ABSTRACT

The reader acknowledges that the information

provided in this Business Concept Note is
confidential; therefore, the reader agrees not to
disclose it without the express written permission of
the owner.
2020

Concept Note
Executive Summary 
Background
Before the civil war in Somalia, the capital, Mogadishu, was known for its wide beaches, fresh sea air
and pure blue ocean water. Today, however, large amounts of trash are spreading everywhere.
Mogadishu is home to two million people. It produces about 2,500 tons of useless waste every day. But,
until recently, it did not have an official place to put waste material or a trash recycling center.

Instead, people have been leaving trash on the streets, placing it along the coast or into the Indian Ocean.
VOA’s Somali Service recently reported on the problem. It found pictures of workers throwing trash into
the water. Other pictures show huge amounts of cans, bottles, boxes, metal and other waste along the
coastline. Sometimes the trash burns, causing smoke and a bad smell to float into the city

Solution
SWAME is experienced in designing and successful delivering of many WTE facilities that meet and
even surpass the emission performances stipulated by world environmental regulations.
The operation area of business will be to collect, recycle/compost, and market waste from cities for use
as a consumer good. This recycled product will meet two critical needs:

1. It will give cities a feasible and cost effective alternative to landfilling the waste, and
2. It will help meet the growing demand for energy (electricity, biogas) organic soil enhancers and
fertilizers. The material that will be recycled is human waste sludge.

Environment

The solutions for economical reduction (elimination) of waste presented are always sustainable and with
guaranteed performances in accordance with the design arising from appropriate bankable environment
which are applicable for the sustainable reduction and economical reuse of waste based on the actual
requirements of each project.

We intend to contract experienced contractors in design and successful delivery of many WTE facilities
that meet and even surpass the emission performances stipulated in the guidelines for environmental
permitting, which are the world’s most stringent emission limits.

In addition to meeting the bankable environmental standards, the local odour from the WTE plant is
minimized by containing and combusting the odorous gases, which are created when waste is fermented
(rotting) before processing in the WTE plant.
ISSUES TO BE CONSIDERED
If we look at a power plant or a waste to energy facility there are virtually hundreds of parameters to look
at:
Prerequisites
The first stage of a feasibility study is to verify all the basic parameters that will have an impact on a
possible project. This can typically be divided in four major groups:
• Waste composition and volumes
• Infrastructure
• Boiler design
• Personnel

Market
There are customers at both ends of our supply chain that will benefit from our services and products. 
 Cities will benefit from our service by having an alternative means of waste disposal.
 recovery of metals, glass, plastics and paper;
 isolation, sanitation and neutralisation of hazardous compounds;
 fermentation (i.e. anaerobic treatment) of waste waters or slurries for production of biogas;
 compositing of residuals;
 Source of Energy for (Electricity, Home Cooling, Bio Gas for Cooking)
Other potential customers who will benefit from our compost product include
 turf farms,
 fertilizer manufacturers,
 nurseries,
 landscapers,
 homeowners,
 and even the federal government for use in highway construction reseeding.
Therefore, we have two basic market segments; those waste treatment facilities which will benefit from
our services and consumers who will benefit from our product.
Revenues and cost
Consider all revenues and costs. For a waste to energy plant possible revenues are
• Gate fees for waste
• Production of electricity
• Possible production of steam for industrial use, district heating or district cooling
• Possible operation of other plants as you do have a competence collected in the control room.
• Recovery of metals
• Other special parameters that make a difference as discussed below.

There are also costs to consider

• Cost for preparing the waste
• Water supply
• Internal consumption of electricity
• Infrastructure during investment. Are there cranes available?
• Deposit of ashes. Sometimes this may be a revenue if the plant is designed correctly
• Operation issues. A W2E plant is sensitive to proper maintenance.
• Changes of prices on electricity and others.
• Inflation with regards to energy production equipment his higher than for almost any other goods. It’s
easy to over- or underestimate these parameters.

Technical

The design of a plant is also depending on many practical issues. Different plant sizes are based on
different technologies. Not so big boilers can be built as standing units. This reduces the complexity size
and cost of the building considerably. The height may be reduced by some 10 meters.
WTE (Waste to Energy) Facility Design Basis for 125 GWh per year

This WTE Concept describes a WTE Plant of a common standard of function and size for production of
electricity in Somalia by using 1500 tons of waste per day.

Preliminary design of a Waste-to-Energy facility to be used for selling 125 GWh electricity per year
according to the Power Purchase Agreement (PPA):

PPA: 30-year term

Technology: Subcontractors for boiler, turbine and generator Operation Design: Ambient
temperature 33 degrees C
Relative humidity 85%
Ambient pressure 1 bar (very near mean sea level)

Consumption of compost in the commercial market is growing due to people looking for a more organic
or natural substitute for traditional chemical fertilizers. Recycling is at the forefront of responding to this
growth trend in Africa. We will initially focus on selling compost to fertilizer manufacturers, nurseries,
and landscapers. Five major market segments for compost have been identified:

 Agriculture (for food and nonfood crops and sod farms).

 Landscapers (for industrial and commercial properties; golf courses, cemeteries, and athletic
fields; landfill covers; and damaged soils).
 Nurseries (for plant and forest seedling crops and reforestation projects).
 Public agencies (for highway median strips, parks, recreational areas, and other public property).
 Residents (for home landscaping and gardening).

