FEATURE ARTICLE SUSTAINABILITY: BRIDGE TO THE FUTURE 2
India, home to 1.4 billion people, is growing rapidly. But urban waste is becoming a serious societal issue. Under the banner of “Clean India,” the Indian government is working to solve this problem while using heat from waste incineration for power generation. Japanese tech is supporting this initiative.
Power generation using waste has been used throughout Japan since its high-growth period of the 1960s. The spread of Japanese technologies is expected to contribute to solving India's economic and social infrastructure challenges. Photo courtesy of Hitachi Zosen Corporation
About 70 percent of waste is buried in landfills, while energy issues and sanitation need addressing
Driven by the world’s largest population, India now ranks fifth globally in terms of GDP. With that momentum behind it, some forecast it will surpass Germany and Japan in 2027 to become the world’s third-largest economy. However, one problem emerging in parallel with rapid development and a huge population is waste.
India’s urban waste is currently 0.4 kilograms per capita per day. This is expected to increase by 50 percent to 0.6 kilograms in 2030. The vast population inevitably makes waste disposal a critical societal problem.
In addition, nearly 70 percent of waste in India is disposed of in landfills, a very high percentage by global standards, with the remaining 30 percent currently recycled or used for power generation. As urbanization is set to rise alongside population growth, concern about an increase in untreated waste is intensifying.
One solution is waste-to-energy, a power generation system in which household waste is processed and the emitted heat converted into electricity. While there are regional differences in collection methods, the post-collection process is basically the same, with the results depending largely on the operator’s experience and matters such as technological capabilities in power generation efficiency.
The government announced the “Swachh Bharat (‘Clean India’ in Hindi) Mission-Urban 2.0” in October 2021 as the second phase of the policy, with the aim of making cities across India waste-free and promoting the establishment of waste treatment facilities, including waste-to-energy plants.
India depends on coal-fired power generation for more than half of its electricity, so the government has set a target of increasing power generation capacity from non-fossil fuels to 500 GW by 2030. Waste-to-energy not only contributes to that goal, but has other benefits as well.
“Reducing landfills for waste disposal will also help improve India’s sanitation problems,” explains YONEYAMA Satoru of JBIC ’s Infrastructure and Environment Finance Group, who has been conducting negotiations with India.
The government of India has allocated USD19 billion of its budget to waste-to-energy and recycling. Since the waste-to-energy market is projected to grow at about 20 percent a year, Japanese companies are naturally taking note of this expanding sector.
JBIC also has a track record in waste-to-energy in other countries, providing support for such projects in the US in 2017, Sweden in 2019, and Dubai in 2021.
YONEYAMA Satoru says that there are needs for waste-to-energy all over the world, and that power generation efficiency and detailed maintenance work are the strong points of Japanese companies.
Overcoming India’s unique challenges to promote renewable energy projects totaling 30 billion yen
In 2023, JBIC signed loan agreements with Indian government financial institution Power Finance Corporation (PFC) to support waste-to-energy projects in the central states of Maharashtra (total loan: approx. JPY2.6 billion - JBIC portion: approx. JPY1.5 billion) and Karnataka (total loan: approx. JPY1.8 billion - JBIC portion: approx. JPY1.1 billion).
These are individual contracts based on a credit line totaling up to JPY30 billion (JBIC portion: JPY18 billion) that was signed with PFC in July 2022 to provide funding for renewable energy projects, energy-efficient power generation and heat supply projects in India.
Waste-to-energy is an area in which the track record and advanced power generation technologies of Japanese companies can be leveraged. Such projects are also in line with JBIC’s green finance objectives. However, some unique local issues emerged in negotiations with stakeholders, recalls YONEYAMA.
“In a usual loan, we conduct negotiations with the borrower. But in this case, since we had to add the step of collecting information on each project from its operator through PFC, while checking the details of the loan agreements between PFC and the project operators, the coordination process was quite time consuming.”
Smooth communication was also a challenge. “Due to the pandemic, meetings had to be held online, but we were unable to move forward with our talks even when contacting them through emails or phone calls. So, after travel restrictions were eased, I visited India repeatedly, and through direct negotiations, finally managed to reach an agreement.”
Although they involve confronting such unique challenges, YONEYAMA finds these waste-to-energy projects to be very meaningful. “Being able to contribute to solving India's environmental and social issues through waste-to-energy using Japanese technologies is meaningful for both India and Japan, and so is very rewarding.”
With this as a first step, JBIC will continue to support India's promotion of renewable energy through various initiatives including use of the credit line with PFC.
Director
Division 2, Social Infrastructure Finance Department Infrastructure and Environment Finance Group, JBIC
YONEYAMA Satoru
