20180424 WBG workshop - World Bank...SUEZ, the challenges we all face increasing resource scarcity limited resources on the planet 60% of the 8.5 billion people on earth will live

WBG – SUEZ workshop

April 25-26th, 2018

Paul Bourdillon, Senior Executive Vice-President, Africa Middle-East India.Fabien Mainguy, Senior Project Manager, Africa Middle-East India.Laurent Poiré, BOT Project Director.Jon Freedman, Senior VP, Global Government Affairs.

Agenda

1. Introduction on SUEZ and relations to WBG

2. SUEZ’s water experience in emerging

countries

3. Responding to the waste crisis in emerging

countries

WBG – Suez workshop – April 25th, 20182 I

Introduction on SUEZ and relations to WBG

3 I WBG – Suez workshop – April 25th, 2018

Introduction to SUEZ

SUEZ’s relations to IFIs and WBG in particular

1

2


Introduction to SUEZ

management of resources

SUEZ, a global leaderin smart and sustainable

SUEZ,SUEZ

activitiesat a glance

A world leader in the smart and sustainable management of resources, we help cities and industries optimize water management, recycling and waste recovery.

consolidated figures including GE Water & Process Technologies as of December 31, 2016*data as of 31/12/2016 without GE Water

employees

over 90,000

operating on

5 continent

s

industrial and business

customers

over 450,000

turnover in 2016*

€15.3 billion

drinking water distributed

(worldwide)*

3.2 billion cubic meters

drinking water produced

(worldwide)*

5.3 billion cubic meters

waste water recycled

(worldwide)*

882 million cubic meters

wastewater depolluted

(worldwide)*

92%

people benefiting from waste

collection services*

34 million people

waste treated*

41 million tonnes

hazardous waste treated*

2.9 milliontonnes

recovered material from

sorting centers*

10.4 million tonnes

SUEZ,

Innovative solutions for smart and resourceful cities

Smart & sustainable management of the water cycle, smart water solutions

Recycling and waste recovery to produce new resources, secondary raw materials and energy

Engineering, design and construction of treatment infrastructure

our fields

activitiesof activity

our ambition

leading the resource revolutionto ensure sustainable growth

SUEZ,the challenges we all face

increasingresource scarcity

limited resources on the planet

60% of the 8.5 billion people on earth will live in cities by 2030

41 mega-cities with more than 10 million inhabitants by 2030

World need for water will exceed by 40% the available quantities by 2030

The volume of urban waste will increase by 70% by 2050

Earth Overshoot Day1

earlier each year

Mineral resources will be exhausted2 in:

1- The date when humanity’s demand for ecological resources and services in a given year exceeds what Earth can regenerate in that year.

2 - Estimated years on the basis of their use in 2009

growing population and urbanization

1990 2000 2010 2017

December 7 November 1 August 21 August 2

SUEZ,our positive

making water management increasingly smarter

turning waste into valuable resources

mitigating the causes of climate change

17 million tonnes of waste recovered in Europe

6,254 GWh of renewable energy produced in Europe

3.9 million tonnes of secondary raw materials produced

9.5 million tonnes of CO2 equivalent of greenhouse gas emissions avoided for our clients

2.1 million tonnes of recovered solid fuels sold

3 millionsmart sensors sold

impacton resources

27,495 km of networks monitored

21 % of customers equipped with remote reading meters

€122 milliondedicated to R&D in 2016

650experts and researchers

innovationat our core

17 Research & Excellence Centers

+3,200 national patents

Over 10,000 employees ready to bring innovation and new value to industrial and municipal customers.

SUEZ, a Group committedto people and the planet

our commitments

for 2021some of our quantified objectives:

� 100% of restricted access zones equipped with suitable signage systems;

� 95% of employees covered by social dialogue systems (in their company or on a more global level);

� Gender roadmap – women to represent 22% of global staff (from 20% in 2016), 33% of managers (from 28%) and 20% of top executives (from 7%);

� Reduce greenhouse gas emissions by more than 30% in the entire scope of activity by 2030;

� Help our customers to avoid more than 60 million tonnes of greenhouse gas emissions;

� Increase the production of secondary raw materials by 20%;

� Put forward 100% sustainable solutions;

� Increase the number of connected objects by 20%;

� Roll out biodiversity action plans at 50% of priority sites managed by the Group.

2016 responsible performance hailed by extra-financial rating agencies

1st in waste and water utilities sector

3rd in utilities sector

SUEZ foundation

Supporting concrete actions to sustainably develop access to essential services (water, sanitation and waste) for underprivileged populations in developing countries

Supporting the integration of the most vulnerable populations in France through education and employment.

Contributing to the achievement of the United Nations’ Sustainable Development Goals.

action

over 3 million inhabitants directly concerned

6-year commitment

€24 million over six years

990project applications received

115 projectsselected

55 NGOs & partners

In Burkina Faso – The Fonds SUEZ initiatives supports Action against Hunger’s projects.Over 70,000 people have now sustainable access to drinking water & improved sanitation.


SUEZ’s relations to IFIs and WBG in particular


Rationale of SUEZ’s relations to IFIs

� SUEZ and IFIs have a common interest in structuring emerging markets

• As mature markets reach a decreasing trend, areas of expansion for SUEZ are emerging markets where IFIs have a key structuring and financing role.

• Conversely, due to public debt issue, IFIs are reorienting their strategy toward private sector participation.

• Working at highest international standards (ISO 14001, innovative technical solutions), SUEZ offers all guarantees and knowledge transfer capabilities to IFIs and developing countries.

� What mutual benefits can be sought

• IFIs bring a risk mitigation to projects in harsh institutional and political environments, with their specific procedures and requirements in the application of norms, in the payment of contractors and the good termination of projects.

• IFIs also have a normative impact as their technical and operational recommendations are widely applied in the developing world.

• SUEZ, being a world leader in the fields of waste, water and sanitation management, can update IFIs with the latest technologies, business and contractual models to enhance the quality of their projects.

• SUEZ is able to manage a whole range of contractual models including knowledge transfer to local staff.

� Means of IFIs – SUEZ partnerships

• Regular exchange on strategies and business pipes.

• Workshops, seminars, conferences with intervention of our experts.

• Staff Exchange or secondment of SUEZ experts for short periods of time (active with AFD).

