This summary covers an equity investment by RenewGEN Pte Ltd ("RenewGEN") of Singapore and non-shareholder loans from yet to be identified lenders in a waste-to-energy project in Sri Lanka. The investors have applied for MIGA guarantees totaling up to $38 million for a period of up to 20 years (equity) and 12 years (non-shareholder loans) against the risks of transfer restriction, expropriation, breach of contract, and war and civil disturbance.
The project involves the construction and operation of a municipal solid waste-to-energy plant in the Kotte Waste Management Zone, which is located in Sri Lanka's Western Province. RenewGEN Environment Protection Kotte Private Ltd, a joint venture company of RenewGEN and its partners, is taking the project forward on a 25-year build-operate-transfer basis. With the total investment estimated at up to $38 million, the waste treatment and power generation project is expected to dispose of 400-580 tons per day of municipal solid waste and to generate installed power capacity of up to 10 megawatts.
The project is a category B under MIGA's Policy on Social and Environmental Sustainability. Click here to view the Environmental and Social Review Summary prepared by the International Finance Corporation for their investment in the project.
Solid waste treatment is a critical environmental and health issue in Sri Lanka's Western Province, and has become increasingly important with the country's continued economic and urban development. The construction of a waste treatment and power generation facility is a high priority for the government.
The project will apply grate incinerator technology to treat municipal solid waste and minimize diversion of waste to open dumps and landfills. In the process, the plant will use the resultant heat/steam to generate renewable energy. The project is expected to have a strong development impact by improving the management and disposal of solid waste, thereby improving the physical environment and people's health; generating low greenhouse gas emission power that helps reduce the large gap between energy demand and supply; and creating employment opportunities while contributing to government revenues.
The proposed project also supports MIGA's strategy of promoting South-South investment, investment in complex infrastructure projects, and in countries eligible for assistance from the International Development Association.