Waste to Energy Project Proposal

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					                                                                    Draft Final Report




         PROMOTION OF RENEWABLE ENERGY,
       ENERGY EFFICIENCY AND GREENHOUSE GAS
               ABATEMENT (PREGA)

                                Bangladesh


                Dhaka City Solid Waste to
                 Electric Energy Project

                A Pre-Feasibility Study Report1




                                    April 2005




1
 Prepared by the PREGA National Technical Experts from Bangladesh Centre for Advanced
Studies.




                                          i
                              TABLE OF CONTENTS
                                                                   Page No.

List of Tables                                                           iii
List of Figures                                                          iii
List of Flow Charts                                                      iii
List of Maps                                                             iii
ABBREVIATION                                                             iv
Chapter 1                                                              1-9
EXECUTIVE SUMMARY                                                        1
1.1   Introduction                                                       1
1.2   Energy Situation and Government Policy                             1
1.3   Quantity and Quality of Solid Wastes of Dhaka City                 2
1.4   Choice of Technology                                               2
1.5   Project Description                                                3
      1.5.1 Project objectives                                           3
      1.5.2 Project location                                             3
      1.5.3 Project outputs                                              3
      1.5.4 Project implementation plan                                  3
      1.5.5 Likely fiscal incentives for the project                     4
1.6   Project Cost and Emission Reduction                                4
      1.6.1 Baseline scenario                                            4
      1.6.2 Project cost and revenue                                     5
      1.6.3 Indirect emission effects                                    6
      1.6.4 Additional environment and social benefits                   6
1.7   Financial Analysis                                                 7
1.8   Economic Analysis                                                  8
      1.8.1 Other Socio-Economic Benefits                                8
1.9   Stakeholders’ Meeting                                              9
Chapter 2 :                                                          10-12
INTRODUCTION                                                            10
2.1   Background of the Project                                         10
2.2   Justification of the Project                                      11
Chapter 3 :                                                          13-18
ENERGY SITUATION AND GOVERNMENT POLICY                                  13
3.1   Sector Description                                                13
3.2   Present and Forecasted Energy Situation                           13
3.3   Constraints and Issues                                            14
3.4   Government Policy and Strategy                                    16
3.5   Government Policy on Renewable Energy                             17
3.6   Market for Electricity                                            18
Chapter 4 :                                                          19-20
SOLID WASTE RAW MATERIAL GENERATION FOR THE PROJECT                     19
4.1   Introduction to Solid Waste Collection and Disposal by DCC        19
4.2   Quantity and Quality of Solid Wastes of DCC                       20




                                          ii
                                                                                    Page No.

Chapter 5 :                                                                           21-24
TECHNOLOGY OPTIONS AND CHOICE OF TECHNOLOGY FOR DHAKA                                    21
CITY SOLID WASTES
5.1   Landfill Gas to Power Generation                                                   21
5.2   Mass Burn Incinerator                                                              21
5.3   The Fluidized Bed Incinerator                                                      22
5.4   Gasification Technology                                                            22
5.5   Plasma Waste Converter (PWC)                                                       22
5.6   Power Cell’s Experience with Bid Invitations                                       22
5.7   Choice of Technology                                                               24
Chapter 6 :                                                                           25-30
PROJECT DESCRIPTION                                                                      26
6.1   Project Goal                                                                       26
6.2   Project Objectives                                                                 26
6.3   Poverty Reduction Through Project                                                  26
6.4   Technology Transfer                                                                26
6.5   Project Location                                                                   26
6.6   Project Partners                                                                   27
6.7   Project Outputs                                                                    27
6.8   Project Implementation Plan                                                        27
6.9   Project vis-à-vis Organization Structure of Bangladesh Electricity Industry        27
6.10 Possible Institutional Ways to Cover Project Risks                                  28
6.11 Likely Fiscal Incentives for the Project                                            29
6.12 Possible Financing Arrangements of the Project                                      29
6.13 Facilitating Agencies of the Project                                                29
6.14 Likely Basis of Tariff Structure Determination                                      30
6.15 Possible Ways to Selection of Firm in the Project                                   30
Chapter 7 :                                                                           32-45
EMISSION REDUCTION AND MONITORING & VERIFICATION PLAN                                    32
      7.1.1 Baseline of Electricity Generation                                           33
      7.1.2 Baseline of GHG Emission Connected with the Project                          33
      7.1.3 CO2 Emission from Natural Gas Based 20 MW Plant                              33
      7.1.4 CO2 and CH4 Emission from the Dumping Site                                   33
7.2   The Proposed Project                                                               35
7.3   Factors Impacting the Baseline                                                     37
7.4   Crediting Period                                                                   37
7.5   Project Boundaries and System Boundaries                                           37
7.6   Project Additionality                                                              42
7.7   Indirect Emission Effects                                                          42
7.8   Additional Environment and Social Benefit                                          43
7.9   Monitoring and Verification Plan                                                   43

Chapter 8 :                                                                           46-48
FINANCIAL ANALYSIS OF THE PROJECT                                                        46




                                            iii
                                                                                   Page No.

Chapter 9 :                                                                          49-50
ECONOMIC ANALYSIS OF THE PROJECT                                                        49
9.1   Economic Analysis                                                                 49
9.2   Other Socio-Economic Benefits                                                     50
Chapter 10 :                                                                            52
STAKEHOLDERS’ MEETING ON DHAKA CITY SOLID WASTE TO                                      52
ELECTRIC ENERGY
Chapter 11 :                                                                         54-55
MAJOR FINDINGS AND RECOMMENDATIONS                                                      54




List of Tables
    Table 1: Gross Peak Growth Forecast                                                 14
    Table 2: Installed, Actual Production and Firm Production Capacity,                 15
              Peak Demand and Shortfall
    Table 3: System Loss of Electricity Organizations                                   15
    Table 4: Accounts Receivable of BPDB and DESA (in billion Tk)                       16
    Table 5: Results of the Analysis of Solid Waste of Dhaka                            20
    Table 6: Prevalence of Types of Municipal Waste to Electricity                      24
              Technologies by Bidding Firms
    Table 7. Progress of Installed Capacity of Power Plant in Bangladesh over           32
              the Period 1991/92 – 2001/02
    Table 8: The Estimated Cumulative Production of CO2 over the Project Period         34
              (2005—18)
    Table 9: Cumulative Production of CO2 over the Project Period with the              36
              Project Activity
    Table 10: Yearly Total Production of CO2 Equivalent from the Matuail                40
              Site and 20-MW Power Plant Based on Natural Gas in the
              Absence of Project Activity
    Table 11: Yearly Abatement of CO2 Equivalent due to the Project                     40
              Activities
    Table 12: Estimated Reduction of GHG Emission During 2005-2018                      42
    Table 13: Project Benefits                                                          43
List of Figures
     Figure 1: Progress of Power Plant Installation in Bangladesh over 91/92-           33
               2001/02 and Projection up to 2019
     Figure 2: CO2 Production without (Series 2) and with (Series 1) the Project        35
               Activity
     Figure 3: Cumulative Reduction of CO2 over the Project Period                      42




                                           iv
                                                                              Page No.

List of Flow Charts
     Flow Chart–1: Flowchart with Calculation for Yearly GHG (CO2)                 38
                   Production From 20 - MW Power Plant Based on Natural
                   Gas without the Project Activity
     Flow Chart–2: Flow Chart with Calculation for Yearly GHG (CO2 + CH4)          39
                   Production from the Matuail Dumping Site of Dhaka City
                   with Daily Unloading of 5000 tonnes of City Wastes
     Flow Chart–3: Flow Chart with Calculation for Yearly GHG (CO2)                41
                   Production from 20-MW Power Plant Based on Landfill Gas
                   with the Project Activity

Map-1: Map of Dhaka City Showing the Location of the Proposed Project              56
References                                                                         57
Annexures : 1, 2, 3, 4a, 4b, 4c, 5a, 5a(1), 5a(2), 5b, 5c, 6a, 6b, 6c, 7, 8



Exchange Rate:

A CONSTANT EXCHANGE RATE OF 58.5 TAKA = 1US $ (FOR 2004) HAS BEEN USED
FOR CORRECT VALUATION AT A LATER DATE.




                                                v
Abbreviation

ADB       -    Asian Development Bank
BCAS      -    Bangladesh Centre for Advanced Studies
BCSIR      -   Bangladesh Council of Scientific and Industrial Research
BOO       -    Built-Owned-Operated
BOOT      -    Built-Owned-Operated and Transferred
BPDB      -    Bangladesh Power Development Board
DCC       -    Dhaka City Corporation
CDM       -    Clean Development Mechanism
CLDC      -    Central Load Dispatch Centre
DESCO     -    Dhaka Electric Supply Company
DESA      -    Dhaka Electric Supply Authority
DP        -    Development Partner
EPA       -    Bangladesh Environmental Protection Act of 1995
FBI       -    Fluidized Bed Incinerator
FIRR      -    Financial Internal Rate of Returns
GEF       -    Global Environment Facility
GOB       -    Government of Bangladesh
GWh       -    Gigawatt hour
IFI       -    International Financing Institution
IFRD      -    Institute of Fuel Research and Development
IPP       -    Independent Power Producer
Kg        -    Kilogramme
KWh       -    Kilowatt Hour
LRMC      -    Long Run Marginal Cost
m3        -    Cubic Metre
MBI       -    Mass Burn Incinerator
ml. Tk.   -    Million Taka
MOEF      -    Ministry of Environment and Forest
MPEMR     -    Ministry of Power, Energy and Mineral Resources
MSW       -    Municipal Solid Waste
MW        -    Megawatt
MSW       -    Municipal Solid Waste
MSWEE     -    Municipal Solid Waste to Electrical Energy
NGO       -    Non-Government Organization
NIC       -    National Implementation Committee
NPV       -    Net Present Value
NTE       -    National Technical Experts
NLDC      -    National Load Dispatch Centre
O&M       -    Operation & Maintenance



                                           vi
PBS    -   Palli Bidyut Samiti
PGCB   -   Power Grid Company of Bangladesh
PPA    -   Power Purchase Agreement
PSC    -   Production Sharing Contract
PSMP   -   Power System Master Plan
PSRB   -   Power Sector Reforms in Bangladesh
PWC    -   Plasma Waste Converter
REB    -   Rural Electrification Board
RDF    -   Refuse Derived Fuel
R&D    -   Research and Development
RFP    -   Request for Proposal
RPC    -   Rural Power Company
SBU    -   Strategic Business Unit
SERF   -   Shadow Exchange Rate Factor
Taka   -   Taka (Bangladesh)
Tk.    -   Taka(Bangladesh)
tpd    -   Tonnes per day
USA    -   United States of America
US$    -   United States Dollar
VAT    -   Value Added Tax
WB     -   World Bank




                                    vii
                                       Chapter 1
                              EXECUTIVE SUMMARY
1.1    Introduction

Municipal solid waste (MSW) in Dhaka city poses a serious problem having adverse effects
on environment and health of the citizens. Both quantity and volume of MSW have
continued to increase with the rapid growth of city population. The population of Dhaka city,
on average, has increased by 5-6% per annum over the past two decades and the trend of
growth is likely to be maintained in the foreseeable future. The population of Dhaka city
increased from 3.4 million in 1981 to 6.10 million in 1991 and to 9.9 million in 2001. The
generation of waste is expected to grow in the future as the waste increases with the rise of
city population. The generation of waste is estimated at 5650 tonnes per day or 2.06 million
tonnes per annum in 2003. The daily waste generation is projected to 8280 tonnes and the
annual generation to 3.02 million tonnes in 2010. By 2021, the daily and annual generation
will amount to 15,110 tonnes and 5.52 million tonnes respectively.

In recognition of the important roles that municipalities play in the areas of economic
growth, human development and environmental management, the Asian Development Bank
(ADB) has identified public service delivery at the municipal level as a priority area of
cooperation Bangladesh. The waste to electricity project in Dhaka, the largest city and centre
of governance and economic activities of Bangladesh, would be an important step towards
implementation of policy strategy of both Bangladesh and ADB as the project would lead to
improved electricity supply and efficient waste management in the city.

1.2    Energy Situations and Government Policy

Bangladesh had a total installed power generation capacity of 4005 MW in 2000/01. Of this,
3,320 MW was in public and 685 MW was in private sector. Available capacity was
however, restricted to 2,900 – 3100 MW due to lack of adequate maintenance and
rehabilitation program. Routine close down, reduction of generation capacity due to
prolonged use beyond economic life etc. were other contributing factors for low available
capacity. Due to shortfall in generating capacity compared to demand, load shedding became
inevitable throughout the country during peak hour. The load shedding problem was
somewhat eased during the last few years due to commencement of some new power plants.
Country’s Power System Master Plan (PSMP) formulated in 1995 estimates peak power
demand for 2005 and 2007 at 5,200 MW and 6,100 MW respectively.

Although power generation is increasing every year, it has nevertheless trailed behind
growing demand. Some ramifications of the slow growth in electricity generation and
consumption are illustrated by the following hard facts:
• Only about 30% of the population now have access to electricity
• Per capita consumption of electricity is only 129 kWh per annum which is one of the
   lowest in the world
• System firm capacity was 2900-3100 MW out of an installed capacity of 4005 MW in
   2000/01 which constitutes only 72-77%
• Peak demand is expected to increase to 5,200 MW by the year 2005. Present generation
   position indicates a power outage not less than 40% by the year 2005.




                                                                                            1
Government Policy on Renewable Energy

Bangladesh’s fossil energy resources consist primarily of natural gas. Domestic oil supply is
considered negligible. Several small deposits of peat exist in the southwestern region of the
country. However, Bangladesh substantial bituminous coal deposits in the northwestern
region, but mining of all of them is quite expensive because of their depth.

Only around 30% of the total population has access to electricity. The vast majority of the
rural population is deprived of electricity. Larger electricity supplies and greater efficiency of
electricity use are thus of paramount importance to meet the basic needs of a growing
population.

It is therefore considered necessary to exploit all sources of renewable energy and to use these in
an efficient form for the benefit of the people. Government has accordingly formulated a
renewable energy policy for the country. The policy mentions necessity of taking up renewable
energy development programs in the areas where potential renewable energy resources are
available, considering economical and technical performance with minimum environmental
effects. Plant site, size and design are to be considered on the basis of available energy resources
of the area and efficient conversion of energy will be given preference. Policy envisages
accomplishment of its objectives by mobilizing a concerted national effort with the continued co-
operation and commitment of Government, international organizations, bilateral and multilateral
funding institutions, non-government organizations, the private sector, research organizations
and universities, etc. Policy also realizes that innovative new financing opportunities will be
needed to attract private capital to supplement the energy deficiencies in the rural areas and thus
to fulfill the aspiration of the poor people.

1.3     Quantity and Quality of Solid Wastes of Dhaka City

Few studies are available dealing on quantity and quality of municipal solid wastes of Dhaka
City. In 1998, the World Bank and Power Cell of the Power Division in the Ministry of
Power, Energy and Mineral Resources (MPEMR) sponsored two studies regarding the
quality and quantity of the municipal solid waste in Dhaka. The Institute of Fuel Research
and Development of Bangladesh Council of Scientific and Industrial Research undertook the
refuse quality assessment, and the Bangladesh Centre for Advanced Studies did the refuse
quantity assessment. The main findings are as follows.

A large amount of municipal solid wastes are generated daily in Dhaka. Dhaka Metropolitan area
generated municipal solid waste of 3944 metric tonnes per day in 1998 and is projected to generate
more than 5000 tonnes per day or 1.96 million tonnes per annum in 2002-03. The waste generation
is projected to grow at the rate of about 5.6% each year. By 2021, the daily waste generation in
Dhaka will amount to 15.1 thousand tonnes and annual generation will be 5.52 million tonnes.
Energy content of the waste of Dhaka is quite low (1386 – 2600Btu/lb or 770 –1444kcal/kg
on as-received basis). The majority of the waste is water (50% -70%) due to the fact that the
main part of the waste consists of vegetable and fruit residues.

1.4     Choice of Technology

Methods and technologies have been developed gradually from traditional ones to advanced
ones in the following order: Landfill, Mass Burn Incinerator (MBI), Fluidized Bed
Incinerator (FBI), Gasifier and Plasma. Landfill gas to power technology is the most cost-
effective way to deal with a large amount of wastes with low heat value. MBI was used to


                                                                                                  2
burn MSW but it has been widely replaced by FBI. So far, FBI is the most commonly used
technology to burn MSW and generate steam and electricity. In order to improve net energy
efficiency of waste–to-power technology and mitigate environmental impacts, scientists have
been developing Gasifier technology. Demonstration plants with such technologies have
been successfully in operation. However, it is unknown that the technology is cost-effective
if it is used to process 5000 tonnes of waste daily with low energy contents. Plasma Arc
technology for MSW processing is still in the R&D stage and should be out of consideration
for Dhaka. MSW in Dhaka has two important characteristics (1) low heat content 770-1440
kcal/kg, about half of that in the developed countries and (2) huge quantity of more than
5000 tonnes per day in 2002 and with annual growth rate of 5.6%. MSW as received in
Dhaka may need considerable additional energy to pre-process and keep the boiler
temperature high enough to burn the wastes. Based on prevailing conditions with respect to
gradual growth of technology and quantity/quality of municipal solid wastes, Landfill or
Biodigestor technology seems to be the most preferred technology for Dhaka City to start
with.

