financing plan (in us$):€¦ · web viewat the same time the private sector’s role in waste...

For more

information about GEF, visit TheGEF.orgPART I: PROJECT INFORMATION

Project Title: Promoting production and utilization of biomethane from agro-waste in South-Eastern Botswana

Country(ies): Botswana GEF Project ID:1 5628GEF Agency(ies): UNDP GEF Agency Project

ID:5299

Other Executing Partner(s):

Ministry of Local Government and Rural Development (MLG), Department of Waste Management and Pollution Control (DWMPC), Selected District Councils (Gaborone City Council, South East District Council, Lobatse Town Council, Kweneng District Council, Kgatleng District Council), Biosys Botswana Pty Ltd, Botswana Development Corporation, Botswana Meat Corporation, Botswana Innovation Hub

Submission Date:

Resubmission Date:

Resubmission Date:

29 October 2013

23 December 2013

20 January 2014

GEF Focal Area (s): Climate Change Project Duration (Months)

48 months

Name of parent program (if applicable): For SFM/REDD+

For SGP

Agency Fee ($): $250,069

A. INDICATIVE FOCAL AREA STRATEGY FRAMEWORK2:

Focal Area Objectives

Trust Fund

Indicative Grant

Amount($)

Indicative Co-

financing($)

CCM Objective 3: Promote investment in renewable energy technologies

GEFTF 2,632,300 14,930,600

Total Project Cost 2,632,300 14,930,600B. INDICATIVE PROJECT FRAMEWORK

Project Objective: To facilitate low-carbon investments and public-private partnerships in the production and utilization of biomethane from agro-waste (for substitutes of diesel and/or LPG) in the districts of South-eastern Botswana.

Project Component

Grant

Type3

Expected Outcomes

Expected OutputsTrust Fund

Indicative

Grant Amount

($)

Indicative Co-

financing($)

1. Institutional

TA - Increased capacity of

1.1 Specific guidelines and standards on low-carbon alternatives and

GEFTF

361,000 1,150,000

1 Project ID number will be assigned by GEFSEC.2 Refer to the reference attached on the Focal Area Results Framework when completing Table A.3 TA includes capacity building, and research and development.

GEF-5 PIF Template-December 27, 2012

PROJECT IDENTIFICATION FORM (PIF)

PROJECT TYPE: FULL-SIZED PROJECT TYPE OF TRUST FUND: GEF TRUST FUND

1

http://www.thegef.org/gef/sites/thegef.org/files/documents/document/GEF5-Template%20Reference%20Guide%209-14-10rev11-18-2010.doc

http://www.thegef.org/gef/sites/thegef.org/files/documents/document/GEF5-Template%20Reference%20Guide%209-14-10rev11-18-2010.doc

http://www.thegef.org/gef/home

strengthening and capacity building for biogas investments and improved agro-waste management and regulation

government, private sector and community stakeholders to develop, finance and implement PPPs in the agro-waste sector

- Increased capacity of government authorities to properly monitor and enforce waste management regulations in the agro-industrial sector(outputs 1.1-1.5)

- Autonomous support systems in place for replication and scale –up of agro-waste technologies post-project (outputs 1.6-1.8)

utilization technologies for agro-waste and waste water developed and disseminated4 to all relevant stakeholders in the sector

1.2 Framework agreement for public-private partnerships (PPP) in the waste sector adopted and disseminated

1.3 Trainings conducted for all relevant stakeholders on the new guidelines and PPP framework agreement (1.1. and 1.2)

1.4 Updated regulations developed and adopted for the successful monitoring of effluent flows and by-product waste in all abattoirs in the country, including launch of a “green certification” waste management award for industry actors

1.5. Support provided to the Department of Waste Management and Pollution Control (DWMPC) and District Council authorities to improve monitoring and enforcement of Trade Effluent Agreements between industries and local authorities.

1.6 Financial institutions trained on best practices in assessing and financing agro-waste projects and training curriculum on biogas established at Botswana Innovation Hub

1.7 Study tours/ knowledge exchanges facilitated between project stakeholders and other agro-waste –to-energy projects in the region, including those supported by GEF5

1.8 Dedicated investment facilitation platform on low-carbon waste utilization technologies established and operational with independent budget6

2. Facilitation and establishment of the first biogas plant in Botswana

TA - Increased investment in clean energytechnologies and low-carbon practices in the agro-waste sector

2.1 Sensitization campaign conducted with district councils and community groups in targeted biogas plant site

GEFTF

100,000 661,160

INV 2.2 Feasibility studies conducted at three potential biogas sites near agro-industrial plants (abattoirs or poultry farms) with potential off-take uses analyzed

GEFTF

1,051,300

8,440,280

4 Under the umbrella of the new process for developing an updated National Waste Policy as well as a National Waste Management Plan5 This will include structured collaboration and knowledge sharing activities with those projects presented in Section A.4, including UNIDO’s waste-to-energy projects in the region. A detailed description of such collaboration will be presented at CEO Endorsement.6 The host for this platform will be determined at PPG phase; likely candidates include Botswana Innovation Hub or Botswana Development Corporation


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2.3 Environmental impact assessment of selected biogas site completed7

2.4 Tender launched for operator of biogas plant 2.5 Institutional (EPC), financial and

business arrangements for biogas plant completed, including financial closure and shareholder structure in place

2.6 Legal establishment of biogas operator based on public-private partnership and concessional agreement with chosen agro-industrial partner (including guaranteed supply of substrate and purchase agreement for supply of biogas)

2.7 Technology agreement signed on North-South or South-South cooperation with a selected international biogas equipment provider

2.8 Construction and commissioning of biogas plant8

3.Facilitation and establishment of appropriate biogas utilization platforms in at least (2) Districts of South-eastern Botswana

TA - Increased investment in less-GHG intensive energy systems using biogas

3.1 Partnership established between biogas plant operator and selected District Councils for supply and purchase of biogas from the plant

3.2 District Council staff trained on biogas utilization technologies selected for investment, including operations and maintenance

3.3 Monitoring scheme in place to track fuel savings (from switch to biogas) and GHG emission reductions

GEFTF

100,000 1,075,000

INV 3.4 Feasibility study (f/s) conducted to analyze the financial viability and best operational options for use of biogas as an alternative fuel in District Council waste operations9

3.5 Based on outcome from f/s, selected biogas utilization technologies constructed and commissioned

3.6 By end of project at least two (2) District Councils in the area operating low-carbon energy technologies (using CBG as a replacement for diesel) in their waste operations

GEFTF

900,000 3,000,000

7 GEF funds will not pay for the EIA; this will be covered by co-finance contributions8 The financial mechanism for use of GEF INV funds to support Output 2.8 will be defined during the PPG phase and its establishment added as a separate project output if needed9 The various potential options for the biogas utilization are described in Section A.1 under Component #3 and in Annex B. One potential option is to establish a CBG refueling station and refurbish garbage trucks for biogas use instead of diesel. Another option to be considered would be to use biogas as a replacement for diesel in the DC incinerators at landfills. A third option is to develop a biogas supply program to replace imported LPG as a cooking fuel among users in the vicinity of the plant. A preliminary assessment of the financial and operational cost-benefits of the various options will be done at the PPG phase.


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Subtotal 2,512,300

14,326,440

Project Management Cost (PMC)10 GEFTF

120,000 604,160

Total Project Cost 2,632,300

14,930,600

C. INDICATIVE CO-FINANCING FOR THE PROJECT BY SOURCE AND BY NAME IF AVAILABLE, ($)Sources of Co-

financing Name of Co-financier Type of Co-financing Amount ($)

National Government Ministry of Local Government and Rural Development (MLG)

Cash 200,000

National Government Department of Waste Management and Pollution Control (DWMPC)

Cash 100,000

National Government Botswana Development Corporation Cash $3,229,000National Government Botswana Meat Corporation Cash $2,660,000Local Government Selected District Councils (Gaborone City Council,

South East District Council, Lobatse Town Council, Kweneng District Council, Kgatleng District Council)

Cash $5,000,000

Private Sector Biosys Botswana Pty Ltd Cash & In-kind $1,291,600Private Sector Barclays Bank Cash $2,000,000Private Sector Finance and Competence (F&C) In-kind $50,000Private Sector Technology Provider - Weltec Biopower GmbH In-kind $100,000Non-Governmental Agency

Botswana Innovation Hub In-kind $100,000

GEF Agency UNDP Cash 200,000(select) (select)(select) (select)Total Co financing 14,930,600

D. INDICATIVE TRUST FUND RESOURCES ($) REQUESTED BY AGENCY, FOCAL AREA AND COUNTRY1 N/A1 In case of a single focal area, single country, single GEF Agency project, and single trust fund project, no need to provide information for

this table. PMC amount from Table B should be included proportionately to the focal area amount in this table. 2 Indicate fees related to this project.

E. PROJECT PREPARATION GRANT (PPG)11

Please check on the appropriate box for PPG as needed for the project according to the GEF Project Grant:

Amount Agency Fee Requested ($) for PPG ($) 12

No PPG required. ___-- 0--________ _ --0--_______ (upto) $50k for projects up to & including $1 million ___ ________ ___ _____ (upto)$100k for projects up to & including $3 million ___100,000_____ ___9,500_____

PART II: PROJECT JUSTIFICATION 13

10 To be calculated as percent of subtotal.11 On an exceptional basis, PPG amount may differ upon detailed discussion and justification with the GEFSEC.12 PPG fee percentage follows the percentage of the GEF Project Grant amount requested.13 Part II should not be longer than 5 pages.


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Project Overview

A.1. Project Description.

Problem Statement

Botswana’s National Report for the United Nations Conference on Sustainable Development (Rio+20) states that “Management of waste as waste is wasteful”. While the country has a laudable record in many areas of natural resource management, as their Rio+ report makes clear the sustainable management of the country’s waste sector – as well as its utilization of renewable energy sources – remains in a poor state. At present Botswana’s energy sources consist primarily of electricity, fuel and aviation gas. Solar, biogas and biodiesel constitute only about 1 % of current national consumption. Meanwhile LPG and all petroleum-based fuels are imported. Consumption by sector shows the transport sector as the largest consumer of energy (all from imported fuels) at 43% of the total national energy budget, with other sectors such as meat production/processing and mining consuming large amounts of electricity and LPG. Total annual consumption of petroleum products reached a peak of 1.54 million cubic meters in 2007 and thereafter declined to about 0.85 million cubic meters in 2011 and 2012 due to the country’s lower growth rate and the impacts of the global financial crisis. With the high price of LPG and diesel, the National Development Plan of 2010-2016 places increased emphasis (compared to previous plans) on sustainable utilization of renewable energy (primarily solar and biogas) to respond to the country’s abundance of solar resources and agro-waste by-products/cow-dung.

With a total human population of just over 2.1 million people and a cattle population of 2.22 million (Statistics Botswana, 2012), the volume of cow-dung and waste products produced annually (3kg dung/LSU/day) is significant and remains an underutilized source of potential biogas. Most of the country’s cattle are concentrated in the southern and eastern parts of the country, which is better suited for rangeland management due to relatively more favorable climatic and soil conditions. Botswana's beef industry, like mining, is a major export earner. The Botswana Meat Commission (BMC), a government parastatal which has a monopoly over the export of both live cattle and beef products, has thus far this year (as of Oct. 2013) exported close to three million tons of beef to Europe, with about one million destined for Norway alone. Other major EU markets include Italy and the United Kingdom. Meanwhile the Energy Policy Brief – Reflecting on the Challenges of Attaining a Green Economy for Botswana14 indicates that meat abattoirs and sewage treatment plants are priority areas for intervention to achieve the country’s Green Economy vision. The Draft Energy Policy of 2012 also specifically points to the need for government strategies that promote investments in infrastructure to produce bio-energy from the by-products of agro-processing.

Abattoir agro-waste can be defined as waste or waste water from an abattoir which could consist of the pollutants such as animal feces, blood, fat, animal trimmings, paunch contents and urine15. Proper waste treatment and methane capture of agro-waste presents opportunities not only for reducing GHG emissions but also addressing the country’s energy needs and limiting groundwater contamination. As a case in point, field visits to BMC’s main abattoir operating for the EU market (located in Lobatse, 70 km from Gaborone), indicates that while the meat processing factory is of high professional standards and regulated according to international best practices (requirements for EU exports), the treatment of effluents from the plant (located some 3 km away) is unsustainably managed. A retrospective EIA done in 200916 (as well as field visits by UNDP) confirmed that polluted waste water from the plant is still entering the nearby Peleng River through seepage coming from three points:

14 This Policy Brief was prepared with assistance from UNDP in support of the Ministries of Environment, Wildlife and Tourism, Finance and Development Planning, and Foreign Affairs and International Cooperation in preparation for the United Nations Conference on Sustainable Development in June 2012 and subsequent use within the country to advance sustainable development. 15 The different sources of waste in red meat abattoirs could be categorized as: Lairagus/animal pens; Bleeding /stunning; Carcass processing /cleaning; Offal processing; and By-products processing.16 Retrospective EIA of the Lobatse Abattoir – Botswana, Ecosurv, Client: Botswana Meat Corporation, 2009


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Pumping of wastewater and sludge and disposal of fats, grease, and oil into the sludge pits, which are unlined pits in the river alluvium;

Spillage from clogged components of the treatment works such as screens and clarifiers; and Surface wash and percolation of rainfall through the screening waste material, which then enters the

Peleng River

That EIA further states that “Since all local aquifers are now polluted, Lobatse is now supplied with water from the North-South Carrier. Any further pollution into the Woodlands aquifer will limit recovery of this important resource.”17 Moreover the methane from the effluents is not captured or flared from the anaerobic ponds – thus releasing large amounts of GHG emissions – while the BMC Lobatse slaughtering plant is exclusively reliant on imported LPG and coal-based electricity for electricity and thermal applications. Such activities continue despite the fact that the Botswana Waste Management Strategy (1998) made a series of explicit recommendations on the sustainable treatment of wastes from the food industry. Section 9.4 (Strategy for the Management of Individual Waste Streams) of that document states as follows:

“The main problem associated with food industry wastes is associated with the meat industry. Botswana Meat Commission (BMC) is currently undertaking studies into processes to convert its wastes into valuable by-products. Action:

GOB will encourage BMC to proceed with the studies and implement the recommendations as soon as possible.

GOB will request BMC to improve the situation with respect to the tannery effluents because they cause a major threat to the ground water. Appropriate technologies are available and possible.

GOB will request BMC to develop a waste management plan covering the period from 2000 to 2005 GOB will invite BMC to cooperate closely in demonstration projects applying its waste recycling

methods to smaller abattoirs.”18

Unfortunately some fifteen years after the publication of that strategy these recommendations remain unaddressed which is testament to the severity of the problem across the country and the need for urgent and long overdue changes in the sector. A review of the vulnerability and adaptation requirements for the waste water sector (Department of Meteorological Services, 2009), revealed that at present some 70% of the public waste water treatment facilities in the country use Stabilization Ponds technology while the remaining 30% use Activated Sludge, Percolating Filters, Rotating Biological Contactors (RBCs) and Wetlands. Facilities using Stabilization Ponds technology recorded the lowest level of compliance to design standards for the quality of treated water. The most compliant technology was the Rotating Biological Contractors at 90%. Factors leading to low lack of compliance with design standards included poor operation and maintenance practices, often compounded by insufficient funding for such activities. There is no updated data as regards current practices and compliance of private sector entities.

