as rest of the waste should be converted into
some sort of energy forms as mentioned above.
This project is going to be developed in a public private partnership (PPP) model. The
main objective of the ISWM-PPP is to promote sustainable, self-supporting partnerships
between micro and small enterprise and local authorities who, over time, improve lives
and livelihood of poor people in cities and municipalities of low-income countries. So for
this project the GON will facilitate in providing all the necessary land for the project
including the land for developing transfer station, processing plant and landfill site and
the developer will develop all the necessary infrastructure necessary for the smooth
delivery of all the project components mentioned above. The developer will own and
operate the project for 20 years and then transfer the project to the GON in good
operating condition.
On the basis of various factors such as overall level of waste management, composition
of waste, calorific value of waste, suitable quantities of waste, transportation time and
distance to the main processing plant, availability of land, availability of workers and
capacity, existing policies linked to waste management, marketing of product and
incentives for low carbon generation, anaerobic digestion is appropriate technology for
the proposed municipalities.
Anaerobic Digestion - Design and Technology
The proposed plant will be based on anaerobic digestion under Mesophilic (35-38
degree Centigrade) conditions. Similar to standard process of biogas generation, bio-
organic materials will be feed into a digester where anaerobic decomposition of the
organic materials takes place to produce biogas as a main product and compost as
byproduct. The gas thus generated will be then purified to increase the methane
concentration. The enriched biogas is then compressed using a suitable compressor and
filled into cylinders/cascades for distribution. Moreover, the digestate can be used as
organic fertilizer when the feedstock is source separated and non-contaminated organic
waste. The major components and end uses of an anaerobic digestion plant is shown
below;
21
Figure 6: Components and end uses of an anaerobic digestion plant [Source:

https://biowaste-to-biogas.com/Download/biowaste-to-biogas.pdf]
Total land required:
According to the report by ADB in association with Australian Government Aid Program,
the land requirement for anaerobic digestion plant is 400–500 m2/ton (includes space for
drying of slurry)15. Hence, for our project to develop the processing site, the tentative land
required ranges from 29320 m2 – 36650 m2 (2.9 to 3.6 hectare). We have assumed that
only 80% of the biodegradable waste collected will be fed into the system to produce
biogas.
Based on the ongoing project of Ministry of Urban Development in cooperation with ADB
for project in Nepalgunj Sub Metropolitan City and Birgunj Metropolitan city, the tentative
land requirement for sanitary landfill site (based on comparison of the total waste
generation) for the proposed package is approximately 2.5 - 3 hectare.
15
ADB, 2011, Towards sustainable municipal organic waste management in south Asia, A guide book for policy
makers and practitioners
22
Market Assessment
The waste composition of our proposed municipality is as follows;
Municipality Total Total organic matters Reusable/ Others

Population16 Waste (Food waste, vegetable/fruit
recyclables (including
waste, green leaves, animal
generation hazardous
excreta, slaughter waste, Straw, (Metal, paper,
waste) 20
(Ton)17 bamboo, woody waste, dry glass, plastic) 19
leaves, etc.) 18
Banepa 61927 19.63 13.37 4.61 1.65

Municipality,
Dhulikhel 36561 11.59 6.10 4.22 1.27

Municipality,
Panauti 57292 18.16 15.06 2.34 0.76
Municipality,
Namobuddha 32862 10.42 8.64 1.34 0.44
Municipality,
Panchkhal 42578 13.50 11.19 1.74 0.56
Municipality
Total 231220 73.30 54.37 14.25 4.68
Table 3: Quantity and composition of Waste
The main products of the plant at 100 % capacity will be as follows;
16
Central Bureau of Statistics (CBS),2011, Population Monograph (Growth rate @1.35)
17
waste generation taken 0.317 kg)
18
ADB, 2013, Solid Waste Management in Nepal: Current status and Policy Recommendations (Composition of
Panauti has been taken as reference for Namobuddha and Panchkhal)
19
20
23
Product Quantity/day Approximate rate Possible Market

(NPR./KG) /Area of use
Compressed Biogas 2022 85 Restaurants, Hotels,
(Kg) etc.
Sale of fertilizer (Kg) 869.86 15 Agro market
Pesticides (liter) 7245.90 8 Agro Market
Reusable & 12111.03 8 Scrap collection
recyclables (Kg) center and
Industry
Table 4: Revenue Sources from the Project
SWOT Analysis
SWOT analysis enables identification of factors characterizing an entity or enterprise

under consideration in the context of a specified purpose, as well as classification of such
factors into four groups. Two of these comprise positive, and the other two negative
elements as shown in the table:
SWOT analysis for integrated solid waste management
Strength Weakness Opportunities Threats
- Improved hygiene and - Lack of - Appropriate - Opposition

cleanliness awareness legislative from the local
- Source of Income for - Misconception framework for people
Sub- about landfill proper because of
Metropolitan/Municipality site integrated solid the lack of
(as some royalty has to - Lack of waste understanding
be paid by the environmental management to differentiate
developer) knowledge - Compliance between
- There will be no annual - Technical with processing
solid waste management deficiency and landfill.
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cost for concerned - Lack of environmental - Lack of