1.5     Project Description

1.5.1   Project objectives

Project has twin development objectives of generating electricity from a renewable source,
namely, MSW and reduction of greenhouse gas (GHG). Electricity generation from
renewable source is considered very important in the context of Bangladesh given the level
of energy use and available source of fossil energy. Also reduction of greenhouse gas will
call forth investment benefits under Clean Development Mechanism (CDM). Saving of
natural gas would also allow utilization of this scarce resource for other development
purposes.

1.5.2   Project location

The present dumping site, Matuail (Map-1) is situated on the eastern side of the Dhaka city,
within metropolitan area. Currently used land area is 55 acres. Setting up a power plant
within the metropolitan area may not sound to be a welcome proposition because of noise.
But the plant will eliminate the bad odour now being spread from the open dumping and the
residents living in areas adjacent to the dumping site have expressed their support for the
establishment of the plant (see Chapter 10). According to Matuail residents, relatives do not
visit their houses because of prevailing bad odour.

1.5.3   Project outputs

The project is likely to produce 175.2 GWh (Gross) of electricity annually. The net reduction
of GHG (CO2 equivalent) is expected to be 1,130,538 tonnes annually. With credit for
reduction in CO2 emission, the project appears financially viable under the Kyoto Protocol
under. The effect of carbon dioxide reduction outweighs cost of the project resulting in
higher internal rate of return (IRR).

1.5.4   Project implementation plan

Implementation of the Project can begin in July 2004 and be completed within one year after
the completion of all the institutional and financial formalities in the project preparatory
period. During the project preparatory period, Memorandum of Undertaking (MOU),
Electricity Purchase Agreement by PGCB/DESA/DESCO, Agreement on Municipal Solid


                                                                                           3
Waste Supply by Dhaka City Corporation, Guarantee from Government /International
Guarantee Agency etc. need to be finalized. Power Cell of the MPEMR will be the main
coordinating agency of the government. Power Cell will provide quarterly monitoring reports
to government /donor providing financial assistance. The implementation plan would include
specific datelines for consulting services, design-supply-erection-testing and commissioning
of the power plant. There will be also training period for the local staff.

1.5.5       Likely fiscal incentives for the project

Different fiscal incentives currently allowable to foreign investors in accordance with the
country’s industrial policy and foreign investment policy would also be available to the
sponsors for the proposed project. The private investors would generally expect the
following incentives (see Country Study Report):

        •       Guaranteed rate of return on equity
        •       Reduction/waiver of customs duty on import of machinery
        •       Tax holiday
        •       Guarantee of payment for power purchased by utility
        •       Guarantee of foreign exchange remittance
        •       Guarantee of convertibility of foreign exchange

1.6         Project Cost and Emission Reduction

1.6.1       Baseline scenario

The baseline is the most probable future development in the absence of the proposed activity.
The proposed project comprises (i) preparation of 50 biogas digesters, each with a volume of
8500 m3, and (ii) a generator 20 MW capacity. The 20 MW plant based on natural gas will
produce 101,092 tonnes of CO2 (Flow chart – 1, page 38).

From a recent study on the Dhaka city waste by Waste Concern (Waste Concern, Dhaka,
Private Communication. October, 2003), gas production per kg wastes in the open dumping
sites vary from 25 liters to 40 litres and the generated gas at a depth of 3--6 metres contains
55-58% CH4. In the present estimation, the average of (25+40)/2 i.e. 32.5 litres per kg was
used. Because of high depth of the above measurements and mostly aerobic digestion of the
upper portion, methane content of the gas produced at the open dumping site will be
somewhat lower than the above value. In the absence of any data involving the entire mass, a
reasonable guess by the NTEs is 45% CH4 and 55% CO2. Based on the above values, yearly
production of CO2 and CH4 from 5000 tonnes/day is as follows:

Total volume of biogas = 59.31 × 106m3
CO2 (55%)     = 59.31 × 106 × 0.55 = 32.62 × 106m3
CH4 (45%)          = 59.31 × 106 × 0.45 = 26.69 × 106m3
Methane has a GWP (Global Warming Potential) of 23 and as such
CO2 equivalent of 26.69 × 106 m3 of CH4 = 26.69 × 106 × 23 = 613.87 × 106 m3
Therefore, yearly production of CO2 equivalent GHG from the dumping site = 32.62 × 106 +
613.87 × 106 = 646.49 × 106 m3




                                                                                             4
Density of CO2 at room temperature = 1.83 kg/m3
Mass of 646.49 × 106m3 = 1,183.076 tonnes from Matuail site (Flow Chart-2, page 39)
In the absence of the project the total yearly CO2 equivalent emissions =
                      101,092 + 1,183,076 = 1,284,168 tonnes

Government of Bangladesh (GOB) has recently placed the waste disposal project under the
Ministry of Environment and Forests. Under these circumstances, it is reasonable to assume
that in the absence of the Waste to Electrical Energy Project, present open dumping system
will continue. The Dhaka City Corporation (DCC) has recently invited proposal for treatment
and recycling of Dhaka City solid wastes (Annex 8). This pre-feasibility study will help DCC
evaluate the proposals when received.
Therefore, in the project scenario
1)     50 digesters, 8500m3 capacity each, are constructed.
2)     20-MW capacity generator is installed.
3)     Generated electricity is fed into the national grid thus displacing equivalent power
       generation based on natural gas by BPDB.
4)     Fresh wastes containing all the components including the recyclables such as metals,
       glasses, etc. will be fed into the digesters, After digestion, when the digested
       materials will be dug out, scavengers with necessary safety measures will be
       employed to pick up the recyclable materials. After anaerobic digestion, the residue
       becomes completely odourless and mostly germ-free. The sorted-out residue will be
       disposed of for land filling.
5)     Methane produced in otherwise open dumping will be trapped and burnt for power
       generation
6)     With the project activity, total yearly CO2 production is 153, 670 tonnes


1.6.2   Project cost and revenue

A.       Investment Cost
     i) Cost of 20-MW combined cycle plant = 410 million Taka.
     ii) Cost of 50 biogas digesters each costing 10 million Taka
                                              =      10.0 × 50
                                              =      500 million Taka
     iii) Cost of 30 Excavators (Bucket capacity = 1 m3 ), each costing 3.63 million Taka
                                              =       3.63 × 30 = 108.9 million Taka
     iv) Cost of 3 Bull Dozers (Truck type), each costing 9.7 million Taka
                                            =        9.70 × 3 = 29.10 million Taka
     v) Cost of 12 Pay Loaders, each costing 2.81 million Taka
                                          = 2.81 × 12 = 33.72 million Taka
     vi) Cost of 50 Dump Trucks (each 10 m3), each costing 2.80 million Taka
                                              = 2.8 × 50 = 140.00 million Taka
     vii) Cost of 1 (stand by) Generator (50 KVA ) = 3.00 million Taka

     viii) Land & Land Development                   = 274 million Taka

     ix) Contingency (5%)                            = 74.94 million Taka



                                                                                            5
                                            ------------------------------------------------
                                                     Total = 1573.66 million Taka
A reciprocating gas engine in place of a combined cycle plant may be a useful choice as its
efficiency is likely to be higher.

B.      Operation and Maintenance
     i) Variable cost (Solid waste and residue handling cost)

                                                      =        45 million Taka

         ii)     Fixed cost (200 employees)           =        16.8 million Taka
                                                      -------------------------------

                                                      Total 61.80 million Taka.
C.       Revenue
         Gross generation of electricity              =        175.2 GWh
         Net generation of electricity (25% system loss) = 75.2 × 0.75 = 131.4 GWh
         Electricity sale                             =      125 GWh
         Revenue (Taka 2 million/GWh)                 =      250 million Taka

D.       Gross Profit per Year

         Revenue – O & M Cost = 250 – 61.8 = 188.20 million Taka

1.6.3    Indirect emission effects

If the emissions are caused by the project outside the baseline and the project boundaries, these
are indirect emissions. In the case of the present project, no such leakage is identified. Some
emissions may occur during civil work and maintenance of engines, but these emissions will be
insignificant considering the conservative calculation of the emission reduction.

1.6.4    Additional environment and social benefit

The Kyoto Protocol requires that a CDM project activity contribute to the sustainable
development to the host country. During the operation, necessary arrangements will be made
to maximize local benefits. The implementation of the project will provide the following
benefits:

a.      Providing jobs to at least 200 local people
b.      Elimination of bad odour from the areas surrounding the Matuail site
c.      Providing a permanent solution to the city waste disposal problem because of the
        modular nature of the biodigesters. Number of biodigesters can be increased on
        demand. If the gas is in excess of the requirement of the power plant, the excess gas
        can be fed to the natural gas line or can be flared up to convert methane into carbon
        dioxide. Before feeding to the natural gas pipeline, necessary clean up of the gas will
        be needed; because it will contain CO2, some moisture and possibly minute amounts
        hydrogen sulphide.
d.      Addition of electricity to the national grid



                                                                                               6
e.     Soil conditioning by the residues from the biodigesters leading to greater fertility of the
       soil.
f.     Significant reduction of GHG due to capture of methane followed by burning
g.     Locally reducing pollution of air, water and soil.

1.7     Financial Analysis

The total investment cost of the project using 5,000 metric tonnes daily has been estimated at
1573.66 million Taka (US$26.90 million) with additional 61.80 million Taka/yr as operation
and maintenance cost. The project is likely to produce 175.2 GWh (gross) of electricity
annually. Net saleable electricity is estimated at 125 GWh annually and the revenue is 250
million Taka @ Taka 2.0 million per GWh The net reduction of CO2 is expected to be
1,130,538 tonnes annually. Annual CO2 credit is estimated at 198.41 million Taka @ 175.50
Taka (US$ 3.00) per tonne of CO2 and at 330.68 million Taka @ 292.5 Taka (US$ 5.00) per
tonne of CO2.

Financial results show that FIRR is 6.39%, NPV is –77.57 million Taka and B/C ratio is
0.81(Annex 4a). Therefore, the project in the base case is not financially viable and could not
be developed under the given scenario.

Sensitivity analysis scenarios have been depicted on two risks that might face the Project
Results of sensitivity tests are shown below:

(i)    NPV drops to –328.70 million Taka, IRR to –10.79% and B/C to 0.20 for a decline in
       project benefits by 15% (Annex 4b);
(ii)   NPV drops to –278.50 million Taka, IRR to –3.02% and B/C to 0.41 for an increase in
       Project costs by 15% (Annex 4c).

The above sensitivity tests indicate that the financial viability of the Project is more sensitive
to revenue changes than similar proportion changes in project costs.

Financial analysis was recast by incorporating Carbon Dioxide credit as per CDM project as
outlined in the ADB guidelines supplied to the Consultant. CO2 credit price was assumed
US$ 3.00 i.e. Taka 175.50 per tonne of CO2. The results show that FIRR and NPV increase
compared to base conditions.

NPV increases to 1251.79 million Taka, IRR to 54.73%and B/C ratio to 4.04 (Annex 5a).

Results of sensitivity analysis are shown below:
(i) NPV drops to 801.25 million Taka, IRR to 39.62% and B/C to 2.95 for a decrease in
     revenue by 15% (Annex 5b) and
(ii) NPV drops to 1050.25 million Taka, IRR to 43.24% and B/C to 3.21 for an increase in
     Project cost by 15% (Annex 5c).

For CO2 credit price of US$ 5.00 (Taka 292.50)
NPV is 2136.99 million Taka, IRR 84.02% and B/C 6.19{Annex 5a(1)}
NPV becomes zero with CO2 credit price of US$ 0.175 per tonne {Annex 5a(2)}.




                                                                                                7
1.8      Economic Analysis

Economic results show that EIRR is 14.45%, NPV is 114.92 million Taka, and B/C ratio is
1.25(Annex 6a). Therefore, the project in the base case is economically viable and could be
developed under the given scenario.

Results of sensitivity tests are as follows:
(i) NPV drops to –191.37 million Taka, IRR to 1.26% and B/C to 0.58 for a decline in
     Project benefits by 15% (Annex 6b);
(ii) NPV drops to –106.17 million Taka, IRR to 6.10% and B/C to 0.8 for an increase in
     Project cost by 15% (Annex 6c).

The above sensitivity tests indicate that the economic viability of the Project is affected
adversely by change in the risk factors that have been tested. As in the case of financial
analysis, here also lowering of project benefits has the more damaging effect than investment
cost enhancement.

In view of the results above, the proposed project could be established if this could be
combined with CDM project as per the provisions of “Kyoto Protocol”.

1.8.1 Other socio-economic benefits

Economic analysis includes health and environment benefits of the project which occur in
the following manners:

Around the dumping site
•     MSW collection and usage in the Project would stop spillage of wastes and leachate of
      surface and underground water, which is used by the inhabitants for drinking purpose.
•     Project would check open decomposition of organic wastes that contribute to air
      pollution.
•     Project would halt sound of equipment currently used for spreading wastes, compacting
      wastes
•     Project would end scavengers’ direct contact with solid waste reducing skin diseases and
      other health disorders and their spreading to the neighborhood.

Annual cost benefit of the health and environment service at the project site is estimated at
Taka 1.6 million.

Around the collection points

•     Effective MSW collection from the bins would stop over-spilling
•     Effective collection would check open decomposition of organic wastes in and around
      the bins that contribute to air pollution.
•     Effective collection would halt ugly sight and odours around the bins
•     Effective collection would relieve road congestion.

 The annualized benefit of the health and environment service at the various collection points
in the city becomes Taka 28.3 million. Sum total of health and environment benefit is
therefore Taka 29.9 (1.6 + 28.3) million.


                                                                                            8
1.9    Stakeholders’ Meeting

A stakeholders’ meeting was held on 11 February 2004 in Dhaka. 68 participants
representing all the strata were present (Annex 7).

The unanimous recommendations during the meeting are as follows:

1.    The project to be undertaken for implementation in consideration of its positive social
      and environmental implications irrespective of its financial viability;
2.    The project to include management of the entire solid waste dumped at the Matuail
      Site;
3.    Attempts to be undertaken to improve the financial scenario;
4.    Activities by different organizations to be made complementary rather than
      overlapping; and
5.    ADB to help develop a CDM-able project.




                                                                                           9
                                           Chapter 2
                                      INTRODUCTION
2.1    Background of the Project

MSW in Dhaka city poses a serious problem having adverse effects on environment and
health of the citizens. Both quantity and volume of MSW have continued to increase with the
rapid growth of city population. The population of Dhaka city, on an average, has increased
by 5-6% per annum over the past two decades and the trend of growth is likely to be
maintained in the foreseeable future. The population of Dhaka city increased from 3.4
million in 1981 to 6.10 million in 1991 and to 9.9 million in 2001. The generation of waste is
expected to grow in the future as the waste increases with rise of city population (see chapter
4). The generation of waste is estimated at 5650 tonnes per day or 2.06 million tonnes per
annum in 2003 (World Bank, 1998a). The daily waste generation is projected at 8280 tonnes
and the annual generation will be 3.02 million tonnes in 2010. By 2021, the daily and annual
generation will amount to 15,110 tonnes and 5.52 million tonnes respectively.

In addition to quantity, quality assessment of the waste in Dhaka reveals that majority of the
waste is water (50% - 70%) due to the fact that vegetables and fruit residues constitute the
lion’s share of the waste. Energy content in the waste of Dhaka city is relatively low (1386-
2000 Btu/lb) or (770-1444 kcal/kg) on an as-received basis (World Bank, 1998b & ADB
Mission report 2002). The moisture in the waste of Dhaka is particularly high compared with
those in the wastes of other cities of the region. The refuse without processing does not burn
even in the presence of additional fuel (natural gas). Dhaka City Corporation (DCC) is
responsible for collection, transportation and disposal of waste in the city. DCC, however,
can collect about 50% of the total wastes, while the remaining 50% of the wastes are either
dumped in low-lying areas or collected by scavengers. Fast decomposition of mixed solid
waste in humid tropical climate causes odour, nuisance, obnoxious conditions and health
hazard in Dhaka city. In order to improve the city environment and health of the city
dwellers, disposal and management of waste has received considerable attention over the
years. An increasing emphasis is laid on public-private partnership including NGOs and
citizens to play a significant role in municipal management, awareness building, collection
and disposal of waste. A pilot biogas plant set up by DCC and BCSIR served as an example
toward recycling of solid waste and its productive use (DCC-BCSIR, 1993).

Initiatives by NGOs and local communities include collection and disposal of wastes for
composting to generate organic manure. In addition to the past and on-going initiatives, GOB
wants to introduce “Waste to Electricity” project for efficient use and safe disposal of wastes.
In order to initiate the process of the “Waste to Electricity” project, Power Cell of the
MPEMR of the GOB has been instrumental in implementing studies to assess the quantity
and quality of solid waste in Dhaka. The studies conducted by BCAS and IFRD (BCSIR)
provides the basic data and information needed to plan and design the project.

In addition to promoting private sector investment in power sector and assisting in
development of renewable energy projects, the Power Cell is assigned the coordinating role
of Promotion of Renewable Energy, Energy Efficiency and GHG Abatement (PREGA)
project supported by the Asian Development Bank (ADB). The feasibility study on waste to
electricity has been selected, out of ten initially identified projects through screening based
on relevant criteria (see Country Study Report).


