Mobilising investment for NDC implementation in Peru’s waste sector
Countries will need to mobilise significant levels of private sector investment to implement Nationally Determined Contributions (NDCs) to the United Nations Framework Convention on Climate Change (UNFCCC). As much as $23 trillion in climate-smart investment opportunities have been identified in emerging economies. The mobilising investment for NDC implementation project explored approaches to encourage and facilitate private sector investment into NDCs in seven developing countries: Peru, the Dominican Republic, Bangladesh, Vietnam, the Philippines, Kenya and Ethiopia.
Attracting the scale of private sector investment at the speed needed to meet NDC goals requires appropriate incentives and financial instruments to support project development, the expansion of market demand and business investment. Unlocking this kind of private capital requires a progressive and iterative process of stakeholder identification in priority investment subsectors, market analysis, and design and implementation of financing measures.
The waste management sector in Peru is at an early stage of development and faces a number of urgent challenges related to waste management services, such as insufficient sanitary landfill infrastructure and inadequate provisions for the management of landfill gas emissions. In 2018 the country was generating over 23,000 tonnes of solid waste per day. At the same time, there has traditionally been a lack of collaboration and coordination between private and public actors involved in the sector. This situation presents an opportunity to develop innovative solutions that can, in turn, generate broad economic, societal and environmental benefits.
The pressing need for a large and rapid scale-up of final waste disposal infrastructure sets the stage for successful models to be tested and replicated across the country. It also presents a key opportunity to engage the private sector to support the Government of Peru to meet its NDC commitments.
About the working paper
This working paper shares the experiences and insights from the mobilising investment for NDC implementation project in Peru. The project team (from PwC UK and PwC Peru) worked with the Ministry of Environment to identify opportunities to mobilise private sector investment for projects delivering landfills that provide both adequate facilities for the final disposal of waste as well as emissions reductions.
This paper presents a number of learnings from this work that may be useful for both public sector and private sector actors involved in the provision of waste management services in countries facing similar challenges and opportunities.
This sector was selected because of the lack of private sector involvement in the waste sector in the country, with thousands of tonnes of solid waste being generated across the country every day. It covers:
- An introduction to the waste sector in Peru
- The two cases of Trujillo and San Juan Bautista landfills
- Developing investment cases for the chosen technologies at each landfill site
- The barriers and enabling conditions for mobilising NDC investment in Peru’s waste sector
- Three opportunities to enable private investment in Peru’s waste sector, including:
Opportunity 1: Increasing the collection of taxes that can be used for public cleaning and waste management through payments made by residents for public services (e.g. water, electricity)
Opportunity 2: Develop a methodology to calculate municipal taxes for public cleaning and waste services at the national level
Opportunity 3: Apply the Work for Taxes (Obras por Impuestos, OxI) mechanism to final waste disposal services
The mobilising investment project is an initiative of the Climate and Development Knowledge Network (CDKN) and Low Emission Development Strategies Global Partnership (LEDS GP), managed by SouthSouthNorth (SSN). It is funded by the International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). Delivery partners for the project include the National Renewable Energy Laboratory (NREL), Overseas Development Institute (ODI) and PriceWaterhouseCoopers UK (PwC).
Photo: Informal waste ‘separators’ at El Milagro who make a living from retrieving and reusing waste materials. Courtesy of PwC Peru.