authority funding objectives investment in
- The partner municipalities - Cost recovery infrastructure
have one kind of informal of solid waste due to
consent among management economic
themselves to develop related services crisis
the project - effective - Poor
- Source Segregation establishment of management
- Land Availability market for - Workers Strike
- Stable Government different end
products
- Possibilities of
integration of
other nearby
municipalities
and rural
municipalities
- Financial
Viability
Examination and evaluation of alternatives
On the basis of various factors such as overall level of waste management, composition
of waste, calorific value of waste, suitable quantities of waste, existing policies linked to
waste management, etc. Anaerobic digestion is appropriate technology for the
proposed package. However we also looked into the following options:
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Composting:
Composting of waste is a method of decomposing solid wastes. The process involves

decomposition of organic waste into humus known as compost which is a good fertilizer
for plants. Due to shortage of space for landfill in bigger cities, the biodegradable yard
waste (kept separate from the municipal waste) is allowed to degrade or decompose in
a medium. A good quality nutrient rich and environmental friendly manure is formed
which improves the soil conditions and fertility. Organic matter constitutes high proportion
of the municipal solid waste generated in Nepal. This waste can be recycled by the
method of composting, one of the oldest forms of disposal. It is the natural process of
decomposition of organic waste that yields manure or compost, which is very rich in
nutrients. Composting is a biological process in which micro-organisms, mainly fungi and
bacteria, convert degradable organic waste into humus like substance. This finished
product, which looks like soil, is high in carbon and nitrogen and is an excellent medium
for growing plants. The process of composting ensures the waste that is produced in the
kitchen is not carelessly thrown and left to rot. It recycles the nutrients and returns them
to the soil as nutrients. Apart from being clean, cheap, and safe, composting can
significantly reduce the amount of disposable garbage. The organic fertilizer can be used
instead of chemical fertilizers and is better specially when used for vegetables. It
increases the soil’s ability to hold water and makes the soil easier to cultivate. It helped
the soil retain more of the plant nutrients.
Waste to Energy
The proposed technology is based on waste to biogas which will be treated further to
enhance the methane content followed by its compression and bottling. The other
alternatives could be Waste to Energy (WTE), is a term that is used to describe various
technologies that convert non-recyclable waste into usable forms of energy including
Heat, Fuels and electricity. There are number of processes which convert waste to energy
like gasification, pyrolysis, in-vessel composting, etc. As our technology is based on waste
to biogas its use as a fuel for combustion engines, which convert it to mechanical energy,
powering an electric generator to produce electricity. The design of an electric
26
generator is similar to the design of an electric motor. Moreover, the compressed

methane gas can be used as fuel in the vehicle.
Relevant case studies
Case Study 1
Project Type: Commercial Biogas Plant
Developer: Gandaki Urja Pvt. Ltd.
Location: Majuwa, Pokhara Lekhnath Metropolitan city, Ward No. 32, Kaski District.
Total Capital Investment: NPR. 166,650,038.54
Total Operation and Maintenance Cost: NPR. 80,751,375.35
The proposed 45TPD Compressed Biogas Bottling and Fertilizer plant is to produce high
quality Compressed Biogas and Organic Fertilizer. A continuous flow stirred tank reactor
type digester is selected to decompose the organic materials in anaerobic conditions.
The plant shall consume about 45 tonnes of substrate per day including cow/buffaloes
dung, pig manure and poultry litter to generate 1600kg of Compressed Biogas (CBG) and
11000 kgs of organic fertilizer.
The proposed project site is at Majuwa, Pokhara Lekhnath Metropolitan city, Ward No.
32, Kaski District. The site is about 20 km from the Pokhara and about 30 km from Damauli,
about 500m north east along the Prithivi Highway. The developer has leased 15 ropanis
of land for setting up the plant. The proposed site is located in an area which receives
ample sunlight throughout the day. In addition, there are a few households on only one
side of the proposed plant (north western side) and thus this project will have minimal
social impact due to sparse population density.
The developer has partnered with SLPP RE-NEW, a reputed technology provider from
India with 15 years of experience in the field to develop and operate the plant. The
technology provider shall provide Engineering Procurement and Construction (EPC)
service and also be responsible for overall performance of the plant and machineries.
27
The technology provider shall also train the staffs and operators of the plant to have an
effective transition while handing over the project to the developers.
The primary produce of the plant shall be compressed biogas and other produce would
be organic fertilizers. The compressed biogas shall be supplied to the nearby hotels,
restaurants, etc. as a substitute of LPG at about 10% reduction of the prevailing rate of
LPG/kg. Similarly, the organic fertilizers shall be supplied to various farms nearby the plant
and also throughout the country.
This project is financially viable as reflected by the key financial indicators. The internal
rate of return of the project is 14.93% and the project payback period is 8 years.
Case Study 2
Project Type: Waste to Energy Project through Anaerobic Digestion (Biogas) Technology
Developer: Venture Waste to Energy P. Ltd. (Vw2E)
Location: Panmara, Ward-6, Dharan Sub-Metropolitan City
Total Capital Investment: NPR. 24,85,02000
Venture Waste to Energy P. Ltd. (Vw2E) is a private limited company with the aim to
develop waste to energy project through Anaerobic Digestion. One of the major product
of the project is bio-methane gas which they aims to sell it to the domestic and industrial
consumers in Nepal.
The project aims to manage municipal solid waste from Dharan Municipality and use
organic waste as energy source through Anaerobic Digestion. The capacity of the plant
is 30TDP (Ton Per Day) and the project site is located at Panmara , Ward-6 of Dharan Sub
–Metropolitan City of Sunsari District in Province 1.
This project is using the SERI Organic Fuels Technology which is a multi-stage variable
hydraulic and solid retention, microbe incubated Bio-Reaction system. This technology
uses the “microbe incubated Bio-Reactors (MIBR) with stabilized incubation system and
laboratory cultured feed specific microorganisms and related biotechnology and fast
28
breeder media”. This technology can process any organic feedstock like fruits and
vegetables waste. Not only organic feedstock, it also processes agricultural waste, oil
effluents, poultry and fish remains etc. One of the major advantages of this technology is
that it processes 100% of waste processed.
The output of this projects are biogas, organic fertilizer, pest repellant and recycling
scraps. The project is technically and financially viable based on their key financial
indicators.
The information provided above are all based on the Detail Project report submitted by
Venture Waste to Energy P. Ltd to Office of Investment Board.
29
3. FINANCIAL ANALYSIS
3.1 Pre-Feasibility Approaches & Assumptions