                                                                                             10
2.2    Justification of the Project

The project would diversify the source of electricity generation and contribute to energy
security and sustainable energy supply. If implemented successfully, this renewable energy
technology could be replicated in other big cities for improvement of city environment and
enhancement of power supply.

The project would add to the country’s net generation capacity by 20 MW and generated
electricity would be supplied to the grid. It may be noted that the country has been suffering
from a chronic shortage of electricity to the detriment of economic activities and growth.
Load shedding and power outage are common phenomena experienced by the electricity
consumers of Dhaka as well as rest of the country. According BPDB load shedding was
recorded in 283 days for a total of 1042 hours during the year 2000/2001.

ADB, one of the major development partners of Bangladesh, provides financial and technical
assistance for sustained economic growth and development of the country. Municipal
infrastructures, improved municipal management and environment can accelerate economic
growth in view of the expanding role of the urban sector of the economy.

In recognition of the important roles that municipalities play in the areas of economic
growth, human development and environmental management, ADB has identified public
service delivery at the municipal level as a priority area of cooperation with Bangladesh. The
waste to electricity project in Dhaka, the largest city and centre of governance and economic
activities of Bangladesh, would be an important step towards implementation of policy
strategy of both Bangladesh and ADB as the project would lead to improved electricity
supply and efficient waste management in the city.

The waste to electricity is justified on the following grounds:
   • The lack of collection and safe disposal of municipal waste poses a serious problem
      in the absence of proper management and economic use of waste for the benefit of
      the people.
   • It is estimated that about 50% of the solid wastes fail to reach the ultimate
      destinations or dumping sites and remain scattered over private or public places
      including roads and other vacant places.
   • The scattered and uncollected solid waste creates public nuisance. It clogs sewers and
      open drains, encroaches roadways, diminishes aesthetic appearance and causes
      unpleasant odour. A serious public health problem arises due to lack of proper
      handling and disposal of solid wastes. The open dumpsites are the breeding grounds
      of flies and mosquitoes. The pathogens present in the wastes are transmitted through
      flies and mosquitoes to cause various diseases of the city dwellers. In addition to
      deteriorating environmental and health problems, economic activities are also
      adversely affected due to problems associated with poor solid waste management.
   • Proper and efficient management of city waste could lead to significant economic
      benefits and improvement of city environment and health of the citizens. Waste to
      electricity project can make noteworthy contribution to improve the power supply
      situation of the city where load shedding and power outages are common phenomena
      causing adverse effects on economic growth and well being of the electricity
      consumers.



                                                                                           11
•    Apart from power generation, the project would produce organic manure, which has
     vibrant demand in the domestic market. It may be noted that organic agriculture is
     now promoted as sustainable agricultural practices. The use of chemical fertilizer and
     insecticides is now being increasingly replaced by organic manure due to the rising
     environmental awareness worldwide. Practical application as manure or soil
     conditioning will depend on the nature of wastes and as such on the market demand
     of the residue. High organic matter and low nitrogen, potassium and phosphorous
     (NPK) will make the residue suitable for soil conditioning.
•    The economic and productive use of wastes under the project would lead to an
     increased rate of collection and transportation of the waste to the project sites. As a
     result, environmental and health conditions will improve to the benefit of the city
     dwellers.
•    The project would stop release of methane into the atmosphere through combustion
     and thus contribute to a net reduction of greenhouse gas. The project therefore would
     qualify to attract external funding under the Clean Development Mechanism (CDM).
     This would improve the financial viability and sustainability of the project.
•    Similar projects were undertaken in the following places.
         1.    Latvia               :    Liepaja Municipal Waste Management Project
         2.    South Africa         :    Durban Landfill Gas to Electricity
         3.    Brazil               :    Salvador da Bahia Landfill Gas Project

    However, performance characteristics of these projects are not available.




                                                                                         12
                                           Chapter 3
               ENERGY SITUATION AND GOVERNMENT POLICY
3.1      Sector Description

Bangladesh has a total installed power generation capacity of 4005 MW in 2000/01. Of this,
3,320 MW was in public and 685 MW was in private sector. Available capacity was
however, restricted to 2,900 – 3100 MW due to lack of adequate maintenance and
rehabilitation programme. Routine close down, reduction of generation capacity due to
prolonged use beyond economic life etc. were other contributing factors for low available
capacity. Due to shortfall in generating capacity compared to demand, load shedding became
inevitable throughout the country during peak hour. The load shedding problem was
somewhat eased during the last few years due to commencement of new power plants as
described below:

 Plant                                       Capacity (MW)    Commencement of Generation
 Public Sector
                                                   210        September 1997
 1. Rauzan Steam Plant (2nd unit)
                                                   210        January 1999
 2. Ghorasal Steam Plant (6th unit)
                                                    35        March 2000
 3. Shahjibazar Gas Turbine (1st unit)
                                                    35        October 2000
 4. Shahjibazar Gas Turbine (sub unit)
                                                   100        February 2002
 5. Baghabari Gas Turbine

                               Sub Total     590
 Private Sector
                                                   110        June 1999
 6. Haripur Barge Mounted
                                                   110        October 1998
 7. Khulna Barge Mounted
                                                    90        June 1999
 8. Baghabari Barge Mounted
                                                   125        February 2002
 8. AES-Haripur
                              Sub Total      435
 Public –Private Sector
                                                    70        November 1999
 9. Mymensingh Gas Turbine (1st phase)
                                                    70        December 2000
 10. Mymensingh Gas Turbine (2nd phase)

                           Sub Total         140

Source: Ministry of Finance and Planning (2002).

3.2      Present and Forecasted Energy Situation

The gross electricity generation in 2000/01 was 17,023 GWh, out of which gas based
generation constituted 87%, hydro generation 6 % and liquid fuel based generation 7%.
During 2001/02, a total of 18,656 GWh was consumed under the overall management of
Power Development Board, Dhaka Electric Supply Authority, Dhaka Electric Supply
Company and Rural Electrification Board. Of the total energy consumption, residential
sector, industry, commercial sector, agriculture and others, accounted for 41%, 44%, 8%and
7% respectively. 13.49% of electricity has been purchased from the private sector. Per capita
consumption was 99 kWh in 1996/97 that stood at 106 kWh in 1997/98, 120 kWh in 1999/00
and 129 kWh in 2000/01.


                                                                                          13
Country’s Power System Master Plan (PSMP) formulated in 1995 estimates peak power
demand for 2005 and 2007 at 5,200 MW and 6,100 MW respectively (Table 1).

                            Table 1: Gross Peak Growth Forecast

                   Fiscal Year                              Gross Peak Growth MW
                     1995/96                                         2200
                     1999/00                                         3150
                     2005/06                                         5,200
                     2007/08                                         6,100

Source: PSMP, 1995


Although power generation is increasing every year, it has nevertheless trailed behind
growing demand. Few ramifications of the slow growth in electricity generation and
consumption are illustrated by the following hard facts:

•     About 30% of the population now has access to electricity.
•     Per capita consumption of electricity is only 129 kWh per annum, which is one of the
      lowest in the world.
•     System firm capacity was 2900-3100 MW out of an installed capacity of 4005 MW in
      2000/01.
•     Forecasted peak demand in FY 2002 was around 4000 MW, showing a power or outages
      of 25%.
•     Peak demand is expected to increase to 5,200 MW by the year 2005. Present generation
      position indicates a power outage not less than 40% by the year 2005.

3.3      Constraints and Issues

Power shortage is the result of accumulated problems of many years. Some of the reasons
that are responsible for the present situations are discussed below:

•     Inefficiency of the parastatal management of the sector and a tariff structure unfavorable
      to efficient usage of power. Economic and Financial Indicators of the electricity utilities
      are shown in Annex 1
•     Reserve margin defined as actual production capacity minus maximum demand served
      has been continuously declining since 1989/90 to reach zero margins in 1993/94. Power
      generation and power supply became precarious due to lack of reserve margin. Added are
      the problems of accounts receivables of the electricity utilities (Annex 2).
•     As shown in Table 2, load shedding during the period 1990/01 – 2001/02 varied from
      340 MW to 774 MW.
•     Investment by Government in power generation plants and transmission and distribution
      has not been sufficient in the past years due to resource constraints.




                                                                                              14
              Table 2: Installed, Actual Production and Firm Production Capacity,
                                   Peak Demand and Shortfall

     Year         Installed    Generation   Demand        Demand        Load       Reserve
                  Capacity      Capacity    Forecast      Served      Shedding     Margin
                   (MW)          (MW)        (MW)          (MW)         (MW)
    1990/91         2350          1719          -           1640         340             5
    1991/92         2398          1724          -           1672         550             3
    1992/93         2608          1918          -           1823         480             5
    1993/94         2608          1560          -           1875         540              -
    1994/95         2908          2133        2038          1970         537             8
    1995/96         2908          2105        2220          2087         545             1
    1996/97         2908          2148        2419          2114         674             2
    1997/98         3118          2320        2638          2136         711             9
    1998/99         3611          2850        2882          2449         774             16
    1999/00         3716          2665        3149          2665         536              -
    2000/01         4005          3033        3394          3033         663              -
    2001/02         4230          4055          -             -           -               -

Source: BPDB (2001/2002)

•     Power sector has always been dependent on foreign aid/loan. However, there has been no
      foreign lending from donors including World Bank, Asian development Bank (ADB) in
      this sector during 1990/91 – 1995/96. As a result, no major investment work could be
      undertaken for power generation, transmission and distribution system. BPDB/DESA
      were unable to meet World Bank and ADB requirements / conditionalities on system
      loss, accounts receivable etc.

                     Table 3:       System Loss of Electricity Organizations

     Year           BPDB           DESA             REB           DESCO          Combined
                  (% of Net     (% of Import)   (% of Import)   (% of import)       %
                 Generation)
    1995/96        17.0            29.5            15.2                           31.3
    1996/97        16.00           27.3            15.8                           30.3
    1997/98        16.5            27.8            16.8                           31.3
    1998/99        16.8            24.9            18.6                           30.9
    1999/00        15.5              -             20.1            32.73          37.1
    2000/01        14.6            26.03           17.9            30.55            -

Source: Ministry of Finance and Planning (2002).

•     Power transmission system became inadequate because of lack of investments in
      construction of transmission network for the last few years.
•     Power generation is far below the installed capacity due to inadequate supply of gas-to-
      gas based generation plants.
•     Power generation declined due to derating of many power plants




                                                                                              15
           Table 4: Accounts Receivable of BPDB and DESA (in billion Tk)

          Fiscal year                       BPDB                            DESA
           1997/98                          17.29                            9.98
           1998/99                          24.64                           12.44
           2000/01                          27.89                           13.96
           2001/02                          33.99                            14.8

Source: Ministry of Finance and Planning (2002)

3.4    Government Policy and Strategy

In 1994, the Government of Bangladesh adopted Power Sector Reforms in Bangladesh
(PSRB), which was formulated in consultation with the major development partners (DPs) in
the power sector. The PSRB outlined the reform process proposed to be followed by the
Government to gradually remove the constraints in the sector through improvements in sector
and corporate governance, introduction of competition, and public-private partnerships.
Reforms of the external environment were to be done through targeted interventions in the
power sector.

In accordance with the PSRB, the power sector in Bangladesh has gradually been undergoing
structural changes through technical assistance for planning and institutional strengthening as
well as capital for system expansion, in line with the principle of reforms-linked assistance.
ADB has focused on the greater Dhaka area, given its commercial and political importance
to Bangladesh.

As a direct result of assistance by ADB and KfW, three new companies have been
established-PGCB, DESCO and Rural power Company (RPC). While RPC was a new start-
up generation company, PGCB took over assets and liabilities of the existing transmission
operations of BPDB, and DESCO took the Mirpur (later expanded to cover the erstwhile
Gulshan circle also) distribution operations of DESA. Although both companies have
improved their operations and have broken even on current operations, their past liabilities
create an accumulated problem which prevents their transformation into profitable
companies.

In line with the reform measures, a number of activities have already been undertaken for the
desired development of power sector.

Government has approved, “Private sector Power Generation Policy of Bangladesh” in
October 1996 to promote private sector investment in power generation. Under this policy,
the private power companies (domestic, foreign or joint ventures) would be exempted from
corporate income tax for a period of 15 years and will be allowed to import plants and
equipment without payment of custom duty and VAT.

In the public sector, a wide range of reform and programmes for the generation, transmission
and distribution system of the power sectors has been undertaken. In this respect, Rural
Power Company (RPC) has set up initially a 60-MW power plant at Mymensingh, which
would supply power exclusively to the rural areas.




                                                                                            16
“Power Grid Company of Bangladesh (PGCB)” has been created to separate the distribution
system. The company at the initial stage has started implementing its programmme for
construction of transmission lines and national load dispatch center for transmission of power
that would be generated from Meghnaghat power plant. PGCB will eventually, acquire the
entire power transmission network of the country and be responsible for its management,
maintenance and expansion.

The area under DESA has been rationalized and re-demarcated in order to increase the
efficiency of the management of the power distribution and improve the quality of the
services. In order to reduce the system loss and give quality of service, a company named
Dhaka Electric Supply Company (DESCO), as stated above, has been created to manage the
power distribution system of Mirpur of Dhaka Metropolitan City since September 1998. This
will eventually take over the entire distribution responsibility of DESA.

Captive Power generation is being encouraged through reduction of import duty. As a result,
generation capacity of over 500 MW has been created during the last 2-3 years. This has
contributed to meeting demand during peak period.

BPDB has created 8 new distribution zones for bringing about distribution efficiency. In line
with modern management concept, distribution areas have been established as Strategic
Business Units (SBU) with greater autonomy.

Power Cell has been created within Power Division in the Ministry Energy, Power and
Mineral Resources for purpose of carrying forward various reforms in a co-coordinated and
concerted manner. Among the important activities currently pursued by the Power Cell
include formulation of Power Act, establishment of an independent Power Regulatory
Authority, Vision and Policy statement of government etc.

Ashuganj Power plant has been transformed into a Public company and Haripur Power plant
has been transformed into a Cost /profit center. Creation of a West Region Integrated Power
Distribution Company is in its final stage.

3.5    Government Policy on Renewable Energy

Bangladesh’s fossil energy resources consist primarily of natural gas. Domestic oil supply is
considered negligible. Several small deposits of peat exist in the southwestern region of the
country. However, Bangladesh has substantial bituminous coal deposits in the northwestern
region, but mining of all of them is quite expensive because of their depth (see Country
Study Report).

Around 30% of the total population has got access to electricity. Vast majority of the rural
population that comprises 76% of the total population is deprived of energy resources. Larger
energy supplies and greater efficiency of energy use are thus of paramount importance to
meet the basic needs of a growing population.

It is therefore considered necessary to exploit all sources of renewable energy and to use
these in an efficient form for benefit of the people. Government has accordingly formulated a
renewable energy policy for the country. The policy mentions necessity of taking up
renewable energy development programmes in the areas where potential renewable energy
resources are available, considering economical and technical performance with minimum


                                                                                           17
environmental effects. Plant site, size and design are to be considered on the basis of
available energy resources of the area and efficient conversion of energy will be given
preference. Policy envisages accomplishment of its objectives by mobilizing a concerted
national effort with the continued co-operation and commitment of Government,
international organizations, bilateral and multilateral funding institutions, non-government
organizations, the private sector, research organizations and universities, etc. Policy also
realizes that innovative new financing opportunities will be needed to attract private capital
to supplement the energy deficiencies in the rural areas and thus to fulfill the aspiration of the
poor people. In case of renewable energy, technology is advancing fast and many
governments have formulated innovative policy formulations for renewable energy
development.

3.6    Market for Electricity

Given that only about 30 percent of households in Bangladesh are connected to the electricity
system, there is a huge potential demand for electricity compared to the current amount that
is now being served. Also among the connected consumers, there are unserved demands. The
market cannot be served now because of generation and infrastructure constraints. BPDB has
limited capacity of financing new generation or transmission lines. Complicating the supply
side even further is the availability of foreign exchange to pay for electricity supplied by
present and future IPPs, PSCs and other energy related capital investments. Examination of
the existing committed and planned generation plants reveals that generation would lag
behind potential demand. The United Nations Commissions on Human Settlements forecast
that the population of Dhaka would increase by almost 50 percent to become the sixth largest
city in the world by 2010. With this increase, power generation would be insufficient to meet
the demand.




                                                                                               18
                                       Chapter 4
              SOLID WASTE RAW MATERIAL GENERATION
                        FOR THE PROJECT

4.1    Introduction to Solid Waste Collection and Disposal by DCC

Dhaka City Corporation (DCC) is the assigned organization for collection, transportation,
treatment and disposal of municipal sold wastes of the Dhaka City. DCC is a local self-
government under the Ministry of Local Government, Rural Development and Cooperatives.
Currently, Dhaka is a city of about 10 million population within a territorial jurisdiction of
360 square kilometer. Every day, more than 5000 tonnes of Solid Waste is generated from
the city’s residential, commercial, industrial and hospitals/clinical activities. As Dhaka’s
population has been continuously rising over the last 100 years, DCC has been facing
increasing problems in providing solid waste management service to its citizens. Lack of
civil awareness, lack of co-ordination among various service delivery agencies, absence of
accountability, faulty reporting system, as well as absence of appropriate laws and
enforcement procedure contribute to DCC’s poor solid waste service delivery. Lack of fund
and dearth of modern scientific technologies also create problems in solid waste management
in DCC.