Meanwhile the governance of water and wastewater in Botswana has recently been undergoing revision in the past three years with service provision roles and responsibilities now concentrated under different entities. Wastewater treatment had previously been the sole responsibility of District Councils and municipalities in villages and urban centers, respectively. These services are now partially under the Water Utilities Corporation (WUC), which is responsible for the provision of portable water and management of waste water treatment plants. WUC collects waste (drains septic tanks) for disposal at the treatment plants and owns and operates the waste water treatment plants (WWTPs) in conjunction with the District Councils19. The relevant Municipalities/District Councils (under the Ministry of Local Government and Rural Development - MLG) own and operate the landfills and Municipal Solid Waste collection trucks. MLG is the coordinator of activities and programs of the District Councils and associated issues come to the central government through the MLG. Meanwhile the Department of Waste Management and Pollution Control (DWMPC) constructs the dams and sewage treatment facilities, and

17 Ibid18 Botswana’s Waste Management Strategy (1998), 9.4 Strategy for the Management of Individual Waste Streams, pg. 1819 The District Councils previously used to own and operate the WWTPs, but this responsibility was then passed on to WUC. Discussions are now ongoing to transfer authority for the WWTP back to them as this was a source of revenue; at present they are jointly administered by WUC and DCs.


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then transfers them to WUC for their operation. DWMPC is also responsible for the development of standards for all types of waste handling and disposal. They issue waste handling permits and are responsible for enforcing adherence to the standards, although at present due to capacity constraints in the department there are no specific guidelines or standards on the utilization of biogas from agro-waste and waste water, nor an institutional framework aimed at providing best practices in this sub-sector. According to the law all private sector entities emitting significant amounts of waste (including agro-waste) are supposed to sign trade effluent agreements with the DWMPC and compliance is supposed to be monitored. The DWMPC is now working on developing a National Waste Policy as well as a National Waste Management Plan (the development of the policy and plan will start in 2014).

The lack of funding for sustainable waste water treatment equipment and monitoring is exacerbated by a vicious cycle whereby the entities involved are paying exorbitantly high prices for fossil-fuel based operations in the waste sector which result in further GHG emissions (in addition to the emissions from unsustainable waste management at source). For example, at present District Councils are using 117,000 liters of imported diesel to operate incinerators at landfills. In the case of the previously mentioned BMC abattoir in Lobatse, BMC is paying 25,000 Pula per day (approximately 2,960 USD) to the Kweneng District Council to dispose of (via pumping) the treated waste water; the District Councils in the region in turn spend almost 21 million Pula per year (2.5 million USD) on waste management activities per year, much of which is spent on diesel fuel costs for its fleet of trucks.

At the same time the private sector’s role in waste management remains largely unexploited. Several companies have proposed plans to expand their operations beyond refuse collection tenders issued by the municipalities to active waste management that entails extensive investments in separation centers and sustainable waste processing. The Ministry of Local Government has now floated a tender for salvaging waste from Gamodubu Landfill but otherwise opportunities in other municipalities are handicapped by institutional infighting or lack of knowledge of available alternatives. Other companies have developed innovative public-private proposals to process abattoir agro-waste, harvest methane and upgrade the biogas into bio methane (CBG) and offer it as an LPG substitute (see baseline section on the proposed Biosys Energy Park). A promising recent development in the biogas sector is the establishment of a new PV-Biogas mini-grid system at Sekhutlane Village in Southern Botswana operated by the BPC-Lesedi and supported by the UNDP/GEF Project Renewable Energy-based Rural Electrification Programme for Botswana and the Swedish SIDA. That solar/biogas mini-grid system (the biogas digestor is powered by cow dung) is now installed and operational and reticulation of the distribution network in the village is now underway. Moreover the Cumberland Hotel in Lobatse is recycling their food waste to generate gas for cooking and powering water boilers. In less than two years, the investment is believed to have paid for itself through savings from reduced consumption of LPG.

In summary, at present the Business-As-Usual scenario/practices for waste treatment at abattoirs and landfills are as follows:

The recommendations on sustainable management of agro-waste streams as provided for in the Botswana Waste Management Strategy (1998) have not been fulfilled.

There are no specific guidelines or standards on the sustainable utilization of biogas from agro-waste and waste water, nor an institutional framework aimed at providing best practices in this sub-sector.

In most cases large-scale abattoir effluent is discharged into anaerobic evaporation ponds, many of which are in a poor state of repair or unlined. Degrading manure emits GHGs and pollutes the ground water with nitrates.

Abattoir effluents – which often have higher amounts of fat residues – are often discharged into rivers (the case at the BMC Lobatse plant).

Other types of solid waste from abattoirs (fecal matter and waste produced during carcass processing and offal handling) are often directed to the ponds via wastewater and are instead transported to the local landfill by the DC

Farm waste and solid waste from small abattoirs is heaped or disposed off at landfills with little or no utilization.

Abattoirs are using imported LPG for refrigeration and/or combined heat and power. Electricity from the grid is predominantly supplied via coal-fired power plants.


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Botswana’s gas market is characterized by undersupply, exorbitant pricing and 100% import dependence MSW and abattoir waste water is pumped/transported to other drainage locations or transported to

landfills with diesel-powered refuse collection vehicles. District councils are using expensive, imported diesel to run incinerators at landfills and fuel refuse

trucks. Districts in the South-eastern region of the country (where most of the population and waste is generated) spend approximately $2.5 million USD per year on inefficient waste management activities.

The country has no biogas plants and no methane from abattoirs or landfills is being sustainably utilized at present. There is no dedicated investment facilitation platform or training programs to support low-carbon agro-waste technologies diffusion.

Barriers and Root Causes

The key twin problems that the project intends to address concerns the emissions of greenhouse gases produced by environmentally unsustainable disposal of agro-waste products combined with usage of imported fossil fuels. Due to the abundance of livestock manure, agricultural/animal waste and other forms of biomass, there is in principle a very good potential for the increased use of biogas in Botswana, and in particular Southeastern Botswana where most of the abattoirs and landfills are concentrated. Livestock waste presents an important potential source of renewable energy. Biogas is an energy rich fuel and can be used to produce heat and power and can also be used as vehicle fuel. Compared to the use of diesel for vehicles, biogas emits 80 per cent less hydrocarbons and 60 per cent less nitrogen oxides on average. The concentration of particles and dust is also negligible when biogas is burned. A variety of factors make the production of biogas from livestock waste particularly appealing in a Botswana context. However stakeholder consultations have revealed the following key barriers that need to be addressed to allow for a truly transformative development of this sub-sector:

No suitable demonstration projects for technology penetration: Since the current use of biogas in Botswana is limited to small-scale applications and there is no institutional biogas plant operating at either an abattoir or a landfill there is widespread ignorance as to the efficacy and viability of such technologies. Animal by-products are suitable for anaerobic digestion giving high gas yields and a nutrient rich organic fertilizer but most of the proven experience with such technologies are in Europe, North America, Latin America and Asia. A limited number of High Performance Temperature Controlled (HPTC) biogas digesters and conventional CSTR (Continuous Stirred Tank Reactor) type digesters have been piloted in Africa (several plants at abattoirs have been piloted in Kenya – see section A.4) but such technologies are relatively uncommon in Southern Africa. There are also potential technical and microbiological problems associated with anaerobic digestion of slaughterhouse waste since the effluents from these facilities contain higher amounts of fat residues. Such fat residues have a tendency to generate a fatty layer or scam at the surface of the liquid in the chamber, which creates problems for the proper anaerobic digestion of the effluents unless specialized equipment is used20 and proper design standards are adopted. Moreover as regards the application of Compressed Biogas (CGB) for vehicle use (fuel switch from diesel), while such technologies are widely used in Sweden, Switzerland, and Germany they are as yet untested in Botswana. As a first step there is a need to develop suitable applied technology platforms that will demonstrate to stakeholders the viability of these technologies on a practical level.

20 To tackle this situation, often a double-chamber “digester” for abattoir waste treatment is used. Periodic release of the gas produced creates a mixing of the liquid contained in both chambers of the fixed-dome digester and prevents the formation of the fatty scam.


Problem Statement: Given the high price of imported LPG and diesel and the associated contributions to climate change from their use, Botswana’s National Development Plan of 2010-2016 places a high emphasis on sustainable utilization of biogas in the country. In particular the inefficient management and disposal of agro-waste at meat abattoirs and their sewage treatment plants creates major environmental challenges and financial burdens, and are therefore priority areas for intervention to achieve the country’s Green Economy vision (waste technologies are prioritized under the Second National Communication - 2011). At present the country has no biogas plants and is missing a major opportunity to produce and utilize biomethane from agro-waste as a substitute for imported LPG and diesel and for other low-carbon energy applications, particularly in South-eastern where 50% of Botswana’s population lives and more than 50% of the country’s poultry and intensive beef farming waste is generated.

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Insufficient knowledge at country level about biogas benefits and available technologies among various stakeholders (government, private companies, farmers, villagers, women, consumers): Further to the above there is across the board a very low level of knowledge among stakeholders in Botswana about the major benefits of biogas technologies, including: production of green energy – both electricity and heat; substitution of biomethane for LPG; the considerable environmental advantages (less methane, CO2 and emission of nitrous oxide); the protection of subsoil water - improved nitrogen exploitation which reduces leaching and thus protects the drinking water; reduced costs for artifical fertilizer from using biofertilizer; and the associated local benefits of green jobs and local employment from operation and maintenance of biogas plants. Abattoirs such as those operated by BMC do not realize that from using simple methane capture from effuents they could either generate electricity for their plants or transform the methane to biogas as a substitute for imported LPG.

Lack of clarity on ownership and concessionality for waste sites: Private sector companies seeking Public-Private Partnerships (PPPs) in the waste sector have been discouraged by bureaucratic hurdles and an inability to obtain concessional rights or secure contracts for the use of waste substrates emanating from public-owned assets such as landfills and abattoirs. Similarly there is an overlap of roles and mandates governing the sector between national and local stakeholders which makes it difficult for investors to know with whom they should be negotiating. For example, several companies have sought a concessional agreement to sustainably treat and utilize effluents from BMC’s abattoirs but this has been obstructed as a result of a lack of a framework for public-private partnerships in the sector and (mis)understandings about who should share the costs and benefits of such a scheme (as well as concern about technical viability).

Lack of specific guidelines or policies on biogas resources and absence of an appropriate legal and regulatory framework on the utilization of biogas from agro-waste and waste water: Developed countries typically have standardized waste management methods and detailed guidelines for different kinds of waste (including agro-waste) and defined policies and legislation, especially as regards waste and its impacts. Unfortunately as previously noted the Botswana Waste Management Strategy (1998) only made recommendations in this regard but did not cater for specific guidelines. Prior to that strategy the government came up with a consultancy to look into issues of sanitation and wastewater. This consultancy resulted with Botswana National Master Plan for Waste Water and Sanitation (NMPWWS). The NMPWWS was intended to be the foundation for sanitation and wastewater management in the country until 2030. Based on the principles of the Waste Management Act (1998) (see next section) it recommended follow-on legislation for the wastewater and sanitation sector that needs to be enacted, including the right to:

A clean and healthy environment; Empowerment of regulators and stakeholders to protect the environment from pollution; An institutional framework aimed at providing the best service with the available resources; Institutional/stakeholder participation in the planning, design and implementation of strategies of

wastewater and sanitation management; and Efficient and equitable administration of the legislation by appropriate processes, practices and economic

instruments.

Unfortunately few of the designated follow-on legislations have been enacted and as noted, at present there is no specific legal and regulatory framework on the utilization of biogas from agro-waste and waste water, nor an institutional framework aimed at providing best practices in this sub-sector.

Poor infrastructure maintenance and weak monitoring and enforcement capacity of waste treatment regulations: Botswana’s municipalities and District Councils have the challenge to provide adequate infrastructure for waste management and recycling services. However such infrastructure services are often of low quality or reliability, while many areas are simply un-served. Most of the municipalities are not spending enough to provide the infrastructures needed or the existing ones are poorly maintained, thus increasing costs and reducing benefits. Most abattoirs discharge (after what is supposed to be appropriate pre-treatment) to municipal sewers or have waste water disposed of by the relevant District Councils. Under the Waste Management Act, licenses must be issued for the operation of sewerage and wastewater facilities; in turn holders of these licenses are bound to


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comply with certain conditions associated with prevention of pollution of the environment and Trade Effluent Agreements between industries and local authorities must be monitored. Unfortunately the “polluter pays” principle has yet to be seriously instituted and punitive measures for non-compliance are rare, thus perpetuating a BAU scenario whereby entities such as abattoirs have little incentive to address unsustainable practices and shift to more sustainable waste treatment platforms. There is a need to empower the appropriate authorities to better perform their regulatory mandates and improve consistency between laws, regulations, institutions, and practical day-to-day waste management.

Insufficient capacity of relevant financial institutions and stakeholders (including banks) to assess the technical risks and benefits of investing in biogas technologies: Banks and financial institutions in Botswana (such as Botswana Development Corporation) are interested in providing term finance and even equity contributions to finance waste management schemes but are handicapped by their unfamiliarity with the chosen technologies and associated business models, as well as the lack of clarity on institutional roles and PPP frameworks. At present there is no framework for systematic cooperation between actors such as the Botswana Innovation Hub (which is helping facilitate financing in clean technology investments across the country and keeps a database of projects) and commercial banks in the waste sector.

The baseline scenario and any associated baseline projects

The major baseline activities of relevance to this project (excluding UNDP’s baseline contributions which are highlighted in Section B.3) are as follows:

Table 1. Summary Overview of all Relevant Baseline Activities

Baseline Project #1 – Ministry of Local Government (MLG) and District Councils (Gaborone City Council, South East District Council, Lobatse Town Council, Kweneng District Council, Kgatleng District Council)

Botswana is divided into 15 administrative districts: 9 rural districts and 6 urban districts. These are administered by 15 local authorities (District Councils, city councils or town councils).The role of the District Councils in waste treatment activities has already been outlined. At present District Councils in the Southeastern region of the country (where most of the population and waste is generated) are spending 21 million Pula per year (approximately $2.5 million USD) on waste management activities. A large portion of this budget is spent on diesel costs for incinerators at landfills and operating a fleet of diesel-run refuse and waste collection trucks. Stakeholder consultations have revealed that the Ministry of Local Government and the relevant District Councils are extremely interested in developing more cost-effective and sustainable models of waste treatment in their areas (fuel switch from diesel) with the funds they are allocated for waste management and treatment.

