The government appears inclined to accept the terms proposed by Griner, which leads the consortium that won the tender for Angola’s first public-private partnership (PPP). The new mechanism aims to adjust the PPP to current macroeconomic and waste management conditions, ensuring the project’s financial viability.
To guarantee the economic sustainability of the Mulenvos Sanitary Landfill, the Luanda Provincial Government (GPL), which owns the project, would pay Griner a gate fee of 12,000 Kz (around 13 USD) for every ton of waste deposited. The proposal from the private operator is being discussed as a way to unlock Angola’s first PPP, awarded in January 2022, according to information obtained by Expansão from government and sources involved in the process.
Four years after the PPP was awarded to the consortium led by Griner, a decision to resolve the deadlock is expected in the first half of this year. However, this would not immediately trigger the start of operations at what will be the country’s first waste valorisation centre. Griner, a construction and infrastructure company that once had Banco Angolano de Investimentos (BAI) as its majority shareholder, has not yet taken control of the landfill, which is currently managed by Empresa de Saneamento e Limpeza de Luanda (ELISAL). As a result, several construction works and investments in waste treatment equipment will still be required, meaning the process will take time.
According to the agreement between the parties, around 1.5 million tons of waste are expected to be deposited annually over 25 years. This would require the Luanda provincial government to pay about 18 billion Kz per year. If the private partner does not receive the agreed volume of waste, the state will pay the difference in cash under a clause included in the PPP’s original structure, defined in 2019.
The initial proposal envisioned that the landfill deposit fee would be paid by companies responsible for waste collection services for the provincial government. However, the contracts currently in force with those companies do not include a provision for charging fees when depositing waste at the landfill, meaning the state will likely have to assume those costs.
In essence, the new mechanism—through which the government, via the provincial administration, would cover the gate fee during the first years of the landfill’s operation—represents an arrangement to adapt the PPP to the current macroeconomic and waste management context while ensuring the operator’s business viability.
During the prolonged stalemate at Mulenvos, Luanda’s population has continued to grow and the waste collection model has evolved. The city now produces more waste than in 2019, when the partnership’s initial assumptions were defined. At the same time, the volume of recyclable materials such as glass, plastic and paper entering the landfill has declined, as organised groups now collect these materials separately and earn a livelihood from recycling.
As time has passed and conditions at the landfill have worsened, what once appeared to be the starting point for PPPs in Angola has instead proved to be a difficult process to implement.
Source: Expansão