Project cost
Total cost of the Project amounted to Dollars 3,794,400.43 Excluding Interest during
Construction. The Total cost including interest amounted to Dollars 4,295,180.78. Costs
are assumed to occur evenly in construction period.
Cost Composition
Particulars Amount in Dollars Amount in Dollars
379,440
Land - 500,780
Civil Structure 379,440 37,944
Machinery 3,377,016
Civil Structure
Others 37944
Interest During 500,780 Machinery
3,377,016
Construction Others
Total Project cost 4,295,181
Interest During
Construction
The portion of the interest during construction is capitalize in the individual assets on
proportionate basis.
Capital Structure
The projects is propose to be finance in a 70:30 debt equity ratio on the total cost of the
project including Interest during construction (IDC). The requirement of working capital
would be finance by internal resources itself. Based on the Structure, The total Investment
pattern has been tabulated below:
Component Percentage Amount In Dollars

Equity 30.00% 1288554
Debt 70.00% 3006627
Total 4295181
Solid Waste Generation & Composition
The overall financial Analysis is based on the total generation of the solid waste on the
various Municipalities. The areas that has been included in Integrated Solid Waste
Management Project (ISWMP), Dhulikhel package are listed below:
30
Areas Included Dhulikhel Municipality, Banepa Municipality, Panauti Municipality,

Namobuddha Municipality, Panchkhal Municipality
Total waste collection on this package has been calculated to be 73.30 Tons per day.
Based on the information and data, composition of the total solid waste collection of
Dhulikhel Package is tabled below:
Composition of the waste (At 100% capacity) In % of

Tons Composition
Organic 54 74
Reusable/Recyclables 14 20
Others (Including Hazardous Waste) 5 6
Collection Efficiency
Based on the various studies conducted by international agencies and prevailing market
tendency, collection of the Solid waste has been assumed as follows
Household Collection Efficiency
From To Efficiency
0 year 3 year 0%
4 year 13 year 50%
14 year 23 year 60%
Out of the total collected solid waste component, it has been estimated that the
following output could be realized from the project. Details of output quantity has been
computed based on the efficiency as elaborated in table above.
Output Per day Output in KGS

Output- Gas 2022
Output - organic fertilizer 869.86
Output- Reusable/Recycles 12111.03
Output – Pesticide 7245.9
The output is assume to increase at the rate of 1.35% per annum, which is based on the
population growth rate.
31
Project Construction and Operation Period
The Project is assumed to build in the period of 3 Years. And the total operation period
after the construction period would be 20 Years. The project would be hand over to the
government after the completion of the operation period.
Tax, Staff Bonus, and Depreciation Assumptions
The tax rate for the Project is assume at 25% on profit earned during the year. Further the
loss carryforward has been taken for 12 years in due consonance with the provision of
Income tax Act 2058. Further, the Staff bonus is assume at 10% on taxable income earned
during any year of the operation as required by The Bonus Act.
Also, the rate depreciation and basis of depreciation is in due adherence to the
provisions of the Income tax Act as Follows:
Particulars Depreciation Method Rate of Depreciation

Land SLM 5.0%
Civil Structure WDV 5.0%
Machinery WDV 15.0%
Others SLM 20.0%
However, 1/3 of the additional depreciation has not been taken into consideration as
facilitated by income tax Act.
Basis of Revenue and Inflation
The Project has mainly two streams of revenue Module:
1. Collection from Household &
2. Revenue from sales of different project outputs.
Following are the rates of sales of the output generated from organic &
recyclable/reusable solid wastes collected.
32
Sales Rate in Sales Rate in Dollars/KG Sales Rate in