Sub-total: USD $100,000 from the MLG to support the project and host the PMU and US$ 5 million USD 21 from the combined waste management budgets of the relevant District Councils over the project lifetime (2014-2018)

Baseline Project #2 – Botswana Meat Corporation (BMC)

The Botswana Meat Commission (BMC) was established by the newly independent Botswana government in 1967 to be solely responsible for the slaughter and marketing of all beef exports from Botswana. The BMC co-ordinates the production of beef from a national herd of some two to three million cattle (?) grazing on rangelands covering much of the country's 580,000 square kilometers. Facilities at the BMC headquarters in Lobatse have been designed and

21 The total overall waste treatment budget of the District Councils listed is approximately $10 million USD over the life of the project ($2.5 million USD X 4 years). However for a conservative estimate and given that a minimum of 2 of the DCs listed will be directly involved in activities under Component #2 and #3 (all will benefit from Component #1 since its sector-wide) we have pro-rated this amount to $5 million USD. The co-finance from the DCs will be further refined at PPG phase according to each component.


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constructed as a complete and integrated complex of abattoir, canning, tanning and waste treatment/by-products plant to handle a throughput of up to 8,000 cattle and 500 small stock per day. Branch abattoirs are operated in the north-west of the country at Maun, with a capacity of 100 cattle per day (soon to be increased to 120), and in the north-east at Francistown with a capacity of 400 cattle and 150 small stock per day.

During the period 1996-2006 the BMC Abattoir at Lobatse slaughtered in the range of 80,000-120,000 cattle per annum. In general it takes between 3-3.9 m3 of water for each animal slaughtered. This in turn leads to approximately 2 m3 of waste water rich in blood, fats and solids (per animal), and 0.02 m 3 of paunch contents per slaughtered animal being disposed of at the treatment facilities.

At present BMC has signed Trade Effluent Agreements for waste water treatment with the relevant local authorities for each of their abattoirs. None of the methane from the effluents emanating from their abattoirs is being captured or flared and there is no legal requirement to do so at present (only a recommendation from the Botswana Waste Management Strategy as previously noted). In the case of the previously mentioned BMC abattoir in Lobatse, BMC is paying 25,000 Pula per day of operation (approximately 2,960 USD or .666 million USD per year based on 225 days of operation) to the local District Council to dispose of (via pumping) the treated waste water from that plant. BMC has indicated that they would consider the possibility of producing and utilizing their agro-waste in a more cost-effective and sustainable fashion (and re-allocate the budget paid to the District Council for such a purpose) via a concessionary scheme and would also be willing to purchase LPG or electricity (for their own use) from such a plant.

Sub-total: 2.66 million USD (666,000 USD X 4 years) over the project period (2014-2018)

Baseline Project #3 – Biosys Botswana Pty (Ltd)

Biosys Botswana Pty Ltd is a limited liability company established to pioneer a waste-based renewable energy industrial subsector in Botswana. The main objective of the company is to focus on waste as a resource for energy generation and initiate a shift from the use of imported fossil based fuels to locally produced waste based renewable energies. The founder of the company, Simon Mahosi, is a Botswana national and German-trained electrical engineer, specializing in biogas plants design and operation. He is the member of German Society for Bioenergy Utilization (GERBIO).

Biosys has developed a project proposal - Biosys Energy Park – based around the construction of a proposed 7 MW agro-waste to bio-methane production facility. The proposed plant design will use substrates such as abattoir waste, feedlot waste and poultry manure for anaerobically producing biogas which will be purified into bio-methane (CH4 > 98%). The effluent in the Anaerobic Digestion (AD) effluent will be further processed into pelletized bio-fertilizer and liquid fertilizer. Bio-methane produced by the plant will then be compressed into high-pressure cylinders as compressed bio-methane gas (CBG) and sold as a substitute for LPG and diesel. Pelletized bio-fertilizer will be packed and sold as a substitute for imported mineral fertilizer. The project’s technology partner is Weltec Biopower GmbH, one of Germany’s top ten suppliers of AD technology (see baseline project #5), which has already made contributions to the project to cost potential plant specifications and is prepared to provide technical advisory support and training of plant operators both in Germany and at a future plant site.

Biosys has a preliminary business plan developed for the proposed Biosys Energy Park and has presented it at numerous Clean Tech investor fairs and conferences. The business plan analyzes various revenues streams from the utilization of the biogas including CBG for cooking, CBG for vehicle fuel, sale of bio-fertilizer and gas used for electricity production. Biosys has held preliminary financing discussions with a variety of Botswana-based investors such as BDC and Barclays, and has also spoken to the District Councils to inquire about the possibility of supplying them with CBG for either their incinerators or their refuse collection fleet. However as a new company they still require a great deal of technical and financial assistance to realize their objectives – starting with support on feasibility studies and facilitation of the PPP structure that will be required to attract the government and financial institution buy-in for any proposed plant. Biosys has also been in discussion with Swedish SIDA for a possible grant to support the project using Swedish technology partners.22 The principals of Biosys have indicated a willingness to mobilize up to USD 1,291,600 in equity financing for any future plant.

Sub-total: USD $ 1,291,600 (equity contribution from Biosys for plant) 22 Discussions on the possible SIDA grant are still at a preliminary phase and a decision on their possible support will only be made at the PPG phase. If SIDA decides to support certain activities currently earmarked for GEF support then the project design will be remised accordingly during the PPG phase.


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Baseline #4 – Finance and Competence (F&C)

Botswana Technology Hub Finance & Competence (F&C) have been working as accredited EU-Funding Project Managers and Competence Brokers since 1999. F&C provide funding solutions for projects in South, West and East Africa and have an office in Botswana. They have been retained by Biosysy Botswana Pty (on brokerage fee success basis) to mobilize financing (grant funding, equity investments and loans) for the Biosys Energy Park, but also have experience in conducting Environmental Impact Assessments and been working as Botswana registered Environmental Planners and have works since 1992 on Environmental Impact Assessments (EIA) for services infrastructure including roads, electrical substations and power stations, filling stations and fuel depots. Environmental Impact Assessments (EIA) are a vital component to ensure viability of the project and to adhere to the Environmental Assessments (EA) Act 2011 in Botswana In addition to their fund raising mandate they have also agreed to provide $25-50K in pro-bono assistance for the EIA for the plant.

Sub-total: USD $50,000 (2014-2015)

Baseline Project #5 – Weltec Biopower GmbH

Weltec Biopower GmbH, a German company, is one of the pioneers in the constructors of biogas plants. This company from Vechta, Germany (with a staff of over 80) offers complete biogas plants (provided on a turnkey basis) from one source and has built more than 250 biogas plants all over Europe, the United States and Asia. One of the reasons why various clients have opted for Weltec Biopower is that the plant engineering company from Lower Saxony is renowned for its individualized implementation and can customize plants for different conditions and substrates. Weltec Biopower GmbH is a partner of Biosys in the proposed development of the Biosys Energy Park and has agreed to provide a variety of in-kind support (preliminary f/s, and technical advisory support) for any future project, on the assumption that they are the chosen technology supplier for any tendered plant.

Sub-total: USD $100,000 (in-kind)

Baseline #6 – Botswana Development Corporation (BDC)

Botswana Development Corporation Limited (BDC) was established in 1970 to be the country's main agency for commercial and industrial development. The Government of Botswana owns 100 percent of the issued share capital of the Corporation. BDC can provide loan finance (and equity contributions in special circumstances) to qualified enterprises in Botswana for a maximum contribution of 25% of the project cost. The loans are available at competitive interest rates and are repayable over a period of up to 10 years, although in exceptional circumstances a longer repayment period may be considered.

BDC has expressed an interest in providing finance to project sponsors of biogas and waste treatment investments. BDC has already engaged in discussions with Biosys Botswana Pty (Ltd) about providing a loan for up to 25% of the total capital cost of the plant ($3.229 million USD) contingent on the successful completion and positive findings of a future feasibility study for a targeted site23, attainment of the required approvals and licenses, and assuming other project sponsors can be brought on board to cover the remaining capital costs.

Sub-total: USD $3.229 million (approximately 25% of the potential total cost of the Biogas plant proposed by Biosys assuming a PPP agreement)

Baseline #7 – Barclays Bank Botswana

Barclays has operated in Botswana for more than 60 years and has the widest branch network in the country. They have an energy and infrastructure desk in Gaborone and have expressed an interest in provision of financing (loans and

23 The proposed f/s BDC is requiring would be funded by the GEF project.


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working capital facilities) for biogas projects in the country. Based on preliminary discussions with Biosys, Finance and Competence and UNDP, they have indicated that they could potentially provide a commercial loan up to USD 2 million for a biogas plant assuming validation of positive findings of a feasibility study for a targeted site and a successful outcome to their financial due diligence process. Barclays would welcome training of their staff on biogas technologies and business models.

Sub-total: USD $2 million (maximum potential term loan for a proposed biogas plant)

Baseline #8 – Department of Waste Management and Pollution Control (DWMPC)

The Department of Waste Management and Pollution Control, (DWMPC) is mandated to prevent and control pollution of the environment through the formulation of waste management policies and regulating and monitoring of the waste sector. Based on preliminary discussions the DWMPC has expressed a strong interest in the project and is committed to providing all the required support to achieve the targeted outcomes under Component #1. They recognize they have major capacity constraints and need to develop specific waste guidelines and best practices for the agro-waste sector.

The DWMPC is now working on developing a National Waste Policy as well as a National Waste Management Plan which is expected to be an aggregation of district waste management plans. The work of developing the Policy and Plan will begin in 2014. The DWMPC has just been awarded BWP 900,000 for this work (@ USD 100K).

Sub-total: USD $100K (2014-2015)

Baseline #9 – Botswana Innovation Hub

The Botswana Innovation Hub (BIH) has partnered with Lund University and Krinova Science Park in Sweden to establish a CleanTech Centre of Expertise program within the Botswana Innovation Hub, with support from the Swedish government through the Swedish International Development Agency (SIDA). The program is meant to establish a hub for research and business development on Clean Technologies with relevance to Botswana, Swedish partners, and their stakeholders. CleanTech business cuts across the four focus areas of BIH as it entails coming up with innovations and technologies for a greener, cleaner, low-carbon, resource efficient and socially-inclusive development path. The program promotes innovation that answers environmental concerns to global challenges such as water and air pollution, biomass and water depletion, and climate change. BIH has expressed an interest in hosting trainings and developing investment facilitation platforms for further agro-waste technology diffusion as part of this project.

Sub-total: $100,000 in-kind support (estimate – further discussions to be held at PPG phase)

Total: USD $ 14,630,600 (excludes UNDP co-finance as mentioned in Section B.3)

The proposed alternative scenario, with brief description of outcomes and components of the project / Incremental cost reasoning and expected contributions from the baseline, the GEF TF and co-financing

The proposed project has the following three components that have been designed to address the barriers presented and build off/leverage the heretofore mentioned baseline investments.

Component 1 – Institutional strengthening and capacity building for biogas partnerships and improved agro-waste management and regulation: This component will utilize TA funds and is designed to address the barriers mentioned which relate to the inadequate regulatory framework and low institutional capacity of waste management stakeholders to both manage/monitor existing agro-waste entities and effluent sources as well as plan for more low-carbon sustainable solutions in the future, particularly in partner with private sector actors.

The Component will seek to achieve the following outputs:

1.1 Specific guidelines and standards on low-carbon alternatives and utilization technologies for agro-waste and waste water developed and disseminated24 to all relevant stakeholders in the sector.

24 Under the umbrella of the National Master Plan for Waste Water and Sanitation – NMPWWS and the Botswana Waste Management Strategy


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1.2 Framework agreement for public-private partnerships (PPP) in the waste sector adopted and disseminated1.3 Trainings conducted for all relevant stakeholders on the new guidelines and PPP framework agreement (1.1. and 1.2).1.4 Updated regulations developed and adopted for the successful monitoring of effluent flows and by-product waste in all abattoirs in the country, including launch of a “green certification” waste management award for industry actors.1.5. Support provided to the Department of Waste Management and Pollution Control (DWMPC) and District Council authorities to improve monitoring and enforcement of Trade Effluent Agreements between industries and local authorities.1.6 Financial institutions trained on best practices in assessing and financing agro-waste projects and training curriculum on biogas established at Botswana Innovation Hub1.7 Study tours/ knowledge exchanges facilitated between project stakeholders and other agro-waste –to-energy projects in the region, including those supported by GEF.1.8 Dedicated investment facilitation platform on low-carbon waste utilization technologies established and operational with independent budget

GEF funds for this component will incrementally build on baseline investments from the MLG, District Councils and DWPPC as part of their newfound commitment to better manage and coordinate their waste-related activities (and shift resources accordingly) in a more sustainable fashion, both via support for adoption and dissemination of updated guidelines and regulations and by making their respective staff available for training.

GEF funding will also build on baseline investments from financial institutions such as BDC and Barclays – as well as technology and investment assistance platforms such as Botswana Innovation Hub – who are not only seeking to support the discrete investments featured under Components #2 and #3, but also create autonomous support systems that can provide assistance to other interested public and private sector partners for replication and broader diffusion of agro-waste technologies post-project. As such under this component an investment and technical assistance platform will be established that will track and monitor the various processes and lessons learned as regards the business development and commissioning of the assets under Components #2 and #3. By the end of the project is expected that this platform will be formally hosted at a local organization such as BIH or BDC and will have secured its own autonomous source of funding for its operations. This platform will then exist post-project to provide assistance (trainings, investment facilitation, possibly tax breaks and government incentive schemes, etc) to other interested project proponents and stakeholders in the waste sector and continue to monitor the investments supported under this project.

Finally, UNDP’s baseline contribution to this Component corresponds to our ongoing support to various government agencies to fulfill their Rio+ commitments, including support to the National Climate Change Policy Strategy and Action Plan (NCCPSAP); the National Strategy on Sustainable Development (NSSD); the Local Economic Development (LED) plan (where UNDP is working directly with MLG to define a strategy for LED that will guide and support local communities and authorities to utilize locally-available resources such as waste to pursue income-generation opportunities); and recent UNDP support for Municipal Solid Waste Recycling Guidelines for the DWMPC. The specific guidelines, frameworks and regulations developed under this component will directly inform and be integrated with the process for developing new strategies such as the NCCPSAP and the NSSD. Moreover UNDP’s past experience and existing relationship with the Department of Waste Management and Pollution Control as regards their support in developing Guidelines for Recycling of Municipal Solid Waste will be key in replicating a similarly successful collaborative approach to agro-waste (those guidelines were welcomed by District Councils and seen as an important first step towards sustainable management of waste in Botswana, a process that will be further advanced via this component).

It is noted that GEF funds will not be used to provide funding for agencies such as DWMPC to perform their normal statutory duties as regards enforcing trade effluent agreements; that must be covered under government funding. Instead GEF funding will be used for discrete tasks such as the development of new guidelines and capacity-building measures that will allow government authorities to assume their regulatory responsibilities in an improved fashion. Activities under outputs 1.1 and 1.3 will also consider the possibilities of introducing new


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punitive measures for non-compliant entities that could be legally adopted and result in fees returned to the DWMPC’s budget in such a way as to allow for a recurring source of revenue for enforcement activities (this will be considered in more detail at the PPG phase).

GEF funding will also be used to facilitate structured knowledge sharing/study tours/technical collaboration between this project and the other agro-waste projects in the region described in Section A.4, particularly UNIDO’s waste-to-energy projects.

