Building the business case for a waste to resource enterprise
In this two-part blog series, Aart van den Beukel, Managing Director of Safisana, a waste to resource enterprise currently operational in Ghana, shares his reflections on the journey to date and his ambition to scale Safisana’s innovative model to other developing countries.
May 19, 2021
Setting up a waste to resource business
Safisana’s journey began in 2011 with a small-scale pilot waste processing plant on the outskirts of Accra, Ghana’s capital city, which took organic and faecal waste from the local community and processed it, producing energy and high-quality compost for agricultural use.
The first few years were spent developing this pilot and mapping out business feasibility, as well as iterative testing of waste processing and mixing different volumes of faecal waste with seasonal organic waste from local markets.
We used the business case developed to find partners to support the delivery of this innovative circular economy approach, and the partnership we developed with local government resulted in the donation of a parcel of land to build a scaled-up processing plant – which needed to be within a local community and close to food markets to ensure streamlined access to waste streams.
This led to the creation of Safisana Ghana Ltd, and opening a new plant at Ashaiman – Safisana’s first operational footprint. Today, the plant at Ashaiman serves over 50,000 people, processing 9,700 tonnes of faecal sludge and over 3,600 tonnes of organic waste per year for the production of biogas and organic fertiliser.
Waste is processed through anaerobic digestion and the conversion of biogas into green electricity sold into the power grid. Remaining sludge is dried and co-composted with more organic waste to produce a nutrient rich, high-quality compost.
In addition, the site includes a large water treatment pond, a greenhouse for testing crop production, and a knowledge centre to promote the concept and train our waste supply chain: toilet operators, faecal truck drivers, market queens and food processing industries.
The Safisana plant distinguishes itself from most waste treatment facilities in low-income countries because of its revenue generating model: waste is treated as a resource for the production of high-value products, with sales intended to cover operational costs.
Five years after the opening of the current plant in Ashaiman, we are very close to reaching operational breakeven. This will be a significant step in demonstrating the financial viability of the model and serving as a proof of concept in order to replicate with other partners in other contexts.
We are currently working on a number of feasibility studies, in Kumasi and Nsawam (Ghana), as well as Mali and Uganda, and we expect to confirm a site for a second plant by 2022.
The Ashaiman site has made significant progress towards reaching breakeven in the past year, covering 85% of operating costs, but key challenges remain in order to consistently achieve 100% coverage:
1. Scaling up production capacity
With support from funding partners we are scaling up production capacity from 650 bags to 1,250 bags of organic fertiliser per month. The composting area has recently expanded and the purchase of a second generator will allow us to double electricity production to 200 kWh.
In 2017, as the only company in Ghana converting waste to energy, we secured a Power Purchase Agreement with the local municipality and the Electricity Company Ghana (ECG) to provide green energy to the national grid. This has been a key source of revenue for Safisana and scaling up production will allow us to sell more energy to the grid, as well as through other channels.
2. Improving waste streams
We are increasing the quantity and quality of waste collected as this will result in higher yields of gas/electricity and compost.
Besides the fixed amount of organic waste that we collect daily from the local markets, and faecal waste from 150 public toilets, we are expanding the suppliers in our network and increasingly working with large food production companies to collect the waste from manufacturing processes; a win-win for both.
For Safisana, it’s an opportunity to increase the production and quality of revenue-generating products. Diversifying where we source our waste also helps mitigate against challenges we observed during the pandemic when markets and some suppliers closed, affecting plant operations and revenues.
For the companies, collaborating with Safisana is a way to dispose of unwanted waste in a cost-effective way and offers an opportunity to reduce CO2 emissions, meet ESG and CSR targets and positively impact the local community.
3. Upgrading systems and processes
We are also advancing our monitoring and data collection systems and processes to improve operations.
For example, we recently built a weighing bridge for the digester and equipped every local transporter of faecal sludge with a mobile tracking system, which enables us to see exactly how much they bring in and which public toilet it originates from.
By regularly taking samples we ensure the waste doesn’t contain chlorides and other chemicals. In future, we will also be able to do early stage detection of the spread of viruses and diseases and environmental pollution – which could be an interesting addition to our model, useful for stakeholders and municipal and city level tracking.
For now, the data allows us to optimise the feedstock recipe for the digester, and to control the quality of our products.
4. Exploring new revenue streams
To further solidify the business model and increase market resilience we are continuously exploring new revenue streams and ways to boost existing revenues as well as reduce costs.
For example, as an alternative to electricity for the grid, we are investigating the technical and commercial viability of selling bottled biogas directly to industries.
We plan to develop the greenhouse operations and invest in the production of fresh fruit and vegetables. Following an agriculture study in collaboration with the Dutch Wageningen University we’ve optimised conditions in the on-site greenhouse, and recently acquired a large area of farmland near the plant where we will start year-round organic food production.
We are also currently engaged in a market assessment for both the compost and the greenhouse produce and will develop sales strategies from the analysis.
These sources of income, as well as the site and operational improvements, are a focus for us this year and must ensure that we can reach the breakeven point but also remain there consistently and long-term, which will strengthen Safisana’s business proposition.
It’s been a challenging but rewarding journey so far – the next phase is critical to demonstrate how this model might be further scaled and replicated.
The second blog in this series will focus on our efforts to replicate the model and the opportunities and challenges we’ve experienced as we look to expand.