• Contribution to IFIs publications, production of case studies and other knowledge products.

• Study tours, participation / co-organization of visits of SUEZ operations with exemplary value.


The SUEZ - World Bank Group knowledge partnership

� Objectives:

• Increase mutual understanding of WB and SUEZ staff involved in the preparation of water projects.

• Increase proximity/interaction with WB teams (with direct and indirect effect on the monitoring of water projects).

� Workshops / seminars

• Participation of WB’s Water GP in SUEZ’s annual forum (March 2016)

• Annual workshop at the WB in Washington

• Occasional meetings : dinner with MIGA at the One Planet Summit (Dec 2017), SUEZ’s presentation at the Water Week in April 2017, regional workshop in Amman in March 2018, …

� Actions on Water

• Action plan and calendar defined in November 2015 for 3 selected work streams: Integrated Urban water Management, Service delivery and Utility reform, Water PPPs.

• Publication « Key lessons learned on water and sanitation PPPs » (27p, 2017) with Philippe Marin.

• Participation to the Water Scarcity initiative with Richard Abdulnur and Stéphane Dahan (SUEZ’s business cases).

• Participation to the operational manual on PBCs with Bill Kingdom and Gerard Soppe (SUEZ’s contribution in workshops).

�Actions on Waste

• Waste workshop held in Washington (with all WBG subsidiaries: IDA, IBRD, IFC, MIGA) on April 25th, 2016, with objective to harmonize our approaches and business models for waste management in emerging countries.

• Partnership on IFC’s approach to open dump remediation since June 2017.


SUEZ’s return on water PPPs experience� Document ready for publication

• Production work done in Q1 2017, in close collaboration with Philippe Marin.

• Changes in the direction and staff of the Water GP put the publication project on hold.

�Document structure (27 pages in total)

• Introduction on PPP contractual models – 2p.

• Focus on 3 utility PPP contracts.

• Algiers management contract – 6p.

• Concession in Casablanca – 4p.

• Hybrid concession in New Delhi – 2p.

• Reflections on contractual approaches for utility PPPs.

• SUEZ’s « 10 commandments » for PBCs – 1p.

• Variations on PBC contractual approaches: Kolkata, Australia, Mexico City, SEMOP France – 4p.

• Constraints on bidding: Karnataka, Kingston – 1p.

• Water and wastewater infrastructure: DBO-BOT schemes.

• Gradual investment in infrastructure through utility PPP contracts: Casablanca, Santiago, Marseille, Cartagena – 2p.

• Infrastructure contracts for large plants: Maribor, Amman, Panama, IVC with decentralized solutions – 4p.

• Conclusion – 1p.

�Main takeaways

• Key factors of PPP success are sector governance, balanced PPP design, sustainable and resilient economic model.

• Blend public and private finance (with grant element to bridge the affordability gap) is a virtuous model.

• Strong PPPs with private investment require long term visibility on contracts.

SUEZ’s water experience in emerging countries


SUEZ’s expertise on PPPs

SUEZ’s Water for All strategy

1

3

Smart solutions for smart cities4

Decentralized solutions for water and wastewater treatment5

Water services – some experiences2


SUEZ’s expertise on PPPs

Years3 5 2510

Degreeof PrivateInvolvement

Affermage

Concession

DBO

BOT

Operations & Maintenance

Management Contract

Management

Support

Infrastructure

Contract

Delegated

Management

Private Ownership

Shared Ownership

Privatisation or

Asset Transfer

BOT within SUEZ global offer


SUEZcontractual models customizable to client needsE

ng

ineeri

ng

& P

rocu

rem

en

t

Design engineering

Procurement

EPE

ng

ineeri

ng

, P

rocu

rem

en

t &

Co

nstr

ucti

on

Design engineering

Procurement

Construction

EPC

Desig

n, B

uild

& O

pera

te

Design

engineering

Procurement

Construction

Operation & maintenance

DBO

Desig

n, B

uild

, O

pera

te &

Tra

nsfe

r

Financing

Design engineering

Procurement

Construction

Operation & maintenance

Transfer to the client

BOT

Construction managed & executed by the client

Turnkey contract

finance,build,operate

Builder +operator

En

gin

eeri

ng

, P

rocu

rem

en

t &

C

on

str

ucti

on

Man

ag

em

en

t

Design engineering

Procurement

Construction supervision

EPCM

Construction executedby the client

Op

era

tio

n&

Main

ten

an

ce

Full O&M of existing plant

Treatment processes expertise

Technicalassistance

Training

Construction work services

O&MServices solutions

22 IWBG – Suez workshop – April 25th, 201822 I

SUEZ PPP-BOTs for Water & Waste infrastructures

ChinaQingdao DongjakouWWTP 150,000 m3/d

Sludge 1,000 m3/d

SloveniaMaribor

WWTP 30,000 m3/d

MexicoCiudad Juarez

WWTP 300,000 m3/d

MexicoCuliacan

WWTP 150,000 m3/d

MexicoSan Luis Potosi

WWTP 90,000 m3/d

MexicoPemex 1 & 2

WWTP 16,400 m3/dRO 13,500 m3/d

ChinaWuhan

WWTP 50,000 m3/dDWP 100,000 m3/d

Indonesia Medan

DWTP 43,000 m3/d

JordanAs Samra-Amman

WWTP 267,000 m3/d+ 100,000 m3/d

AustraliaProspect-Sydney

DWTP 3,000,000 m3/d

AustraliaMelbourne

SWRO 450,000 m3/dSpain

AndraxSWRO 14,000 m3/d

MexicoPuebla

WWTP 311,000 m3/d

ItalieMilano Nosedo

432,000 m3/d

England

Merseyside

2 lines EfW, 467 000t/y

Severnside


Cornwall


Northumberland

EfW 143 000 t/y

South Tyne & Wear

2 lines EfW 256 000 t/y

Suffolk


Surrey

Gazeification 60 000t/y

Methanisation 40 000t/y

Kirklees

Isle of Man

France

x 11 Contracts

The latest Vernea

Clermont Ferrand:

EfW 150 000t/y

Digester and

stabilization

Poland /Poznan


ScotlandAyshire WWTP353,000 m3/d

MalaysiaPerak DWTP 126,000m3/d

Johor4 DWTPs 636,000

m3/dKota Kinabalu

DWTP 280,000 m3/d

ColombiaBogota

WWTP 345,000 m3/d

Germany / Netherlands /

Belgium

ZORBAU

BAVIRO

SLECO

Oman – BarkaSWRO 280,000 m3/d

in construction


PPP - BOTa long term performance based contract

SUEZ BOT offer: an integrated approach� Developer and sponsor for the long run

� Technology and Process experts

� Designer and/or construction manager

� Leader in services

� Expert in project financing

FINANCE BUILT OPERATE TRANSFER


As Samra wastewater treatment plant

�BOT contract signed in 2003 with the Government of Jordan

�Plant capacity: 267.000 m3/day

�Construction completed: 2008

�O&M period of 22 years

As Samra Expansion (phase II) signed in 2012

�Water line capacity increased by 37 %: 267 000 m3/d to 365 000 m3/d.

