Introduction > Develop Project Plan > Assess Feasibility > Identify and Select Finance Source/Instrument > Mitigate Risks > Secure Permits and Approvals > Seek Project Funding/Finance > Structure and Close Financing > Case Studies > Acknowledgements
Step 1: Develop Project Plan
A project plan typically describes the project scope and expected outcomes and designs the business model for the project. At this stage, it is important to incorporate considerations of a bankable project, as well as the emissions reduction potential and other health and environmental co-benefits. Project developers should review and update the project plan as project assumptions are refined and optimized based on the results of feasibility assessments (Step 2) and the evaluation criteria of finance providers or funding organizations.
Best Practice Activities for this Step
Define the problem, identify the need, and conduct a baseline assessment
Begin developing the project plan by defining the problem, which comprises the baseline situation without the project, and describing the rationale for the project. This task involves conducting a baseline assessment of the city’s waste management to learn about:
- The type and volume of organic waste
- Current practices in organic waste management, including how waste is currently collected and disposed of and its associated costs
- Projected growth in waste generation rates
- Current and projected emissions from waste
- Existing policies, environmental targets, or other factors that may impact future organic waste disposal (for example, if a landfill is scheduled to close by a certain date).
Design the project
The project design is a broad overview of the proposed project. For organic waste management projects, a project design includes the feedstocks and technologies to be used, the products generated by the project, their potential offtakers (end-users), and the markets for the products. The project design should incorporate the baseline quantities of feedstock, the chosen technology, the expected products, and the potential offtakers.
When designing a project, plan for community engagement to ensure social acceptance once the project is constructed and operational. Additionally, you may need to plan for behavioral change programs to ensure the project's success.
Conduct a pre-feasibility study
A pre-feasibility study is a preliminary screening of the technical and financial viability of a proposed project before committing additional resources for a full-scale feasibility study. GMI offers several tools for assessing the technical and financial feasibility of organic waste management projects (see Key Tools/Resources Related to this step, below, to download the tools).
As part of determining the financial feasibility of the organic waste management project, map the potential product offtakers and determine their willingness to buy the products, the quantities, and approximate sale prices for the products. Likewise, determine what would be the cost of the feedstock, if applicable, or a reasonable tipping fee for the organic waste.
Define the project scope
Use the findings from the pre-feasibility study to inform the project scope, which describes a project’s goals and how it will operate. The project scope should include information on the project’s resources (i.e., feedstocks), key relationships, structure, sources of expenses (costs), and ways to sell or use recoverable products (e.g., biogas, compost, animal feed). The project scope can be a simple flow chart or a more detailed plan that provides a general overview of how the project works, including the inputs and outputs (i.e., recoverable products).
Recruit an experienced team
Build a core team of engineers and specialists, internal and/or external to the organization, who have experience in finance, risk management, commercialization, and implementing organic waste management projects. As the project progresses, the team can expand to include technology vendors, equipment providers, operators, and others to supplement the core team. The project plan should include details on the credentials of the project team, including those designing, building, and operating the system.
Develop the business model
The business model should include information about the owner and operator model, technology selection, recoverable products, offtake markets for the recoverable products, revenues, expenses, and project financing. It should also include other value propositions from the project, including greenhouse gas reduction potential, as well as health and environmental co-benefits.
It is also crucial to assess whether private sector participation will be necessary at any stage of the project's implementation, including facility design, construction, ownership, and/or operations.
Negotiate pre-agreements for feedstock and offtakes
After completing the pre-feasibility study, negotiated pre-agreements to have a firm idea of the range of payment (i.e., tipping fee) to expect for the treatment of the organic waste and for the sale of the recoverable products. Furthermore, lenders may require these pre-agreements to have greater certainty about the bankability of the project.
Identify procurement vendors
As part of stakeholder mapping, identify the potential procurement vendors for business operations, facility design and construction, operations and maintenance, and interconnection to the grid.