The present legal foundations for solid waste management are the “Municipal Ordinance of
1983” and the “Bangladesh Environmental Protection Act of 1995” (EPA). EPA deals with
the control and disposal of radioactive substances having a provision of penalty up to 5 years
imprisonment. “Dhaka Municipal Ordinance of 1983” requires DCC to remove all types of
refuse from all public streets, public latrines, urinals, drains and dustbins. The
“Environmental Policy 1992” intends to restrict disposal of municipal, industrial or
agricultural wastes in rivers, ponds and drains, discourages open truck transportation and day
time collection of waste. These legal foundations give a general guideline about the duties
and responsibilities of Dhaka City Corporation. The ordinance of 1983 entrusted Dhaka City
Corporation to manage solid waste within its area. For the purpose, its Conservancy
department sweeps and accumulates garbage; its transport department carries the garbage to
the dumping destination by its vehicles. Its Mechanical Engineering Division–1 gives logistic
support for repairs, maintenance and purchases of the vehicles. Mechanical Division-2 has
the responsibility of dressing and compaction of garbage at the final disposal depot.
Mechanical Division-2 also provides logistic support to the final dumping depot by providing
conservancy equipment. The equipment used are chain dozers, excavators, pay loaders,
wheel dozers etc. In case of emergency, Mechanical Engineering Division-2 also provides
dump and payloads, wheel dozers for solid waste management.

DCC is now dumping wastes mostly at Matuail landfill site (Map-1). Completed dumping
sites were located at Mugdapara, Jatrabari and Gabtoli. DCC is practicing crude dumping
process in order to minimize cost, but it is being done at the cost of public health and
environmental pollution. DCC has 332 conservancy trucks in the fleet. These trucks carry the
garbage from the collection point to the site of disposal. The average useful life of the
conservancy trucks is greatly reduced by the corrosion process in body, chassis and other
parts. The disposal operation is poorly organized with wastes being spread over without any
cover. Collection crews as well as scavengers are in direct contact with the solid wastes. The
residents of the neighborhood areas are exposed to serious health risks associated with air
pollution as well as surface and groundwater pollution from landfill leachate.


                                                                                           19
4.2    Quantity and Quality of Solid Wastes of DCC

Few studies are available dealing on quantity and quality of municipal solid wastes of Dhaka
City. In 1998, the World Bank and Power Cell of the Power Division in Ministry of Power,
Energy and Mineral Resources (MPEMR) sponsored two studies regarding the quality and
quantity of the municipal solid waste in Dhaka. The Institute of Fuel Research and
Development (World Bank, 1998b) of Bangladesh Council of Scientific and Industrial
Research undertook the refuse quality assessment, and the Bangladesh Centre for Advanced
Studies (World Bank, 1998a) did the refuse quantity assessment. The main research findings
are presented as follows (see Country Study Report):
1) A large amount of municipal solid wastes are generated daily in Dhaka. According to
      (World Bank, 1998a), Dhaka Metropolitan area generated municipal solid waste of
      3944 metric tonnes per day in 1998 and is projected to generate more than 5000 tonnes
      per day or 1.96 million tonnes per annum in 2002-03. The waste generation is projected
      to grow at the rate of about 5.6% each year. By 2021, the daily waste generation in
      Dhaka will amount to 15.1 thousand tonnes and annual generation will be 5.52 million
      tonnes.
2) Energy content of the waste of Dhaka is quite low (1386 – 2600Btu/lb or 770 –1444kcal/kg
      on as-received basis) (Table 5). The majority of the waste is water (50% -70%) due to the
      fact that the main part of the waste consists of vegetable and fruit residues.
3) Combustion tests of the refuse by (World Bank, 1998b) shows the following:
      a)    Without any processing (about 60% moisture content), the refuse does not burn
            even in the presence of additional fuel (natural gas)
      b)    When dried at moisture level of 20-25%, the refuse catches fire in presence of
            additional fuel and keep on continuous burning even on removal of the flame.

                Table 5: Results of the Analysis of Solid Waste of Dhaka

 Contents             Share by Weight          Calorific Values    Btu/lb        Kcal/kg
 Water (moisture)     50% - 70%                As received         1386 – 2600   770 – 1444
 Carbon               6.02% - 25.06%           Air dry (with       2900 – 4300   1611 – 2389
                                               Moisture 5 – 8%)
 Hydrogen             1.20% - 3.53%            Oven dry            3300 – 6200   1833 - 3444
 Nitrogen             0.46% - 1.62%
 Sulfur               0.00% - 0.02%
 Ash                  13% - 33%
Source: (World Bank, 1998b) and ADB Mission)

4)    The main implication of the above findings is:
      •   A large quantity of solid wastes is daily collected in Dhaka. However, the total
           moisture content is high in comparison with those in the wastes of other cities.
           For example, the share of moisture was 31%-42% in cities of India, while this
           figure was 50-70% in Dhaka (World Bank, 1998b).
      •   About two tonnes of refuse as-received would be needed to produce 0.8 tonnes of
           combustible refuse by driving out one ton of moisture (assuming the moisture
           level is 20% after the refuse is processed). Also high content of moisture in the
           wastes would make it destructive in boiler-based power generation.




                                                                                            20
                                         Chapter 5
  TECHNOLOGY OPTIONS AND CHOICE OF TECHNOLOGY FOR
              DHAKA CITY SOLID WASTES
A discussion on choice of appropriate technology for generating electric energy from solid
wastes of Dhaka City should have to be based on examination of all available and relevant
technologies on the field. Currently, several Municipal Solid Wastes to Energy technologies
have been adopted worldwide. These include Landfill, Mass Burn Incinerator (MBI),
Fluidized Bed Incinerator (FBI), Gasification, and Plasma Converter (Yang and Li, 2002).
Brief description of the available technologies is provided below:

5.1    Landfill Gas to Power Generation

Landfill site is a traditional method to process waste. The basic concept of landfill is that the
Municipal Solid Wastes are compacted and dumped in a large water and air proof pit. In
order to prevent water leakage and air penetration, clay or geo-textile and impervious
membranes are often used during the civil construction of the pit and sealing of the dumping
site. On the top, about 15-meter depth of earth is needed to cover the site. In the absence of
free oxygen, microbiological organisms degrade organic matter and produce landfill gas,
which mostly consists of methane or CH4. CH4 recovered from landfill sites have been used
to generate power in Australia, the USA and Europe.

The advantages of the technology include:
• It fits any kind of wastes, either high energy contents with low moisture or high moisture
   with low energy contents
• During construction of the site, it creates more jobs to the local community than other
   technologies
• It can be significantly cheaper than any other technologies
• The land can be re-used for non-construction purpose, such as forestation. Building a
   park, etc.

The disadvantages include:
• Possible pollution of underground water due to leakage of leachate
• Energy utilization from the wastes by landfill technology is usually less than that by other
   technologies (One million tonnes of municipal solid wastes in landfill site can produce
   primary energy for one MW gas power for 10 years and generate about 70 GWh
   electricity, while the same amount of electricity can be generated from a fluidized bed
   technology by using about 190 thousand tonnes or about 1/5 of the waste used in
   landfill).

5.2    Mass Burn Incinerator

This is one of the earliest wastes to energy technologies that have been developed to convert
household, industrial and agricultural waste into energy. The Mass Burn plants incinerate
wastes as received without pre-processing. The heat produced during the combustion is
recovered through specially designed boilers to generate high temperature and high-pressure
steam. The steam is then used to drive the ordinary turbine/generator sets to generate
electricity. The majority of the Mass Burn facilities were built in America and Europe. This
system is relatively expensive to construct and to operate.


                                                                                              21
5.3    The Fluidized Bed Incinerator

It utilizes modern high temperature combustion techniques to incinerate pre-processed waste,
known as Refuse Derived Fuel (RDF), in an integrated incinerator and boiler unit to produce
high temperature and high-pressure steam. The steam is then used to generate electricity
through a turbine and generator used as high quality industrial process steam. The waste pre-
processing facilities in fluidized bed incineration plants are similar to those employed in the
Gasification plants, which receive, sort and shred wastes and convert it into RDF. Since the
successful completion of a fluidized bed facility to process 450 tonnes of wastes per day (450
tpd) in Tokyo in 1982, the Fluidized Bed Combustion unit has been considered as a cost-
effective alternative to the Mass Burn systems.

5.4    Gasification Technology

This consists of three components: waste processing, gasification and power generation.
Waste processing involves receipt of the wastes, sterilization with heat and pressure, and
then mechanical separation. In the process, steel, aluminum and some rigid plastics are
recovered for recycling and a pulp is produced from the organic material. The pulp is
then washed to remove sand and glass, and dried in preparation for gasification. In the
gasification process, the organic pulp is fed into an environment with high temperature
(1100 degree centigrade) with little oxygen (a gasifier), which converts the elements to a
gaseous compound consisting mainly of carbon monoxide, hydrogen and oxygen. These
elements are reformed into a synthesis gas, which is processed to make a clean, dry fuel
gas suitable for use with a variety of internal combustion engines to generate electricity.
Compared with the method and technologies of Landfill, MBI and FBI, this technology
provides higher rate for solid wastes into electricity. It does not produce NOx. If
combined cycle generation technology is used, the net electrical efficiency of wood fired
gasification process could be over 30%. However, still at its R&D stage, this gasification
technology has not been found to process low energy content wastes at scale of 5000
tonnes per day.

5.5    Plasma Waste Converter (PWC)

This uses electrodes and a large amount of electric energy to produce electricity that creates
an extremely high temperature environment (up to 6000 degrees centigrade). In such an
environment, organic and some inorganic materials are broken down into their constituent
components. The wastes in the converter will not burn but directly become “syngas” – a
mixture of hydrogen and carbon monoxide. Some inorganic elements of the feedstock
become melted and can be removed like molten glass and used as construction materials. The
PWC is a machine not a chemical plant. So far, unit capacity to deal with wastes of this
technology is quite small, in the range of 5, 10, 25, 50 and 100 tonnes per day. It is mostly
used in on-site treatment of wastes in hospitals and small industries. So far, no report shows
that a large scale of PWC is used in processing Municipal Solid Wastes. This might be due to
the requirement of large amount of electricity to provide electric arc, which considerably
reduces the net energy efficiency of the equipment.

5.6    Power Cell’s Experience with Bid Invitations

More understanding about the Municipal Solid Waste to Electricity technology can be
obtained by review of the experience of the companies that submitted capacity statements (or


                                                                                            22
pre-qualifications) in request to Power Cell’s bid invitations in 1998. Firms from the USA,
Australia and Europe participated. In the following, an assessment of the firms and their
technologies are provided:

The USA Company has the following experience:
•    Participated in the development of 22 wastes to energy plants in varying roles in the
     USA, totaling 400MW (A typical American Ref-Fuel Waste-to-Energy facility uses
     Fluid Bed incinerator)
•    Assisted in developing 310 MW power plants in Asia (110 MW in China, 200 MW in
     Philippines)
•    Participated in the management of the construction and operation of over 1GW of new
     power generation in over 30 facilities
•    With total capacity of 13,337 tonnes/day and with power generation capacity of over
     394 MW in mid 1998
•    In consortium involved with additional five small MSWEE projects with unit capacity
     of 450 kW or steam productions of 30 tonnes per hour.

The Australian Company has the following experience:
•    Using MSWEE technologies and projects during the 1990s developed 18 Landfill gas
     power generation projects with size between 1 MW to 11 MW each
•    Designed and developed a MSW pre-treatment pilot plant with processing capacity of
     10 tonnes/hr in the USA
•    Designed and constructed commercial demonstration plant embodying the MSW plant
     with capacity of 50 tonnes/hr in Australia
•    Designed, constructed and operated 3 gasification projects in the USA and Australia
     with a total production of 20 GJ per hour that can generate 10 MW by using integrated
     combined recycle turbines
•    Developed a MSWEE project with a forecast capacity of 2000 tonnes per day (40 MW)

One European Company has the following experience:
•    Used Fluidized Bed Incinerator for two MSWEE projects with waste processing
     capacity of 320 tonnes per day and power generation capacity of 10 MW
•    Used Fluidized Bed Incinerator for two MSWEE projects with waste processing
     capacity of 310 tonnes per day and power generation of 14 MW

Another European Company has the following experience:
•    Used Fluidized bed incinerator technologies in 3 Waste-to-Power plants in Belgium for
     mixed industrial and municipal solid waste and sludge with waste processing capacity
     of 770 tonnes/day, 440 tonnes/day; 274 tonnes/day respectively.
•    The heat value of the wastes in the plants was about 2600 kcal/kg (In Dhaka, this value
     was 770-1440 kcal/kg)
•    Used Fluidized bed incinerator technologies in 4 similar Waste-to-Power plants in the
     USA, South Korea, and Japan

Table 6 summarizes the information pertaining to prevalence of types of technologies for
waste to electricity generation:



                                                                                         23
                  Table 6: Prevalence of Types of Municipal Waste to
                       Electricity Technologies by Bidding Firms

   Firm Name and Number         Landfill     MBI         FBI         Gasifier     Plasma
 Name             Number
 USA Firm           1                                          22
 European Firm      2                                          17
 Australian Firm    1               18                                    5

The review of technologies shows the following:
•    FBI is the most common technologies. This technology mostly used in the USA would
     be most appropriate to Solid Waste of Dhaka if the energy contents in wastes were
     reasonably high.
•    USA has the experience to develop large facilities to process thousands of tonnes of the
     municipal wastes per day while other two have experience in processing hundreds of
     tonnes of wastes per day
•    The USA has considerable experience in Asian developing countries (China and
     Philippines)
•    Australia uses both traditional methods (Landfill) and contemporary technology
     (Gasifier).
•    Given that MSW in Dhaka as received contains 50%-70% moisture, Landfill gas to
     power might be the most cost-effective and most efficient of the technologies. In
     addition, Gasifier, as a new technology which has the highest energy efficiency
     recovery, might also be a good option to Dhaka
•    MBI and Plasma are not in use, possibly because MBI is out-dated and Plasma is
     immature and uncertain

5.7    Choice of Technology

Methods and technologies have been developing gradually from traditional ones to
advanced ones in the following order: Landfill, MBI, FBI, Gasifier and Plasma. Landfill
gas to power technology is the most cost-effective way to deal with a large amount of
wastes with low heat value. MBI was used to burn MSW but it has been widely replaced by
FBI. So far, FBI is the most commonly used technology to burn MSW and generate steam
and electricity. In order to improve net energy efficiency of waste–to-power technology
and mitigate environmental impacts, scientists have been developing Gasifier technology.
Demonstration plants with such technologies have been successfully in operation.
However, it is unknown that the technology is cost-effective if it is used to process 5000
tonnes of waste daily with low energy contents. Plasma Arc technology for MSW
processing is still in the R&D stage and should be out of consideration for Dhaka. MSW in
Dhaka has two important characteristics (1) low heat content 770-1440 kcal/kg, about half
of that in the developed countries, and (2) huge quantity of more than 5000 tonnes per day
in 2002 and with annual growth rate of 5.6%. MSW as received in Dhaka may need
considerable additional energy to pre-process and keep the boilers temperature high enough
to burn the wastes. In order to deal with daily-generated vast quantity of MSW, multiple
methods of technologies and units may be necessary. Based on prevailing conditions with
respect to gradual growth of technology and quantity/quality of municipal solid wastes,
Landfill technology, as suggested by ADB mission seems to be the most preferred


                                                                                           24
technology for Dhaka City to start with. ADB mission recommended landfill gas
technology for use in the pre-feasibility study of the project. As there is acute shortage of
land in and around Dhaka city and as DCC is finding it difficult to get a new dumping site,
appropriate variation of landfill for Dhaka city is biogas digesters. Necessary cost estimates
are given in Chapters 8 and 9.

Work is being done by Waste Concern (Pilot scheme on solid waste management and
composting in Bangladesh. www.wasteconcern.org/ongoing project/project2.html) to
introduce aerobic composting of MSW in Dhaka, Khulna and Sylhet. This technology
reduces methane generation occurring currently at the dumping site because of aerobic
digestion.




                                                                                           25
                                       Chapter 6

                             PROJECT DESCRIPTION
6.1    Project Goal

The project’s goal is to have self-sustained development in the electricity sector, improved
quality and increased coverage. It is expected that the project would contribute to
improvement of the living standard of the people of Bangladesh through provision of a vital
energy source at affordable prices.

6.2    Project Objectives

The project has twin development objectives of generating electricity from a renewable
source, namely MSW and reduction of GHG. Electricity generation from renewable source is
considered very important in the context of Bangladesh given the level of energy use and
available source of fossil energy. Also reduction of greenhouse gas will call forth investment
benefits under CDM. Saving of natural gas would also allow utilization of this scarce
resource for other development purposes. Collection of methane otherwise released into the
atmosphere from the open dumping site and subsequent burning for power generation will
have significant effect on GHG reduction (see Chapter 7).