�Sludge line capacity increased by 80% + mechanical dewatering for phases I & II.

�The BOT duration is up to July 2037


POLITICAL SUPPORT

• Direct involvement of the government in the Project, stability of the policy and people

• Specific and adapted contractual framework put in place

• Intense communication, ministry supports, flexibility and prompt decision process

EXPERIENCED TENDERING MANAGEMENT

• Complete and quality documentation (feasibility study, EIA, prequalification, detailed tender

documentation (technical documents, draft of contracts, risk matrix allocation)

• Declared and Transparent bid evaluation process with Limited pre qualified consortium (5 max.)

• Realistic bid tendering period – stick on timing

CONTRACTUAL ENVIRONMENT

• Complexe, complete, balanced and In line with the international standards and practices

• Protection of the investment

• Dialogue and dispute resolution mechanism

Jordan political will & project preparation


Tariff affordable thanks to:

INNOVATIVE TECHNICAL CHARACTERISTICS

• Use of local characteristics (eg: dewatering of sludge using rehabilitated pound

– dryness 30% - sludge reused for land fertilizer or fuel in cimentery )

• Plant energy sufficient for 95% thanks to innovative technology: inlet and outlet

pelton turbine (35% of energy needs), generation of biogaz (60% of the energy

needs)

CLIENT CREDIT RISK

• a reserve account,

• Ministry of Finance Guarantee

• Long term guarantees

Economic viability – Tariff affordable & bankability


FINANCING STRUCTURE

• Government support: Grant of approx 60% of the investment by the USAID

• Long term financing: pool of 11 local banks – debt in JOD – maturity 12 years

• Non recourse financing: with direct obligation of sponsors, guarantees and

securities, step-in rights, substitution rights, debt service cover ratio

TARIFF FORMULA

• Risk exchange coverage for the investment part (JOD/USD)

• Interest rates coverage

• Tariff structured with a Fixed and variable parts including indexation

mechanism – index coherent with the cost structure

Economic viability – Tariff affordable & bankability



Water services – some experiences


LYDEC concession – Casablanca (Morocco)

�Objectives

• Modernize water, wastewater and electricity services in the Greater Casablanca region

• General Data

• Largest city of Morocco / 5 million inhabitants (1 million customer)

• 30-years concession contract with Lydec

• 4 delegated services :

• drinking water distribution (5200 Km of networks)

• electricity distribution

• wastewater collection and treatment, stormwater collection (5.000 km of networks)

• street lighting (May 2009)

• 22 000 ha urbanized

• Innovative financing• An innovative and efficient financing scheme : mobilization of the real-estate developers

• Contributions from real-estate developers (representing around 30%) mainly finances structural infrastructure investments, network extension, land acquisition, and part of social connexions

• Fund contributions’ revenue has risen from 7% in 2004 to 54% in 2014

• The real burden for households is about 1% of the sale price, which remains very limited

• An integrated management of investments to optimize available resources• Concessionaire/operator manages all investments throughout the concession area (planification, studies, design, project and works management)

• Contributions are deposited in a public authority owned “Works Fund account”, which is managed by Lydec on behalf of the Public Authority

Strengths

83% 81%75%

68% 63% 65%

52% 50%44%

17% 19%25%

32%37% 35%

48% 50%56%

0%

20%

40%

60%

80%

100%

Ex.2006 Ex.2007 Ex.2008 Ex.2009 Ex.2010 Ex.2011 Ex.2012 Ex.2013 Ex.2014

Délégataire Fonds de Travaux

Self financing Real estate developers


Characteristics of Indian water services (1)

� Key DRIVER: Improved availability of funds

• ADB active in many states

• Cities blending funds from Federal Programmes (Urban Development and Smart Cities) for Projects

• Municipal Bonds: many cities already got investment grade credit rating

• Although slow, but most states are increasing tariff to make utilities operations sustainable

�Tender process is mandatory

• All Projects are tendered

• Contract is part of tender documents

• Contractual conditions not negotiated on one-to-one basis – Group pre-bid meetings for queries, clarifications and suggestions

• PQ criteria followed by price bid – No technical proposal stage

• L-1 is the winner, subject to within reasonable client estimates

• Conditional bids not allowed

• No post-award negotiation of contractual conditions


Characteristics of Indian water services (2)

� Types of Contracts

• Typical investment oriented PPP contracts are obsolete

• Financed by ADB, JICA, or Federal / State / City Government

• All our contracts are very different from each other

• Concession (Delhi, Coimbatore); Design-Build and O&M (Kolkata, Davanagere), Integrated Services (Mumbai), O&M

Contract (Hubli-Dharwad)

�Project Scope

• Bulk Assets: typically tendered as separate package

• Battery limit: from Master Balancing Reservoirs upto customer taps / meters

• Project Assets: MBRs, transmission & distribution pipelines, pumping stations, OHTs, valves, flow meters, house service connections, customer meters, etc.

• Scope: Construction / Réhabilitation and O&M of project assets, CRM, Meter Reading, Billing and Collection of user charges

• KPI / Project Objectives: H24, NRW, water quality, CRM, Collection Efficiency


Possible future project structures

� Most Popular Project Structure is Design-Build and O&M contract

• BOQ driven: lower quantity risk as compared to lumpsum contracts

• Works scope more dominant: 60%-65% of contract value

• O&M Price split into fixed and performance fees

• Fixed fee is 60% - 70% of quoted O&M price

• Performance fees subject to meeting KPIs

WORKS PRICE (BOQ based): paid upon actual progress

o Phase 1: Design / Study Period: 6 Months to 1 Year

o Phase 2: Works Period: 3-4 Years (partial O&M commencement for DMAs when commissioned)

O&M PRICE: (Paid on per connection month basis)

o Phase 3: 3 Years – 10 Years upon commissioning of all DMAs


Implications for SUEZ (1)

� Our positioning as Operator

• Construction / Works: traditionally non-core activity for Suez

• Management Contracts (e.g. Algiers, Jeddah) ?