Component 2 – Facilitation and establishment of the first biogas plant in Botswana: This component will utilize a combination of TA and INV for the development of feasibility studies, business plans and technology/financing agreements for the approved construction and commissioning of Botswana’s first biogas plant. While the baseline section documents the expressed interest of several stakeholders in constructing or financing such a plant, only GEF support and its role as a neutral broker can unlock the associated baseline co-finance and address the concerns and preconditions of all the respective stakeholders in a way that will allow the project to move forward.25 The Component will seek to achieve the following outputs in a sequenced fashion:

2.1 Sensitization campaign conducted with district councils and community groups in targeted biogas plant site (TA)2.2 Feasibility studies conducted at three potential biogas sites near agro-industrial plants (abattoirs or poultry farms) (INV)2.3 Environmental impact assessment of selected biogas site completed ( this will be funded by baseline co-finance) 2.4 Tender launched for operator of biogas plant (INV)2.5 Institutional (EPC), financial and business arrangements for biogas plant completed, including financial closure and shareholder structure in place (INV)2.6 Legal establishment of biogas operator based on public-private partnership and concessional agreement with chosen agro-industrial partner (including guaranteed supply of substrate and purchase agreement for supply of biogas) (INV)2.7 Technology agreement signed on North-South or South-South cooperation with a selected international biogas equipment provider (INV)2.8 Construction and commissioning of biogas plant (INV)

Firstly, GEF funds will be used to conduct feasibility studies at three potential sites, one of which will be the BMC Lobatse abattoir and likely another at a major poultry farm in the Southeastern region. The optimum use for biogas is always case specific, depending on the feedstock, the scale and the location of the plant. In addition to the methane capture component, the feasibility studies will consider four main uses for the biogas: 1) Conversion to heat; 2) Conversion to heat and electricity; 3) Upgrading and use of biogas for residential and commercial users (including DC incinerators); and 4) Upgrading and use as vehicle fuel.

From all preliminary analyses conducted to date the most viable scenario seems to be a combination of options (1) and (3 or 4) or (2) and (3 or 4). Most AD plants combust biogas in a combined heat and power (CHP) engine, producing electricity and heat. Results from many studies have shown that biogas utilization through CHP incurs the least overall environmental impact, especially if the plant has a high utilization of heat, which is often the case for anaerobic digestion of slaughterhouse waste (which often uses a double chamber digester). It is almost certain that the plant will use heat and electricity for captive use in the running of the plant and possibly supply of power and heat to the substrate provider if needed (the abattoir or poultry farm supplying the waste). Large-scale electricity production from biogas (except for captive use in the plant itself) is not considered viable in a Botswana context since the current cost of electricity remains low and there is no regulatory framework in place at present for an IPP to supply electricity to the grid. Option (3) is a possibility given that the current retail price

25 This is evident by the fact that while Biosys Ltd, BDC, BMC and Barclays have all expressed strong interests in facilitating such a plant, to date no one entity has been able to undertake the necessary policy and financial de-risking measures and coordination functions to realize that objective; hence the need for GEF support.


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of LPG is $1.95 per kg and an unreliable supply has caused many businesses and consumers to look for cheaper alternative fuels. Moreover the use of biogas as a substitute for diesel in landfill incinerators is another possibility. However creating the required supply and distribution network among potential users is considered to be onerous from a logistics and costing perspective.

Provision of biogas as a substitute for diesel in vehicle fuel is another option as the primary revenue stream for the plant operator; however this will be confirmed via the feasibility studies. To be utilized as a transport fuel biogas must be upgraded into biomethane. This involves stripping CO2 until the gas is approximately >95% methane. Hydrogen sulphide and water vapor are also removed, and a small volume of propane is added as a safety feature to give the gas a detectable odor. Given the fact that diesel prices in Botswana are very high at present26 and expected to remain so for the foreseeable future and in light of the fact that there is a strong demand for alternatives to diesels by the District Councils (see Component #3), the upgrading and supply of compressed biogas as a vehicle fuel or for use in the incinerators are the likeliest options. The feasibility studies will also consider possible waste valorization from plant by-products; a possible scenario for consideration will be for the filtered and dried digestate from the plant to be sold to poultry farms while the solid digestate will be pelletized and sold to farmers as bio-fertilizer.

Depending on which site is selected for preference, a sensitization campaign will then be implemented with the relevant district council staff and community groups about the proposed biogas plant. Concurrent to those processes a variety of activities will be taken to facilitate the financing and implementation of the biogas plant. In line with Output 1.2, an agreement has to be reached with the relevant partners on the institutional and operational structure of the proposed plant and whether it will be developed as a Special Purpose Vehicle, Public-Private Partnership (the likely scenario – BMC has expressed interest in such a structure) or joint venture with a private sector partner. A concessional agreement for the provision of substrate from the effluence source to the plant will be negotiated as part of this process, as well as a supply and pricing agreement to provide the biogas to the District Council CBG filling station to be developed under Component #3 (as well as all other revenue streams from the biogas production). Biosys and Weltec Biopower GmbH have already undertaken preliminary technical estimates for a proposed 7MW biogas plant and have developed a business plan, technical specifications and financing structure for the proposed plant, including engagement with potential financiers such as BDC and Barclays Bank. The proposed biogas plant (customized by Weltec based on preliminary data collected) will process up to 302 tons (consisting of 86 tons of solid waste such as manure and rumen content and 216 tons of abattoir effluent) and the plant would consist of 4 x 4,903 m3 reactors. The proposed plant would have an expected biogas yield of 33,092 Nm3/day and expected methane yield of 18,679 Nm3/day.

High Rate Anaerobic Ponds are wastewater treatment plants that produce biogas as a by-product. They have a low biogas yield per cubic meter of effluent processed as the effluent has a low organic matter content (normally less than 7%). The current plans for the biogas plant (based on the preliminary study) propose using CSTR technology, which processes feedstock with 18% organic dry matter load. This would allow for the collection of additional solid waste from feedlots and poultry farms in the vicinity of the plant to be used as a co-substrate to the abattoir effluent. The result would be a biogas yield that is more than 2 times that of the HRAP system with the same reactor volume. CSTR AD plants are primarily biogas plants and their effluent (digestate) has a high COD and NPK and therefore is good as organic fertilizer. These design specifications of the plant will be considered in greater detail at PPG phase

As regards the process for developing the bio-fertilizer from the plant this involves the following steps:

As noted above the proposed anaerobic digestion plant is fed with 302 tons of waste consisting of 86 tons solid waste and 216 tons water (preliminary estimates)

After anaerobic digestion the plant discharges the waste which is filtered with a screw press filter into 23.5 tons solid digestate and 278.5tons liquid digestate.

26 Current price of diesel in Botswana is $1.25 USD/liter


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Solid digestate is mixed with biochar, pelletized into organic fertilizer and proposed to be sold throughout the country as a replacement of mineral fertilizer.

Liquid digestate is pumped into the high rate algal ponds (HRAP) for algae production. Effluent from the HRAP is stored in PH adjustment pond for 5 days before it is recycled back into the biogas plant for mixing solid waste.

As regards the organization of distribution to mitigate eutrophication through nitrates and phosphates, several measures are proposed to be taken to mitigate possible eutrophication due to over application of digestate on fields (see Annex A for more details).

All high rate algal ponds (HRAPs) constructed or reconstructed for the proposed plant will be built according to the highest environment standards and will minimize any potential soil/groundwater pollution (appropriate mitigation actions will be identified as part of the EIA and design).

A variety of measures will be put in place to monitor and assure the quality and safety of the pelletized bio-fertilizer quality including:

Both the solid digestate and the liquid digestate will be regularly tested for Nitrogen (N), Phosphorous (P), and Potassium (K) - NPK

The NPK of the pelletized biochar-enriched fertilizer is maintained by adding back some liquid digestate to the solid digestate when mixing it with biochar.

NPK of the biochar-enriched pelletized fertilizer is continuously monitored. PH and NKP of the HRAP effluent is also continuously monitored to ensure that nutrients are removed by

algae before it can be recycled to mix solid waste in the biogas plant. This is also important as high nitrates level in the effluent would upset the Carbon: Nitrogen ratio in the anaerobic digestion process. PH is the HRAP is neutralized by storing the effluent for 5 days.

During the PPG phase an in-depth assessment will be made as to the most optimal use of GEF INV funds to facilitate the financing for the plant (output 2.8). Options could include a capital grant; a possible non-grant financial instrument (to be hosted by the Botswana Development Corporation and used as partial guarantee to facilitate a commercial loan); or the provision of incentives towards equipment purchase within the limits set by the principles of incremental cost. However GEF funds are used, it is clear that the majority of financing for the plant will come from private sector partners (the project sponsor), commercial banks and government partners (BMC or BDC). A detailed proposal for the justification, use and oversight of GEF INV funds will be presented at CEO endorsement.

Component 3 – Facilitation and establishment of appropriate biogas utilization platforms in at least (2) Districts of South-eastern Botswana: This Component is directly interlinked with the establishment of the biogas plant under Component #2 and follows on the government’s directive to encourage local authorities to improve the cost-effectiveness of their waste management operations. Based on stakeholder consultations and strong interest from government it was proposed that a practical way to both reduce emissions and utilize the gas from the plant in a cost-effective manner would be via supply of Compressed Biogas (CBG) from the plant to the District Councils (DCs) for use in one of several possible scenarios already mentioned: 1) a vehicular fuel-switch (CBG for diesel) program; or a 2) waste processing (CBG for diesel) fuel-switch incinerator program. Since as described in the baseline the DCs are already using so much of their waste budget on diesel costs for running refuse trucks and incinerators at landfills, they have indicated a strong interest in supporting such a scheme and purchasing the biogas produced at the plant, as well as using their current waste budget to purchase the appropriate technologies to utilize the gas. A possible third option (if these are not deemed viable) would be to utilize the biogas as a substitute for cooking fuel at restaurants and hotels in the area (or for industrial use). All of these scenarios assume that there will be excess biogas produced from the plant that cannot otherwise be used by the plant itself or supplied to the abattoir (onsite for heat or electricity). This component will seek to achieve the following outputs:

- 3.1 Partnership established between biogas plant operator and selected District Councils for supply and purchase of biogas from the plant (TA)


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- 3.2 District Council staff trained on biogas utilization technologies selected for investment, including operations and maintenance (TA)- 3.3 Monitoring scheme in place to track fuel savings (from switch to biogas) and GHG emission reductions (TA)- 3.4 Feasibility study (f/s) conducted to analyze the financial viability and best operational options for use of biogas as an alternative fuel in District Council waste operations (INV)- 3.5 Based on outcome from f/s, selected biogas utilization technologies constructed and commissioned (INV)- 3.6 By end of project at least two (2) District Councils in the area operating low-carbon energy technologies (using CBG as a replacement for diesel) in their waste operations (INV)

The first activity will be Output 3.4 which will be to conduct a detailed feasibility study to confirm the financial and operational viability and produce the required technical parameters and detailed input costs of one of the scenarios mentioned regarding the use of the biogas by the District Councils (or another buyer). At present the proposed idea of a vehicular fuel-switch program is the scenario which has been looked at in the most detail; COWI Sweden, one Sweden’s leading environmental consulting firm, has already prepared draft ToRs and a budget for a potential biogas refueling station and truck refurbishment scheme (please see Annex B – Proposed activities and budget for the facilitation and establishment of a compressed biogas (CBG) filling station in Botswana and pilot testing of a fleet of refuse trucks run on biogas in (2) Districts).

However notwithstanding whatever analyses have been done to date it is planned that a preliminary analysis of the main options will be done at PPG phase and this will then confirm whether the current assumptions of the PIF as regards the most cost-effective use of the biogas are indeed valid and/or whether other biogas utilization options need to be considered (for the purpose of the PIF its assumed that sale to the District Councils is indeed the most viable). Whereas the financial viability of the business model for the biogas plant (Component #2) is based on an assessment of the cash flows from revenue-based sales of various products produced by the plant (biogas, pelletized organic fertilizer, possible heat/electricity provision to the waste source e.g. abattoir, etc) the financial viability of investing in assets under Component #3 is based on assessing the capital costs of the targeted low-carbon technologies (and their operations) versus the annualized cost savings (in diesel or LPG purchases) of the project scenario compared to the BAU scenario.

As was the case with Component #2 and assuming that the basic financial viability of the proposed utilization scenarios is validated by the f/s, under this scenario GEF funds will be used for a combination of interrelated and sequenced TA and INV activities that will start with establishing a partnership and supply agreement with the biogas operator and finish with the actual construction and commissioning of the selected biogas utilization technologies. In light of the budget capacity constraints of the DCs and the fact that the technologies are untested in the Botswana context and this is a pilot scheme, it is envisioned that GEF INV funds will directly subsidize a portion of the capital costs of the scheme with a matching amount provided by the participating District Councils. One possible option (for the vehicular fuel-switch scenario) is that the DCs will pay for the actual truck acquisitions (from their waste budget) while GEF will fund the incremental retrofit cost and training component (this could also be applied to the scenario for the purchase of incinerators). As regards the refueling station scheme, a possible option is a capital grant scheme whereby various DCs are encouraged to compete for hosting the refueling station and the two that offer the greatest mobilized investment for the station and associated purchase of trucks could receive a matching GEF capital subsidy grant of 25% of the station capital cost. Any use of GEF grants for INV (irrespective of technology choice) will be designed within the limits set by the principles of incremental cost.

Following further analysis a suitable cost-sharing arrangement between GEF and the DCs will be developed and presented at CEO endorsement for the purchase of the targeted biogas utilization technologies with a clear delineation of what GEF INV funds will be used for and what District Council funds will be used for.

Incremental cost reasoning and expected contributions from the baseline, the GEFTF and co-financing


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A summary of the business-as-usual (BAU) scenario, incremental activities funded by GEF, and linkages to baseline investments is provided below in Table 3, disaggregated by Component.

Table 3: Project Activities and Incremental Reasoning

BAU Scenario Incremental Activities (GEF Project Components)

Incremental Reasoning vis-à-vis baseline

Component 1: Institutional strengthening and capacity building for biogas partnerships and improved agro-waste management and regulation- Lack of clarity on ownership and concessionality for waste sites- Poor infrastructure maintenance and weak monitoring and enforcement capacity of waste treatment regulations- Lack of specific guidelines or policies on biogas resources and absence of an appropriate legal and regulatory framework on the utilization of biogas from agro-waste and waste water- Insufficient capacity of relevant financial institutions and stakeholders (including banks) to assess the technical risks and benefits of investing in biogas technologies

- Specific guidelines on low-carbon alternatives and utilization technologies for agro-waste and waste water developed and disseminated

- Framework agreement for public-private partnerships (PPP) in the waste sector adopted and disseminated

-Trainings conducted for all relevant stakeholders on the new guidelines and PPP framework agreement

- Updated regulations developed and adopted for the successful monitoring of effluent flows and by-product waste in all abattoirs in the country, including launch of a “green certification” waste management award for industry actors

- Support provided to the DWMPC and District Council authorities to adequately monitor and enforce Trade Effluent Agreements between industries and local authorities.