Understanding the length of time required to secure contracts and agreements is important because this duration can vary depending on the project partners and agreement types involved.
Key Tools/Resources Related to this Step
Resources
Waste Wise Cities Tool (WaCT)
UN-Habitat
2021. The WaCT guides stakeholders through seven steps to collect data on municipal solid waste management in a city, including waste generated, collected, treated, and disposed.
Solid Waste Management Toolkit
U.S. Environmental Protection Agency
2020. This toolkit presents best practices for managing organic waste, including collecting and analyzing data on organic waste, evaluating policy and program options for separating organic waste, and analyzing options for treating organic waste. Section 5 provides more information on planning for solid waste management systems.
Towards the Valorization of Solid Waste in Latin America and the Caribbean: Basic Concepts, Feasibility Analysis and Public Policy Recommendations
Inter-American Development Bank
2022. This technical note offers a feasibility analysis methodology that can guide stakeholders, based on their local context, in the selection of waste valorization technologies.
AgSTAR Project Development Handbook – A Handbook for Developing Anaerobic Digestion/Biogas Systems on Farms in the United States
U.S. Environmental Protection Agency
2020. This Handbook provides an overview of what makes a successful anaerobic digestion or biogas project, how to conduct a pre-feasibility study, and how to make the business case for a proposed project. Chapters 1-6 provide detailed technical and financial considerations about anaerobic digestion projects that you can use to develop the project plan. Chapter 7 provides an overview of conducting a pre-feasibility analysis.
Landfill Gas Project Development Handbook
U.S. Environmental Protection Agency
2021. This Handbook provides an overview of what makes a successful landfill gas-to-energy project and how to develop a project plan. Chapters 1-4 provide detailed technical and financial considerations about landfill gas collection projects that you can use to develop the project plan.
Sustainable Financing and Policy Models for Municipal Composting
The World Bank Group and Climate and Clean Air Coalition
2016. This guide provides an overview of the different types of composting technologies and what makes composting project models sustainable.
Designing ‘Bankable’ Climate Resilient Infrastructure Projects
CapaCITIES
2022. This guide describes how to design bankable, climate-resilient infrastructure projects.
Tools
Anaerobic Digestion (AD) Screening Tool
Global Methane Initiative
2022. This is an Excel-based tool that allows users to perform rapid, screening-level assessments of potential emissions reductions and biogas generation benefits of anaerobic digesters. You can use this tool to assess the technical feasibility of a proposed AD project.
Organics Economics (OrganEcs)
Global Methane Initiative
2021. These are a set of Excel-based tools for determining the expected internal rate of return (IRR) given user inputs for a composting or an anaerobic digestion project. You can use them to assess the financial feasibility of a proposed project.
Landfill Gas Screening Tool
Global Methane Initiative
2021. This is an Excel-based tool for assessing the feasibility of landfill gas energy projects. It provides an estimate of how much landfill gas a site could collect and whether that fuel supply is sufficient to support a modest-sized landfill gas energy project.
Solid Waste Emissions Estimation Tool (SWEET)
Global Methane Initiative
2023. This is an Excel-based tool for quantifying the methane, black carbon, carbon dioxide, and other emissions impacts of organic waste management projects. You can use it to evaluate the baseline and projected future emissions under alternative scenarios.
Biogas Wastewater Assessment Technology Tool (BioWATT)
Global Methane Initiative
2016. This is an Excel-based tool that provides a quick and preliminary assessment of wastewater-to-energy projects. Through BioWATT, users can receive a specific summary of their biogas production estimates for various wastewater-to-energy technologies, electricity generation potential from the produced biogas, greenhouse gas savings associated with biogas-generated electricity, and more.
Biogas Toolkit
U.S. Environmental Protection Agency
2024. This is a one-stop-shop website for tools and resources on a variety of topics critical for assessing the pre-feasibility of biogas projects.