�Our interest in Works dominated projects

• Challenges in qualification ?

• Competitivesness vis-a-vis Construction companies ?

• Need for a partner or subcontractor – sharing of responsibility

• Little flexibility or incentive to optimise Capex

�Non-Standard O&M practices

• Lower estimates: Clients & Competitors don’t understand O&M complexeties

• 30%-40% Performance fees (implications on cashflows)

• Stringent KPI thresholds (revenue loss and hence provisions)


Implications for SUEZ (2)

� Payment Security mechanism

• Works are financed by multi-lateral agencies but O&M financed by municipalities (Credit risk)

• Escrow Agreement and ring-fencing of municipal revenues

�Key Project Risks

• Inaccuracy of Client Data

• Working in Public Spaces

• Permits/ Permissions delays

• Partner and CW Subcontractor Issues

• Payment validation especially for O&M KPIs


Some conclusions

� DBO is the most appropriate model

• 1 contract in 3 phases – Design, Build, O&M (incl. metering and billing)

• Ensures (1) appropriate works; (2) control of works; (3) full control of NRW

� Need for satisfactory contract period

• ~12 months of Design, 4 years of Works and minimum 5 years of O&M.

• Works always take longer than expected (need for permits, difficult access to roads, …).

� Incentive based contract but with limited number of clear & balanced KPIs, and limited impact

• Usual major KPIs are NRW, 24/7, subject to water availability.

• Beware of expectations based on faulty initial data (NRW …).

� Set incentives to optimize spending between CAPEX (is BOQ appropriate?) and OPEX

� Balanced legal contract

• Including adequate protection of international operators, liability cap, currency risk protection, escalation formulas, change in law clauses, etc.

� Project financing for different phases

• mixture of DFIs, national authorities and State / local authorities seems a good mix (not feasible to secure private finance forsuch projects).

� Payment security

• Need to implement mechanisms to ensure reliable and on-time payment, including an affordable but sufficient tariff.


Malvyia Nagar (Delhi) – key contract features

� 12-year concession contract for an area in south Delhi of 400,000 population

�Tender fixed Capital Cost of Rs 171 Crores (~ $25 Mn)

• Bidders didn’t quote for Works item rates (fixed by contract)

• Operator finances 30%

�DJB supplies about 75 MLD of bulk treated water for distribution to project area

�Operator is in-charge of the O&M - Network as well as all Customer Services (meter reading, billing, collection, complaint handling)

�DJB fixes tariff (same as in rest of Delhi), and Operator collects user charges and deposits in the escrow account

�Operator’s O&M Revenue is for only the water billed & collected

• Operator’s Monthly O&M Revenue: Gross Rate * Volume billed and collected during the month

• Gross Rate re-adjustment if the business plan assumptions change.


Malvyia Nagar (Delhi) – performance achieved

Sr. No. Service Level Benchmark Initial (2011)Current (Jan 17)

Contractualtarget

CommentA

SS

OC

IAT

ED

WIT

H P

EN

AL

TIE

S

Coverage of water supply 84% 95% 100 %Unauthorized

areas

Per Capita supply of water 286 LPCD 173 LPCD150 LPCD

(ultimate Year)High Customer

wastage

Continuity of supply 3-8 hrs 3-8 hrs 24 hrs

(End of Works Period)24/7 In two areas

Extent of metering 27% 86% 100 %

Quality of Water Not meeting 100% 100 %

Redress of complaints No data 81% 80%

AS

SO

CIA

TE

D

WIT

H

RE

VE

NU

E Efficiency in Collection 81% 95% 95 %

Extent of Non Revenue Water

67% 39%• 40% (End of Works Period) • 15% (Ultimate Year)

Most importantly, Reduced / Optimized Capex from $ 25 Mn to $ 12 Mn withbetter asset management and leak detection / repair program.


Bangalore: project objective of UFW reduction

� Reduction of UFW to 16% overall across all established DMAs in the project area

� 8-Year Project divided in two parts (BOQ based)

• First 3 years : Works Contract including services (Survey, design & construction works of DMAs, leaks detection and repair,base lining and UFW reduction works)

• Last 5 years : Maintenance Contract (for maintenance, leakage control and sustaining UFW level)

� Contractor is not responsible for

• Day-to-day distribution system operations and supply of water to consumers

• Meter reading, billing and collection of user charges

• Disconnection of Illegal connections

� Methodology to achieve 16% UFW is specified - based on creation of DMAs

�UFW target level calculated by adjusting measured quantity supplied to stand posts and slum, operation use (scouring etc), and consumption estimated for illegal connections

� Design-Build Contract based on FIDIC, 1999

� BOQ based project; assumption is that BOQ implementation will enable UFW reduction which is debatable

• 153 Kms of pipes out of 800 Kms to be changed

• 22,000 customer meters and 39,000 HSCs (out of 70,000) to be changed


Kolkata loss reduction contract: background

� 6-Year Loss Reduction Contract in Cossipore (Northern Kolkata)

• Client is Kolkata Municipal Corporation (KMC) and Financed by ADB

• 3-Years Works Period and 3-years O&M

� Project Area

• 6 Wards out of 141 Wards in the city

• ~ 9.0 Sq. km with population of 250,000

• Old neighborhood - lot of slum / low income population

�Water supplied from Tallah Complex, (pumping station and 9 MG elevated tank) which is in project area itself

• 18 hours / day Supply; 90-98 MLD Water supplied (~ 350-400 LPCD)

• Miya Water estimated 64% losses in this project area

� Project Scope – Design and Works (3 Years)

• Design, Hydraulic Modelling and Establishing DMAs (~ 25000 connections)

• Works within DMAs as per SIP (~150 Kms of distribution network, 25,000 HSCs & Domestic meters, Valves, PRV, sluice valves, Flow meters, SCADA)

� Project Scope - O&M Phase (3 Years)