- Financial institutions trained on best practices in assessing and financing agro-waste projects and training curriculum on biogas established at Botswana Innovation Hub

- Study tours/ knowledge exchanges facilitated between project stakeholders and other agro-waste –to-energy projects in the region, including those supported by GEF

- Dedicated investment facilitation platform on low-carbon waste utilization technologies established and operational with independent budget

GEF funding under Component #1 will build on existing and new government initiatives and platforms to utilize TA funds to improve the regulatory framework and institutional capacity of waste management stakeholders to both 1) better manage/monitor existing agro-waste entities and effluent sources; and 2) plan for more low-carbon sustainable solutions in the future, particularly in partner with private sector actors.

GEF funds for this component will incrementally build on baseline investments from the MLG, District Councils, BIH and DWPPC as part of their newfound commitment to better manage and coordinate their waste-related activities (and shift resources accordingly) in a more sustainable fashion, both via support for adoption and dissemination of updated guidelines and regulations and by making their respective staff available for training. GEF funding will also build on baseline investments from financial institutions such as BDC and Barclays (who have expressed a strong interest in financing waste projects in Botswana but lack the required technical knowledge of the sector) and UNDP’s ongoing support to various government agencies to manage climate change and fulfill their Rio+ commitments for the waste sector as described in Section B.3.

As regards trainings, it is possible that a series of training modules developed under this project will be institutionalized as part of BIH’s standard offerings to companies and stakeholders and thus financed under their annual budget.


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Component 2: Facilitation and establishment of the first biogas plant in Botswana- The country has no biogas plants and no methane from abattoirs or landfills is being sustainably utilized at present.- Widespread ignorance as to the efficacy and viability of such technologies- No suitable demonstration projects for technology penetration- Insufficient knowledge at country level about biogas benefits and available technologies among various stakeholders (government, private companies, farmers, villagers, women, consumers)

Development and commissioning of Botswana’s first biogas plant from agro-waste providing:- Compressed bio methane gas (CBG) as an alternative to diesel and LPG- Compressed bio methane is offered an alternative fuel to power thermal power generators replacing coal and coal based electricity.- Biofertilizer is provided as a low-carbon alternative to imported petroleum-based fertilizers

This component will utilize a combination of GEF TA and INV for the development of feasibility-level engineering designs, EIAs27, business plans and technology/financing agreements for the approved construction and commissioning of Botswana’s first biogas plant in cooperation with government and private sector partners.

GEF funding under Component #2 will incrementally build off indicative baseline investments from various partners for the development and construction of a plant, including: Biosys Botswana Pty (Ltd), Botswana Meat Corporation, Botswana Development Corporation, Barclays Bank, F&C, Weltec Biopower GmbH (or a designated technology supplier), Botswana Innovation Hub and District Councils. Note that in the case of the biogas plant the combined indicative co-finance from Biosys Ltd, Botswana Development Corporation and Barclays Bank together represents only a little more than 50% of the pro-forma capital cost budget of the 7 MW plant described.

GEF INV – in combination with TA – is therefore critical to incrementally contribute to and help catalyze the baseline INV co-finance from other partners in such a way as to meet the financial milestones for construction and commissioning of the targeted assets.

Component 3: Facilitation and establishment of appropriate biogas utilization platforms in at least (2) Districts of South-eastern Botswana- District councils are using expensive imported diesel to run incinerators at landfills and fuel refuse trucks, with large associated GHG emissions- All restaurants and major industries in the area are using imported LPG for cooking or thermal applications

- Partnership established between biogas plant operator and selected District Councils for supply and purchase of biogas from the plant (TA)- District Council staff trained on biogas utilization technologies selected for investment, including operations and maintenance (TA)- Monitoring scheme in place to track fuel savings (from switch to biogas) and GHG

As was the case with Component #2 GEF funds will be used for a combination of interrelated and sequenced TA and INV activities that will start with establishing a partnership and supply agreement with the biogas operator and finish with the actual construction and commissioning of the targeted biogas utilization technologies.

27 GEF funds will not be used for the EIA; that will be covered by F&O and the project sponsor.


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emission reductions (TA)- Feasibility study (f/s) conducted to analyze the financial viability and best operational options for use of biogas as an alternative fuel in District Council waste operations (INV)- Based on outcome from f/s, selected biogas utilization technologies constructed and commissioned (INV)- By end of project at least two (2) District Councils in the area operating low-carbon energy technologies (using CBG as a replacement for diesel) in their waste operations (INV)

GEF funding under Component #3 will incrementally build off investments from MLG, District Councils and Botswana Innovation Hub. It is envisioned that GEF INV funds will directly subsidize a portion of the capital costs of the scheme with a matching amount provided by the participating District Councils; the proposed cost-sharing arrangement between GEF and the DCs will be developed and presented at CEO endorsement.

Global Environmental Benefits

According to Botswana’s Second National Communication to the UNFCCC (2000), Botswana’s total GHG emissions (excluding land use change and forestry) were 7,434, 200 t CO2 eq (taking into account land use change the country is a net carbon sink). In 2000 the largest amount of emissions (as measured by the SNC) came from the energy sector (a total of 5,538,000 tCO2 eq) with the transport sector representing some 474,000 tCO2 eq (from the consumption of petroleum products in Botswana). The second highest source of emissions came from the agricultural sector (1,785,000 tCO2 eq; 26% of total emissions) followed by the liquid and solid waste sector (representing 111,300 t CO2 eq or 1.5% of the total).

Updated GHG emissions data for Botswana is not available at present; however if you take the average annual growth rate (%) in CO2 emissions from 1994-2000 (4.7%) and apply it to the 2000 figures on a compound annual basis you can estimate the current total GHG emissions (excluding land use change) for the year 2013 as 13,506,446 tCO2 eq in total with the sub-total of emissions from the agricultural sector at 3,242,986 t CO2 eq per year and the liquid and solid waste sector at 202,210 t CO2 eq per year (applying the same share of total emissions as the year 2000).

In Botswana tracking and calculating GHG emissions from waste (methane) is challenging since they emanate from all three of the major emission sectors mentioned and there are certain technical specificities as to under which sector or sub-sector they should be categorized. Methane is emitted from the energy sector (subsectors: fuel combustion and fugitive emissions); agricultural sector (subsectors: enteric fermentation and manure management); and what is classified as the “waste” sector (but which as we have noted only includes solid waste disposal and wastewater treatment). The agricultural and “waste” sectors contributed 82.6% and 5.1% respectively of the country’s CH4 emissions; the largest single source is enteric fermentation. As noted in the SNC, most of the solid and liquid waste at dumping sites in Botswana is not managed; therefore the methane content measured from dumping sites only comes from measurements at a few landfills and waste water treatment plants and can be considered to be an underestimate. There are literally thousands of small and medium-sized abattoirs and butcheries across the country that operate for domestic processing and consumption of meat products; agro-waste from these sources are often discharged into rivers, dumped at landfills or disposed at farm sites (methane emissions from these sources are not monitored). Because abattoir agro-waste is not properly managed or utilized its contribution to emissions has not been accurately quantified; moreover while animal effluences from the country’s live ruminant population is categorized under “enteric fermentation” as regards its contribution towards GHG emissions (and calculated on a per head basis), the methane from feces, paunch contents and urine from slaughtered animals theoretically falls under the “waste sector” (even though it could also be categorized as manure management). This project will focus on reducing emissions from waste-related emissions emanating from both the agricultural and solid/liquid waste sectors, which together represent some 28% of Botswana’s GHG emissions (all of its from methane).


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The global benefits from this project can be divided into three emission reduction streams: 1) avoided emissions from methane capture from the biogas plant (Component #2); 2) combined power and heat production from the biogas plant (for both auto-production and possible supply to the waste substrate provider thus replacing grid-supplied electricity and LPG) (Component #2); and 3) fuel switch from diesel to compressed biogas in the refuse trucks (Component 3#).

As regards the avoided emissions from methane capture, Biosys and Weltec Biopower GmbH have done some preliminary technical estimates for a proposed 7MW biogas plant which would have an expected biogas yield of 33,092 Nm3/day and expected methane yield of 18,679 Nm3/day. Converting the Nm3 biomethane unit to metric tons of CH4 and then a tCO2e results in avoided emissions of approximately 83,317 tCO2e per year . Using this calculation, and assuming an expected (conservative) lifetime of 15 years for the plant, the total direct CO2 emission reductions will be 1,249,755 tCO2e.

The combined heat and power production and its utilization is dependent on the size and type of the plant constricted and it’s electrical and thermal properties but based on the plant specifications proposed above the estimated annual excess heat surplus (after factoring in process heat demand for fermentation at the plant) would be 24,354 kWh per annum. The emission reductions from this emission reduction stream will be analyzed during the PPG phase.

As regards the fuel switch benefits of biogas compared with petrol or diesel (the utilization component), at present we only have a preliminary analysis for one possible use of the biogas: the vehicular fuel-switch (CBG for diesel) program. For this type of use (on an illustrative basis) most studies typically compare the ‘well to wheel’ (WTW) and ‘tank to wheel’ (TTW) emissions for biogas (from AD of municipal wastes, sewage sludge or agricultural wastes) with petrol, diesel and other renewable fuels. On a global scale biogas (from wastes) has consistently been found to be the top performing fuel in terms well to wheel carbon emissions. Often, the AD of wastes and utilization of biomethane as a transport fuel actually show a net carbon saving. As illustrated in Table 4 below, the WTW CO2 emissions for the fuel for a heavy goods vehicle (HGV) go from positive to negative if the fuel is biogas from sewage sludge compared to if the fuel is diesel28. In this particular study they used a composite biogas figure comprising 50% from municipal waste and 50% from liquid manure. The difference between the CO2 figures for biogas and diesel is then the CO2 benefit of replacing diesel with biogas. It can be considered that biogas produced from other agro-waste based sources (as proposed in this project) and used in vehicle applications would have similarly low WTW emissions.

Table 4: Emission Reduction Scenarios from a Switch to Biogas from Diesel

28 The carbon saving shown by digesting liquid manures in the study cited is due to the uncontrolled emissions associated with the present case disposal scenario (uncovered storage and land-spreading) in that study which was England.


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Source: Biogas as a Road Transport Fuel, National Society for Clean Air and Environmental Protection (2006)

As regards the potential emission reductions for this particular project scenario, a typical refuse collection truck operated by the District Councils uses on average 32,551 liters of diesel per year which results in annual emission of 87.9 tCO2e. Assuming the deployment of 10 refuse trucks powered by the CBG the annual emission reductions would total approximately 879 tCO2e per year and 6,150 tCO2e over a 7 year period (expected lifetime of a refurbished truck). Therefore, the unit abatement cost (GEF$/ton CO2) of the all the direct CO2 emission reductions (all streams) from the targeted project investments is US$2/ton CO2.

The annual emission reduction targets from the GEF-funded project interventions would therefore represent an annual reduction of 2.5 % in Botswana’s total GHG emissions from the agriculture and “waste” sectors. If the GEF-funded activities were scaled up across all agro-waste and waste water treatment sites across the country the emission reduction benefits could be increased by a factor of 5-10. The direct and indirect ex-ante emission reduction targets from project activities – as well as the potential for scale-up – will be further analyzed and refined at the PPG phase.

Innovativeness, sustainability and potential for scaling up

As noted in the introductory section, biogas applications are proven in providing lasting, relatively cheap and environmentally sound and green eco-solutions to organic waste management and low-carbon energy and transport challenge in developing economies. Renewable methane has been successfully promoted in many countries as a sustainable alternative to fossil fuels in all types of transport applications. Methane is the only fuel that can be used in all transport engine types, i.e. Otto, Diesel, 2-stroke, Wankel, steam, hot bulb, jet and rocket engines, gas and steam turbines and fuel cells, and in hybrid vehicles it can provide power for electric motors. Moreover CBG vehicles are factory made by hundreds of manufacturers, but they are also produced by converting gasoline, diesel and LPG vehicles. Although well-known in other parts of the world, the technologies proposed in this project would be the first-of-their-kind to be introduced in a Botswana context and are therefore highly innovative for the country. Moreover the potential for scaling-up these technologies is also massive; this project only focuses on one part of the country but given the amount of agro-waste in the country there is potential to extend the technologies to many other effluent source points and communities. Biogas plant technology is not just an abattoir or agro-waste waste treatment specific technology but rather a technology applicable to other industrial sectors generating organic pollutants. Hence, it is applicable to all other agro-processing industries and has potential for utilization in all meat-processing plants, landfills and waste water treatment plants in the country. As noted previously, small-scale biogas digestors (fed by cattle dung) for off-grid energy provision (as part of a hybrid mini-grid) is already being promoted by the UNDP/GEF Project Renewable Energy-based Rural Electrification Programme for Botswana and with co-financing support from Swedish SIDA.

The city of Gaborone alone generates 0.1 ton per person per annum, adding up to 85 ton per day for the entire city which is currently not utilized. Moreover waste generation in Botswana is estimated to increase at a rate of 7% per annum (UN-Habitat, 2010) and so the potential substrates for use in biogas technologies will increase exponentially in the coming years. Experiences have proven that “seeing is believing” and the actual demonstration of these technologies will have a powerful effect in inducing further investments in all sectors. Moreover the establishment of a dedicated investment facilitation platform on low-carbon waste utilization technologies (Output 1.8) hosted at a local entity in the country will ensure that the project is only singularly focused on one set of investments, but rather supporting broad-scale systematic replication after the project has ended.

It should also be noted that Component #3 is only intended to cover (2) District Councils on an initial basis; however there are four (4) other Councils interested in replicating the project. The success of this project can have a major impact on Botswana’s Waste Sector since more than 50% of Botswana’s population lives in these 6 Councils and more than 50% of the country’s poultry and intensive beef farming waste is generated in this area. The exact technical replication and scaling up potential in Botswana of all technologies to be introduced (Component #2 and #3) will be done during the PPG phase.


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As regards sustainability, this project offers a combination of both “sticks” (improved monitoring and enforcement) and “carrots” (financial incentives, facilitation and training for technology dissemination and showcasing of low-carbon commercial business models) to foster the long-term development of the sector. As noted earlier, the absence of updated regulations and punitive measures for non-compliance – combined with a lack of knowledge of the available low-carbon alternatives – perpetuates a BAU scenario in the waste sector whereby entities such as abattoirs have little incentive to address unsustainable practices and shift to more sustainable waste treatment platforms.

A.2. Stakeholders. Identify key stakeholders (including civil society organizations, indigenous people, gender groups, and others as relevant) and describe how they will be engaged in project preparation:

The following table lists the stakeholders of the proposed GEF project. Included in the list are the summary of expected roles of each stakeholder in the design, development, implementation and management of the proposed project.

Table 5. Summary Overview of Stakeholder Roles and Responsibilities

Stakeholder Role in ProjectMinistry of Local Government and Rural Development (MLG) and Selected District Councils (Gaborone City Council, South East District Council, Lobatse Town Council, Kweneng District Council, Kgatleng District Council)

The MLG will be the overall lead executing entity for the project. MLG will chair the steering committee and work closely with other national government partners such as DWMPC and WUC as regards institutional strengthening, training and improving regulatory oversight.