Dollars/KG NPR
Gas 0.75 85
organic fertilizer 0.13 15
Reusable/Recycles 0.07 8
Pesticide 0.07 8
Further, each house hold is charged at the rate of 0.88 Dollars as monthly charges. Total
number of household in the beginning of the period is 48900 families. The increase rate
of the number of family is based on the growth rate in Population and Output as
discussed above. The sales inflation rate is assumed to increase at the rate of 3% Per
annum and which would be capped at 180%
Other Cost of Operations
The project is estimated to have total operating cost of 7% based on the project initial.
The Operations cost are Inclusive of all staff salary, vehicle maintenance but don’t
include Interest cost and depreciation cost component It is further assumed that the
total operation expense is likely to increase at the rate of 4% With the cap of 200%. As
discussed in earlier paragraph, the project would be financed by 70% Debt. The Interest
rate that has been taken into the calculation is12% which would be repaid in four equal
Installment In the period of 12 Years.
Working capital and other Assumptions used
It has been assumed that the overall working capital requirement would be financed by
the equity holders. The working capital has been assumed on following basis.
Receivable & advance 30 DAYS

Payable and liabilities 15 days
Total number of working days has been assumed to be 330 Days and 12 working months.
The total population living in project area of Dhulikhel Package is 231221 Persons.
33
3.2 Financial Analysis
3.2.1 Basic Financial Results

The project cost for Integrated Solid Waste Management Project (ISWMP), Dhulikhel has
been taken from desk study report prepared by IBN. It is assumed that all the cost
presented are in line with current cost structure. It is also assumed that the project
development cost was prepared based on the district rates and prevailing marked rates.
The total Cost of the project is 4,295,180.78 Dollars of which 500,780.35 Dollars is interest
component during construction. The total project excluding Working capital has been
financed by 70% debt and remaining by Equity.
In analysis of the pre-feasibility of the project, projections were made using different
techniques. Based on the analysis, Project Net Present Value (NPV) was calculated to
551,819.52 Dollars. Also, the Project IRR is calculated to be 14.26% which exceed the
required rate of return of the project. Equity IRR of the project is computed at 14.43%.
Project IRR & Equity IRR substantiate the feasibility of the project. Project Benefit Cost
Ratio (BCR) is 1.15 Times whereas Equity BCR is 1.43 times.
The project simple payback period & discounted payback period are 6.72 years and
14.09 years respectively. Considering the specific nature of business and overall industry,
the pay-back period seems to be satisfactory.
The average DESR is computed at 1.37 Times. Although DESR is low in initial years, it has
been gradually increased.
Indicators Results
Firm IRR 14.26%
Equity IRR 15.43%
NPV- Equity 551,891.52 Dollars
Debt Equity Service Ratio (average) 1.37 Times
Project BCR 1.15 Times
Equity BCR 1.43 Times
Simple Payback Period 6.72 Years
Discounted Payback Period 14.09 Years
34
3.2.2 Sensitivity Analysis

Sensitivity Analysis has been carried out on three different components: Interest Rate, O
& M Cost and Project cost.
Rate Increase/Decrease by 5%
Percentage of change Impact on Equity IRR % of change
0.00% 15.43%
5.00% 14.93% -3.28%
-5.00% 15.94% 3.27%
O & M Increase/Decrease by 5%
O&M cost Impact on Equity IRR % of change

0.00% 15.43%
5.00% 14.91% -3.40%
-5.00% 15.96% 3.40%
Project Cost Increase/Decrease by 5%
Project Cost Impact on IRR % of change

0.00% 15.43%
5.00% 14.98% -9.40%
-5.00% 17.01% 10.20%
Based on the analysis, it seems that the project cost is highly sensitive as compared with
O&M Expenses and Interest rates. The special focus to provide to project cost ensuring
the cost remains as projected.
The Financial Statement of first 10 years of operation has been separately annexed in the
report.
35
4. STATUTORY AND LEGAL FRAMEWORK
4.1 STATUTORY AND LEGAL FRAMEWORK
There are number of legislations on solid waste management which governs all the
activities related to its operation. Major ones are given below:
1. Solid Waste Management National Policy, 1996

The first Solid Waste Management National Policy was formulated in 2053 BS
(1996AD) to tackle the emerging solid waste management problems due to
urbanization. The policy emphasized on waste management in municipal and
urban areas. This policy is still in force.
2. The Environment Protection Act, 1996

Sub-article 7.1 of The Environment Protection Act (1996) prohibits haphazard waste
disposal, which will have an adverse impact on environment or civic health. This is
an overarching act on environmental protection from which all other
environmental related legislations are guided including waste management.
3. The Local Self-Governance Act, 1999

The act was issued within the context of decentralization. It stipulates that all
responsibilities for solid waste management (SWM) including collection,
transportation and final disposal have been transferred over to the municipalities,
together with other duties and authority to protect the local environment.
4. Solid Waste Management Act, 2011

The Government of Nepal enacted the Solid Waste Management Act of 2011
effective from 15 June 2011. The objectives of the act include maintaining a clean
and healthy environment by minimizing the adverse effects of solid waste on
public health and the environment. The local bodies, such as municipalities, have
been made responsible for the construction, operation, and management of
infrastructure for collection, treatment, and final disposal of MSW. The act
36
mandates local bodies to take the necessary steps to promote reduce, reuse, and
recycle (3R), including segregation of MSW at source. It also provides for the
involvement of the private sector, community-based organizations (CBOs), and
nongovernment organizations (NGOs) in SWM through competitive bidding.
Procedures for bidding, selection of the successful bidder, and authority of the
bidder in collecting tipping fees (tariffs) against SWM services are provided. In
addition, the act authorizes the imposition and collection of service fees against
SWM services, and prescribes the basis for fixing such fees and procedures for their
collection and usage. It also authorizes the local bodies to formulate rules, by-laws,
and guidelines, with the approval of the municipal board.
5. Solid Waste Management Regulation 2013