• Water Distribution in the Project Area (~97 MLD is the current supply)

• In-charge of Network and back-end support to KMC for Customer Services

• Meet KPI obligations - NRW, 24/7 supply, Water Quality and Complaint Resolution


Kolkata loss reduction contract: bid variables and KPIs

� Bid variables: sum of three streams

• DMA establishment Fee: Towards surveys, hydraulic modeling, SIP, creation of hydraulically discreet network, zero pressure test,as built drawings, leak detection and achieving 24/7 supply

• Works (BOQ based)

• O&M Services: Fixed and Performance Fee (70:30)

� Mandatory to quote DMA fee, Works price and O&M fee in ratio of 18:54:18

� Four KPIs, NRW has 15% weightage in O&M fees

� NRW and 24/7 KPI to be measured at each DMA level, and not at Project level

NRW achieved 20% 25.00% 30% 32.00% 35% 37.00% 40.00% >=50.00%

NRW Performance

Fees Received (as

%age of O&M Fees) 15.00% 12.50% 10.00% 8.00% 5.00% 1.00% -5.00% -25.00%


Karnataka projects: key contract features

� Upscaling of continuous (24/7) Pressurized Water Supply and Operation, Maintenance and Management of Water Supply System in Hubli-Dharwad, Belgaum & Gulbarga

� 12 year Management Contract

• Year 1 : Study Period

• Year 2-4: Transition Period (Works and O&M with gradual improvement in KPIs)

• Year 5-12: Sustaining Period with sustained KPIs

� KUIDFC / City funds the entire Capital Costs (Works) through World Bank Loan

� Operator carries out various surveys, utility systems, SOPs, procurement and construction supervision of works, and performance based O&M

� Construction Scope (to be bid out by Operator to third-parties): Rehab/ Construction of WTP, Pumping Station, MBR, Transmission mains, service reservoirs, distribution network, DMAs, service connections, consumer meters and other distribution assets

� Operator is in-charge of the O&M for the entire water infrastructure: source, WTP, MBRs, Reservoirs, network and Customer Services cycle (reading, billing, collection, complaint handling).

� Operator’s Payments

• Set-up, Customer and Top Surveys, Pipeline Asset Condition Assessment, Hydraulic Modelling, Preparation of SIP, various SOPs and Utility Systems Improvement fees

• Construction Management Fees as PMC

• O&M Fee from year 2-12

� Bid Variable: NPV of above quoted fees (Operator’s Payments)


Davanagere (Karnataka): key contract features

� Context of Project

• Part of 65 M€ Works of Davanagere Water Supply Project, covering both bulk water and water distribution assets

• Construction of New Bulk Water Assets (12 M€): already awarded

• This project involves Construction / Rehab of new and existing Bulk and Distribution Assets, with 8-year O&M for all Assets

� Scope of Works (This Project)

• Design, Rehabilitation and Implementation of Distribution system (clear water transmission, reservoirs, network, HSCs, meters, valves, etc.)

• O&M of bulk and distribution system with conventional KPI objectives - H24, NRW, water quality, CRM, Power Factor

� Current water supply is 77 MLD against demand of 89 MLD

• Existing treatment capacity: 99 MLD across 3 WTPs (only 2 plants are operational)

• Current supply regime is once in 3-4 days

• Existing distribution network will be discarded after new network is commissioned

� Contractual Duration (140 Months), including 5 months of Design validation, 36 months of Works phase, and 96 months of O&M

� Legal contract based on FIDIC (for construction), with Escalation, Change in law, limited liability cap, currency protection, protection against non-payment

� Bid Variable: Sum of Works and O&M Price (BOQ based)

� Funding of Works

• Works: Funding from ADB (28%), AMRUT (38%), State Govt. of Karnataka (34%)

• O&M: DCC / State Gov. KUIDFC (100%); through User-charges and other municipal income


Coimbatore (Tamil Nadu): key contract features

� Scope of Works

• Design, Rehab and Implementation of Distribution system (reservoirs, network, HSCs, meters, valves, etc.)

• O&M of distribution system with conventional KPI objectives - H24, reduce NRW, water quality and CRM

• Flexibility in Prioritization of Works and CAPEX phasing – BOQ is only for guidance

• Asset replacement and major maintenance paid for by CCMC

�Duration

• Study Period: 1 Year

• Works: 4 Years

• O&M: 25 years including the Works period

�Legal contract with satisfactory liability cap, arbitration, but lacking clear protection on currency exchange and change in law

�Bid Variable

• Sum of Works and Y-o-Y O&M Quote over 25 years

�Revenue model: Payment of Staggered Annuities (defined for each of the 25 years)

• Quarterly Annuity payments, subject to Works Progress as per BOQ / WP during first 4 years

• No penalty for Works delay (except for meter installation) – only delayed revenue realization

�Funding of Works

• Works: JNNURM, State Govt. of Tamil Nadu, CCMC

• O&M: CCMC (100%); through User-charges (escrow mechanism) and Property Taxes (ring-fenced)


SUEZ’s Water for All strategy

The “Access to essential services” offer aims at

our municipal customers, to satisfy 5 distinct

needs

2. Governance and management of an access to essential services project

1. Diagnostic and Analysis of the issue of access and sustainability of access to services

3. Extend access to services in

disadvantaged areas

5. Access to essential services for people on the margins of society

and collective sanitation facilities for all

4. Guarantee the sustainability of access to

water for customers in precarious situations

The SUEZ offer on “Access to water and sanitation services for all”


Created in 1999, this program is implemented within commercial contracts to provide a sustainable access to water and sanitation to population living in informal settlements, both in developing and developed countries.

The program has been awarded in 2004 by the International Chamber of Commerce and the UNPD for its contribution to the United Nations Milleminum Development Goals.

3 objectives

Help our client to achieve its social goals

Help the users to improve

their access to services

Help us to achieve our contractual

commitments

x / x

The Water for All program, why?


A 3 steps approach

Evaluate and analyze existing

situations�Stakeholder mapping

�GIS on settlements

�Households surveys

Scale up and

monitor� Implementation at large scale

�Develop a dashboard with targeted KPIs

�Evaluate impacts of the project (SDGs framework)

Build and test

solutions�With local authorities and

stakeholders

�Participative design of solutions

�Test in pilot areas

x / x

The Water for All program, how?