The relevant DCs (to be determined during the PPG phase) will the lead executing agency for all activities under Component #3 and could also be involved as a partner/sponsor of the biogas plant under Component #2 (they will obviously be involved as a purchaser of a portion of the biogas from the plant). Both the MLG and DCs will sit on the PSC.

Department of Waste Management and Pollution Control (DWMPC)

DWMPC will be a key project partner across all Components but particularly for Output 1.4 (Updated regulations developed and adopted for the successful monitoring of effluent flows and by-product waste in all abattoirs in the country, including launch of a “green certification” waste management award for industry actors) and Output 1.5 (Support provided to the DWMPC and District Council authorities to adequately monitor and enforce Trade Effluent Agreements between industries and local authorities). Output 1.4 will be developed under the umbrella of the new process for developing an updated National Waste Policy as well as a National Waste Management Plan.

They will also monitor the trade effluent agreement for the biogas plant developed under Component #2. Preliminary discussions have been held with the DWPMPC technical staff on their specific role in the project and these will continue in more depth during the PPG phase.

Botswana Development Corporation (BDC)

BDC is intended to be one of the main project sponsors and investors (they may take an equity stake) of the biogas plant developed under Component #2. They will also be a beneficiary of the trainings under Output 1.6.

Botswana Meat Corporation (BMC)

Depending on whether the biogas plant is constructed to utilize substrates from a BMC abattoir, BMC will be a major partner in Component #2 and part of the PPP developed for the plant. BMC will also be affected by the various waste management capacity-building and regulatory improvements, as well as new guidelines, conducted under Component #1, which will likely entail changes to the way they manage their waste at all their abattoirs and feedlots in the country. They will likely sit on the PSC.

Biosys Botswana Pty Ltd Biosys will seek to be involved as the chosen project sponsor (following a


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competitive tender) to design, build and operate the biogas plant under Component #2. Regardless of whether they are directly involved in the project as the chosen contractor and operator of the plant, as the main biogas energy company in Botswana they will act as a industry representative for all project activities.

Barclays Bank Barclays is to be one of the proposed financial investors and in the biogas plant under Component #2. They will also be a beneficiary of the trainings under Output 1.6.

Finance and Competence Finance and Competence will assist the chosen biogas company to mobilize financing for the plant and also provide in-kind technical advisory assistance for the EIA under Component #2.

Weltec Biopower GmbH Depending on whether Biosys is selected as the company to construct and operate the biogas plant under Component #2 Weltec will be the technology provider and main PS technology partner under Output 2.7.

Botswana Technology Hub (BIH)

BIH is expected to be a key partner across all project Components and will be invited to sit on the PSC. Their role in the project could encompass many activities including technology promotion, trainings, advocacy, assistance with international partnerships and provision on in-kind technical assistance. The project will seek to establish a formal type of collaboration between BIH (which is helping facilitate financing in clean technology investments across the country and keeps a database of projects) and commercial banks in the waste sector and establish a recurring training program under Output 1.6 and a broader investment support program under output 1.8. The biogas plant operators selected under Component #2 will also be invited to be part of BIH’s Technology Entrepreneurship Programme.

Local community groups & women and youth organizations

Local community groups will be involved in the project in a variety of ways including:- As part of training under Component #1- To ensure participation of women and youth owned agro businesses in substrate supply for the biogas plant.- To ensure participation of women and youth owned businesses in upstream industries such as energy crops farming and landscaping biomass for biogas plant feedstock.- To ensure participation of women and youth owned businesses in downstream industries such as bio horticulture using pelletized and liquid bio fertilizer from the biogas plant.The specific roles of the groups will be further elaborated at PPG phase.

A.3 Risk. Indicate risks, including climate change, potential social and environmental risks that might prevent the project objectives from being achieved, and, if possible, propose measures that address these risks to be further developed during the project design (table format acceptable):

The following risks are identified but hopefully will be addressed and minimized through appropriate mitigation measures.

Risk Level of Risk Mitigation ActionThe technologies proposed – while proven in other countries – are unfamiliar in Botswana and technical capacities in this area are limited

Moderate The project intends to utilize proven feasible and affordable technologies and duplicate solutions that have been successfully introduced in several countries with similar climates. As noted, GEF is already promoting small-scale biogas use in mini-grids via the UNDP/GEF Project Renewable Energy-based Rural Electrification Programme for Botswana. The project will benefit from the technical expertise of stakeholders such as Biosys and Weltec that have extensive experience in this area;


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Risk Level of Risk Mitigation Actionmoreover one of BIH’s main aims is to facilitate technical assistance for such innovative technologies. All of the components include major institutional strengthening and training activities so capacities will be built at the country-level to operate and maintain the technologies.

In the case of one possible scenario, there are special environmental and safety considerations that are involved with the use of compressed biogas in vehicles. First of all the upgrading and scrubbing of the gas must be done correctly. To be used as a fuel for vehicles, biogas must be compressed (or liquefied) to decrease the storage volume requirements. The fact that the biogas is stored at a high pressure for use as a vehicular fuel is the most unique physical characteristic of CBG. The presence of a gas that is stored and transferred at pressures that far exceed the normal experience of most fleet operations personnel raises the standard of precaution and training required. Inadvertent opening of valves or loosening of fittings containing high-pressure natural gas not only can create a fire hazard, but also can result in the high-velocity ejection of metal parts or fragments that could be lethal to nearby personnel.

Moderate

As regards ensuring the application of proper environmental and safety standards and practices for the chosen technologies the project will benefit from the technical expertise of stakeholders such as Biosys and the chosen technology provider that have extensive experience in this area. The technology provider for the plant will be mandated to train all the relevant stakeholders and operators in the proper operation and maintenance of the plant. If biogas use for refuse trucks is chosen, council mechanics will be provided with hands-on training on filling station operation and CBG powered trucks maintenance. The District Councils will have to comply with certain new safety standards for the operation of the filling station and use of the refurbished refuse trucks. All the relevant safety standards and proposed mitigation actions are detailed in Annex A, which is excerpted from the Environment and Social Safety Policy (ESSP) checklist prepared for the project at PIF submission.

Economic/financial risk: The capital costs of the proposed plant and associated platforms are high relative to the grant funds proposed and the due diligence and financing processes of the proposed stakeholders are not accustomed to investments in these types of projects. BDC and Barclay investment is predicated on the feasibility studies demonstrating commercial viability as well as the successful outcome of their own due diligence processes.

Moderate/High

As regards the biogas plant, the project economic benefits and financial viability have already been defined assessed by experts from one of Germany’s top ten anaerobic digestion technology provision companies as well as experts from F&C and a BDC loan officer; all of whom have concluded that in principle the project seems commercially attractive. The business model for the biogas plant is based on very conservative assumptions as regards the selling price of the biogas and biofertilizer. The indicative IRR for the plant is estimated at 25%, which can be considered above the bench-mark for alternative investments in the country. The role of BDC, BMC and Barclays will ensure that proper attention is paid to the economic and financial risks of the investments and these will be analyzed in depth during the PPG phase.

There is a risk of the government introducing alternative or subsidized fuels like LPG thus making biogas based systems less viable and attractive as an alternative.

Moderate

The Government -- via the Economic Diversification Drive -- now enforces the government policy of using the government’s buying power to support locally produced goods and reduce the country reliance on imports, which bodes well for the project’s success.

PPPs are not yet widely established in Botswana and therefore the

HighAs noted, the government is strongly committed to local economic developed and increased private sector


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Risk Level of Risk Mitigation Action

establishment of one in this project could face protracted, bureaucratic challenges; moreover the success of the project is predicated on the successful signing of a concessional agreement between the biogas operator and the provider of the substrate for use in the plant

participation in the waste sector. Preliminary engagement with all government and private sector stakeholders has indicated a strong willingness to partner together provided that project investments make economic and social sense for all concerned parties. The strengthening of enforcement and monitoring under Component #1 will further incentivize waste producers such as BMC to seek solutions to out-source waste management to private sector partners rather than risk punitive fines from the BAU scenario. The issue of how to most-effectively establish the framework for a possible PPP will be analyzed in depth during the PPG phase and UNDP will look at possible best practices from other sectors (such as tourism) as well as UNDP’s experience overseeing the establishment of a BPC-Lesedi (first PPP in the energy sector)

DWMPC’s capacity to fulfill their regulatory function depends not only on capacity-building but also on a more clearly defined mandate and a source of recurring revenue for enforcement activities. The development of improved regulations for monitoring of effluent flows and by-product waste in all abattoirs in the country will not be effective unless DWMPC and the DCs have the capacity to actually apply them in practice.

High

These issues will be analyzed in-depth at the PPG phase and any and all necessary amendments will be made to Component #1 to ensure DWMPC’s long-term capacity and delineation of responsibilities.

UNDP Botswana already benefits from having looked closely at many of these issues in the context of their support to DWMPC under the project “Municipal Recycling Guidelines for Botswana Municipalities.” The lessons learned and experiences from that project will help inform the design of the activities under this project.

The District Councils may not have the technical capacity of management oversight practices to successfully operate and maintain the CBG filling station and refuse trucks. Moderate

The MLG and District Councils have expressed their strong support for this project and committed to use all of their collective capacity and current waste management budgets to support the roll-out of the proposed scheme. The project includes several activities on the training of DC members and their staff. The issue of ensuring proper operation and maintenance of the technologies will be analyzed in detail during the PPG phase and every effort will be made to ensure that a long-term technology agreement is signed with the chosen service provider to provide technical support and quality assurance.

Botswana is a semi-arid country, withscarce supplies of water and many of the country’s aquifers depleted. The protection of these invaluable resources is vital to the continuing health and prosperity of the country. Water use requirements in the agro-waste processing sub-sector are extremely high and scarcity of water in the future could see this sector have to scale back production, thus producing less effluents to be treated and utilized in any biogas plant.

Moderate/High Although not the primary focus of this project, the project will do everything possible to advocate for a strategic approach towards water and waste management at abattoirs in accordance with the principles of water conservation, waste minimization and progressivewaste treatment philosophies. Water use licenses and trade effluent permits should make provision for conditions which will force abattoirs to incrementally progress towards predetermined water quality andwaste management objectives within specified time frames. The guidelines developed under Output 1.1 will cover best practices on minimization of waste generation at source (including maximizing the recovery of useful materials) and curb the practice of washingsolids to drain (which transfers waste solids to the liquid


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Risk Level of Risk Mitigation Actionmedium). BIH will be encouraged to promote research into cleaner technology and recovery of higher value products from the waste stream. At present (according to our knowledge) no abattoir in Botswana operates on a closed water circuit. The reason for this is that wastewater streams generated by abattoirs contain high levels of pollutant and it is generally prohibitively costly to treat to a water quality standard which is fit for recycling or re-use (especially in view of the high intake water quality required). Nonetheless as part of the feasibility studies for the plant a variety of water minimization and treatment/re-use technologies will be costed and analyzed and the principles of water conservation and waste minimization will be factored into all project activities.

Botswana is extremely prone to drought and reduced rainfall patterns which can result in major losses to its livestock population from drought-induced mortality and absence of healthy rangelands, which in turn can mean significantly reduced cattle stocks available for agro-processing facilities. The cattle population of Botswana fell by 32% between 1962 and 1966 from a population of 1.35 million head in 1962 (Campbell, 1979). From 1981-84, the national herd is estimated to have decreased by 20% to 2.4 million head, following 3 years of drought (FAO, 1984a). The government in Botswana has declared 2013/14 a drought year, noting that rainfall was poorly distributed and has been below normal in most parts of the country.

This is a major external risk to the project which will be mitigated in the context of a variety of other activities and initiatives the Government is undertaking as part of its National Strategy on Sustainable Development (NSSD). All research indicates that a reduction in rainfall and grazing quality may best be addressed not through increases in grazing area (as the land is finite) but through improved systems of land and herd management. Such improvements in herd and range management are needed as cattle farming operates at sub-optimal levels wherein (i) recruitment rates rise and (ii) mortality rates fall but with no commensurate increases in off-take. During the implementation of NDP10, livestock farmers will be assisted with drilling and equipping of boreholes in areas where finding water is a problem and the government is also in the process of finalizing a National Climate Change Policy Strategy and Action Plan (NCCPSAP) that will address these issues as part of a broader climate adaptation policy.

In the context of this project, this issue will be considered as part of the feasibility studies for the plant which will use conservative assumptions regarding the minimum amount of waste effluents feedstock that will be needed to operate on a commercial basis and the risk of an interruption in supply because of drought-related factors. A risk analysis of this issue and proposed mitigation actions that the project is undertaking in this regard will be presented at CEO Endorsement.

Overall Risk Level Moderate/High

A comprehensive overview of all environmental and social issues relevant to the project and the suggested mitigation actions was prepared as part of the UNDP ESSP Checklist prepared together with the PIF. A full assessment of all project risks will be provided at CEO Endorsement, in addition to an updated and fully executed ESSP sign-off.

A.4. Coordination. Outline the coordination with other relevant GEF financed and other initiatives:


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During the PPG phase, in-depth consultations will be undertaken to establish partnerships and practical modalities for collaborating with similar projects in the country, region and internationally (which will feed into the design of Output 1.7). At this stage the following projects/initiatives have been identified for possible collaboration and learning:

UNDP Botswana has been assisting the Government of Botswana with a national process whose primary purpose is to build a framework for local economic development (LED) in Botswana. The development of a “National LED Implementation Plan” under that process is envisioned to inform the strategy and structures adopted under this project; in parallel the innovative models of LED and decentralized technology dissemination proposed under this project will provide real-life case studies and lessons learned to shape LED in Botswana over the long term.

UNDP Botswana has recently supported the Department of Waste Management and Pollution Control ($123,510 USD in total support) to develop Guidelines for Recycling of Municipal Solid Waste under a project “Municipal Recycling Guidelines for Botswana Municipalities.” The development of these guidelines will provide a reference point and lesson learned for the development and adoption of similar guidelines for the agro-waste sector supported under Component #1.

The UNDP/GEF project Renewable Energy-based Rural Electrification Programme for Botswana facilitated the first major Public-Private Partnership in the Botswana energy sector via the creation of BPC Lesedi (Pty) Ltd, a joint venture between Botswana Power Corporation and the French energy company EDF International. BPC Lesedi is an energy services company formed for the commercial provision of basic energy services using solar photovoltaics (PVs) and energy-efficient cooking appliances. As already noted, that project established a new PV-Biogas mini-grid system at Sekhutlane Village in Southern Botswana operated by the BPC-Lesedi and – although much smaller in scale that the proposed plant in this project – that experience will be studied as a guide for the PPP model in this project.

UNIDO has also been working with the Government of Botswana in identifying Government Secondary Schools as potential biomass feedstock for smaller decentralized biogas plants that could be used within the schools to supplement energy requirements and cut down energy costs. Besides wet waste, the schools also generate solid waste from their agricultural operations that could further justify investment into right-sized biogas plants. The biogas plants could have a dual function as anaerobic digesters and water purifiers for re-use as irrigation water for gardening and greening the school grounds.