6.3    Poverty Reduction Through Project

In Bangladesh, poverty is widespread and acute by any indicator of measurement and the role of
electricity in addressing the challenge of poverty reduction is crucial. The Constitution of
Bangladesh stipulates electrification as one of the obligations of the State. With this
constitutional mandate in mind, successive governments with assistance and support from donors
have placed electrification high on the agenda of reforms.

6.4    Technology Transfer

Although electricity is being generated in the country since the later half of the nineteenth
century, this has always been either from liquid, hydro or gas sources. Use of solar energy
has only been recently started. Generation of electricity from MSW has never been practiced
in the country, although solid waste generation has been regarded sizeable for the purpose.
Therefore, the project is expected to contribute to technology transfer in this new area. With
growing urbanization in Bangladesh, this technology can be further refined and tuned to local
circumstances.

6.5    Project Location

The present dumping site, Matuail (Map-1) is situated on the eastern side of the Dhaka city,
within metropolitan area. Currently used land area is 55 acres. Setting up a power plant
within the metropolitan area may not sound to be a welcome proposition because of noise.
But the plant will eliminate the bad odour now being spread from the open dumping and the
residents living in areas adjacent to the dumping site have welcomed the proposed
establishment of the plant.




                                                                                           26
6.6    Project Partners

Under the “Private Sector Power Generation Policy” of Bangladesh announced in 1996,
several Independent Power Producers (IPPs) have started producing power since 1998/99.
These IPPs are 100% foreign financed established on Built-Owned-Operated (BOO) system
or (Built-Owned-Operated and Transferred (BOOT) basis or any of its combinations. Under
mixed sector, there is a Rural Power Company Ltd. (RPC) established under the ownership
of a para-statal called Rural Electrification Board (REB) and private Pally Biddut Samities
(Rural Electricity Associations) in 1999-2000. Given that electricity generation from
Municipal Solid Waste in the proposed project is first of its kind in Bangladesh, the project
could be established in BOO or BOOT system as in the case of IPPs. Moreover, the
combination of CDM in the project is likely to encourage foreign investment as per the
provisions of “Kyoto Protocol”. Financial commitment is likely to be finalized at the time of
soliciting bids from interested parties. The total investment cost of the project is expected to
be US$26.90 million (1 US$ = 58.5 Taka).

6.7    Project Outputs

The project is likely to produce 175.2 GWh (Gross) of electricity annually. The net reduction
of carbon dioxide equivalent is expected to be 1,130,538 tonnes annually. With credit for
reduction in CO2 emission, the project appears to be financially viable under the Kyoto
Protocol appropriate financing conditions. The effect of carbon dioxide reduction outweighs
cost of the project resulting in higher internal rate of return (IRR).

6.8    Project Implementation Plan

Implementation of the Project can be completed within one year after the completion of all
the institutional and financial formalities and operation will continue up to the end of June
2019. During the period, MOUs, Electricity Purchase Agreement by PGCB / DESA /
DESCO, Agreement on Municipal Solid Waste Supply by Dhaka City Corporation,
Guarantee from Government / International Guarantee Agency etc. need to be finalized.
Power Cell of the Ministry of Energy, Power and Mineral resources will be the main
coordinating agency of the government. Power Cell will provide quarterly monitoring reports
to government / donor providing financial assistance. The implementation plan would
include specific datelines for consulting services, design-supply-erection-testing and
commissioning of the power plant. There will be also training period for the local staff.

6.9    Project vis-à-vis Organization Structure of Bangladesh Electricity Industry

Originally, the state owned organization Bangladesh Power Development Board used to
generate, transmit and distribute all electricity in the country. Later, the Dhaka Electric
Supply Authority (DESA) and now also the Dhaka Electricity Supply Company (DESCO)
distributes and sells electricity in metropolitan Dhaka. During the 1970’s the Rural
Electrification Board (REB) was established to promote the development of electricity
supply in the rural areas of the country. The REB established Palli Bidyut Samities (Rural
Electricity Association) or PBSs, modeled after rural electricity cooperatives in the United
States of America. The PBSs supply electricity in the rural areas. The REB has a goal of
electrifying all the rural villages of the country by the year 2020. Under the REB
programme, which started in 1978, about 40%, or over 34,000 villages, have received
electricity. The country is divided into five electricity zones, Northern, Central, Dhaka,


                                                                                             27
Southern and Western. In addition, there are two main zones, called Eastern (including the
Central, Dhaka and Southern Zones) and Western (including the Northern and Western
Zones), which are on the eastern and western sides of the Jamuna River, respectively.
Currently, the BPDB purchases electricity from the IPPs and sells electricity to DESA and
DESCO for distribution in the Dhaka area, the REB, and to final users in the remaining
Central, Northern, Southern and Western Zones. In turn, DESA sells electricity to REB and
DESCO (for the Dhaka area) and to end users in the Dhaka area. And finally, the REB sells
electricity, through the PBSs, to rural users throughout the country. In FY 2000, there was
about 594 kms of 230 kV transmission lines; over 2,795 kms of 132 kV lines, all operated
through the central load dispatch center. In addition, there are 8 substations for 230 kV to
132 kV reduction and 75 substations for 132 kV to 33 kV reductions. There is a substantial
network of 33 kV and 11 kV secondary transmission lines. The eastern and western grids are
interconnected by 10 spans over the Jamuna River. Distribution voltage is 415 volts at 50
Hz. The Central Load Dispatch Center (CLDC) administers the transmission grid, which is
equipped with PLC communication and a mimic board. This allows monitoring of selected
stations only. There is a project to modernize the dispatch center to set up a National Load
Dispatch Center (NLDC) to include EMS and SCADA with fiber optic communications.

As currently practiced, BPDB/DESA would have to purchase the electricity either directly
from the project or through the Power Grid Company of Bangladesh. The developer needs to
enter into a Power Purchase Agreement (PPA) with BPDB or PGCB. BPDB or PGCB in turn
would sell the electricity to one of the distribution companies like BPDB/DESA or DESCO.
The economics of marketing would depend on:

•   The purchase price of electricity
•   Presence or absence of satisfactory distribution systems
•   The spread between the purchase price and the sales price

6.10   Possible Institutional Ways to Cover Project Risks

For covering risk, the developer might arrange guarantees from an Export Credit Agency or
an International Financing Institutions or arrange partial risk guarantee from an international
agency. In order to qualify for either export credit financing, or any other form of IFI
financing, following conditions would need to be satisfied:

•   Internal rate of return should be at least 14% or greater;
•   Long-term (at least 20-25 years) solid waste supply contract with pricing formulas that
    guarantee that the spread between electricity and solid wastes will remain essentially
    unchanged
•   Long term electricity purchase agreements with settlements in US Dollars or in a
    currency which is guaranteed convertible at a specified dollar yield;
•   At least 30% of the capital requirement in cash equity
•   Political risk insurance
•   Firm fixed price competitively bid engineering. Procurement and construction contracts.

Also risks may be shared as follows:

Owner/Operator
• Construction and operation cost overruns
• Delay in completion—and so penalty


                                                                                            28
•   Performance guarantees—fuel utilization (efficiency), capacity availability
•   Statutory regulations—environmental limits

Utility
• Force Majure due to Utility / Government
• Inflation
• Market down trend
• Foreign exchange risk
Government
• Foreign exchange remittance
• Convertibility of foreign exchange
• Utility obligation
• Tax incentives
• Damage for non-performance

6.11   Likely Fiscal Incentives for the Project

Different fiscal incentives currently allowable to foreign investors in accordance with the
country’s industrial policy and foreign investment policy would also be available to the
sponsors for the proposed project. The private investors would generally expect the
following incentives (see Country Study report):
• Guaranteed rate of return on equity
• Reduction/waiver of customs duty on import of machinery
• Tax holiday
• Guarantee of Payment for Power Purchase by utility
• Guarantee of foreign exchange remittance
• Guarantee of convertibility of foreign exchange

6.12   Possible Financing Arrangements of the Project

The MSWEE Project as a renewable energy project is likely to receive following assistance:

    The GOB is a signatory to the United Nations Framework Convention on Climate
    Change. The GOB may establish a Global Environmental Facility (GEF) grant fund to
    support renewable energy projects in Bangladesh
    GOB may allocate funds to few local Banks for project as well as micro financing part of
    the capital cost of the renewable energy project.
    GOB may facilitate the creation and encouragement of corporate debt securities market
    for local financing of renewable energy project development.

6.13   Facilitating Agencies of the Project

Power Cell of the MPEMR is assigned the responsibility of articulating, coordinating, and
promoting renewable energy projects like MSWEE until a new institution is created for the
purpose. In this connection, the responsibilities of the Power Cell include (see Country Study
Report):
• Issuing consents/license on behalf of the GOB for renewable commercial projects. The
   consents issued will have indicated tariff calculated on the basis of financial and
   technical analysis of Projects.


                                                                                           29
•   Identifying and assessing the potential of establishment of renewable energy projects
    which could make a significant contribution to Bangladesh’s energy needs both in near
    term and long term.
•   Recommending financing and delivery mechanisms to increase the affordability of
    renewable energy systems for the rural poor.
•   Promoting NGO and private sectors in development of renewable energy and suggesting
    strengthening the institutional requirements for successful implementation of projects.
•   Recommending research and development and required training facilities for technology
    transfer needed to support commercialization of renewable energy technology.
•   Representing GOB in international institutions and implementing all policy and
    recommending measures adopted.
•   Identifying the type and extent of support needed from international sources
•   Considering existing network and planned infrastructure of different utilities before
    issuance of consents/licensees for establishment of renewable energy projects.
•   Resolving issues pertaining to the jurisdiction of geographical area of different utilities
    should there arise any, upon approval of the MPEMR.

6.14   Likely Basis of Tariff Structure Determination

In line with other private sector power projects like IPPs, the tariff structure for the Project in
line with similar electricity generating units would consist of the following:
    Debt service, return on equity, fixed and variable operation and maintenance cost,
    insurance costs, money escalation costs, exchange fluctuations etc.
    Payment will be linked to a certain level of availability of power which will be made
    available at the time of PPA signing
    Tariff payment will be made in local currency, but PPA may be made in US cents/kWh
    Renewable energy private sponsors will provide year-wise tariff profile over the contract
    period in a manner that will match their annual debt service requirements
    Usually two-part tariffs are proposed, comprising of a capacity charge, which is designed
    to recover the capital or fixed costs of the plant and an energy charge, which would vary
    with the net amount of energy in kWh actually delivered by the power producer to the
    purchasing utility.

6.15   Possible Ways to Selection of Firm in the Project

Current GOB policy on selection of firms allows two approaches—Unsolicited Proposals
and Solicited Proposals. Under Unsolicited Proposals, Developer approaches Government/
Utility with a proposal to build a power plant and proposes the location, size, fuel types etc.
Under Solicited Proposals, Government/Utility calls for competitive bid for specific
technology, size, location and fuel for plant. Both the options have advantages and
disadvantages. The main advantage of the option of unsolicited proposals would typically be
quicker bidding process while the disadvantages would be more complicated evaluation
process and validity. Also seriousness of bids could be more often difficult to determine. The
main advantages of solicited bids would be possibility of least cost supply which is essential
to ensure that scarce and costly capital that are raised through private sources are utilized in
an optimal manner. Solicited proposals can be obtained by calling for competitive bids for
development of projects for specific and proven technology, size and location. The structured
Requests for Proposals (RFPs) should contain the following:
• Invitations of applicants



                                                                                                30
•   Information for applicants
•   Instruction to applicants
•   Security/package and financial structure
•   Tariff structure
•   Applicants’ proposals and supportive data
•   Performance specifications and drawings
•   Draft Implementation Agreement
•   Draft Power Purchase Agreement (PPA)
•   Draft Fuel Supply Agreement
•   Draft Land Conveyance Agreement
•   Site soils investigation data

Project structures whether BOO or BOOT or its variations would affect Power Purchase
Agreement (PPA). PPA would also depend on technical aspects like system load demand
pattern, project type, project efficiency, transmission arrangements and environmental
aspects. Finally, PPA would depend on financing aspects including type and quantum of
financing to be attracted, creditworthiness of the country and the sector.




                                                                                   31
                                       Chapter 7
             EMISSION REDUCTION AND MONITORING &
                       VERIFICATION PLAN

7.1.1 Baseline of electricity generation

The baseline is the probable future development in the absence of the project activity.
The proposed project comprises (i) preparation of 50 landfill gas digesters, each with a
volume 8500 m3 and (ii) a generator of 20 MW capacity. The progress of power plant
installation in Bangladesh from 1991-92 to 2001-2002 is given in Table 7 and the trend
up to 2019 shown in Figure 1. The average yearly increase over this period is 7.6%
(based on 2400 MW in 1991-92). This is the baseline of the electricity generation. Of the
projected generation, only 300 MW (Barapukuria) will be based on coal and the rest on
natural gas, i.e. during the project period only 11.7% will come from non-natural gas and
the rest (88.3%) from natural gas. In the year 2000-01, 84% of generation was based on
natural gas. Baseline for power is therefore natural gas with small contribution from
coal and oil.

         Table 7.     Progress of installed capacity of power plant in Bangladesh
                             over the period 1991/92 – 2001/02

                      Year                               Installed Capacity (MW)
                     1991-92                                       2398
                     1992-93                                       2608
                     1993-94                                       2608
                     1994-95                                       2908
                     1995-96                                       2908
                     1996-97                                       2908
                     1997-98                                       3091
                     1998-99                                       3611
                    1999-2000                                      3716
                     2000-01                                       4005
                     2001-02                                       4230

Source: PDB Annual Report, 2003




                                                                                      32
                          Figure 1: Progress of power plant installation in Bangladesh
                                  over 91/92-2001/02 and projection up to 2019
             8000

                                                                          y = 178.74x + 2108.6
             7000                                                             R2 = 0.9366


             6000


             5000
  Megawatt




                                                                                                 Series1
             4000                                                                                Linear (Series1)
                                                                                                 Linear (Series1)
             3000


             2000


             1000


                0
               20 00
               19 -92
               19 -93
               19 -94
               19 -95
               19 -96
               19 -97
               19 -98
               99 99


               20 -01
               20 -02
               20 -03
               20 -04
               20 -05
               20 -06
               20 -07
               20 -08
               20 -09
               20 -10
               20 -11
               20 -12
               20 -13
               20 -14
               20 -15
               20 -16
               20 -17
               20 -18

                       9
                     -1
                    0
             19 98-
                 91
                 92
                 93
                 94
                 95
                 96
                 97




                 00
                 01
                 02
                 03
                 04
                 05
                 06
                 07
                 08
                 09
                 10
                 11
                 12
                 13
                 14
                 15
                 16
                 17
                 18
                  -2
               19




                                                   Year



7.1.2               Baseline of GHG emission connected with the project

The proposed project envisages utilization of 5,000 tonnes of Dhaka city wastes daily for the
production of 20 MW of electricity. This reduces CO2 emission on two counts: firstly
avoiding combustion of natural gas already planned by Power Development Board and
secondly avoiding methane emission at the dumping site due to anaerobic digestion.

Quantification of the CO2 reduction based on the first count is fairly straightforward
assuming that each kWh delivered to the grid leads to an equivalent reduction of power
production by other grid-connected power plants.

7.1.3               CO2 emission from natural gas based 20 MW plant

In the absence of the project, yearly production of CO2 by PDB through a 20 MW power
plant is as follows:

Gross yearly electricity production: 20 × 106 W × 24 hrs./day × 365 days/year = 175.2
GWh/year
Energy consumed for 175.2 GWh by burning natural gas with an average conversion
efficiency of 35% = 175.2 × 109 Wh × 3600 sec./hr × 1/0.35 = 1802 TJ. 35% conversion
efficiency is chosen because in future efficiency will increase from the present PDB value of
31% due to installation of higher efficiency plants.
Attendant CO2 production = 1802 TJ × 56.1 tonnes/TJ = 101,092 tonnes (A)

7.1.4               CO2 and CH4 emission from the dumping site

A recent study on the Dhaka city waste by Waste Concern (Waste Concern, Dhaka, Private
Communication. October, 2003), gas production per kg wastes in the open dumping sites
vary from 25 liters to 40 litres and the generated gas at a depth of 3--6 metres contains 55-
58% CH4. In the present estimation, the average of (25 + 40)/2 i.e. 32.5 litres per kg was


                                                                                                             33
used. Because of high depth of the above measurements and mostly aerobic digestion of the
upper portion, methane content of the gas produced at the open dumping site will be
somewhat lower than the above value. In the absence of any data involving the entire mass, a
reasonable guess by the experts is 45% CH4 and 55% CO2. Based on the above values, yearly
production of CO2 and CH4 from 5000 tonnes/day is as follows:
Total volume of landfill gas =                   1000 6 3
                                                      kg                                    1m3
                                32.5 litres/kg × × 10 m × 5000 tonnes/day × 365 days/year ×
                                       = 59.31        ________________                                               ___________

                                                         Tonne                                                       1000 litres
CO2 (55%)       = 59.31 × 10 × 0.55 = 32.62 × 10 m
                            6                               6        3

CH4 (45%)       = 59.31 × 106 × 0.45 = 26.69 × 106m3

Methane has a GWP (Global Warming Potential) of 23 and as such
CO2 equivalent of 26.69 × 106 m3 of CH4 = 26.69 × 106 × 23 = 613.87 × 106 m3
Therefore, yearly production of CO2 equivalent GHG from the dumping site = 32.62 × 106 +
613.87 × 106 =        646.49 × 106 m3
Density of CO2 at room temperature = 1.83 kg/m3
Mass of 646.49 × 106m3 =                  1.83 kg  1tonne
                                646.49 × 10 m ×
                                      6 3
                                                  ________________   ×   ________________   = 1,183.076 tonnes (B)
                                                     m3                  1000 kg
In the absence of the project the total yearly CO2 equivalent emissions = A + B
                      101,092 + 1,183,076 = 1,284,168 tonnes (C )

This is the yearly baseline of CO2 production in the absence of the project. The estimated
cumulative production of CO2 over the project period is shown in Table 8 and Fig. 2 (upper
curve).