1. Solutions for communities designed with regard to their actual

context

2. Formal partnerships supporting the projects

3. Adaptation of technical and commercial standards to the local context

4. A real service beyond the connection

x / x

The Water for All program, 4 guiding principles


Alger

Diagnostic1

2 Solution

Results

3 types of situations identified:

Informal housing

• Organized zones

• Defaulting infrastructures

Crisis shelters

• Post-seism

• Poor maintenance

Slums

• Unplanned areas

• No basic infrastructures

150 000 people connected in 5 years.

3

TOOLS

• Social fee for connection

• Evaluation of informal networks

• Social engineering

ORGANISATION

• Dedicated team for planning, supervision and

community relations.

• Other departments contribute with their usual job

x / x


Jakarta

Diagnostic1

2 Solution

Results3Contaminated groundwater + city sinking and floods.

Only 63% of households connected(2009).

Massive investments needed for non connected areas.

100 000 households with individual connections funded by the GPOBA program.

Collective meters distributing drinking water to about 576 households in North Jakarta.

52 Water Kiosks supplied by trucks (7 000 households)

- Individual connections campaign funded with a GPOBA program from the World Bank : innovative financing scheme based on 2 performance goals:

- Number of connections (75%)- Average consumption > 10,8 m3/household

for 3 consecutive months (25%)

- Collective meters

- Water kiosks


Casablanca

Diagnostic1

2 Solution

Results3

Eradication of 178 000 unsafe homes in thegreat Casablanca. Two programs:

- Relocation of 90 270 households

- INDH-INMAE Program: rehabilitation of 88000 homes and connection to water,sanitation and energy networks.

1. Individual connection of households

2. Specific financing scheme based on:

- A contribution from beneficiaries (2000 Dh TTC eachservice), instalment payment on first bills

- Subventions

- A contribution from the company covering the managementcosts

- A construction fund

3. Formal agreement with the authorities who vet thebeneficiaries list

4. Creation of an INMAE Direction with extensive skills insocial engineering to: :

- Engage users through community meetings, focus group ordoor-to-door ;

- Liaise with beneficiaries before, while and after works ;

- Help inhabitants with administrative procedures, raiseawareness on their rights and duties as new customers andresponsible use of services.

36,000 households connected to day, 26,000 on going


x / x

As Samra, Jordan


Responding to operational problems and

ensuring wastewater treatment station’s long-

term success

As Samra, Jordan

In order to win acceptance for the project in the local community, Samra Plant Company (SUEZ / Morganti) began a proactive dialogue strategy with different stakeholders in the region:

- An environmental committee was set up to discuss and make decisions about environmental issues related to the station.- A project to plant new olive trees adapted to the local environment was established with the Ministry of Agriculture; local communities were invited to take part.- A task force composed of the Samra Project Company, the municipality and the Ministry of Water, was set up to control the spread of flies and implement multiple simultaneous treatment campaigns on and around the site.- Actions were deployed to help stakeholders get to know the project

This dialogue process reduced the amount of criticism from various stakeholders, reduced the number of conflicts with local residents, and fostered collaboration between the Samra Project Company and the public authorities to resolve problems. It allowed to win stakeholder backing for the extension phase from 2012.

Dunkerque, France


Observatoire éco-solidaire

("Eco-solidarityObservatory")

Dunkerque, France

In 2012, SUEZ and the Dunkirk region water supply authority (SMAERD) set up an innovative water pricing structure in the urban area of Dunkerque: billing the first tier of water consumed at a lower price and charging more for subsequent tiers, to foster eco-responsible behavior, while weighting this price increase by a social indicator applied to underprivileged households, to ensure access to water for all.

The “Eco-solidarity Observatory” combines local authorities, social housing, social services, consumer associations and all stakeholders in charge of sustainable development. Its role is to measure the impacts (quantitative and qualitative) of this new “ecological and social water pricing” and consider the necessary changes, through the analysis of the perception of users, changes in consumer behavior, or financial impacts of these changes for water services.

SMART SOLUTIONS forsmart cities


information

Communicate and inform stakeholders in real time

Improve the understanding of on-going operations

Reinforce control over operator

commitments

environment

Reduce water losses

Preserve the quality of the natural

environment

Commit to an energy performance

economy

Optimise the output from plants or

network installations

Rationalise operational costs and

investments

Increase the value of existing

assets

safety

Forecast natural or accidental

events (floods and pollution)

Improve reliability of operations

on a daily basis and during a crisis

Comply with regulatory requirements

Securing the drinking water supply

Value of smart water utilities


ReduceOperating Cost

The water sector is going

DIGITAL

ImproveSustainability

EnhanceCustomer

experience

OptimiseAsset Utilisation

Drivers for smart water utilities


4 Data repositoryData Analytics, Data Science,

Machine Learning

2 IOT NetworkCollect data within shared

communication networks

SMART

systems

5 ServicesOpen Data

Web portals, mobile apps1 Industrial connected

devicesOn-board or fixed devices

A new set of skills & Technologies for aconnected city 3 Business IT system

Existing IT management systems


Figures for Rhône-Alpes

Auvergne area :

27,495 kms of remotely monitored networks

3,308 sites monitored 24/7

763 municipalities served

5 Advanced Solutions FactoriesSmart Metering, Smart Water, Asset Management,

Revenue Management, Environmental Quality

Monitoring

Digital at the core of our operational activities

>3000 fully equipped plants Automated and operated by SUEZ

10 Visio Centers

deployed in France in 2017

3M sensors monitored real timefor SUEZ’ water networks in Europe

8,6M inhabitants protected from flooding by predictive models & automated systems

in Paris area as of 2016*

SUEZ Smart Solutions – April 2018



AQUADVANCED®

Water NetworksReal time performance of the drinking water

distribution network

Monitor water quality in real time

Optimise the operation

They put their trust in us: Barcelona ,

Castelldefels (Spain) , SMG SEVESC

(Versailles, France), SEPG (Nanterre,

France), SUEZ Eau France networks,

Macao (China), Casablanca (Morocco),

Westchester (USA)

Control communication and inform consumers in

real time

Reduce water losses


AQUADVANCED®

EnergyPredictive and optimised real time

management of drinking water systems

Rationalise operational costs

Optimise the management of drinking water production

They put their trust in us: Eau du Sud

Parisien (France), Eastern municipal water

district (USA), Peel region, Ontario

(Canada), Northumbrian (UK), Tarragona

(Spain), Unity water (Australia), etc.

