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Sectors 18 October 2022

Bolstering SA’s Waste Management Systems Through Foreign Partnerships

In the last three decades, South Africa has made significant progress in becoming one of the most industrialized, technologically advanced, and diversified economies on the continent.

With this boon, the country has however experienced a surge in population growth and urbanization, which in parallel, has resulted in an escalation of solid waste generation – placing added pressure on local municipalities and waste management infrastructure.

In the absence of aggressive short-term strategies to avoid producing excessive waste, it is expected that the volume of waste generated will increase substantially, further exhausting already unsustainable landfill resources. 

According to the World Bank, a modernized solid waste system can include up to 20 services – from general disposal and collection to specialized services, like recycling. Each of these services may stand to benefit from private sector efficiency, financing, and expertise – especially when considering the success of large multinationals in the sector having provided sustainable solid waste management solutions for countries in which they operate. 

For South Africa, a recently concluded deal between French utility giant, SUEZ, and EnviroServ, the largest private waste management business in sub-Saharan Africa, enables a global leader in the sector to bring its expertise and knowledge to the country’s waste management landscape. 

SUEZ, along with local partners Royal Bafokeng Holdings (RBH) and African Infrastructure Investment Managers (AIIM), acquired EnviroServ from private equity firm Rockwood – a transaction for which Standard Bank was the financial advisor and funder for the acquiror. 

The acquisition of EnviroServ will enable SUEZ to reinforce its positioning as an international player in industrial and municipal waste treatment, strengthening its position in South Africa and assisting in the continent’s development. It is investments such as these that can help improve Africa’s waste and water resource management, meaning better infrastructure, a higher quality of living in our cities, and more sustainable impact,said Stephen Barnes, Global Head of Power and Infrastructure, at Standard Bank Corporate and Investment Banking. 

In more than 40 countries in which SUEZ has operations, the company has brought real world solutions to local authorities, industry, and consumers for the smart and sustainable management of solid waste and water.

For example, in Morocco, SUEZ built the only waste treatment and recovery centre of its kind in Meknes, transforming a former uncontrolled rubbish dump stretching over 25 hectares - only 5km from the city - into a Green landfill with a treatment capacity of 330,000 tons of waste per year. SUEZ’s facility can capture and treat biogas, avoiding the emission of 20,000 tons of CO2 per year, sort and recycle materials, recycle leachate thanks to a unique technique using Reverse Osmose, and produce compost – resulting in fewer emissions and sustainable waste management practices.  

In the field of management of waste from chemical and mining industry, which requires critical capabilities given the hazardous nature of the waste and where EnviroServ is a leader on the SA market, SUEZ will be able to support the company’s growth with advanced technologies such as thermal treatment or advanced stabilization. The group already delivers these solutions in Europe as well as in China, where it operates the country’s largest hazardous waste treatment plant for the Shanghai Chemical Industrial Park.

For Standard Bank, facilitating global partnerships like these not only brings foreign direct investment into the country, but has the potential to effect positive change and development for all South Africans.   

Standard Bank remains committed to driving sustainable and inclusive economic growth, and our passion more purposeful work is embodied in such important partnerships. Improved waste management is required to make our cities more liveable, and we believe SUEZ’s global industry knowledge will be paramount in effecting this change. Africa is our home, and we drive her growth,said Barnes.

The deal comes at a time when South Africa finds itself in urgent need of strategic solutions for both water and waste management. 

According to the 2018 State of Waste Report, the country generates on average 55 million tons of general waste per annum, with only 11% being diverted from landfill. South Africa is also experiencing severe constraints in terms of the availability of landfill space, as well as challenges in operating and decommissioning landfills in a manner that is compliant with licensing conditions.

Recent surveys have shown that more than one-third (34,4%) of South Africans households had to rely on communal or household refuse dumps, with no access to scheduled refuse collection from a proper authority. 

SUEZ’s expertise may have the potential to alleviate some of these challenges in the short-term, but the company is also well-equipped to deal with another impending challenge – South Africa’s water crisis. 

Many of the country’s cities currently face an unprecedented crisis in the delivery of basic water supplies, with ageing infrastructure believed to be a major contributor to water loss. The World Bank Group’s 2030 Water Resources Group has indicated that 41% of municipal water in South Africa is either lost before reaching the end user or is unbilled due to leaks or inadequate metering. 

While the company uses the solid waste management sector as a kick-off point in the country, it may explore other viable partnerships through which it can lend its expertise to effect meaningful change in South Africa and the region. The SUEZ transaction is an example of how investments and partnerships with large multinationals have the potential to draw in expertise and critical skills to assist countries like South Africa in reaching their development goals.