Government of Nepal in 2013 published Solid Waste Management Regulation
under the rights of Solid Waste Management Act, 2068. This regulation has
emphasized the segregation of hazardous waste at source and mentioned that
the responsibility of proper disposal and management of segregated hazardous
waste belongs to the producers themselves. The regulation has also given priority
for the segregation and minimization of waste at source. And this has emphasized
the role of local authority for creating mass awareness for managing the waste
accordingly.
6. Investment Board Act 2068 (2011):

As per section 9 (1) ( C ) of the Investment Board Act, 2011 (2068 BS), OIBN has
been facilitating investment in solid waste management projects in Urban Areas.
The law states that “Irrespective of whatever stipulation made in existing laws, the
investment required for implementation of any project for Solid Waste
Management and Treatment in urban areas should be mobilized based on this
Act”. So any projects of this nature should get approval from the Investment Board
before they start implementing the project.
Managing solid waste has been accorded a low priority mainly because the
demand is higher for other public services in many municipalities in Nepal. Local
37
bodies are experiencing difficulties in developing management plans due to the

lack of SWM baseline information and data related to the functional elements of
SWM. It is essential to know the quantity and composition of MSW when designing
and implementing proper waste management plans that include resource
recovery through appropriate methods.
38
5. PRELIMINARY ENVIRONMENTAL AND SOCIAL IMPACT

ASSESSMENT
Environment assessment of waste processing and management facilities is required to be

undertaken with the objective of providing services to the population of the area. Existing
law in Nepal have provision of carrying out Initial Environmental Examination (IEE) or
Environmental Impact Assessment (EIA) depending upon the extent, duration and
magnitude of environmental impacts. As mentioned in Environment Protection Rules
(EPR), following projects requires IEE:
1. For municipal waste,

a. Filling of land with One thousand to Five Thousand tons of waste a year.
b. Activities relating to transfer stations and resource recovery areas spread over
from 5 to 10 hectares.
c. Selecting, picking, disposing, and recycling waste through chemical,
mechanical or biological techniques in an area from 5 to 10 hectors.
d. Activities relating to compost plants in an area ranging between 5 to 10
hectares.
e. Operations of sewerage schemes more than Five millions.
Similarly, following projects should conduct Environmental Impact Assessment, if

required,
1. Waste management activities to the undertaken with the objective of providing

services to a population of more than Ten Thousand.
2. Following activities relating to waste emitted from houses and residential areas: -
a. Filling of land with more than 5,000 tons of waste per year.
b. Activities relating of transfer station and resources recovery areas spread over
an area of more than 10 hectares.
c. Selecting, picking, disposing and recycling wastes through chemical,
mechanical or biological techniques' in an area spread over more than 10
hectares.
39
d. Activity relating to compost plants spread over an area of more than 10

hectors.
e. Burying of waste emitted from an urban area with a population of at least
Ten Thousand.
40
6. PRELIMINARY RISK ANALYSIS
A set of risk factors which are cross cutting all technologies pertain to due diligence and
transparency at the time of initial project development, selection of plant location and
conducting environmental and social impact assessment. Several plants across the world
have closed down when the above aspects are not addressed appropriately at the right
stage of project evolution. Some of the major risks are highlighted as follows;
• Opposition by the community regarding sanitary landfill site

• Municipal solid waste to be treated and thereby receive value addition needs to
be considered not just as waste but as ‘feedstock’ from the point of view of the
plant operator. Hence, shortfall in the quantity of waste can lead to ineffective
operation of the plant.
• The tariff rate might not be accepted by the community
• Lack of availability of land for processing plant and sanitary landfill site
The risk should be shared by the municipality and provincial government. The detailed
framework should be decided while developing project development agreement.
Risk Matrix:
Score
10 10A 10B 10C 10D 10E
Catastrophic
9 9A 9B 9C 9D 9E
S 8 8A 8B 8C 8D 8E
e Hazardous
7 7A 7B 7C 7D 7E
v
6 6A 6B 6C 6D 6E
e Major
5 5A 5B 5C 5D 5E
ri
4 4A 4B 4C 4D 4E
t Minor
y 3 3A 3B 3C 3D 3E
2 2A 2B 2C 2D 2E
Negligible
1 1A 1B 1C 1D 1E
Extremely
Occasio Frequen
Impossibl Impossible Remote
nal t
e
A B C D E
Likelihood
41
ACCEPTABL
LOW
E
REVIEW MEDIUM
NEED OF
CRITICAL HIGH
ANALYSIS
The above risk matrix has been designed and colour coded on the basis of severity and
likelihood of the risk factor. Severity scale has been given from Negligible to catastrophic
from 1 to 10 respectively whereas the likelihood has been graded from extremely
impossible to Frequent with the alphabet being assigned from A to E respectively. For
example if a risk factor has the score of 4B then it is interpreted as minor on a severity
scale and impossible in terms of likelihood. This will fall under the green colour which
implies the risk is at low acceptable level whereas if the risk factor has the score of 10E
then that implies the severity of catastrophic level with the likelihood of happening as
frequent and it will fall under Red Zone. This implies that this risk factor need careful and
critical analysis prior to the project implementation.
Risk bearing
Risk
in % Possible
S.N. Possible Risks Scor Remarks
Description Gov Devel Mitigation
e
. oper
• Regular
engagement
with all the
Understandi
stakeholders
1 MoU signing ng between 5C 50% 50%
• Transparent
two parties
and
Agreeable
document
• There are land
Land Land 100
2 5C 0% available but
Acquisition Availability %
not committed
42
for the project