Reduce the environmental impact of the service


AQUADVANCED®

Urban DrainageEarly warning and dynamic management of

stormwater systems

Protect citizens from flood risks

Preserve the natural environment from pollution risks

They put their trust in us: SIAAP, Bordeaux

(France), SERAM (Marseille, France) ,

SIAHVY (France), Stéphanoise des Eaux

Saint Etienne town council (France), Dijon

city council (France), Biarritz city council

(France), PUB Singapore

Optimise the economic performance of the

wastewater treatment system



Decentralized solutions for water and wastewater treatment

>20 ansof experience in compact units

>160 references

accross the world

compactadaptation of Degremont’stechnologies

for every applicationMunicipalindustry

UCD references

today 5 separation

technologies

UCD®

Degremont Compact Units

>700 000 m3/day produced

in the world


� from 115 to 22 000 m3/day/unit

� Delivery time at factory output 3 to 6 months

� Turnkey solution

� Skid-mounted delivery

� In accordance with local standards

what are UCDs® for Drinking Water ?


� Capacity from 15 to 4 200 m3/d

� Delivery time at factory output 3 to 6 months

� Turnkey solution

� Skid-mounted delivery

� In accordance with local standards

what are UCD® solutions for wastewater treatment ?


ModularityAddition of modules, inter-changeable units and transfer is possible

Optimised lead timeFactory assembledand wired

Installation in dense areasReduced footprint

Risk managementFactory testedLimited structural engineering

Reliable and robustPatented technologiesOver 150 references in operation for over 20 years

Reduced CAPEX and OPEXCivil engineering and operating costs reduced

advantages


a sustainable solution

IrakInstalled in 2002Picture taken in 2010

Mayotte Installed in 1996

Picture taken in 2008

Specific constraint : heat and abrasive sand wind

Specific constraint : Salty and tropical environment


3 fields of application

� Isolated areas

�Rural hydraulic system

MUNICIPALITIESHUMANITARIAN/ RURAL

INSTALLATIONINDUSTRIES

�Decentralised production or Treatment at district scale for the creation of an autonomous network in a capital or secondary centre

�Supports rapid extension of urban and peri-urban centres

�Rehabilitation of existing treatment plants by the addition and/or substitution of a treatment phase

� Securing of water supply

� Site facilities, hotel, hospital, military base etc.

�Discharge into sensitive zone and high demand of natural environment protection

�Reuse of treated water project (irrigation, sprinkling…)


40 drinking water units in Ivory Coast


• SUEZ will install 40 compact modular drinking water

production units in Ivory Coast.

• With a total production capacity of 92,000 m3/day,

they will supply 18 towns in 17 regions.

• The 10 first units delivered will be implemented quickly

to meet the needs of sites where drinking water distribution is currently incomplete.

• Contract total: 19 million euros.

Responding to the waste crisis in emerging countries


dealing with urban population growth

people = waste = impact

So

urc

e: U

N


… and challenges associated withurban waste growth in emerging countries

x3waste production in fast-growing urban areas isexpected to nearly triplebetween 2012 and 2025

80%of collected wasteis disposed ofin unregulatedlandfill sites

12%of global methaneemissions will begenerated bylandfill sites by 2025



Waste projects are socio-economically profitable

� Waste projects are socio-economically profitable

• SUEZ – Harvard Kennedy School cost-benefit analysis using the Social Cost of Carbon.

• GIZ socio-economic study of Rabat dumpsite in Morocco.

• WB study on the economic cost of environment degradation in Morocco

• Methane emissions through waste is becoming the next climate topic

� But not financially viable in many developing countries


Leveraging guarantees and grants on waste management

� Green Climate Fund

• Initial capitalization of 10 Bn USD in 2015, targeted replenishment of 10 Bn USD every year.

• Initial operational bottlenecks are being worked out.

• Few investments in hard water, wastewater and waste infrastructure for the moment.

• SUEZ reference : Belgrade EfW with EBRD.

� European funds

• Several blending facilities: European Regional Development Fund, Neighboring Investment Fund, European Fund for Sustainable Development, Latin America Investment Fund, Africa Investment Fund, …

• Several references with SUEZ: Maribor WWTP, Belgrade EfW, Poznan EfW, As Samra WWTP.

� MIGA’s investment guarantees

• Applicable when gate fee is used to repay the debt on DBFO / BOT / concession models.

• Equity guarantee on any kind of project. SUEZ reference: As Samra III in Jordan.

� AFD’s public payment guarantee

• Applicable to all types of O&M contracts where public authorities are a main customer.

• Consists in bank guarantee on first demand, with AFD guarantee, and EU first loss counter-guarantee.

• Product designed and created but never tested yet.

� Proposed discussion topics

• Blend financing facilities, like International Solar Alliance with MIGA, GCF and AFD, replicable in the waste sector?

• Case study on upcoming Kampala waste PPP.


Poznan, Poland – EfW BOT

�Objectives

• Abide by European Environmental Standards on the treatment of waste.

�General Data

• Area of 730,000 inhabitants.

• 25 years BOT contract signed in 2012 with a JV composed of SUEZ and the Marguerite infrastructure fund (managed by EIB).

• Project capital cost estimated180 M€, including 84 M€ EU grant and 96 M€ non-recourseloan.

• Incineration capacity 210,000 t/year.

• Power Purchase Agreement over 25 years with the city of Poznan.

• Annual expected revenue 34 M€ (850 M€ over the duration of operations).

• First experience of waste PPP in Poland, chosen by the City of Poznan to comply swiftly with new national and European environmental laws, with minimal impact in the short run on the City’s budget.

•Successful management of a challenging procurement procedure, in which EU financing in the form of grant committed after selection of the preferred bidder. Hence, two business models had to be explored during competitive dialogue.

Lessons learnt and good practices


Belgrade, Serbia – EfW BOT

Lessons learnt and good practices

�Objectives

• Catch-up European environmental standards with hope of medium-term adhesion to the European Community.

�General Data

• Dumpsite of 42 ha, active since 1977, on ISWA’s list of the 50 biggest dumpsites in the world.

• Area of 1,3 Million inhabitants.