                  Table 8: The estimated cumulative production of CO2
                           over the project period (2005-18)

         Year             Yearly production (tonnes)                                  Cumulative production (tonnes)
         2005                     1,284,168                                                     1,284,168
         2006                     1,284,168                                                     2,568,336
         2007                     1,284,168                                                     3,852,504
         2008                     1,284,168                                                     5,136,672
         2009                     1,284,168                                                     6,420,840
         2010                     1,284,168                                                     7,705,008
         2011                     1,284,168                                                     8,989,176
         2012                     1,284,168                                                    10,273,344
         2013                     1,284,168                                                    11,557,512
         2014                     1,284,168                                                    12,841,680
         2015                     1,284,168                                                    14,125,848
         2016                     1,284,168                                                    15,410,016
         2017                     1,284,168                                                    16,694,184
         2018                     1,284,168                                                    17,978,352




                                                                                                                                   34
                                             Figure 2: GHG (CO2 equivalent) Production without (Series 2)
                                                        and with (Series 1) the project activity

                                 2 0 ,0 0 0 ,0 0 0


                                 1 8 ,0 0 0 ,0 0 0


                                 1 6 ,0 0 0 ,0 0 0
      Cumulative CO2 (tonnes)




                                 1 4 ,0 0 0 ,0 0 0


                                 1 2 ,0 0 0 ,0 0 0

                                                                                                                                                       S eries 1
                                 1 0 ,0 0 0 ,0 0 0
                                                                                                                                                       S eries 2
                                  8 ,0 0 0 ,0 0 0


                                  6 ,0 0 0 ,0 0 0


                                  4 ,0 0 0 ,0 0 0


                                  2 ,0 0 0 ,0 0 0


                                                0
                                                     2005   2006   2007   2008   2009   2010   2011   2012   2013   2014   2015   2016   2017   2018

                                                                                                 Y ear


7.2                             The Proposed Project

As mentioned above, the proposed project comprises gas generators from wastes and feeding
the produced gas into a 20-MW electricity generator. According to a DCC-BCSIR project
(1993) completed in 1993, the rate of gas production from Dhaka city waste under anaerobic
conditions is 0.046m3 per kg. With 5,000 tonnes of daily production of city wastes, the
production of gas is
                     5,000 × 103 × 0.046 = 230,000 m3.

Calorific value of the generated gas is 22 × 106 J. With 35% efficiency of the generator, the
capacity of the plant is estimated at

                                                22 × 106 × 230,000 × 0.35
                                               -------------------------------- = 20.49 × 106 J/sec = 20.49 MW.
                                                    24 × 60 × 60

Therefore, in the project scenario
1)   50 digesters, 8500m3 capacity each, are constructed.
2)   20-MW capacity generator is installed.
3)   Generated electricity is fed into the national grid thus displacing equivalent power
     generation based on natural gas by BPDB.
4)   Fresh wastes containing all the components including the recyclables such as metals,
     glasses, etc. will be fed into the digesters, After digestion, when the digested materials
     will be dug out, scavengers with necessary safety measures will be employed to pick
     up the recyclable materials. After anaerobic digestion, the residue becomes completely
     odourless and mostly germ-free. The sorted-out residue will be disposed of for land
     filling.




                                                                                                                                                                   35
5)    Providing a permanent solution to the city waste disposal problem because of the
      modular nature of the biodigesters. Number of biodigesters can be increased on
      demand. If the gas is in excess of the requirement of the power plant, the excess gas
      can be fed to the natural gas line or can be flared up to convert methane into carbon
      dioxide. Before feeding to the natural gas pipeline, necessary clean up of the gas will
      be needed; because it will contain CO2, some moisture and possibly some hydrogen
      sulphide.
6)    Methane produced in otherwise open dumping will be trapped and burnt for power
      generation
7)    With the project activity, total yearly CO2 production is 153, 670 tonnes

The landfill gas to be generated by the project will contain CH4 and CO2. Since 1 Vol. of
methane gives 1 volume of CO2 on complete combustion
CH4 + 202 CO2 + 2 H2O,
total volume of CO2 ( CO2 already present in the landfill gas + CO2 produced on complete
combustion of CH4 ) will be equal to the volume of landfill gas produced.
Yearly production of gas by the project =             m3
                                           230 × 103   _______________   × 365 days/yr   = 83.95 × 106m3/year
                                                          day
                   3                                                                     = 83.95 × 106m3 CO2/yr
     With 1.83 kg/m of CO2
        the total yearly mass of CO2 =       153.63 × 106 kg/yr
                                     =       153,630 tonnes/year (X)

The cumulative production of CO2 over the project period with the project activity is given in
Table 9 and shown graphically in Fig. 2 (lower curve).

            Table 9:   Cumulative production of CO2 over the project period
                               with the project activity

        Year            Yearly production (tonnes)                  Cumulative production (tonnes)
        2005                     153,630                                       153,630
        2006                     153,630                                       307,260
        2007                     153,630                                       460,890
        2008                     153,630                                       614,520
        2009                     153,630                                       768,150
        2010                     153,630                                       921,780
        2011                     153,630                                      1,075,410
        2012                     153,630                                      1,229,040
        2013                     153,630                                      1,382,670
        2014                     153,630                                      1,536,300
        2015                     153,630                                      1,689,930
        2016                     153,630                                      1,843,560
        2017                     153,630                                      1,997,190
        2018                     153,630                                      2,150,820




                                                                                                            36
7.3        Factors Impacting the Baseline

Factors impacting the baseline emissions are (a) power plant construction plans by BPDB
and IPP based on sources other than natural gas and (b) waste management plans of DCC. As
mentioned above, only other new source is Barapukuria coal, which account for about 11%
of the projected generation. Current contribution from oil is 16% of total power production.

DCC has recently invited (date: 12 Feb. 2004) “Request for Proposal on Solid Waste
Recycling & Treatment Investment Project for Dhaka City”(copy of Ad is at Annex 8) If this
plan is materialized, baseline emissions will be changed significantly. This pre-feasibility
study will help DCC evaluate the bids when received.

7.4        Crediting Period

Because of the renewable nature of the inputs, the project is expected to continue with
replacement of parts at intervals. However, considering the lifetime of the combustion
engines first installed, the project is opting for a crediting period of 14 years (two 7-year
terms).

7.5        Project Boundaries and System Boundaries

The project boundaries are limited to the geographic boundaries of the landfill site. The
following project activities and emissions are within the project boundaries.

      1.      Biogas production
      2.      Biogas collection
      3.      Biogas combustion in generators

System boundaries include national grid, because, in the project activity, emission reduction
occurs through displaced-grid electricity.




                                                                                          37
                              Flow Chart – 1


Flowchart with Calculation for Yearly GHG (CO2) Production From the 20 -
    MW Power Plant Based on Natural Gas without the Project Activity


             20 – MW power plant based on natural gas




        Gross yearly electricity production = 20 × 106 w × 24
           hrs/day × 365 days / year = 175.2 GWh/year




     Energy consumed for production of 175.2 GWh by burning
           natuarl gas with conversion efficiency of 35%
        = 175.2 × 10 9 wh × 3600 secs / hr × 1/0.35= 1802 T J




         CO2 production attendant on generation of 1802 TJ
     = 56.1 tonnes of CO2 / T J × 1802 TJ=101,092 tonnes of CO2




                                                                       38
                           Flow Chart – 2
Flow Chart with Calculation for Yearly GHG (CO2 + CH4) Production
      from the Matuail Dumping Site of Dhaka City with daily
              Unloading of 5000 tonnes of City Wastes



  32.5 m3 of gas containing 55% CO2 and 45% CH4 from 1 tonne of
                               wastes




    Yearly production of gas = 32.5 × 5000 × 365 = 59.31 × 106m3




    Yearly Production of CH4 = 59.31 × 106 × 0.45 = 26.69 × 106 m3
    Yearly production of CO2 = 59.31 × 106 × 0.55 = 32.62 × 106 m3




   With GWP of 23 for CH4, CO2 equivalent of 26.69 × 106 m3 CH4
              = 26.69 × 106 × 23 = 613.87 × 106 m3




              Total yearly production of CO2 equivalent
            = 613.87 × 106 + 32.62 × 106 = 649.49 × 106 m3




   With 1.83 kg/m3 as density of CO2, yearly total mass equivalent
                 of CO2= 649.49 × 106 m3 × 1.83
                 = 1,183,076 tonnes




                                                                     39
Table 10: Yearly Total Production of CO2 Equivalent from the Matuail Site and 20-
          MW Power Plant Based on Natural Gas in the Absence of Project Activity

 Yearly Production of CO2 from 20-MW Power Plant                     =           101,092    Tonnes

 Yearly Production from the Matuail Dumping Site (With daily =              1,183,076       Tonnes
 unloading of 5000 tonnes of Wastes)

                                Total                                =      1,284,168       Tonnes


Table 11:      Yearly Abatement of CO2 Equivalent due to the Project Activities

  i) Yearly total production of CO2 equivalent in the                1,284,168     Tonnes
     absence of the project activities
                                                                                   (Table 10)

  ii) Yearly total production of CO2 with the project activity   =    153,630      Tonnes

                                                                                   (Flowchart 3)

                     Yearly Abatement of CO2                     =   1,130,538     Tonnes




                                                                                                   40
                              Flow Chart – 3

Flow Chart with Calculation for Yearly GHG (CO2) Production from 20-MW
          Power Plant Based on Biogas with the Project Activity


     Biogas production from 1 tonne of waste by the project activity =
                                 46m3




     Yearly production of biogas from daily charging of 5000 tonnes of
                wastes = 46 × 5000 × 365 = 83.95 × 106 m3




        Since 1 volume of CH4 gives 1 volume of CO2 on complete
     combustion, yearly total vol. of CO2 from the power plant will be
             equal to the volume of biogas i.e. 83.95 × 106 m3




     With 1.83 kg/m3 as density of CO2, yearly production of CO2 from
                   the Power Plant = 83.95 × 106 × 1.83
                     = 153,630 tonnes




                                                                         41
Cumulative reduction of GHG (CO 2) emission over the project period is shown in Table 12
and Fig. 3.

Table 12: Estimated Reduction of GHG Emission During 2005-2018

      Year                        Yearly GHG (CO2) Reduction (tonnes)                                                 Cumulative (tonnes)
      2005                                    1,130,538                                                                   1,130,538
      2006                                    1,130,538                                                                   2,261,076
      2007                                    1,130,538                                                                   3,391,614
      2008                                    1,130,538                                                                   4,522,152
      2009                                    1,130,538                                                                   5,652,690
      2010                                    1,130,538                                                                   6,783,228
      2011                                    1,130,538                                                                   7,913,766
      2012                                    1,130,538                                                                   9,044,304
      2013                                    1,130,538                                                                  10,174,842
      2014                                    1,130,538                                                                  11,305,380
      2015                                    1,130,538                                                                  12,435,918
      2016                                    1,130,538                                                                  13,566,456
      2017                                    1,130,538                                                                  14,696,994
      2018                                    1,130,538                                                                  15,827,532

                            Figure 3: Cumulative Reduction of CO2 over the Project Period
                     18,000,000


                     16,000,000


                     14,000,000


                     12,000,000
       Tonnes(CO2)




                     10,000,000

                                                                                                                                    Series1
                      8,000,000


                      6,000,000


                      4,000,000


                      2,000,000


                             0
                                  2005   2006   2007   2008   2009   2010   2011   2012   2013   2014   2015   2016   2017   2018

                                                                              Year

7.6                  Project Additionally

A project is considered environmentally additional if it reduced emissions against the baseline.
Emission additionally is shown in flow-charts 1, 2 & 3, Tables 10, 11 & 12 and Figs 2 & 3.

7.7                  Indirect Emission Effects

If the emissions are caused by the project outside the baseline and the project boundaries,
these are indirect emissions. In the case of the present project, no such leakage is identified.
Some emissions may occur during civil work and maintenance of engines, but these
emissions will be insignificant considering the conservative calculation of the emission
reduction.


                                                                                                                                              42
7.8     Additional Environment and Social Benefit

Kyoto Protocol requires that a CDM project activity contribute to the sustainable
development to the host country. In the monitoring plan, necessary arrangement will be made
to maximize local benefits. The project will improve the local environment by eliminating
odour that arises from the open dumping of the wastes in the absence of the project.

The project will also increase the local employment for maintenance and operation of the plants.
Table 13 summarizes the environmental, social and other benefits.

                                      Table 13: Project benefits

       Issues                                               Explanation
 Local                   -   Local air quality will be improved.
 Environmental           -   The project will deliver more electricity to the grid reducing load
 Benefits                    shedding
                         -   The project will help solve waste disposal problem
 Socio-economic          -   The project will lead to employment generation.
 Benefits                -   The project will improve the quality of life of people living in areas
                             adjacent to the project site.
 Capacity Building       -   This project will be a first CDM project in the country and thus help
                             capacity building related to CDM projects.
 Technology              -   This will be a new technology in the region and as such successful
 Transfer                    implementation will result in replication leading to further emission reduction.
 Host Country Criteria   -   GOB is still in the process of defining requirements for CDM projects.
 Government              -   This project is in the priority list of GOB and has already been placed
 Priority                    under MOEF.
 EIA                     -   EIA will be carried out as per Law.


7.9     Monitoring and Verification Plan Monitoring of Project Performance

Monitoring involves continuous or periodic measurement of specific parameters for assessing
project performance over the project period. CDM projects require that emissions reduction be
proved through the development and implementation of a monitoring plan that provides objective
evidence that emissions have been avoided. It is equally important that the emission reductions are
demonstrated in a transparent, complete, consistent, comparable and accurate manner. It is the
responsibility of the project participant to maintain appropriate records and documents to generate
the relevant data/information required for calculation of GHG emission reductions. Given the
baseline emission, the expected reductions of GHGs through the waste and electricity project
activities will depend on the quantity of solid waste put into land-fill gas disaster, quantity of land-
fill gas (LFG) generated, the methane content of LFG, quantity of methane flared and GWh
generation of electricity through burning of methane from LFG. The monitoring plan, therefore,
provides for direct and continuous measurement of the actual quantity of biogas flared and the
methane content of the landfill gas flared using a flow meter. Watt meter will be installed to
calculate the net generation of electricity on a regular basis.

Verification of Performance

Verification is the periodic review and ex-post determination of the monitored greenhouse
gas emission reductions that have occurred as a result of the CDM project. The designated
operational entity (DoE) verifies the data collected by the project developer according to the


                                                                                                           43
monitoring plan. The verification process confirms the total number of CERs (Certified
Emission Reduction) resulting from the project during a specific period of time. The
frequency of verification may be every year or every two years as agreed upon by the project
participants and the DoE. Based on verification, the DoE will issue CERs that during the
specified period the project has achieved the reduction of greenhouse gas emissions, in
compliance with all relevant criteria. The DoE at the outset of the project will validate the
project design document, the key document for the project. The validation process confirm
that all the information furnished and assumptions made in the project design document are
accurate/ or reasonable. The validation of the project design document would lead to its
acceptance by CDM executive board, which is a precondition for CERs.

Data to be Monitored

In order to measure the quantity of GHG reduction through the project and assess the impact
in terms of sustainable socio-economic development of the country, a set of variables /
indicators will be regularly monitored, recorded and documented by the project participant.
The monitored data/information will be verified by DoE, contracted by the project
participant. The DoE would issue CERs based on thorough scrutiny of the relevant
data/information maintained by the project participant.

It is suggested that the project operator will collect the following data/ indicators for
monitoring emission reductions under the project.

Sl.       Data type       Data Unit    Measured Recording Proportion How will data be           For how long will the
No.                                        or      Frequency of data to be     archived         archive data be kept.
                                       Calculated              monitored (electronic/paper)
 1    Flow of biogas to      m3       Measured    Continuous     100%      Electronic           Two years after the
      generator                                                            spreadsheet/ paper   completion of the project.
 2    Methane content        %        Measured    Quarterly  Statistically          “           Two years after the
      of biogas                       (Laboratory intervals  significant                        completion of the
                                      analysis)              sample                             project.
 3    Gross electricity    MWh        Measured    Continuous     100%               “           Two years after the
      produced (engine/                                                                         completion of the
      generator output)                                                                         project.
 4    Net electricity      MWh      Measured      Continuous 100%                   “                      “
      produced for grid
 5    Emission intensity 56.1tonnes Calculated    Annually          -               “                       “
      of Bangladesh      of CO2/TJ
      natural gas


In addition to emission data, sustainable development indicators, which will be collected, are
as follows.

