Waste-to-Energy Due Diligence consultancy in Mexico

Latin America has experienced fast economic growth, associated with urban migration and unplanned expansion and public service provision. Cities face the dual challenge of providing infrastructure which improves life quality at an affordable cost. Effective municipal solid waste management practices are limited in the emerging countries of Latin America. The lack of proper MSW treatment methods causes public health problems, waste crisis and potent greenhouse gas (GHG) emissions. Due to the rapid development of economies and populations, landfills and open dump areas are already saturated and will not be capable to accept urban waste in the near future. That combined with the lack of space in big cities and improve in environmental awareness are driving a change in how the continent deals with municipal solid waste. Waste to Energy (WtE) systems have been used in developed countries since many years and are now approaching Latin American countries as one of the best available solutions, to manage big amount of residues in a environmental soundly manner. The problem of large CAPEX amounts related to WtE facilities is usually solved with project financing schemes of other financial tools by investors and banks. In view of this panorama, BlackForest Solutions, supported by the German Corporation for International Cooperation GmbH (GIZ), conducted workshops for bankers and decision makers in Mexico, focusing on financing of Waste-to-Energy projects in the country. The goal was to explain how these types of projects can be calculated, aiming their technical and economic feasibility. The target groups were development banks, international organizations and government officials. Besides, BFS provides onsite consultancy for ongoing WtE projects in Mexico, involving technical assessment and due diligence checks, consulting on environmental standards, financial analysis and best-practices worldwide.

Project Facts

Project Period: 05/2018 - 09/2018
Customer: GIZ & local banks
City: Mexico City
Country: Mexico

Project details

Waste to energy

Waste to energy means technologies which use the calorific value or related reactions to create energy. Either as incineration-based thermal process or other processes such as bio gas generation etc. In all cases, a detailed technical and financial feasibility check is crucial for the success of a WtE project.

Waste to energy financial context

Professional, effective and safe WtE facilities with high throughput rates are expensive. The involvement of strong technical partners, EPCs, banks and investors is crucial for the success of a WtE project. Due to the importance of banks and investors for WtE projects, many approaches in emerging markets fail without external support.

Due diligence in emerging markets

As international banks often reject projects in emerging markets, and local banks do not have experience in the assessment & due diligence checks for WtE projects, third party assessors (technical and financial) like BFS can help to develop a successful case.