Economic challenges of
wastewater treatment and
use in agriculture
Bharat Sharma, IWMI,
Javier Mateo-Sagasta, FAO;
Pay Drechsel, IWMI
Second Regional Workshop on
“Safe Use of Wastewater in Agriculture,”
16-18 May, New Delhi, India
Outline
1. Financial and economic perspectives of assessing
the feasibility of wastewater irrigation
2. Cost-effectiveness of wastewater use and
options to safeguard the food chain
3. How to make wastewater reuse projects and
treatment in general viable and sustainable?
 Sharing of experiences in the working groups
1. Financial and economic
perspectives for assessing the
feasibility (costs and benefits)
of wastewater irrigation
Benefits of wastewater irrigation
1. Saves freshwater which is expensive in dry regions and in
particular in peri-urban and urban areas (environmental benefits).
2. Constitutes a reliable year-round source of water with high
nutrient value (savings in fertilizer).
3. Saves on groundwater pumping costs.
4. Generates livelihood opportunities for poverty alleviation and
contributes to food production and security.
5. Feeds poor urban consumers at affordable prices, due to proximity
of consumers and farmers (health benefits).
6. It provides low-cost land treatment (savings in treatment).
7. ……
 Can be quantified in economic terms
Costs of wastewater irrigation
a) If untreated:
• Health costs along the food-chain.
• Environmental costs (water and soil contamination).
(often hidden costs, ignored long-turn risk factor)
b) If treated:
• WWTP capital and M&O costs; irrigation systems
costs; residual environmental costs
(larger investments often only follow epidemics)
Cost-benefit analysis
 Benefit/Cost ratio
Example from China showing the common difference in
financial and economic assessments.
(Source http://repub.eur.nl/res/pub/19590/cbaWST_10_105.pdf)
Guidelines for economic assessments:
FAO
Water Report 35, IWMI WP 26, 37
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Guidelines for economic assessments: FAO Report 35, IWMI WP 26, 37
2. Cost-effectiveness of wastewater use
and options to safeguard the food chain
Is wastewater treatment the most cost-effective
approach for adding safe irrigation water or are
there alternatives source or safety measures?
Cost-effectiveness analysis
•
•
•
•
WWTP: 0.1-0.2 US$/m3; often sold at US$ 0.01-0.02/m3 (irrigation)
Desalination: 0.3-0.5 US$/m3; sold at US$ 1-2 per litre (bottled water)
RWH…..
Water transfer ….
How many USD does it take to gain a healthy life year?
1100
214
More information on non-treatment options
(on-farm, post-harvest)
www.who.int/water_sanitation_health/wastewater/gsuww/en/index.html
www.idrc.ca/EN/Resources/Publications/Pages/IDRCBookDetails.aspx?PublicationID=93
Conventional treatment is not the most cost-effective
option if we only look at human health benefits, but
when we also consider environmental health.
City
Agriculture
Environment
3. How to make wastewater reuse projects and
treatment in general viable and sustainable?
• Wastewater reuse business models are
difficult to find.
• The sector speaks at best about cost recovery,
but hardly about <business>.
• However, Reuse and Resource Recovery open
large doors for better economics and
operational sustainability.
Four-point cost-saving strategy:
1. Plan for reuse as otherwise service charges are the
only source of revenue
a) Cost recovery (O&M) from wastewater reuse in
irrigation ranges between 20-70% (MENA).
b) Further revenue options are treated sludge as
fertilizer or energy source, duckweeds from
treatment ponds as fish feed, etc.
Market analysis and willingness-to-pay have to be
analyzed to know how much to charge for reuse.
Alternative finance options (e.g. carbon credits)
should be explored.
2. Keep energy requirements low as this is a major cost
factor or generate your own energy:
 Location which allows gravity flow instead of
pumping; low-energy plants or pond-based systems
(aeration accounts for about 50% of the overall energy
costs).
 Energy optimization (20% energy recovery).
 Energy generation from anaerobic sludge digestion
can cover 40- >80% energy demand!
 Fit for purpose: Treat only to the level the reuse
requires to keep costs low (e.g. nutrient removal costs
much energy). Some countries demand wastewater
treatment only to a level better than that of the
receiving water body.
3. Partner with private sector for O&M unless
effective incentives are in place. PPP can also
facilitate innovative win-win models (example:
aquaculture, Ghana).
4. Invest in multiple barriers (not only conventional
treatment): less risky, less costly and more costeffective for health risk reduction.
Summary
Economic appraisal of reuse projects is an
essential component for water planning and
allocation strategies within IWRM.
Smart planning and new technologies allow
high levels of cost recovery.
• The FAO water report 35 provides a sound
methodology for the economic appraisal of
reuse projects.
• IWMI Working Paper 26 provides a useful
framework and Working Paper 37 a related
literature review. All reports are on the
UN-Water tool kit CD
Are there success stories to share to learn
from each other?
Which business models are known to make
wastewater treatment for reuse less costly
and more sustainable?
How to increase cost recovery rates ?
 Working groups
[email protected]
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