yet
• Early
communicatio
n with the
municipalities
to find the
appropriate
land and get
an early
commitment
• Finding land
away from the
local
settlement
• Following
international
Local Local practices for
3 Opposition Community 6D 90% 10% the landfill
(Land fill Site) Opposition design
• Developing
effective
compensation
package for
the affected
people
• Regular
communicatio
Developer
n with the
should have
developer
Financial all the
4 5C 0% 100% • Making sure all
Closure necessary
the financial
financial
documentatio
documents
n are correct
and verifiable
• Sticking to the
original plan
Infrastructure • Contingency
Time of
5 development 6C 0% 100% plan should be
construction
(Time) incorporate in
the overall
planning
Recruitment
and Staffs and • Structured
6 5D 0% 100%
management labor issues Training and
of work force development
43
plan should be
in place
• Provide
incentive to
the existing
workforce for
retaining them
• Ensure
education
and outreach
program in
Collection and Source
7 1C 0% 100% place for
Segregation Segregation
awareness
raising prior to
the beginning
of the project
• Develop a
scientific
method for
calculating
Finalizing the the tariff rate
8 Tariff Rate 5D 50% 50%
rate • Regular
communicatio
n with all the
relevant
stakeholders
Table 5: Risk Factor Analysis
44
7. PROJECT STRUCTURE AND IMPLEMENTATION MODEL
PUBLIC-PRIVATE PARTNERSHIPS (PPP)
Public-Private Partnership is an agreement between public and private entities for a fixed
period, private entities shall make arrangements to own the potential risks that may arise
partially or fully from all or some portion of financing, building, operation, repair and
maintenance of projects under the PPP model. Such entity provides public services
directly or indirectly through construction and/or operation and/or repair and
maintenance and/or use of public or private assets and shall be entitled to earn
reasonable profit. Public entities shall create environment that facilitates the private
sector’s investments through policies, legal, institutional and economic arrangements21.
It will be appropriate to design a project based on PPP model where Public and Private
Entities are involved. When resources allocated from national treasury fall short, assets of
public utility and operation of public services less costly as well as resources, skills and
technology available with the private sector must be attracted towards development
works of the nation based on the concept of PPP.
In the present context of Dhulikhel municipality and its adjoining municipalities, PPP
model is suitable. The preliminary study conducted in these municipalities gave the
information that the land will be provided by local government for the development of
integrated solid waste management projects.
21
World Bank, 2072, Public-Private Partnership Policy
45
8. FINDINGS AND RECOMMENDATIONS
Findings
Some of the major findings of the study are listed as follow:
1. The project incorporates Banepa Municipality, Dhulikhel Municipality, Panauti

Municipality, Namobuddha Municipality, Panchkhal Municipality of Province 3.
based on their daily waste generation and other relevant criteria.
2. Based on the study, the most suitable and relevant waste to energy plant that has
been taken into consideration is Anaerobic digestion, where the methane gas will
be compressed, bottled and can be sold to local market. Also 2% of the organic
input can be generated as a fertilizer and 16.66% of organic input can be
generated as bio-pesticide.
3. Public-Private Partnership business model was found to be suitable for the project.
4. The project can be completed with the total cost of 4295180.78 USD (including
interest component during construction period) and Equity IRR of 15.43%
5. Payback period has been calculated as 6.72 years.
8.2 Recommendations
Based on the findings, the project sounds to be technically as well as financially viable
for developer to invest. Whereas, study of environmental and social aspect as well as in-
depth study of all other components needs to be further considered in the next stage.
46
Disclaimer:
This project profile is based on preliminary study to facilitate prospective developers to

assess possible scope. It is, however, advisable to get a detailed feasibility study
prepared before taking a final investment decision.
47
9. ANNEX
9.1 Next Steps and Useful Contacts
As part of further development of project, the potential developer who might be

interested to develop this project will be identified. Afterwards, communication channel
will be formulated for the effective execution of this project. The useful contacts of all
the municipalities incorporated in this are highlighted as follows;
Table 6: Useful Contact information
S.N District Municipality Chief Mayor