As previously noted, at present there are no industrial-size biogas projects in Botswana and only a few small-scale pilot (SME and residential) projects. However GEF and other donors are supporting a variety of industrial-scale biogas projects in Sub-Saharan Africa and collaboration will be sought with the following projects in particular:

UNIDO has recently developed a new GEF V project in Kenya “Sustainable conversion of waste to clean energy for GHG emissions reduction” that focuses in part on the agro-waste sector and builds on previous work done in Kenya. With support from government partners a small biogas plant was installed at the Dagoretti abattoir outside Nairobi to showcase the possibility of turning a waste disposal problem into a useful energy resource whereby animal wastes are converted into biomethane rather than being discharged into environment. A biogas plant has also been installed at the Nyongara slaughter house in Kiambu District whose objective is to demonstrate biogas generation from slaughter house waste.

In Nigeria the “Cows to Kilowatts” model pioneered a new model of waste management that treats slaughterhouse effluent at the source and converts harmful greenhouse gases into clean energy through social enterprise. The project deploys a cutting-edge anaerobic fixed film bioreactor technology to treat abattoir waste and generate biogas more efficiently than conventional biodigester technologies. This also reduces water pollution and greenhouse gas emissions and provides a sustainable and cheap source of clean energy and bio-fertilizer. The flagship bioreactor dubbed “Cows to Kilowatts” is located at Ibadan, the largest indigenous city in Tropical Africa.

Recently Ghana has launched a pilot biogas project at the Kumasi Abattoir to serve as a catalyst for other projects across the country and in the West African sub region. The three-year project, titled


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“Supporting green industrial development in Ghana: Biogas technology and business for sustainable growth” is supported by the Ministry of Trade, Industry and Energy (MOTIE) of Korea and the Korea Institute of Energy, Technology Evaluation and Planning (KETEP). Collaborating in the project are the Ministries of Trade and Industry (MOTI) and Energy (MoE), Ghanaian Council for Scientific and Industrial Research (CSIR) and the ECOWAS Regional Centre for Renewable Energy and Energy Efficiency (ECREEE).

As regards the utilization of biogas in municipal vehicle fleets (particularly refuse trucks) the PPG phase will analyze many current practices and schemes under operation in cities such as Toronto, Stockholm and elsewhere.

The Government of Botswana is in the process of developing a National Climate Change Policy (NCCP), and (2) a Comprehensive National Climate Change Strategy and Action Plan (NCCSAP) to implement the Policy. This project will seek collaboration with both these processes and strategies.

Under GEF V, the UNDP/GEF’s EITT team has also started the project Developing a market for Biogas Resource Development and Utilization in Guinea which follows on several other biogas projects successfully completed in other regions. Previous successful biogas projects implemented by UNDP UNDP/GEF include the Jordan Biogas Project - Reduction of Methane Emissions and Utilisation of Municipal Waste for Energy in Amman -- which facilitated the instalment of a biogas waste plant with the capacity to treat 60 tons of organic waste per day to produce 5,200 cubic meter of methane gas and produce 7 million kWh of electricity per year. UNDP/GEF also implemented the successful GEF project Developing High-Rate Biomethanation Processes as Means to Reduce Greenhouse Gas Emission (India) which piloted a variety of successful technology demonstrations focused on various substrates (including waste from abattoir and agro-processing industries) and worked with different target groups (municipalities, small industry and large industry). Lessons learned from both those projects will be analyzed as part of the design of the project during the PPG phase.

B.1 National strategies and plans or reports and assessments under relevant conventions, if applicable, i.e. NAPAS, NAPs, NBSAPs, national communications, TNAs, NCSAs, NIPs, PRSPs, NPFE, Biennial Update Reports, etc.:

Firstly, this project proposal concept was first proposed and discussed at a Climate Change Proposal Development (GEF) Workshop held in Gaborone, Botswana in March 2013 and sponsored by the Department of Meteorological Services as the National Focal Point on Climate Change with the support of UNDP. Following presentation and ranking of several project ideas for possible utilization of the CCM STAR allocation, it was selected as the highest priority project for programming of GEF V CCM resources.

In addition to what has already been mentioned as regards relevant waste strategies, as regards the clean energy component the project is consistent with and informed by Vision 2016, the National Energy Policy and the Botswana Energy Master Plan (1996, reviewed 2003), which has the following targets of relevance to this project:

Improved access, security and reliability of energy supply to all sectors of the economy, particularly the low income and marginalized;

Improved capacity for service delivery for all key stakeholders in the energy delivery chain; Improved availability of energy information for policy and planning; Minimized energy related environmental, safety and health impacts; Improved energy efficiency for all energy sources in all sectors for economy, increased security and

environmental protection; and Effective private sector participation and investment at all levels in the energy sector.

The project is also supportive of the objectives of the Botswana Waste Management Act (1998), which include the following:

Minimizing and reducing wastes in industry, commerce and private households Maximizing environmentally sound waste reuse and recycling Promoting environmentally sound waste collection, treatment, and disposal.


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Moreover a full elaboration of Botswana’s opportunities and challenges for the Green Economy was made through the Rio+20 Issues Paper prepared in October 2011. That Issues Paper identifies the following five building blocks for a green economy, several of which are the explicit focus on this project (see bold highlights):

Low-carbon energy, infrastructure and transport Sustainable systems of food production, water and sanitation, and waste Ways of protecting and sustainably using biodiversity green jobs and livelihoods that ensure social justice

and equity, and set real measures for progress and wellbeing Investment in green sectors, environmental ‘accounting’ and the introduction of new business models Policy reform which provides for enhanced decision making through broad participation across sectors

Botswana is a founding signatory of the United Nations Framework Convention on Climate Change (UNFCCC) and ratified the Convention on 27 January 1994. The Initial National Communication was submitted to the UNFCCC in 2001 and the Second National Communication was submitted in December 2011. This project directly responds to two of the priority climate change projects identified in Table 6.2 of the Second National Communication as excerpted from the table below.

Table 6. List of Priority CC Mitigation Projects from the Second National Communication (2011)

This project also directly responds to two of the priority technologies identified in the country’s Technology Needs Assessment report prepared in 2004, as identified in Table 5.1 of the TNA excerpted below:

Table 7. Key Technology Needs for Botswana from the TNA (2004)


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B.2. GEF focal area and/or fund(s) strategies, eligibility criteria and priorities:

This project is consistent with the GEF-5 strategy to address climate change, especially the Objective 3 – “Promote investment in renewable energy technologies” and the key outcomes attached to that strategic objective as regards investments mobilized for renewable energy technologies and GHG emissions avoided.

B.3 The GEF Agency’s comparative advantage for implementing this project:

The proposed project is clearly within the comparative advantages of UNDP as stated in the GEF Council Paper C.31.5 “Comparative Advantages of GEF Agencies”. The project fits within the program of work that UNDP Botswana is undertaking as part of the implementation of the Government of Botswana – United Nations Development Assistance Framework (UNDAF) and the implementation of its Programme Operational Plan (POP). The project specifically contributes to UNDAF Outcome 4 on Environment and Climate (“By 2016 the rural poor, especially women, are deriving greater benefits from the environment and natural ecosystems”) and UNDP Country Programme Output 4.3 on Enhanced National Capacity for Climate Change Adaptation and Mitigation. While the project cuts across several practice areas of UNDP Botswana, it specifically falls under the Energy and Environment Programme (E&E) of the Country Office, which will provide day-to-day management and technical support. It also contributes to the work of the Economic Diversification and Poverty Reduction (EDPR) Unit of UNDP Botswana. The program work of the Country Office is structured such that it has program management and technical support based in the UNDP office and technical advisory personnel based in implementing government ministries. The office promotes cross-practice or cross-unit collaboration that enables projects like this to benefit from the inputs of several experts within UNDP Botswana. The E&E Unit of UNDP Botswana is comprised of a Programme Analyst who is the substantive head of unit, supported by a Programme Assistant from the Operations Unit, and a Finance and Administration Associate and a senior Technical Advisor for Sustainable Development who also provide technical support to other aspects of the E&E program, in particular climate change related work. The Programme Analyst and the Programme Assistant are based at the UNDP office while the Finance and Administration Associate and the Sustainable Development Advisor are both


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based at the Ministry of Environment Wildlife and Tourism. This operational structure enables UNDP Botswana to provide focused technical and policy inputs into UNDAF and PoP programs as well as strategic programmatic development and oversight, quality control and ensuring that implementation is done in line with the appropriate standards and contractual obligations.

UNDP is a key partner for the Government of Botswana as regards implementation of GEF projects and has the largest portfolio of GEF projects under implementation in the country. Moreover UNDP Botswana is supporting the government on several other key initiatives that illustrate our comparative advantage in the country:

National Climate Change Policy Strategy and Action Plan (NCCPSAP) - UNDP is supporting the development of a comprehensive climate change policy with a strategy and action plan that will define, among other tasks, a pathway towards low carbon development for the country.

National Strategy on Sustainable Development (NSSD) – The NSSD will constitute an important planning strategy document for the country as it strives towards a more sustainable development pathway in line with the Rio+20 Outcomes and various national visions and national development aspirations that. It will define the overarching strategy for SD to be realized in Botswana as well as the institutional structures that drive strategy planning and implementation. UNDP is providing key support to the development of this strategy.

Local Economic Development (LED) – As already noted in Section A.4, UNDP is also working with the Ministry of Local Government and Rural Development to define a strategy for LED that will guide and support local communities and authorities to utilize locally-available resources (such as waste) to pursue income-generation opportunities and build credible local enterprises and economies thereby generating sustainable employment and poverty eradication.

Municipal Solid Waste Recycling Guidelines – As already noted in Section A.4, UNDP supported Department of Waste Management and Pollution Control ($123,510 USD in total support) to develop Guidelines for Recycling of Municipal Solid Waste. These guidelines were welcomed by District Councils and seen as an important step towards sustainable management of waste in Botswana.

These and other activities under the E&E and EDPR portfolios provide UNDP with a wide base of experience, expertise and insights on issues related to the project being proposed here. UNDP is also well-placed to facilitate/manage the implementation of this project because of its long-standing partnership with the Government of Botswana in the formulation of development interventions that are sustainable, and the recent collaboration of a number of initiatives, including those introducing approaches to the management and use of resources in a manner that contributes to reductions in greenhouse gas emissions. In addition to these and other work that UNDP will undertake under Outcome 4, Output 3 of the GoB-UN POP, UNDP Botswana commits a further $200,000 as co-financing toward this project through the services of the Technical Advisor – Sustainable Development based at the Ministry of Environment, Wildlife and Tourism, and Technical Advisor – Local Economic Development based at the Ministry of Local Government and Rural Development.

This project also feeds under the UNDP-GEF EITT (Energy, Infrastructure, Technology and Transport) Signature program number 2 “Urban infrastructure: promoting low emission urban and transport infrastructure.” As noted in Section A.4 UNDP EITT staff have extensive past experience with promoting innovative urban biogas schemes, both in GEF-funded projects (Jordan and India are two notable examples) and in the carbon finance arena. Most recently UNDP’s MDG Carbon Facility and EITT Africa team (working with the Government of Ethiopia, Addis Ababa City Municipality, UNDP Ethiopia, and the Horn of Africa Regional Environment Centre HoAREC) registered the Addis Ababa Repi Open Dump Fill Methane Capture and Flaring CDM Project, the second registered – and first registered non-forestry – project in Ethiopia.

PART III: APPROVAL/ENDORSEMENT BY GEF OPERATIONAL FOCAL POINT(S) AND GEF AGENCY(IES)A. RECORD OF ENDORSEMENT OF GEF OPERATIONAL FOCAL POINT (S) ON BEHALF OF THE

GOVERNMENT(S): (Please attach the Operational Focal Point endorsement letter(s) with this template. For SGP, use this OFP endorsement letter).


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http://www.thegef.org/gef/sites/thegef.org/files/documents/OFP%20Endorsement%20Letter%20Template%20for%20SGP%2009-08-2010.doc

http://www.thegef.org/gef/sites/thegef.org/files/documents/OFP%20Endorsement%20Letter%20Template%2011-1-11_0.doc

NAME POSITION MINISTRY DATE (MM/dd/yyyy)Khulekani Mpofu Chief Natural Resources Officer and

GEF Operational DEPARTMENT OF ENVIRONMENTAL AFFAIRSMINISTRY OF ENVIRONMENT , WILDLIFE AND TOURISM

JULY 25TH, 2013

B. GEF AGENCY(IES) CERTIFICATIONThis request has been prepared in accordance with GEF/LDCF/SCCF/NPIF policies and procedures and meets the GEF/LDCF/SCCF/NPIF criteria for project identification and preparation.

Agency Coordinator, Agency name

SignatureDATE

(MM/dd/yyyy)Project Contact Person

TelephoneEmail Address

Adriana DinuUNDP-GEF Executive

Coordinator and Director a.i.

January 20, 2014

Lucas BlackUNDP/GEF

RTA, Energy,

Infrastructure, Transport and Technology

(EITT)

Tel: +27 71 874 4893

[email protected]

Annex A – Overview of Environmental and Social Issues and Mitigation Actions

Overview of Environmental and Social Issues relevant to the Project

As regards Component #1, one of the project activities is updated regulations developed and adopted for the successful monitoring of effluent flows and by-product waste in all abattoirs in the country, including launch of a “green certification” waste management award for industry actors. The development and adoption of these new regulations will generate major environmental benefits for the agro-waste sector as a whole since it can be expected that the new regulations will include a major strengthening of both environmental and social safeguards and increased penalties for non-compliance. However the new regulations can also be expected to possibly be met with resistance from some industry stakeholders who will resist stricter environmental controls and possible retroactive directives to bring their facilities in compliance with the new regulations.

As regards Component #2, as noted in the PIF the current use of biogas in Botswana is limited to small-scale applications and there is currently no institutional biogas plant operating at either an abattoir or a landfill (or legal requirements for methane to be captured or utilized). Animal by-products are suitable for anaerobic digestion giving high gas yields and a nutrient rich organic fertilizer but most of the proven experience with such technologies are in Europe, North America, Latin America and Asia. A limited number of High Performance Temperature Controlled (HPTC) biogas digesters and conventional CSTR (Continuous Stirred Tank Reactor) type digesters have been piloted in Africa (several plants at abattoirs have been piloted in Kenya) but such technologies are still relatively uncommon in Southern Africa and non-existent in Botswana. There are potential technical and microbiological problems associated with anaerobic digestion of slaughterhouse waste since the effluents from these facilities contain higher amounts of fat residues. Such fat residues have a tendency to generate a fatty layer or scam at the surface of the liquid in the chamber, which creates problems for the proper anaerobic digestion of the effluents unless specialized equipment is used and proper design standards are adopted. Raw biogas produced from digestion is roughly 60% methane and 29% CO2 with trace elements of H2S; without treatment and upgrading it is not high quality enough to be used as fuel gas for machinery. The solution is


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mailto:[email protected]

the use of biogas upgrading or purification processes whereby contaminants in the raw biogas stream are absorbed or scrubbed, leaving more methane per unit volume of gas. There are four main methods of upgrading: water washing, pressure swing absorption, selexol absorption, and amine gas treating. Each requires careful operation, planning and maintenance. Moreover as regards the application of Compressed Biogas (CGB) for vehicle use (fuel switch from diesel), while such technologies are widely used in Europe they are as yet untested in Botswana. These technologies also require careful planning, design, operation and maintenance schemes to generate the intended environmental and social benefits.

