Beijing Rohrueck Mobile Garbage Bins Co. Ltd.
MIGA has issued a guarantee of $6.93 million to Golden State Waste Management (Beijing) Corporation for its equity investment in Beijing Rohrueck Mobile Garbage Bins Co. Ltd. The coverage, for a period of up to 20 years, is against the risk of expropriation.
The project consists of the construction of a comprehensive solid waste treatment and transfer center in Beijing’s Fengtai District on a 25-year build-operate-transfer (BOT) basis. The facility will have the capacity to handle solid waste treatment of 3,000 tonnes per day. The facility will include a garbage screening system to sort renewable resources, which it plans to sell or send to renewable resource markets. Remaining garbage will be used as compost and for other purposes.
With rapid economic and urban development in China, solid waste treatment in large cities has become an increasingly important issue. The government’s current five-year plan estimates that the country needs more than $38 billion in investment in the area of solid waste treatment. The Chinese government is encouraging municipalities to attract public and private investment from both domestic and foreign investors to meet this need.
Solid waste treatment will improve environmental conditions in Beijing. Disposing of 3,000 tonnes a day will substantially conserve the available landfill capacity, reduce land take for waste management purposes, and improve air quality.
The project introduces advanced international waste treatment technology and is well tailored to the situation and needs of the Fengtai District. If successful, the project will have a powerful demonstration effect locally and nationally. This is also consistent with the World Bank Group’s Country Partnership Strategy for China, which has managing resource scarcity and environmental challenges as a key theme. This project will also advance the Bank’s private sector development strategy of promoting private participation in infrastructure.
MIGA’s guarantee support was particularly important for the investor to help mitigate the risks associated with sub-sovereign investment.