Competition
 Our service offers a feasible, even desirable, alternative to traditional means of disposing of
human waste. Our product is a value added,
 soil enhancer that appeals to the growing environmental conscientiousness among consumers.
 Direct competition is almost nonexistent.
 We intend to position ourselves as the logical, economical choice for human waste disposal and
compost production in Mogadishu and the entire Horn of Africa

Financing Needed
Plant capacity can be varied to suit the actual application. With a plant designed for an annual capacity of
CSW (City Solid Waste) serving around 2 million inhabitants, i.e. around 1,500 tons per day, it would be
possible for the plant to receive current waste and to reduce an existing waste hill at the same time. The
construction time of the plant would be 2-3 years. The price for such a basic turnkey plant is around 5
million USD depending on waste composition among other parameters.

Pre-investigation of Local Conditions

For the EPC Contractor assisted by the Agent to start negotiations for a bankable EPC Contract between
the Contractor (the selling party) and the Local WTE Company (the purchasing party) of the Contract
deliverables (the Project), the following is necessary.

Local WTE Company

Agreements, Licenses and Permits

The Local Company must prepare and present bankable agreements, licenses and/or permits for among
others:

 Land area for the plant around 100,000 m2.

 Supply of Municipal Solid Waste (MSW).
 Supply and discharge of utilities (e.g. power, water and sewage).
 Sale of electricity to the grid.
 Environmental approvals and permits.

Thermal Power Plant Projects

In regards of a waste fired power plant Project, the Local Company must arrange bankable long-term
(e.g. 30 years) and index-regulated Waste Supply Agreement (WSA) with the Federal Government or
similar authority for the supply of solid waste as well as for the recovery of such waste from existing
waste deposits (landfills).

Sale of Electricity and/or District Cooling

In case of Projects producing electricity, the Local Company must arrange bankable long- term and
index-regulated Power Purchase Agreements (PPA), which should apply for at least 30 years or other
bankable period and shall include guaranteed minimum sale (e.g. MWh per year or equivalent
measurement) of electricity with guaranteed power purchase prices (e.g.150 EUR per MWh).

Infrastructure (roads, water supply, wastewater discharge, connection to electric grid etc.
The Local Company will arrange all necessary land use rights for the Project and all infrastructure
outside the Project’s battery limits often defined as “outside the fence”, including but not limited to
 roads,
 water supply,
 waste water discharge,
 connection to the electric grid (power transmission line),
 connection to external steam and hot water piping systems etc.,

which are required to construct and operate the Project for at least 30 years of another bankable period.
For the common good, the municipality may arrange this, but the Local Company must ensure that this
actually happens.

There are several options for a WTE Company to buy and operate the WTE plant.

1. Big Investor owning the Company without need for any loan just have to buy and pay directly to
the EPC Contractor - stepwise in advance according to the Contract.
2. Small Investor owning the Company but needing loan to finance the Project. SWAME may
arrange the loan against a Sovereign Bond, a Sovereign Guarantee or similar collateral.
WTE Proposal for the initial Construction period:

No. Text Ready/No ready Attachment No.

1 Local Company with a genuine desire and capability
to develop, permit, get financial guarantee for the
Project
2 Bankable agreements, licenses and/or permits
3 Bankable long-term waste supply agreements
4 Bankable long-term power purchase agreement
(PPA)
5 Land use rights for the Project
(typical area 300 x 400 m)
6 Roads to the plant
7 Water supply to the plant and Sewage discharge from
the plant
8 Low voltage power supply (during construction)
9 High voltage power line from the plant to the grid
Comments and additional information:
 The diagram and the table below show a forecast example of a 540,000 tons WTE plant as a
loan Project. In this example, the income is based only on sale of electricity at 0.15 EUR/kWh
and on 5% inflation of costs and sales. Loan period 15 years and interest rate 3%.

Year (EUR) 2 3 4 5 6 7 8 9 10

REVENUES 0 3 276 000 20 638 800 21 670 740 22 754 277 23 805 037 25 128 074 26 359 658 27 651 678
Accum. Revenues 0 3 276 000 23 914 800 45 585 540 68 339 817 92 144 854 117 272 928 143 632 586 171 284 264

OPERATIONAL COSTS 1 251 000 1 877 400 3 691 170 3 875 729 4 069 515 4 257 439 4 494 059 4 714 323 4 945 396
EBITDA -1 251 000 1 398 600 16 947 630 17 795 012 18 684 762 19 547 598 20 634 015 21 645 335 22 706 282
Accum. EBITDA -1 838 000 -439 400 16 508 230 34 303 242 52 988 004 72 535 601 93 169 616 114 814 951 137 521 232

Depreciation 0 5 000 000 5 000 000 5 000 000 5 000 000 5 000 000 5 000 000 5 000 000 5 000 000
FINANCIAL COSTS 0 0 5 000 000 5 000 000 5 000 000 5 000 000 5 000 000 5 000 000 5 000 000

NET PROFIT -1 251 000 1 398 600 11 947 630 12 795 012 13 684 762 14 547 598 15 634 015 16 645 335 17 706 282
Accum. Net Profit -1 838 000 -439 400 11 508 230 24 303 242 37 988 004 52 535 601 68 169 616 84 814 951 102 521 232

Liquidity 8 162 000 -439 400 6 508 230 14 303 242 22 988 004 32 535 601 43 169 616 54 814 951 67 521 232

Year 2 3 4 5 6 7 8 9 10
Return of investment of
0% 1% 11% 12% 12% 13% 14% 14% 15%
150 000 000
Company value based on 8
-10 008 000 11 188 800 135 581 040 142 360 092 149 478 097 156 380 783 165 072 117 173 162 676 181 650 252
x EBITDA
EBITDA = Earning Before Interest, Taxes, Depreciation and Amortization