While the project intends to utilize proven feasible a technologies and duplicate solutions that have been successfully introduced in several countries with similar climates, the technologies involved require careful environmental assessments to mitigate any potential negative externalities. For the biogas plant a full EIA is required for it to be approved and financed and it will also require a trade effluent agreement in compliance with the updated regulations. Consideration of water usage is one of the main environmental issues to consider in the design of the plant and the upgrading technology selected should consider this factor. Water use requirements in the agro-waste processing sub-sector are extremely high and scarcity of water in the future could see this sector have to scale back production, thus producing less effluents to be treated and utilized in any biogas plant. Although the current BAU scenario may use less more water than that used by a new biogas plant the quality standard of water treated will be significantly higher from the new plant and there will be a possibility for a semi-closed system and water recycling. Nonetheless in light of Botswana's water scarcity challenges it is very important to monitor water usage and seek to minimize water consumption in all facets of the biogas plant project design.

An additional environmental consideration as regards the biogas plant is the potential impacts of drought and its associated effect on cattle stocks (if the biogas plant is located adjacent to an abattoir) and how much waste will be generated for processing from the plant. Botswana is extremely prone to drought and reduced rainfall patterns which can result in major losses to its livestock population from drought-induced mortality and absence of healthy rangelands, which in turn can mean significantly reduced cattle stocks available for agro-processing facilities. If the abattoir connected to the plant is not producing a sufficient amount of effluents than the plant itself cannot operate to its intended capacity which can have both environmental and financial impacts.

As regards what happens to the remaining waste after fermentation and any possible environmental contamination, under the proposed plant scheme the biogas effluent undergoes two process after which is looped back to dilute feedstock. The first step in biogas effluent processing is the screw press separation, which separates biogas digestate into solid digestate and liquid digestate. Dry matter content in solid digestate is about 30% and 5% in liquid digestate.

The solid digestate is pelletized and bagged. It is primarily used as a substitute for mineral fertilizer in nearby agricultural lands (including Napier Grass plantations). Experts recommend a fertilizer application of 800kg – Urea, 395kg – phosphates, 325kg potassium and 15tons manure per hectare per year in Napier grass plantation. This recommendation is to be followed in conjunction with recommendations by the local soil testing agricultural experts. Surplus pelletized organic fertilizer will be sold as a substitute for mineral fertilizer throughout the country.

The second step in biogas effluent processing is the High Rate Algae Ponds (HRAP). Research has shown that algae cultivation is very efficient in nutrients removal from waste streams. The table below and many other studies show a nitrates and phosphates removal of more than 90%.

Table 4.4: Ammonia removal comparison for algae treatment systems

Study % NH3-N

RemovalAlgae Species Media


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Martinez (2000) 80-100 Scenedemus obliques Autoclaved municipal wastewater

Lincoln (1996) 99 Arthrouspira plantensis Anaerobic treated dairy wastewater

Green (1995) 99 Mixed culture Municipal wastewater

This study 96 Mixed culture Anaerobic treated dairy wastewater

Source: Ian Charles Woertz et la 2007

At the end of the HRT, algae biomass is harvested and the algae pond effluent is stored in the maturation pond for 20 days before it can be used to mix solid digestate in the biogas plant again.

As regards the organization of distribution to mitigate eutrophication through nitrates and phosphates, the following measures are proposed to be taken to mitigate possible eutrophication due to over application of digestate on the fields:

- The system will be closed loop operation. Recycled water is looped back to mix substrates in the biogas plant. This is important because the number of cattle slaughtered (the amount of effluent from the abattoir) fluctuates from day to day. The biogas plant operates on a constant feed-rate whether the abattoir is undergoing maintenance or is in full production. - As explained above biogas plant effluent is not spread on the fields as liquid fertilizer but pumped into the algae ponds for algae cultivation. Algae removes visually all the nutrients from the effluent, hence the possibility of eutrophication is zero even if the algae ponds effluent could be spread on the fields.

In this way the project will make sure that all high rate algal ponds (HRAPs) constructed or reconstructed for the proposed plant are built according to the highest environment standards and will minimize any potential soil/groundwater pollution (appropriate mitigation actions will be identified as part of the EIA and design).

As regards Component #3 – and the possibility of developing a compressed biogas (CBG) filling station in Botswana and pilot testing of a fleet of refuse trucks run on biogas – there are some special environmental and safety considerations that are involved with the use of compressed biogas in vehicles. First of all the upgrading and scrubbing of the gas must be done correctly. To be used as a fuel for vehicles, biogas must be compressed (or liquefied) to decrease the storage volume requirements. Three common pressures for CBG are 2400, 3000, and 3600 psi. For these three pressures, the equivalent amount of energy stored per unit volume is 22, 27, and 33% of that of gasoline, respectively. Because CBG cylinders have thicker walls than diesel tanks, a smaller amount of fuel can be stored within a given tank volume. CBG fuel systems deliver fuel to the ICE as a result of the stored pressure in the fuel tank. There are no fuel pumps or compressors. As CBG moves from the tanks to the engine, its pressure is reduced in steps to a pressure that is slightly above atmosphere. Fuel stored at high pressure presents some unique handling considerations. For CBG, two of these are the Joule-Thompson effect and static electricity. Precautions must be taken to dissipate any static electrical charge (characterized by high voltage and low current) prior to the transfer of natural gas (both fueling and removal of fuel from a vehicle) to reduce the possibility of a spark ignition event. A grounding strap is used to make sure that the vehicle being fueled (or having fuel removed) and the fueling piping are at the same electric potential.

The fact that the biogas is stored at a high pressure for use as a vehicular fuel is the most unique physical characteristic of CBG. The presence of a gas that is stored and transferred at pressures that far exceed the normal experience of most fleet operations personnel raises the standard of precaution and training required. Inadvertent opening of valves or loosening of fittings containing high-pressure natural gas not only can create a fire hazard, but also can result in the high-velocity ejection of metal parts or fragments that could be lethal to nearby personnel.


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Methane is an inflammable gas. A common gas compressor poses fire hazards, since the auto-ignition temperature of biogas is 537 °C. Leakage and excessive temperature rise can be fatal. Due care must be applied during operation must be done so as not to allow the temperature to rise above safe limits. As such the upgrading, storage and CBG fueling station operation must be carefully monitored and maintained.Moreover in terms of the use of CBG in commercial vehicles the following regulations should be observed:• Transportation in approved tanks that do not exceed the rated tank pressure • Water vapor content of less than 0.5 lbs/million scf (i.e., less than 10 ppm H2O) • Minimum methane content of 98% • Appropriate hazardous materials markings

The principal constituents of natural gas—methane, ethane, and propane—are not considered to be toxic. These gases are considered asphyxiants because they can displace oxygen in a closed environment. The issues described are just some of the myriad environmental and safety issues associated with the construction and operation of a biogas plant and the utilization of biogas as a vehicular fuel.

The project will also have social impacts as regards employment creation for local communities in the plant and the possible waste valorization from plant by-products; a possible scenario for consideration will be for the filtered and dried digestate from the plant to be sold to poultry farms while the solid digestate will be pelletized and sold to farmers as bio-fertilizer. All of these activities will yield potential social benefits and employment for communities in the vicinity of the plant.

Nest Steps in Addressing these Issues

The project includes a series of specific measures to mitigate all the relevant environmental and social risks mentioned in Section B of the ESSP. Some of these issues will be dealt with during the PPG phase via application of best practices, specific design criteria and safeguards, and proposed activities and trainings while further more in-depth environmental protection measures will be taken during the course of the project itself. The proposed actions to be taken include the following:

During the PPG phase the design of the activities such as Output 1.1 (Specific guidelines and standards on low-carbon alternatives and utilization technologies for agro-waste and waste water developed and disseminated to all relevant stakeholders in the sector) and Output 1.4 (Updated regulations developed and adopted for the successful monitoring of effluent flows and by-product waste in all abattoirs in the country, including launch of a “green certification” waste management award for industry actors) will include a comprehensive assessment of the current institutional and regulatory context of the country and an analysis of the most optimal way to ensure that such guidelines and regulations meet the highest possible environmental standards possible. A review of standards and best practices from other MICs will be undertaken for incorporation into this project. Moreover a capacity assessment of the main actors in the waste sector will be undertaken to assess their capacity to fully implement and enforce any new regulations introduced during the project.

During the PPG phase the selection of the three sites for the planned feasibility studies (to be conducted during the project) will include a preliminary analysis of their current EIAs and environmental impacts; during the project itself a full EIA will be undertaken for the prioritized site as selected from the feasibility studies. The f/s studies will include a detailed assessment of all the potential environmental, occupational safety and social impacts noted in section B. The EIA done for the plant will be completed as per the guidelines and legal requirements of Botswana's Environmental Assessment Act (2011); moreover the EIA will also include a thorough assessment of any secondary or consequential impacts in the area of the plant. The EIA will be subject to rigorous due diligence since it is a prerequisite for funding from both Botswana Development Corporation and Barclays. GEF funding for the plant or CBG filling station/refuse will be contingent upon full compliance with the EIA recommendations.


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As regards the EIA the project will benefit from the assistance of Finance and Competence and their affiliated partner RPlanM (Pty) Ltd (RPM) who have been working as Botswana registered Environmental Planners and have worked on EIAs since 1992 for services infrastructure including roads, electrical substations and power stations, filling stations and fuel depots. They have also agreed to provide $25-50K in pro-bono assistance for the EIA for the plant.

As regards ensuring the application of proper environmental and safety standards and practices for the chosen technologies the project will benefit from the technical expertise of stakeholders such as Biosys and Weltec that have extensive experience in this area. Weltec has built more than 250 biogas plants all over Europe, the United States and Asia. The company is renowned for its individualized implementation and can customize plants for different conditions and substrates. It has agreed to provide a variety of in-kind support (preliminary f/s, and technical advisory support) for any future project, on the assumption that they are the chosen technology supplier for any tendered plant. The technology provider for the plant will be mandated to train all the relevant stakeholders and operators in the operation and maintenance of the plant. The District Councils will have to comply with certain new safety standards for the operation of the biogas utilization technologies.

Although not the primary focus of this project, the project will do everything possible - both as regards the development of new guidelines and via the introduction of new technologies -- to advocate for a strategic approach towards water and waste management at abattoirs in accordance with the principles of water conservation, waste minimization and progressive waste treatment philosophies. Water use licenses and trade effluent permits should make provision for conditions which will force abattoirs to incrementally progress towards predetermined water quality and waste management objectives within specified time frames. The guidelines developed under Output 1.1 will cover best practices on minimization of waste generation at source (including maximizing the recovery of useful materials) and curb the practice of washing solids to drain (which transfers waste solids to the liquid medium). BIH will be encouraged to promote research into cleaner technology and recovery of higher value products from the waste stream. At present (according to our knowledge) no abattoir in Botswana operates on a closed water circuit. The reason for this is that wastewater streams generated by abattoirs contain high levels of pollutant and it is generally prohibitively costly to treat to a water quality standard which is fit for recycling or re-use (especially in view of the high intake water quality required). Nonetheless as part of the feasibility studies for the plant a variety of water minimization and treatment/re-use technologies will be costed and analyzed and the principles of water conservation and waste minimization will be factored into all project activities.

As regards the potential impacts of drought and its associated effect on cattle stocks (if the biogas plant is located adjacent to an abattoir) and how much waste will be generated for processing from the plant, this issue will also be considered as part of the feasibility studies for the plant and biogas utilization. This issue will also be considered as regards the development of the guidelines and regulations earmarked under Component #1.

A full assessment of all project risks will be provided at CEO Endorsement

As regards social impacts, the project envisions a number of positive ways for local community groups to be involved in the project including:

- As part of training under Component #1- To ensure participation of women and youth-owned agro businesses in substrate supply for the biogas plant.- To ensure participation of women and youth owned businesses in upstream industries such as energy crops farming and landscaping biomass for biogas plant feedstock. Any dedicated energy crop farming for supply to the plant will be done on degraded land with indigenous crops that do not compete with food crops and are deemed to be environmentally suitable for the area.


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- To ensure participation of women and youth owned businesses in downstream industries such as bio-horticulture using pelletized and liquid bio fertilizer from the biogas plant.

The specific roles of the groups will be further elaborated at PPG phase. Moreover depending on which site is selected for preference, a sensitization campaign will be implemented with the relevant district council staff and community groups about the proposed biogas plant.

Annex B – Proposed activities and budget for the facilitation and establishmentof a compressed biogas (CBG) filling station in Botswana and pilot testing of a

fleet of refuse trucks run on biogas in (2) Districts

COWI Sweden, one Sweden’s leading environmental consulting firm, has already prepared draft ToRs for a potential biogas refueling station that would cover the following areas:- Project definition- RFQ for CBG refuelling station- Suppliers of re-fuelling stations- An overview of dual fuel technology for garbage trucks- Filling instructions- Contract proposals- Technical requirements for dual fuel garbage trucks- Conclusions and recommendations

As already noted, under this scenario GEF funds will be used for a combination of interrelated and sequenced TA and INV activities that will start with establishing a partnership and supply agreement with the biogas operator and finish with the actual construction and commissioning of the country’s first CBG filling station and roll-out of 10 refurbished refuse trucks (hybrid CBG/diesel). The CBG station will likely be a low-fill system that takes gas directly from the compressor into the vehicle. Re-fuelling time for a large vehicle can be in excess of three hours and these systems are therefore suitable when sufficient re-fuelling time is available outside the hours of operation (e.g. overnight) which is the case with the DC refuse truck depots.

In an effort to save costs and deploy as many trucks as possible, it is envisioned that the project will engage a professional retrofitting company in Europe to source used refuse collection trucks (10-15 trucks) for refurbishment before shipping them to Botswana. One CBG refueling station will be constructed where two District Council refuse trucks park and refuel over night (likely candidates based on preliminary analyses are Kweneng District Council and South East District Council). The refurbished vehicles will store the gas in high-pressure cylinders on the vehicles and have a hybrid arrangement whereby they can use the fuel in a bi-fuel spark ignition engine that allows the use of both gas and diesel depending on conditions. A preliminary budget for the scheme is as follows (a financial model has not yet been developed):

Indicative Budget for the CBG Filling Station and Refuse Truck Pilot SchemeDescription Quantity Estimated BudgetCBG refueling stationLow pressure for overnight refueling

One (1) Equipment - US$ 700,000Training - US$ 50,000Total - US$ 750,000

Refurbished Refuse collection trucks (<150,000km and < 6 years)

Ten (10) Truck - US$ 54,000 (each)Refurbishment - US$ 12,500 (unit)Shipping - US$ 3,375 (per unit)Sub-total - US$ 69,875 (per unit) X 10 = @$700,000Training - US$ 21,250Total - US$ 720,000

Total US$1,470,000


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financing plan (in us$):€¦ · web viewat the same time the private sector’s role in waste...

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