Administrative
officer
1 Kavrepalanchok Banepa Municipality, Bhoj Raj Ghimire Laxmi Narsingh
Bade Shrestha
2 Kavrepalanchok Dhulikhel Municipality, Taranath Luitel Ashok Kumar
Byanju
(Shrestha)
3 Kavrepalanchok Panauti Municipality, Bijaya Raj Bhim Neupane
Paudel
4 Kavrepalanchok Namobuddha Kumar Prasad T. P Sharma
Municipality, Koirala (Timilsinha)
5 Kavrepalanchok Panchkhal Municipality Bhola Prasad Mahesh Kharel
Chapagain
48
9.2 Map of Banepa Municipality
49
9.3 Map of Dhulikhel Municipality
50
9.4 Map of Panauti Municipality
51
9.5 Map of Namobuddha Municipality
52
9.6 Map of Panchkhal Municipality
53
9.7 Annex- Financial Report
Projected Profit and Loss statement for initial 10 years of operation
Particulars 4 years 5 years 6 years 7 years 8 years 9 years 10 years 11 years 12 years 13 years
Household 259,646 279,402 291,845 304,784 318,236 332,221 346,759 361,870 377,576 393,898
Collection fees
Output- Gas 254,349 282,458 299,660 317,909 337,270 357,810 379,600 402,718 427,244 453,263
Output - 19,624 21,443 22,749 24,135 25,605 27,164 28,818 30,573 32,435 34,410
organic
fertilizer
Output- 143,384 159,230 168,927 179,215 190,129 201,708 213,992 227,024 240,850 255,518
Reusable/Recy
cles
Output - 85,785 95,266 101,067 107,222 113,752 120,680 128,029 135,826 144,098 152,874
Pesticide
Total Income 762,787 837,799 884,249 933,265 984,992 1,039,583 1,097,199 1,158,012 1,222,203 1,289,963
- - - - - - - - - -
Operating - - - - - - - - - -
Expenses
Depreciation 603,473 516,388 442,259 379,147 325,404 271,041 232,047 198,818 170,495 146,346
O&M 312,689 325,197 338,205 351,733 365,802 380,434 395,652 411,478 427,937 445,054
Expenses
Operating (153,375) (3,785) 103,786 202,386 293,786 388,108 469,501 547,716 623,771 698,563
Profit
- - - - - - - - - -
Interest 355,507 340,387 323,368 304,214 282,655 258,391 231,081 200,344 165,749 126,812
Expenses
Profit (508,882) (344,172) (219,582) (101,828) 11,130 129,716 238,419 347,372 458,021 571,751
Provision for - - - - 1,012 11,792 21,674 31,579 41,638 51,977
Staff Bonus
Income Tax - - - - - - - - - 105,568
- - - - - - - - - -
- - - - - - - - - -
Net profit (508,882) (344,172) (219,582) (101,828) 10,119 117,924 216,745 315,792 416,383 414,205
1
Projected Balance Sheet for Initial 10 years of Operation
Shareholders Fund
Share Capital 1,288,554 1,288,554 1,288,554 1,288,554 1,288,554 1,288,554 1,288,554 1,288,554 1,288,554 1,288,554
Reserve and (508,882) (853,054) (1,072,636) (1,174,464) (1,164,345) (1,046,421) (829,676) (513,884) (97,501) 316,704
Surplus
Loan Fund - - - - - - - - - -
Term Loan 2,886,152 2,750,556 2,597,942 2,426,173 2,232,846 2,015,255 1,770,354 1,494,716 1,184,483 835,312
Short Term - - - - - - - - - -
Loan
Total 3,665,824 3,186,056 2,813,860 2,540,263 2,357,055 2,257,388 2,229,232 2,269,386 2,375,536 2,440,571
Particulars
Fixed Assets 3,691,708 3,175,320 2,733,061 2,353,915 2,028,510 1,757,469 1,525,422 1,326,604 1,156,108 1,009,762
(Net)
Investment - - - - - - - - - -
Current Assets (12,855) 24,286 94,890 201,004 343,787 515,770 720,295 959,927 1,237,259 1,449,353
Sundry Debtors 69,344 76,164 80,386 84,842 89,545 94,508 99,745 105,274 111,109 117,269
Advances - - - - - - - - - -
Cash & Bank (82,200) (51,878) 14,504 116,162 254,242 421,263 620,550 854,654 1,126,149 1,332,083
Balance
Less: Current 13,029 13,550 14,092 14,656 15,242 15,851 16,485 17,145 17,831 18,544
Liabilities
Net Current (25,884) 10,736 80,799 186,349 328,545 499,919 703,810 942,782 1,219,428 1,430,809
Assets
Total 3,653,142 3,248,178 3,017,733 2,956,928 3,059,870 3,304,780 3,686,307 4,206,386 4,867,884 5,357,820
The cash balance is seen as negative in initial years, the amount has to be injected by the equity holders
2
Cash Flow Statement for Initial 10 years of Operation
Amount In Dollars
Cash flow from operating activity - - - - - - - - - -
Net profit before interest and tax (508,882) (344,172) (219,582) (101,828) 10,119 117,924 216,745 315,792 416,383 519,773
Add: Depreciation 603,473 516,388 442,259 379,147 325,404 271,041 232,047 198,818 170,495 146,346
Add: interest 355,507 340,387 323,368 304,214 282,655 258,391 231,081 200,344 165,749 126,812
Operating cash flow before working capital change 450,098 512,603 546,045 581,533 618,178 647,356 679,873 714,955 752,628 792,931
Increase/Decrease in Current Assets (69,344) (6,819) (4,223) (4,456) (4,702) (4,963) (5,238) (5,528) (5,836) (6,160)
Increase/Decrease in Current Liabilities 13,029 521 542 564 586 610 634 659 686 (52,071)
Payment of Tax - - - - - - - - - (52,784)
Net Cash flow from operating activity 393,783 506,305 542,364 577,640 614,062 643,003 675,269 710,086 747,478 681,916
- - - - - - - - - -
Cash flow from Investing Activity - - - - - - - - - -
Purchase of Fixed Assets (4,295,181) (0) 0 (0) 0 - - - - -
Increase/Decrease in Investment - - - - - - - - - -
Less: Payment of Dividend - - - - - - - - - -
Net Cash flow from Investing Activity (4,295,181) (0) 0 (0) 0 - - - - -
- - - - - - - - - -
Cash flow from Financing Activity - - - - - - - - - -
Increase in Share Capital 1,288,554 - - - - - - - - -
Increase in Borrowing Fund (Long Term Loan) 3,006,627 - - - - - - - - -
Increase in short Term Loan - - - - - - - - - -
Less: Repayment of Long Term Loan (120,475) (135,596) (152,614) (171,769) (193,327) (217,591) (244,901 (275,638) (310,233) (349,170)
)
Less: Payment of interest on Short Term Loan - - - - - - - - - -
Less: Payment of Interest on Long Term Loan (355,507) (340,387) (323,368) (304,214) (282,655) (258,391) (231,081 (200,344) (165,749) (126,812)
)
Net Cash flow from Financing Activity 3,819,198 (475,982) (475,982) (475,982) (475,982) (475,982) (475,982 (475,982) (475,982) (475,982)
)
- - - - - - - - - -
Increase/Decrease in Cash and Cash Equivalent (82,200) 30,322 66,382 101,658 138,080 167,021 199,287 234,104 271,496 205,934
- - - - - - - - - -
Cash & Bank Balance at the beginning of the - (82,200) (51,878) 14,504 116,162 254,242 421,263 620,550 854,654 1,126,149
period
- - - - - - - - - -
Balance at the end of period (82,200) (51,878) 14,504 116,162 254,242 421,263 620,550 854,654 1,126,149 1,332,083
The Equity shareholders needs to inject additional cash for serving Working capital in initial years as assumed in the report Earlier

