Egypt’s First PPP Offers Relief to a Fast-Growing Population
The New Cairo Wastewater Treatment Plant—the first PPP in Egypt—now serves more than 1 million residents. © Orasqualia
With only a third of Egypt’s population connected to a sewer system—and rapid urbanization straining already overburdened infrastructure—Egypt’s fast-growing cities have been searching for solutions. This is true even for the country’s newest areas, built specifically to alleviate overcrowding. That was the case in New Cairo, a satellite town constructed near the capital in 2000.
New Cairo’s rapid growth has strained officials’ ability to provide adequate services, especially sanitation. With the city population expected to more than quadruple by 2030, the Government of Egypt hired IFC in 2007 to structure a public-private partnership (PPP) to finance, design, construct, operate, and maintain its wastewater treatment plant.
The New Cairo Wastewater Treatment Plant—the first PPP in the country—now serves more than 1 million residents . Treated wastewater from the plant is being used to irrigate agricultural land and urban green areas, reducing the need to use fresh water. In addition, the sludge from the plant serves as fertilizer that increases the productivity of the fields, boosting economic growth in agricultural sectors. This is creating regular jobs in addition to the 60 direct jobs for skilled workers at the plant.
Modeling Best PPP Practices
PPPs are at the heart of the Government’s long-term economic development strategy—and the New Cairo PPP set national and regional standards for success . Every step in its development was designed to demonstrate best practices. Three particular characteristics made this project successful: competitive bidding, grouping construction and operation, and gaining experience from a multinational firm in collaboration with a local operator.
The creation of a PPP Central Unit within Egypt’s Ministry of Finance was another important element of the project. PPP Central Unit personnel helped navigate political processes and build stakeholder support, which generated advantages for both private and public partners.
The project’s design, including its solid regulatory framework, has already inspired other collaborations, such as Cairo’s Abu Rawash wastewater treatment plant. And although the New Cairo Wastewater Treatment Plant was conceived to provide adequate water sanitation, it has potential for replication in other parts of the water sector.
Fulfilling Sustainable Development Goals
The New Cairo plant responds directly to one of the United Nations’ Sustainable Development Goals (SDGs): the need for clean water and sanitation. The plant addresses a number of other SDGs as well—such as helping the population’s health and well-being, improving the quality of life below water, building partnerships, creating decent work that feeds economic growth, and reducing inequalities.
For its contribution to sustainable development, the New Cairo Wastewater Treatment plant was recognized among the finalists at the 2017 FT (Financial Times)/IFC Transformational Business Awards—a prominent global program that highlights innovative, long-term private sector solutions that help address key development issues and meet key UN Sustainable Development Goals.
The New Cairo Wastewater Treatment Plant project was implemented with the financial support of DevCo, a multi-donor facility affiliated with the Private Infrastructure Development Group. DevCo provides critical financial support for important infrastructure transactions in the poorest countries, helping boost economic growth and combat poverty. DevCo is funded by the UK’s Department for International Development (DFID), the Austrian Development Agency, the Dutch Ministry of Foreign Affairs, the Swedish International Development Agency, and IFC.
IFC works throughout the Middle East and North Africa region on infrastructure projects that pose pressing challenges, from renewable energy to water treatment.
To learn more about IFC’s work in public-private partnerships, visit www.ifc.org/ppp
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Published in August 2017