• 25 years BOT contract signed in 2017 with SUEZ-Itochu, include: rehabilitation and aftercare of Vinca dumpsite, EfW facility of 340 ktpa, new sanitary landfill, construction waste disposal site.

• Project capital cost estimated 350 M€, annual expected revenue 35 M€.

• Power Purchase Agreement over 12 yearswith the national company EPS.

•Effort from national and local authorities to bridge the affordability gap: creation of a new waste treatment tax, 12-year PPA with national grid company, heat prices guaranteed all along the contract period.

•The competitive dialogue phase with potential private partners has been essential, in order to develop realistic, hence bankable, waste treatment solutions, and with suitable risk allocation between public & private

•Full “non-recourse project financing” is being developed to fund the project, with participation of 3 international financing institutions (including EU grants and a concessional loan from GCF), which is an achievement for an emerging country with rating yet below investment grade.

SOLUTION• Design, building and operation of two

sanitary landfills, NENT and WENT. • Both landfills are operated as

bioreactors to optimize the production of biogas and the sites’ landfilling capacities.

• In NENT, over 40 million Nm³ of landfill biogas is treated and turned into a synthetic natural gas conveyed to the Town Gas power plant in Tai Po by a 19 km subterranean pipe

CHALLENGES• Large volumes of waste

produced every day on a small

size territory

• Lack of fossil resources

BENEFITS

• Increased autonomy in energy production

• Optimized landfill capacity and aftercare management

• Reduction in greenhouse gases emissions (annual savings equivalent to the consumption of 304,000 oil barrels)

KEY FIGURES• Joint total capacity of 100 million m³:

14,000 tons of incoming waste every day

• Every day: 5,000 m³ of leachate treated and 30,000 MWh of electricity produced

WENT and NENT, Hong Kong

Optimized waste treatment and energy production on a small territory


Saida, LebanonLandfill rehabilitation and site conversion into a public park


KEY FIGURES700,000 tons of waste landfilled in safe conditions40m³/day of leachate collected and treated

ChallengesUncontrolled dumpsite with a surface area of 3 ha, with large volumes

of waste falling in the sea

High environmental and sanitary risks

SolutionSite rehabilitation and creation of a sanitary landfill, equipped with

leachate and gas treatment systems

Project supported and monitored by the UN Development Program

(UNDP)

BenefitsSite remediation with limitation of environmental and odor nuisances

Adequate aftercare management to ensure sustainable positive impacts

Site conversion into a public park

“From Shame to Fame: Saida trash mountain to green park!” (UNDP Lebanon, 2016)

https://www.youtube.com/watch?v=dFRcvbzMdQg

Meknès, MoroccoLandfill rehabilitation and integration of the informal sector


KEY FIGURESEstimated 100,000 tCO2eq/year avoided emissions

ChallengesEnvironmental and health issues generated by the presence of an

uncontrolled dump site (22 ha)

Presence of informal waste pickers on the dump site

Significant tourism industry

SolutionRehabilitation of the dumpsite, construction and operation of a

sanitary waste disposal and recovery center

Collection and treatment of leachate and landfill gas

Composting unit of 3,000 m²

Creation of a sorting cooperative including 150 previous informal

workers, which produces 10,000 tons/year of recovered materials

BenefitsEfficient and sustainable waste treatment, ensuring no pollution

Establishment of a cooperative of 150 waste-pickers

Existing jobs preserved and new jobs created

Annexes


ready for the resource revolution

WATER TREATMENT

Present in 70 countries over 80,000 employees

€15.1 billion turnover in 2015323,000 industrial and business customers

10 million people

receivingdesalinated water

>250 desalination plants

92 millionpeople supplied

1,200 drinking water facilities

65 millionPeople served

2,300 wastewater treatment plants

RECYCLING& RECOVERY

44 milliontons

of treated waste

57 millionpeople

benefiting from waste collection

47 Incineratorsworldwide

5,138 GWh

produced annually from waste

14 million tons

of valorized waste


Water Infrastructure – Major Projects

Barcelona (Spain) - DBODesalination – 200 MLD

Al Dur (Bahrain) - DBDesalination – 218 MLD

Melbourne (Australia) - BOTDesalination – 450 MLD

Perth (Australia) - DBODesalination – 143 MLD

Panama City (Panama) - DBOWastewater – 238 MLD

As Samra 1& 2 (Jordan) - BOTWastewater – 365 MLD

Doha West (Qatar) - DBOWastewater & Reuse– 280 MLD

Mapocho (Chile) - DBOWastewater – 760 MLD

Alexandria (Egypt) - DBOWastewater – 800 MLD

Pilar Point (Hong Kong) - DBOWastewater – 241 MLD

Saidabad (Bangladesh)DBO – DW – 226 MLD

FranceAchères

DB WWTP – 1,700 MLD

Czech Rep.Prague

DB WWTP – 350 MLDCanadaMontréal

DB WWTP – 3,456 MLD

La Farfana (Chile) - DBOWastewater – 760 MLD

ChinaHuai Fang

DB WWTP – 600 MLD

UAEMirfa

DBO Desal. – 136 MLD

TK Halli (India)DBO – DW – 1,600 MLD

Oman Barka 4

BOT Desal. – 280 MLD


Waste Infrastructure – Major Projects

Ametyst (France) DBOMSW (MBT+AD) – 33.5 kT/y

OWTF (Hong Kong) - DBOOW AD – 200 t/d

Ivry (France) - DBOEfW 350 kT/y – OW AD 310 kT/y

Surrey (UK) - BOTEfW + AD – 55 + 40 kt/y

Poznan (Poland) - BOTEfW – 210 kT/y

Nantong (China) - BOTEfW – 33 kT/y

Cornwall (UK) - BOTEfW – 240 kT/y

Vernéa (France) DBOEfW + AD – 235 kT/y Valorly (France) DBO

EfW – 150 kT/y

Merseyside (UK) - BOTEfW – 430 kT/y

Severnside (UK) - DBOEfW – 300 kT/y

Teesside + NEERC (UK) - BOTEfW – 640 kT/y

Other projects in UKKirklees EfW

Isle of Man EfWSuffolk EfW

Cleveland EfW


Documents

20180424 WBG workshop - World Bank...SUEZ, the challenges we all face increasing resource scarcity limited resources on the planet 60% of the 8.5 billion people on earth will live