Performance area             Data requirements                           Monitoring procedure
Job creation      No. of employees/engaged in the project Employment record maintained by the project
                                                          operator
Income generation Absolute and incremental wage/salary of Wage/salary records maintained by the project
                  the workforce.                          operator.
Trade Balance     Use of imported fuels in power          Value of imported fuels used in power generation
                  generation
Odour             Odour from landfill site by the project Interview of residents in the neighborhood of landfill
                                                          site.




                                                                                                                44
Quality Assurance / Quality Control

The monitoring system will ensure strict quality standards and quality control of data to be
generated and monitored. The measurement equipment to be used for assessing gas quality
and quantity i.e. gas quality analyzer (Gas Chromatograph) and gas flow meter will be
regularly calibrated as per international standards. The amount of methane flared and quality
of electricity generated and transferred to the grid will also be metered for the sake of good
monitoring and verification of the of the emission data.

Project Approval by Designated National Authority (DNA)

It is a requirement that the relevant authority in the host country approves CDM project
document. In Bangladesh, National Designated Authority (DNA) has been constituted for
clearing and endorsement of CDM project. The DNA is a three-tier body comprising
National CDM Board, National CDM Committee and CDM Clearing house/ secretariat. The
CDM project document is submitted to CDM clearing house/secretariat which scrutinizes
and assesses the document and if necessary asks for its revision. If the clearing
house/secretariat is satisfied with the content of document, it is forwarded to CDM
committee for approval and finally to CDM Board for endorsement. The structure of DNA in
Bangladesh is as follows.

Structure of DNA of Bangladesh

                                 National Designated Authority

.                                          CDM Board

                              For endorsement

                                          National CDM
                                           Committee

                                  For approval
       Project
        Project
          Project
      Concept               submitted                                           Endorsement
       Concept
      Concept paper/                        CDM Clearing
        paper                                                                    Letter for
         paper
        Full Project                       House/Secretariat                     Validation
          Project
     FullDocument
      Full Project


    Develop


         Project                            Comments and
     Developer/Owner                         Request for
                                              Revision




                                                                                           45
                                             Chapter 8
                      FINANCIAL ANALYSIS OF THE PROJECT
Financial analysis was done in accordance with the ADB’s Guidelines for Preparation and
Presentation of Financial Analysis. The financial analysis was carried out to examine the
financial viability of the project through calculation of the financial rate of return (FIRR). All
constituent costs and benefits of the Project are included in the analysis. The FIRR is based
on the investment costs and the streams of costs and benefits spread-over the life of the
project (14 years). Estimated project costs are given below:

Project Cost (Estimated)

Anaerobic processing of wastes in biodigesters normally produces about 70 % residues i.e.
processing of 5,000 tonnes of wastes will produce approximately 3,500 tonnes of residue
necessitating daily handling of 5,000 + 3,5000 = 8,5000 tonnes of materials having an
average density of 0.6 tonne per m3. An excavator of 1 m3 capacity can handle 360 tonnes in
24 hrs. and therefore to handle 8,500 tonnes 8,500/360 = 24 excavators will be needed.
Considering rest and repair, a total of 30 have been included in the estimate. The number of
other equipment has been fixed based on loading and unloading of the above amounts of
wastes and residues. Costs have been quoted from the available catalogues and current land
price in the area.

       A.       Investment Cost

       i)       Cost of 20-MW power plant = 410 million Taka.

       ii)      Cost of 50 biogas digesters each costing 10 million Taka

                                                =       10.0 × 50

                                                =       500 million Taka

        iii)    Cost of 30 Excavators (Bucket capacity = 1 m3 ), each costing 3.63 million Taka

                                                =       3.63 × 30 = 108.9 million Taka

        iv)     Cost of 3 Bull Dozers (Truck type ), each costing 9.7 million Taka

                                               =         9.70 × 3 = 29.10 million Taka

        v)      Cost of 12 Pay Loaders, each costing 2.81 million Taka

                                              = 2.81 × 12 = 33.72 million Taka

        vi)     Cost of 50 Dump Trucks (each 10 m3 ), each costing 2.80 million Taka
                = 2.8 × 50 = 140.00 million Taka

        vii)     Cost of 1 ( stand by ) Generator (50 KVA ) = 3.00 million Taka

        viii)    Land & Land Development                       = 274 million Taka


                                                                                                  46
        ix)    Contingency (5%)              =                 = 74.94 million Taka
                                             ------------------------------------------------
                                                      Total = 1573.66 million Taka

       B.      Operation and Maintenance
       i)      Variable Cost (Solid waste and residue handling cost)
                                                      =        45 million Taka
       ii)     Fixed cost (200 employees)             =        16.8 million Taka
                                                      -------------------------------
                                                      Total 61.80 million Taka.
Transportation of wastes to the plant site will be done by DCC and the recruited staff will do
the remaining activities including power generation and grid connection.

       C.      Revenue
        Gross generation of electricity            =       175.2 GWh
        Net generation of electricity (25% loss) = 175.2 × 0.75=131.4 GWh
        Electricity Sale                           =       125 GWh
        Revenue (Taka 2 million/GWh)               =       250 million Taka.
25% loss has been assumed as a conservative figure taking into account any possible
interruption in power production and poor transmission system.

       D.      Gross Profit per Year
       Revenue – O & M Cost = 250 – 61.8 = 188.20 million Taka
The quantifiable benefits of the Project are estimated in terms of gross margins e.g., by
subtracting variable costs like solid wastes, other chemicals and raw material, salaries and
wages costs, other costs etc. from gross revenues. The main data source for the analysis was
various reports on solid wastes of Dhaka and private sector power generation obtained from
Power Cell of the Ministry of Power, Energy and Mineral Resources, Dhaka City
Corporation, ADB mission and World Bank. Some of the data were calculated based on
discussions with relevant organizations.
In the analysis, all costs and benefits are expressed in constant 2002-03 Taka (Tk). An
exchange rate of Taka 58.5 = $1.00 has been used to convert constant dollar values in their
local currency equivalent. A fourteen-year financial life has been used though actual life
could be in the range between 20-25 years. The loan term is also assumed 14 years excluding
the construction period with 10% nominal rate of interest. Working capital is equity financed
Among the tangible output of the Project, electricity is the only saleable product. Residues
obtainable from the fermentation tank would be used up by DCC for land filling. Municipal
Solid Wastes of Dhaka are the only major inputs. Other inputs are chemicals and salaries and
wages.
A 20-MW gas power plant is estimated to require 5000 metric tonnes of solid wastes daily.
Total cost of this combined cycle plant includes cost of plant and machinery, land cost,
construction and installation cost. 50 fermentation tanks, each with capacity of 8500 m3,
would be required to generate gas in airtight conditions. Cost of fermentation tank includes
cost of brick-soling construction, use of clay or geo- textile and impervious membranes for


                                                                                                47
creating airtight conditions, pipes and other installation costs. 30 Excavators, 3 Bull Dozers,
12 Pay Loaders, 50 Dump Trucks and 1 Generator will be required for generation and
maintenance purpose. DCC is assumed to charge for waste collection, transportation, and
disposal costs (Annex 3). It is noteworthy that DCC has a statutory obligation to collect,
transport and dispose all solid wastes of Dhaka City and it would anyway perform the
function whether or not there is a waste to electricity plant as proposed. City dwellers pay
municipal taxes for this service. Estimates of O&M costs for power plant is based on cost
estimates of similar power plants now operating in Bangladesh.
The total investment cost of the project using 5,000 metric tonnes daily has been estimated at
1573.66 million Taka (US$26.90 million) with additional 61.80 million Taka as operation
and maintenance cost. The project is likely to produce 175.2 GWh (gross) of electricity
annually. Net saleable electricity is estimated at 125 GWh annually and the revenue is 250
million Taka @ Taka 2.0 million per GWh The net reduction of CO2 is expected to be
1,130,538 tonnes annually. Annual CO2 credit is estimated at 198.41 million Taka @ 175.50
Taka (US$ 3.00) per tonne of CO2 and at 330.68 million Taka @ 292.5 Taka (US$ 5.00) per
tonne of CO2.
Financial results show that FIRR is 6.39%, NPV is –77.57 million Taka and B/C ratio is
0.81(Annex 4a). Therefore, the project in the base case is not financially viable and could not
be developed under the given scenario.
Sensitivity analysis scenarios have been depicted on two risks that might face the Project
Results of sensitivity tests are shown below:
(i)  NPV drops to –328.70 million Taka, IRR to –10.79% and B/C to 0.20 for a decline in
     project benefits by 15% (Annex 4b);
(ii) NPV drops to –278.50 million Taka, IRR to –3.02% and B/C to 0.41 for an increase in
     Project costs by 15% (Annex 4c).

The above sensitivity tests indicate that the financial viability of the Project is more sensitive
to revenue changes than similar proportion changes in project costs.
Financial analysis was recast by incorporating Carbon Dioxide credit as per CDM project as
outlined in the ADB guidelines supplied to the Consultant. CO2 credit price was assumed
US$ 3.00 i.e. Taka 175.50 per tonne of CO2. The results show that FIRR and NPV increase
compared to base conditions.
NPV increases to 1251.79 million Taka, IRR to 54.73%and B/C ratio to 4.04 (Annex 5a).
Results of sensitivity analysis are shown below:
(i)  NPV drops to 801.25 million Taka, IRR to 39.62% and B/C to 2.95 for a decrease in
     revenue by 15% (Annex 5b) and
(ii) NPV drops to 1050.25 million Taka, IRR to 43.24% and B/C to 3.21 for an increase in
     Project cost by 15% (Annex 5c).
For CO2 credit price of US$ 5.00(Taka 292.50)
NPV is 2136.99 million Taka, IRR 84.02% and B/C 6.19 {Annex 5a(1)}
NPV becomes zero with CO2 credit price of US$ 0.175 per tonne {Annex 5a(2)}.




                                                                                               48
                                        Chapter 9

                  ECONOMIC ANALYSIS OF THE PROJECT
9.1    Economic Analysis

Economic analysis was done in accordance with the ADB’s Guidelines for the Economic
Analysis of Projects. The economic analysis was carried out to reassess the economic viability
of the project through calculation of the economic rate of return (EIRR). All constituent costs
and benefits of the Project are included in the analysis. The EIRR is based on the investment
costs and the streams of costs and benefits spread-over the life of the project.

The quantifiable benefits of the Project are estimated in terms of gross margins e.g., by
subtracting variable costs like solid wastes, other chemicals and raw material, salaries and
wages costs, other costs etc. from gross revenues. The main data source for the analysis was
various reports on solid wastes of Dhaka and private sector power generation obtained from
Power Cell of the Ministry of Power, Energy and Mineral Resources, Dhaka City
Corporation, ADB mission and the World Bank. Some of the data were calculated based on
discussions with Power Cell.

In the analysis, all costs and benefits are expressed in constant 2002-03 Taka (TK) in the
domestic price numeraire. A shadow exchange rate factor (SERF) of 1.11 has been used to
convert non-tradable values to this numeraire. A conversion factor (CF) of 0.88 has been
used to adjust salaries and wages to economic values. A zero residual value has been
assumed for project machinery and equipment. An exchange rate of Taka58.5 = $1.00 has
been used to convert constant dollar values in their local currency equivalent. A fourteen-
year economic life has been used though actual life could be in the range between 20-25
years. The loan term is assumed 14 years excluding the construction period with 10%
nominal rate of interest. Working capital is equity financed.

Among the tangible output of the Project, electricity is the only saleable product. This is non-
tradable in the context of Bangladesh. As such its financial price is multiplied by the SERF.
Municipal Solid Wastes of Dhaka is the only major input and is non-tradable. Other inputs
are chemicals and salaries and wages.
Description of machineries and equipment, procedure for collection and disposal of wastes
and the basis of cost estimates has been given in the chapter 8.
Revenue estimates from electricity sales are calculated on the basis of recent figures related
to bulk purchase of electricity by DESA from BPDB. Residues from fermentation tank are
disposed of for land filling by DCC.
Economic results show that EIRR is 14.45%, NPV is 114.92 million Taka, and B/C ratio is
1.25(Annex 6a). Therefore, the project in the base case is economically viable and could be
developed under the given scenario.
Results of sensitivity tests are as under:
(i) NPV drops to –191.37 million Taka, IRR to 1.26% and B/C to 0.58 for a decline in
     Project benefits by 15%(Annex 6b);
(ii) NPV drops to –106.17 million Taka, IRR to 6.10% and B/C to 0.8 for an increase in
     Project costs by 15%(Annex 6c).




                                                                                             49
The above sensitivity tests indicate that the economic viability of the Project is affected
adversely by change in the risk factors that have been tested. As in the case of financial
analysis, here also lowering of project benefits has the more damaging effect than investment
cost enhancement.

In view of the results above, the proposed project could be established if this could be
combined with CDM project as per the provisions of “Kyoto Protocol”.

9.2     Other Socio-Economic Benefits
Economic analysis includes health and environment benefits of the project which occur in
the following manners:

Around the dumping site
• MSW collection and usage in the Project would stop spillage of wastes and leachate of
   surface and underground water, which is used by the inhabitants for drinking purpose.
• Project would check open decomposition of organic wastes that contribute to air
   pollution.
• Project would halt sound of equipment currently used for spreading wastes, compacting
   wastes
• Project would end scavengers’ direct contact with solid waste reducing skin diseases and
   other health disorders and their spreading to the neighborhood.

Around the collection points
• Effective MSW collection from the bins would stop over-spilling
• Effective collection would check open decomposition of organic wastes in and around
   the bins that contribute to air pollution.
• Effective collection would halt ugly sight and odours around the bins
• Effective collection would relieve road congestion
Methodology used in the case of the dumping site involved interviewing a sample of 50
households randomly selected from 4,500 households living in the surrounding area. The
interview results show that about 82% of the households would be willing to pay a fee of
Taka 30 per month for access to the better service promised by the Project. On the other
extreme 100 percent of the households would use the service at a zero charge. The slope of
the demand curve is – 30/(100-82) or –1.67. The demand curve becomes D = a – 1.67P.
Therefore by extrapolation, all households would cease to use the service at a charge of Taka
60 per month. The Project’s health and environment service can then be valued through the
average demand price 60/2 using the domestic price numeraire. The annualized benefit of the
health and environment service at the project site becomes Taka 1.6 million.
The methodology in the case of collection points involved interviewing a random sample of
50 households – one each from 50 different collection points out of a total of 4925 collection
points spread across the city. The interview results show that about 68% of the households
would be willing to pay Taka 50.00 per month for access to the better service promised by
the Project. On the other extreme 100 percent of the households would use the service at a
zero charge. The slope of the demand curve is – 50/(100-68) or –1.56. The demand curve
becomes D = a – 1.56P. Therefore by extrapolation, all households would cease to use the
service at a charge of Taka 64 per month. The Project’s health and environment service can
then be valued through the average demand price 64/2 using the domestic price numeraire.
The annualized benefit of the health and environment service at the various collection points


                                                                                           50
in the city becomes Taka 28.3 million. Sum total of health and environment benefit is
therefore Taka 29.9 (1.6 + 28.3) million.




                                                                                  51
                                      Chapter 10
 STAKEHOLDERS’ MEETING ON DHAKA CITY SOLID WASTE TO
                 ELECTRIC ENERGY
A stakeholders’ meeting on Dhaka City Solid Waste to Electric Energy was held on 11
February 2004 at the LGED (Local Government Engineering Department) building in
Dhaka. A total of 68 participants representing different stakeholders’ groups participated in
the meeting (see the list of participants at Annex-7). The meeting was presided over by Mr.
Mujibur Rahman, Senior Fellow, Bangladesh Centre for Advanced Studies (BCAS).

Dr. M. Eusuf, Team Leader, NTE presented keynote paper containing the energy situation of
the country, quantity and quality of solid wastes and technical aspects of the proposed Waste
to Electricity Project. Mr. Khandaker Mainuddin, an NTE Member, presented the paper
containing the social and financial aspects. The presentations were followed by lively
discussion. Mr. B.D. Rahmatullah, Director, Power Cell, Ministry of Power, Energy and
Mineral Resources initiated the discussion. The presentations by Dr. Eusuf and Mr.
Mainuddin included summary of the feasibility report and therefore not re-written here. The
discussion and recommendations are given below:

Discussion:

Because of open dumping, Dhaka City Waste is a nuisance spreading bad odour, creating a
breeding ground for flies, mosquitoes and germs. Worst affected stakeholders are the people
around the Matuail Waste Dumping Site. Eight representatives of the people around Matuail
site were present. They expressed their firm desire to have the project if it removes the bad
odour. They said that many of their relatives and friends had stopped paying visits to their
houses because of the stink. A survey was undertaken to see if the Matuail residents are
willing to pay something in exchange of a better environment. The results of survey (Chapter
9) show that 82% of them are willing to pay Taka 30/= per month for access to the better
service of the project.