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Pre-feasibility Study of

INTEGRATED SOLID WASTE MANAGEMENT PROJECT

‘INTEGRATED SOLID WASTE MANAGEMENT PROJECT’

ADB Asian Development Bank

4. STATUTORY AND LEGAL FRAMEWORK 36

Table 1: Salient Features of the Project

Table 2: Project Features

Table 3: Quantity and composition of Waste

Table 4: Revenue Sources from the Project

Table 5: Risk Factor Analysis

Table 6: Useful Contact information

Figure 1: Average composition of household waste of 60 municipalities

Figure 2: Population of the municipalities included in the package

Figure 3: Waste generation of the municipalities included in the package

Figure 4: Average Waste Composition of the municipalities included in the package

Figure 5: Project area location map

Figure 6: Components and end uses of an anaerobic digestion plant

SALIENT FEATURES OF THE PROJECT

S.N. Features Characteristics

• The creation of renewable energy and other environmental

1.2. Municipal Solid Waste Management in Nepal

Figure 1: Average composition of household waste of 60 municipalities7

1.4. Scope of Work

1.5. Approach & Methodology

Project Background and Description

Municipality Total Population8 Daily waste generation

Banepa Municipality, Dhulikhel Panauti Municipality, Namobuddha Panchkhal

Figure 2: Population of the municipalities included in the package11

Waste Generations Tons/Day

BANEPA DHULIKHEL PANAUTI NAMOBUDDHA PANCHKHAL TOTAL

Figure 3: Waste generation of the municipalities included in the package12

AVE RAG E WASTE CO M PO SITIO N

Figure 4: Average Waste Composition of the municipalities included in the package13

Overview of the Area

The project incorporates Banepa Municipality, Dhulikhel Municipality, Panauti

Figure 5: Project area location map (Source: Google Earth)

Developing a Business Case

Anaerobic Digestion - Design and Technology

Figure 6: Components and end uses of an anaerobic digestion plant [Source:

Total land required:

Municipality Total Total organic matters Reusable/ Others

Banepa 61927 19.63 13.37 4.61 1.65

Dhulikhel 36561 11.59 6.10 4.22 1.27

The main products of the plant at 100 % capacity will be as follows;

Product Quantity/day Approximate rate Possible Market

SWOT analysis enables identification of factors characterizing an entity or enterprise

SWOT analysis for integrated solid waste management

Strength Weakness Opportunities Threats

- Improved hygiene and - Lack of - Appropriate - Opposition

cost for concerned - Lack of environmental - Lack of

Examination and evaluation of alternatives

Composting of waste is a method of decomposing solid wastes. The process involves

generator is similar to the design of an electric motor. Moreover, the compressed

Relevant case studies

Developer: Gandaki Urja Pvt. Ltd.

Total Capital Investment: NPR. 166,650,038.54

Total Operation and Maintenance Cost: NPR. 80,751,375.35

Developer: Venture Waste to Energy P. Ltd. (Vw2E)

Location: Panmara, Ward-6, Dharan Sub-Metropolitan City

Total Capital Investment: NPR. 24,85,02000

3.1 Pre-Feasibility Approaches & Assumptions

Component Percentage Amount In Dollars

Solid Waste Generation & Composition

Areas Included Dhulikhel Municipality, Banepa Municipality, Panauti Municipality,