1. Bank aus Verantwortung
Development of solid waste projects in the
frame of German Financial Cooperation
Wolfgang Pfaff-Simoneit
Senior Technical Expert
Department ‘Water and Solid Waste Management MENA Region’
2nd Alternative Fuels Symposium | Duisburg – Germany
14 - 15 October 2015

2. 2
Outline
KfW Development Bank – How we work
3
1 KfW Development Bank – Who we are
2
KfW Development Bank – Why we support solid waste management
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation

3. Bank aus Verantwortung
KfW Development Bank – Who We Are

4. 4
A bank with a wide array of functions
We promote
development
Promotion of
developing and
transition countries
International business
We promote Germany
Promotion of housing construction
and refurbishment, improved
accessibility and education
Financing of municipal infrastructure
and global loans
Promotion of SMEs,
business founders,
start-ups
Domestic promotion
We support
internationalisation
International
export and project finance
Promotion of environmental and climate protection
Mittelstandsbank Kommunal- und
Privatkundenbank/Kreditinstitute
KfW IPEX-Bank KfW Development Bank,
DEG
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation

5. 5
International business: We ensure internationalisation
International Export and project finance (KfW IPEX-Bank)
We finance projects of German and European companies so they can compete in
global markets.
Target group
Large and medium-sized companies conducting international business (PEAs for
large-scale investments in infrastructure, environmental and climate protection
Volume of
commitments
2014
EUR 16.6 billion
Financing
priorities
Medium and long-term structured financings for
› Export finance (incl. trade finance) and other financing for specific purposes of
export companies
› Maintenance and expansion of German and European infrastructure including
corresponding means of transport
› Climate and environmental protection projects
› Securing German and European raw material supplies
› Foreign investments of German companies
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation

6. Promoting development at the KfW Group
Financial
Cooperation
Entrepreneurial
Cooperation
Governments and public companies Partners/clients Private enterprises
Fiduciary funds (German federal budget)
and own funds (capital market)
Funds Mainly own funds
Grants and loans, as well as advisory
services for project preparation and
support
Instruments
Participations and loans as well as
advisory services
EUR 7,4 billion
Volume of
commitments
2014
EUR 1,47 billion
Promoting
development
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 6

7. Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 7
International business: We promote development
KfW Development Bank
We promote economic and social progress in developing and emerging
countries to improve people's lives.
Task
› As the development bank of the German Federal Government, we provide
support and advice for reform processes and investments in developing and
emerging countries
Objectives
› Sustainably improve economic and social conditions
› Poverty reduction
› Climate and environmental protection
› Promote the financial sector
Partners
› Governments, other governmental and non-governmental institutions in
developing and transition countries, and bilateral and multilateral donors
Promotional
business
volume 2014
EUR 7.4 billion

8. Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 8
International business: We promote development
DEG
Since more than 50 years DEG has been financing entrepreurial initiatives.
We provide long-term investment capital to private companies.
Task
› As the development finance institution for the private sector we promote
promising business initiatives in developing and emerging countries
Objectives
› Expand private sector structures through investment financing and provision
of long-term investment capital
› Economic growth and sustainable improvement of living conditions
› Reduce poverty
Partners › Companies investing in developing and emerging markets
Promotional
business
volume 2014
EUR 1.5 billion

9. Organisation of KfW Development Bank
Executive Board FC Evaluation Unit
Africa/Middle East Europe/Asia
Latin America
and the Caribbean
Policy, Promotional
Instruments, Planning
Development and
Sector Policy
West Africa
East Africa and African
Union
North Africa and the
Middle East
Southern Africa and
Regional Funds
Southeast Europe and
Turkey
South Asia
East Asia and
Pacific
Eastern Europe,
Caucasus
Central Asia
Policy /
Latin America
East Asia and Pacific
Urban Development and
Mobility
Regional Team
East Asia and Pacific
Natural Resources
Energy
Sustainable Economic
Development
Award of Contracts,
Contract/Loan
Coordination
Afghanistan,
Pakistan
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 9

10. 10
Headquarters of KfW in Frankfurt
http://campus.kfw.de
Founded 1948 on the basis of the KfW Law
Approx. 3,576 employees in Frankfurt in own as well as leased facilities
KfW Group
Palmengartenstrasse 5-9
60325 Frankfurt
Germany
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation

11. 11
Worldwide presence
about 80 representative offices
KfW employees
Tiflis
Jerewan
Damascus
Amman
Kampala
Windhoek
Pretoria
Lusaka
Skopje
Ankara
Kiev
Belgrad
PrištinaSarajevo
Tirana
Berlin
Frankfurt
Istanbul
London
Brussels
Cologne
Podgorica
Bonn
Juba
Cairo
Al-Bireh
Addis Abeba
Kigali
Rabat
Dakar
Accra
Ouagadougou
Jaunde
Bamako
Cotonou
Kinshasa
Niamey
Manila
Baku Beijing
Jakarta
Kabul
Islamabad
Ulan Bator
HanoiDhaka
BishkekTashkent
Dushanbe
Bangkok
Phnom Phen
Kathmandu
New Delhi
Mumbai
Moscow
Lima
La Paz Brasilia
Managua
Tegucigalpa
Mexico-City
São Paulo
Quito
Bogotá
Guatemala-City
New York
Sanaa
Maputo
Daressalam
Lilongwe
Abu Dhabi
Johannesburg
Nairobi
San Salvador
Singapore
Tunis
Rangoon
Bujumbura
Vientiane
Mazar-e-Sharif
5,518
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation

12. 12Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation
KfW Development Bank - How we work

13. › Preventing crises
and conflict
› Reconstruction
› Emergency relief and
transitional aid
› Reintegration
› Renewable energies/
energy efficiency
› Water/sewage/waste
› Transport
› Urban development
› Agriculture
› Preserving biodiversity
› Reforestation
› Anti-erosion measures
› Microfinance
› Promoting SMEs
Priorities and sectors
Infrastructure
Social development/
governance
Financial system
development
Rural development/
conservation of
natural resources
Peace and security
› Education
› Health
› Decentralisation
› Good governance
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 13

14. EU
Commission
Other
government
departments
Our clients
BMZ
German Federal
Ministry for
Economic
Cooperation and
Development
German
Federal
Foreign Office Other
bilateral and
multilateral
donors
BMUB
German Federal Ministry
for the Environment,
Nature Conservation,
Building
and
Nuclear Safety
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 14

15. Organisation of German bilateral DC
Political framework: German federal government (BMZ and other government departments)
Definition of the goals, guidelines, concepts and long-term strategies of German DC
Implementingorganisations
Implementation of Financial and Technical Cooperation projects
KfW Development Bank
Task
Promoting public investment and reform processes
Services
› Providing grants as well as concessionary and
market-based loans
› Financing supporting consulting services
GIZ
Task
Boosting the performance capacity of people,
organisations and societies
Services
› Advisory and material support
› Assignment of specialists
› Instruments designed to complement each other
› Close cooperation at institutional, specialist and operating levels
› Shared implementation of joint DC programmes on behalf of the German federal government
Financial Cooperation Technical Cooperation
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 15

16. Our principles
Ownership Alignment
Guiding principles
Sustainable impacts
Reinforcing the partner
country's responsibility
for itself
Alignment
towards the partner
country's national
development strategies
and structures
Supporting partners in
the preparation,
implementation and
operation of projects by
providing advisory
services
Assessing the impact of
projects by means of
independent
evaluation
Shared responsibility
Target
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 16

17. Financial Cooperation – a four-way interaction
= International law = German law
KfW Project-executing agency
Germany
(represented by the German
federal government)
Partner country
(represented by its
government)
= Law of the partner country
General contract/
negotiation mandate Onlending agreement
Intergovernmental agreement
and/or exchange of notes
Loan/financing agreement
Separate agreements
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 17

18. Project cycle
Basis: development
potential
of the partner country
Intergovernmental
negotiations
Mutual agreement on sectors and
projects to be promoted
Drafted by BMZ, negotiated and
ratified with partner country
Country/priority area
strategy
Project/programme
preparation
Collective, based on what was
agreed during the
intergovernmental negotiations
Project/programme
appraisal
Carried out in partner
country by KfW
Financing agreement
Between partner country
and KfW
Financing decision by
BMZ
Implementation
Project-executing agency in
partner country (supported by
consultant), monitoring by KfW
Carried out by partner country,
final review by KfW
Outcome assessment,
ex post evaluation
Start-up of operation
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 18

19. Sources of funds and financing instruments in 2014
Grants, delegated funds and
budget fund loans
KfW Development Bank
KfW funds
FC development loans FC promotional loans
(Loans using own funds)
EUR 1,658 million (incl. interest
subsidies)
EUR 340 million
EUR 5,358 million
EUR 1,913 million EUR 2.847 million EUR 2,596 million
Delegated funds
Budget funds
(mainly loans with interest subsidies)
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 19

20. DEG's financing offer
Tailor-made capital for foreign investments
Risk-taking
by DEG
Equity
Loans
Guaranteed
loan
Subordinated loan
Quasi-equity loan
Hedged equity
participation
Risk participation
Locally
secured
loan
20Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation

21. Special programmes
Special programme Co-financed measures Partner
develoPPP.de Developmentally and economically feasible projects
Feasibility studies External feasibility and market studies in preparation of a specific investment
measure in a DEG partner country
Technical assistance Measures with specific structural effects
Example: increased energy efficiency or optimised production processes
Climate partnerships
with the private sector
Measures in the field of climate protection
Example: pilot plants, qualification measures, introduction of innovative climate
protection technologies etc.
Up-Scaling Pioneering investments of SMEs planning to further develop innovative
business models
Co-financings for entrepreneurial measures and pilot projects
21Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation

22. Bank aus Verantwortung
Why we support solid waste management

23. Why is Solid Waste Management so important for KfW?
23
› Significant employment opportunities for unskilled employees (informal sector).
› Largest cost factor for most municipal budgets in developing countries.
› Core environmental problem in many regions.
› Third largest potential to reduce greenhouse gases (after energy & forest protection).
› Many linkages to other priority sectors (focal areas) of German Development Cooperation.
› Increasing demand from partner countries.
Global trends: Political trends:
› Population growth. * G7 topics 7./8. June 2015 Elmau / Germany
› Urbanization. - Resource efficiency
› Resource scarcity. - Protection of marine environment -> Marine Litter
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation

24. Dump Sites - Examples
Kicevo / Mazedonien
Korca / Albanien Rustenburg / Südafrika
Trabzon / Türkei
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 24

25. Waste collection and transport - examples
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 25

26. 26
Portfolio Solid Waste Management Projects
Implementation
Planing/Preparation
Part of program - implementation
Part of program: Planning/Preparation
Finalised
Chile
Marokko
Tunesien
Ägypten
China
Vietnam
Philippinen
Albanien
Palästinensische
Gebiete
TürkeiRussland
Indonesien
Südafrika
El Salvador
Georgien
Aserbeidschan
Jordanien
Armenien
Peru
Serbien
Liberia
Indien
Äthiopien
Active Portfolio:
427 Mio. EUR
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation

27. Framework conditions for waste management in developing countries
› Absence of competent service utilities
› Insufficiently qualified personnel
› Inadequate legal and regulatory framework
› Lack of appropriate technical and environmental standards
› Absence of professional authorities and institutions for regulation, permission,
supervision and enforcement
› Lack of adequate financing and cost recovery systems
› Less developed willingness / tense capability of beneficiaries to pay for services
› Shortfalls of appropriate education, training and research institutions
› Lacking of civil society participation
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 27

28. Framework of FC Projects
From Intergovernmental Agreement to Project Implementation
28
KfW
Project executing
agency
Partner countryBMZ
Intergovernmental Agreement
Public funds and political
guidelines
Supply and Service ContractsProject monitoring,
Evaluation
Consultant/Engineer Contractor
Financing/Loan Agreement
On-lending or Grant Agreements
Supervision
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation

29. Focal points of project appraisal
Economic viability /
affordability
Capacities of PEA
Framework conditions
(legal, institutional, financial)
Project
Project objectives
Risks
Impacts
Socio-economic,
environment, climate
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 29

30. Conclusions / Theses for discussion - I
› Revenues for recyclables and energy from waste have to contribute to cost
coverage -> no ‚cherry-picking‘ by private companies
› Objectives for SWM must include also other than economic aspects
(e.g. waste-picker interests, acceptance of technologies and facilities…)
SWM happens between public interest and private business opportunities
Private activities in must be embedded in a public SWM concept / strategy
› SWM is a system / not just a technology:
* SWM consits of different interrelated processes and technologies /
* there is no ‚one-fits-for-all‘ solution
› Clear objectives, roles and frame conditions / standards required
SWM investments are predominantly long-term investments
› Long-term investments require long-term funding and long-term contracts
› SWM concepts under way require flexible contracts
› Private companies can not bear the long-term risks
› Private companies will have difficulties to find funding and insurances
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 30

31. Conclusions / Theses for discussion - II
› Unqualified contracting authorities are not able to assess the appropriateness
of proposed solutions / concepts
-> susceptible for unqualified / poorly conceived solutions / profiteers
› Unqualified contracting authorities are are not able to rate and remunerate
fairly the delivered services
› Unqualified contracting authorities are not able to understand the cost
calculation of private companies
Private sector participation requires professional contracting authorites
Private sector participation requires clear regulations and reliable partners
› Abiding by contract stipulations
› Clear definition and common understanding of the services to deliver
› Reliable remuneration of delivered services
› Reliable cost coverage system
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 31

32. Contact
KfW Development Bank
Palmengartenstrasse 5 – 9
60325 Frankfurt am Main
Visitors Adress:
Senckenberganlage 30 - 36
60325 Frankfurt am Main
Phone: 069 7431–4145
Fax: 069 7431-3279
www.kfw-entwicklungsbank.de
Dr.-Ing. Wolfgang Pfaff-Simoneit
Technical Expert
Phone: +49 69-7431-4145
E-Mail: wolfgang.pfaff-simoneit@kfw.de
Dr. Wolfgang Pfaff-Simoneit | Solid Waste Management in German Financial Developing Cooperation 32