Representative from Dhaka City Corporation said that they would welcome any feasible
initiative for the proper disposal of the wastes and they had already invited tenders for this
purpose. He further said that DCC had already issued No-objection Certificate (NoC) to the
Waste Concern, a local NGO, to go ahead with a Waste to Electric Energy Project if the fund
could be made available. The representative from the Waste Concern confirmed the receipt
of NoC from DCC saying that they were planning to set up a 7 MW plant. This project
would not however solve the bad odour problem of the Matuail site. Under the
circumstances, Pre-feasibility Study of the Dhaka City Solid Wastes to Electric Energy – a
component of PREGA is more appropriate as it plans to handle the entire solid wastes
dumped at the Matuail site.

Dr. Aminul Huq, Ex-Head, REACH, ADB told the meeting that it was clear from the
deliberations and discussion that the implementation of the project was urgently needed; but
there was duplication of work between BCAS and Waste Concern. NIC should have
straightened this up. The meeting was told by the Team Leader, NTE that by mutual
discussions between BCAS and Waste Concern, the activities would be made




                                                                                           52
complementary rather than overlapping. Since the project proposed by the Waste Concern is
of small size, further study to up grade the project is needed.

All the participants were of the opinion that the project should be undertaken for
implementation considering its positive social and environmental implications irrespective of
its financial viability. There were suggestions (Representative from the Planning
Commission) to fix up some price to the landfill gas residue to improve the FIRR and to seek
advice from ADB to make the project CDM-able.

Recommendations:

Unanimous recommendations are as follows:

1.   The project be undertaken for implementation in consideration of its positive social and
     environmental implications irrespective of its financial viability.
2.   The project to include management of the entire solid waste dumped at the Matuail
     Site.
3.   Attempts to be undertaken to improve the financial scenario.
4.   Activities by different organizations be made complementary rather than overlapping.
5.   ADB to help develop a CDM-able project.




                                                                                          53
                                         Chapter 11
                 MAJOR FINDINGS AND RECOMMENDATIONS

The report attempted a research on the feasibility of a Municipal Solid Waste (MSW) to
Electricity generation and attempted integration of the project with “Clean Development
Mechanism (CDM)”. The major findings and recommendations are as follows:
Given that Bangladesh’s annual per capita electricity consumption of 102 kilowatt-hours
(kWh) in 2001-02 was one of the lowest in Asia, exploitation of all energy sources including
renewable energy source like MSW is of paramount importance.
Dhaka City with about 10 million people is estimated to currently generate around 5,000
metric tonnes of solid waste daily or 1.96 million metric ton yearly. The daily waste
generation is projected to grow to 15,000 metric tonnes or 5.5 million metric tonnes by 2021.
However, energy content of Dhaka’s solid waste is comparatively low at 770-1444 kcal/kg.
The majority of the waste is water (50%-70%) as the major portion of the solid waste
consists of green vegetable and fruit residues.
A number of technologies ranging from traditional ones like Landfill to advanced ones like
Fluidized Bed Incinerator (FBI), Gasification, Plasma Waste Converter (PWC) are currently
available. However, given the large volume of Dhaka’s solid waste, low heat content and
nascent stage of this type of enterprise in the country, Biogas technology is considered most
appropriate to start with. It is visualized that once the technology is operational, further
advancement of the technologies can be attempted.
The total investment cost of the project using 5,000 metric ton daily has been preliminarily
estimated at US$26.90 million. The project is likely to produce 175.2 GWh (gross) of
electricity annually. The net reduction of CO2 is expected to be 1,130,538 tonnes annually.
Financial results show that FIRR is 6.39%, NPV is –77.57 million Taka and B/C ratio is
0.81. Therefore, the project in the base case is not financially viable and could not be
developed under the given scenario. Sensitivity analysis scenarios are also alarming. FIRR
drops to –10.79%, NPV to –328.70 million Taka, B/C to 0.2 for a decline in Project benefits
by 15% and FIRR drops to –3.02%, NPV to –278.50 million Taka and B/C 0.41 for an
increase in project costs by 15%.
Economic results show that EIRR is 14.45%, NPV is 114.92 million Taka, and B/C ratio is
1.25. Therefore, the project in the base case is economically viable. However, EIRR drops to
–1.26%, NPV to –191.37 million Taka and B/C to 0.57 for a decline in project benefits by
15% and EIRR drops to 6.10%, NPV to –106.17million Taka and B/C to 0.80 for an increase
in project costs by 15%.
The project turns quite viable once carbon dioxide credit (US$ 3.00/tonne of CO2) as per
CDM project guideline is incorporated in the analysis. The results show that FIRR increases
compared to base conditions in the following manner:
     (i) FIRR increases to 54.73 % from base condition of 6.39%:
     (ii) FIRR drops only to 39.62% as compared to – 10.79% for a sensitivity analysis of
           decrease in revenue by 15% and
     (iii) FIRR drops only to 43.26% as compared to – 3.02% for a sensitivity analysis of
           increase in the Project cost by 15%


                                                                                          54
In view of the results above, the proposed project could be established if this could be
combined with CDM project as per the provisions of “Kyoto Protocol”.
Economic analysis includes health and environment benefits of the project which occur in
the following manners:

Around the dumping site
•    MSW collection and usage in the Project would stop spillage of wastes and leachate of
     surface and underground water, which is used by the inhabitants for drinking purpose.
•    Project would check open decomposition of organic wastes that contribute to air
     pollution.
•    Project would halt sound of equipment currently used for spreading wastes, compacting
     wastes
•    Project would end scavengers’ direct contact with solid waste reducing skin diseases and
     other health disorders and their spreading to the neighborhood.

Annualized benefit of the health and environment service at the project site is estimated at
Taka 1.6 million.

Around the collection points
• Effective MSW collection from the bins would stop over-spilling
• Effective collection would check open decomposition of organic wastes in and around
   the bins that contribute to air pollution.
• Effective collection would halt ugly sight and odours around the bins
• Effective collection would relieve road congestion.

The annualized benefit of the health and environment service at the various collection points
in the city becomes Taka 28.3 million. Sum total of health and environment benefit is
therefore Taka 29.9 (1.6 + 28.3) million.

A stakeholders’ meeting was held on 11 February 2004 in Dhaka. 68 participants
representing all the strata were present. The unanimous recommendations are:

1.    The project be undertaken for implementation in consideration of its positive social and
      environmental implications irrespective of its financial viability.
2.    The project to include management of the entire solid waste dumped at the Matuail
      Site.
3.    Attempts to be undertaken to improve the financial scenario.
4.    Activities by different organizations be made complementary rather than overlapping.
5.    ADB to help develop a CDM-able project.




                                                                                           55
    Map 1: Map of Dhaka City Showing the Location of the Proposed Project.




8




                                                                             56
References

1.   MOFP, 2002.          Ministry of Finance and Planning, Bangladesh Economic
                          Review

2.   PSMP, 1995.          Power System Master Plan, BPDB

3.   World Bank, 1998a.   Refuse Quantity Assessment of Dhaka City Corporation for
                          Waste to Electrical Energy Project, prepared by BCAS, Dhaka

4.   World Bank, 1998b    Refuse Quantity Assessment of Dhaka City Corporation for
                          Waste to Electrical Energy Project, prepared by IFRD, BCSIR,
                          Dhaka

5.   Yand and Li, 2002    M. Yang and C.H.Li, From Waste to Energy, an unpublished
                          research paper, Energy Economics and Technologies,
                          Melbourne, Australia

6.   CEE, 2001            Center for Environmental Education, Solid Waste Management
                          Hand Book, Ahmedabad, India

7.   Waste Concern        www.wasteconcern.org/ongoing project/project2.html




                                                                                   57
                                                   Annex 7
                                        Stakeholders’ Meeting
                                                 on
 Dhaka City Solid Waste to Electric Energy – a Component of Promotion of Renewable Energy, Energy
                         Efficiency and Greenhouse Gas Abatement (PREGA)
                                            Organized by
                          Bangladesh Centre for Advanced Studies (BCAS)

Date:        11 February 2004, Venue: Local Government Engineering Department
             (LGED) Seminar Room (Level-4)

                                               Registration
Sl.
                      Name and Designation                        Address and Tel. No.
No.
 01. Mr. Md. Ziaul Haque Khan                            689, North. Shahjahanpur, Dhaka – 1217
     Pharmacist (Local Representative)                   Ph: 9345544
 02. Mr. Md. Abdur Rouf                                  Power Cell,
     Asstt. Director, Power Cell                         Ministry of Energy and Mineral Resources,
                                                         Government of Bangladesh.
 03. Mr. Md. Liton Mian                                  689, North Shahjahanpur, Dhaka – 1217
     Teacher, Law College (Local Representative)         Ph: 9345544
 04. Mrs. Sabita Mitra                                   Project Planning, PDB
     Director                                            WAPDA Bldg. (5th Floor)
                                                         Motijheel C/A., Tel: 9554820
 05. Mirza Muhammad Husain                               Project Planning, Power Development Board (PDB)
     Deputy Director                                     Wapda Building, (5th Floor)
                                                         Motijheel C/A., Dhaka
 06. Dr. M. Eusuf                                        Bangladesh Centre for Advanced Studies (BCAS)
     Senior Fellow                                       Tel: 8851237
 07. Mr. Mahbubul Hasan                                  Centre for Natural Resources (CNRS)
     Director
 08. Mr. Md. Mokhlesur Rahman Khandaker                  Ministry of Energy and Mineral Resources,
     D.G. Power Cell                                     Government of Bangladesh
                                                         Tel: 8118940
 09. Mr. Sarder Shafiqul Alam                            Bangladesh Centre For Advanced Studies (BCAS)
     Research Fellow                                     Tel: 8851237
 10. Dr. Eng. Khursheedul Islam                          Association for Resources Management Company
     Engineer/Partner                                    (ARMCO)
                                                         55, Motijheel C/A., (4th Floor), Tel: 9550292
 11. Mr. Md. Osman Goni                                  Bangladesh Centre For Advanced Studies (BCAS)
     Research Officer                                    Tel: 8851986
 12. Mr. Md. Mostaque Ahmed                              Association for Integrated Development (AID)
     Director
 13. Mr. Md. Zahurul Islam                               Rampura, Dhaka
     Pharmacist (Local Representative)
 14. Mr. Md. Hasan Khan                                  Badda, Dhaka
     Businessman (Local Representative)



                                                                                                           58
Sl.
                       Name and Designation             Address and Tel. No.
No.
15. Mr. Md. Mashudur                          North Badda, Dhaka
    Businessman (Local Representative)
16. Dr. Md. Aminul Islam                      Badda, Dhaka
    Physician (Local Representative)
17. Mr. Matiur Rahman                         Rajar Bug, Dhaka
    (Local Representative)
18. Mr. Omar Farook                           Malibagh, Railgate, Dhaka
    (Local Representative)
19. Mr. Meshkat Ahmed Chowdhury               Energy & Mineral Resources Division
    Deputy Secretary                          Bangladesh Planning Commission
20. Mr. Zahirul Islam                         Bangladesh Centre for Advanced Studies (BCAS)
    Research Officer                          Tel: 8851237
21. Mr. Munir Siddiquee                       Local Government Engineering Department (LGED)
    Project Manager                           Tel: 8119138
22. Mr. B.D Rahmatullah                       Power Cell,
    Director                                  Ministry of Energy and Mineral Resources
                                              Government of Bangladesh
23. Mr. Md. Zakir Hossain                     Shahjahanpur, Dhaka
    Serviceman (Local Representative)
24. Mr. Khandaker Mainuddin                   Bangladesh Centre for Advanced Studies (BCAS)
    Fellow                                    Tel: 8851986
25. Dr. M. I. Sharif                          Bangladesh Centre for Advanced Studies (BCAS)
    Fellow                                    Tel: 8851237
26. Mr. Mujibur Rahman                        Bangladesh Centre for Advanced Studies (BCAS)
    Senior Fellow                             Tel: 8851986
27. Mr. Md. Akram Hossain                     BMD
    Director                                  Tel: 8116694
28. Dr. Anwar Hossain                         Institute of Infrastructure Facilitation Centre (IIFC)
    Energy Expert                             Tel: 9113345
29. Mr. Shahjada Khan                         Marool Badda, Dhaka
    Businessman (Local Representative)        Tel: 019383655 / 881377
30. Mr. Mozaharul Alam                        Bangladesh Centre for Advanced Studies (BCAS)
    Research Fellow                           Tel: 8851237
31. Mr. Md. Mustafizur Rahman                 The Bangladesh Today
    Reporter/Journalist                       Tel: 0171455214
32. Mr. Kaji Mahmud Ullah                     Grameen Shakti, Mirpur, Dhaka
    Engineer
33. Mr. Md. Liaquat Ali                       Bangladesh Centre for Advanced Studies (BCAS)
    Senior Fellow                             Tel: 8851237
34. Mr. A.H.G. Quddus                         Bangladesh Centre for Advanced Studies (BCAS)
    Fellow                                    Tel: 8851237
35. Mr. Faruque Ahmed                         Bangladesh Centre for Advanced Studies (BCAS)
    Programmer                                Tel: 8851986
36. Mr. Mahmudul Hassan                       Planning Commission. Ministry of Planning
    Division Chief                            Government of Bangladesh


                                                                                                       59
Sl.
                      Name and Designation            Address and Tel. No.
No.
37. Mirza Shawkat Ali                        Department of Environment (DoE),
    Research Officer                         Government of Bangladesh
38. Mr. Md. Tarikul Islam                    United Nations Development Programme (UNDP)
    Researcher                               Tel: 8118600
39. Mr. Tajul Islam Chowdhury                Bangladesh Centre for Advanced Studies (BCAS)
    Research Officer                         Tel: 8851237
40. Mr. Mirza Zakir Hossain                  Bangladesh Centre for Advanced Studies (BCAS)
    Research Officer                         Tel: 8851986
41. Major ATM Abdul Wahab Ret.               Bangladesh Centre for Advanced Studies (BCAS)
    Energy Expert                            Tel: 9887070
42.                                          Old Depends Officers Housing Society, Dhaka
43. Mr. Afzalur Rahman                       Federation of Bangladesh Chambers of Commerce
    Asstt. Secretary                         and Industries( FBCCI)
                                             60, Motijheel C/A., Dhaka, Tel: 9560102 Ext - 220
44. Ms. Aleya Ferdousi                       Bangladesh Environment Lowers Association (BELA)
                                             Tel: 8614283
45. Mr. Bidyut Shome                         Rahimafrooz Batteries Ltd.
    Engineer                                 Tel: 9568112
46. Mr. Nasir Hassan                         Rahimafrooz Batteries Ltd.
    Engineer                                 Tel: 9568112
47. Dr. Shohel Faquque                       Dhaka Clty Corporation (DCC)
    Central Coordinator                      Tel: 9556016
48. Mr. Tariq Bin Yousuf                     Dhaka Clty Corporation (DCC)
    XEN.                                     Tel: 8629916
49. Ms. Shamima Isharat                      Bangladesh Centre for Advanced Studies (BCAS)
    Research Officer                         Ph: 8851986
50. Ms. Shamsun Nahar                        Bangladesh Centre for Advanced Studies
    Research Officer                         Ph: 8851986
51. Mr. Jamshed Ali                          Bangladesh Centre for Advanced Studies (BCAS)
52. Ms. Dil Meher Banu                       Bangladesh Centre for Advanced Studies (BCAS)
53. Mr. Iftekher Enayatullah                 WASTE CONCERN
    Director                                 Mohammadpur, Dhaka
54. Mr. Maqsud Sinha                         WASTE CONCERN
    Executive Director                       Mohammadpur, Dhaka
55. Mr. Arup Dutta,                          Daily Newsletter
    Senior Reporter                          Prothom Alo
56. Mr. Kazy Bappi                           Matuail
    Local Representative                     Tel: 011874619
57. Mr. Md. Aktaruzzaman (Noman)             Matuail, Dhaka
    Local Representative                     Tel: 7517484, 01722927
58. Mr. Masudur Rahman Khan                  Matuail, Dhaka
    Local Representative
59. Mr. Nazrul Islam                         Matuail, Dhaka
    Local Representative




                                                                                                 60
Sl.
                    Name and Designation            Address and Tel. No.
No.
60. Mr. Mahmudul Huq                       Matuail, Dhaka
    Local Representative
61. Mr. Faizul Haque                       Matuail, Dhaka
    Local Representative
62. Mr. Md. Jahangir Alam                  Matuail, Dhaka
    Local Representative                   Tel: 7171046, 7175091
63. Mr. Md. Moslehuddin                    Matuail, Dhaka
    Local Representative
64. Mr. Md. Saiful Islam                   Bangladesh Centre for Advanced Studies (BCAS)
    Accountant
65. Mr. Md. Golam Jilani                   Bangladesh Centre for Advanced Studies (BCAS)
    Senior Research Officer
66. Mr. Atiar Rahman                       Local Government Engineering Department (LGED)
    Asstt. Engineer
67. Mr. Md. Golam Mostafa                  Local Government Engineering Department (LGED)
    Engineer
68. Mr. Sazzad Hossain                     Local Government Engineering Department (LGED)
    Research Officer




                                                                                            61
Annex 8:    Request for Proposal on Solid Waste Recycling & Treatment
Investment Project for Dhaka City.




                                                                   62

				
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