HKA

completed

Total Project cost is estimated at US$226 million, including costs associated with existing operations. The proposed IFC investment is US$30-35 million A Loan for IFC’s own account; up to US$20 million of equity/quasi-equity investment by IFC; up to US$100 million syndicated B Loans and Parallel Loans; to support expansion of the Company in Turkey. HKA is a Turkish private solid waste management company that converts municipal solid waste into organo-mineral fertilizer. The Company is jointly managed by individuals who have experiences in oil and gas, automotive and waste management sectors. HKA’s business model is based on acquiring long-term municipal concessions for the collection, treatment and disposal of municipal solid waste. The Company’s services include the collection, separation (recyclables, organics, inert/residues), disposal and anaerobic digestion of organic waste to generate biogas for the production of electricity. The Company has four concession contracts from the Pamukova Municipality, Bilecik Union of municipalities, Odemis Municipality and Soke Municipality, all located in Turkey. As a result of these concessions, the Company’s planned investments include; i) expansion of the existing segregation and construction of a new composting facility, cool house and a warehouse in Pamukova (construction planned to commence in March 2015 and operations planned in January 2016); ii) a greenfield project for segregation and, composting, biogas, a landfill and a fertilizer plant in Bilecik (construction already commenced in August, 2014 and operations planned to commence in December 2015); iii) a greenfield project for segregation, biogas and composting in Soke (construction planned to commence in March 2015 and operations planned in January 2017); iv) greenfield project for segregation, biogas and composting in Odemis (construction planned to commence in June 2015 and operations planned in July 2017); and v) a greenfield fertilizer facility in Odemis or Ortaklar (construction planned to start in June 2015 and operations planned in July 2017) which will be a joint plant to produce fertilizer with the compost of Soke and Odemis facilities.The concessions provide the Company with the right to collect and treat the municipal waste available generated by the population within the region defined in the concession. All concessions have been tendered competitively. Concession durations are 29 years, with effective dates as follows; i) Pamukova: 12.03.2010; ii) Bilecik: 21.09.2012; iii) Söke: 22.03.2013 and; iv) Ödemiş: 29.11.2013According to the concession agreements, all facilities will accept only organic, recyclable and inert municipal wastes. Municipal waste amounts to be collected will be in the region of 55,000 tons per annum (tpa) at Pamukova, 75,000 tpa in Bilecik, 40,000 tpa in Soke and 50,000 tpa in Odemis. HKA will be responsible for collection of the wastes and transportation to the facilities. Solid waste is separated as organics, recyclables and inert at source i.e., at the individual households, and this will be further refined at each waste facility. Recyclables such as plastic, metal, cardboard are sold to third party licensed contractors. Organics will be used for biogas production and inert waste will be transported to and disposed of at the municipal landfills, i.e., currently at the Pamukova dump site / the Sakarya Buyuksehir Belediyesi landfill once notified by such municipality in Pamukova, the Kusatak landfill in Soke and to the Menderes landfill in Odemis. At Bilecik, a landfill of some 20 ha in extent will be constructed as a part of the project, adjacent to the segregation and composting facility. At the waste facilities, organic wastes will be combined with animal manure and agricultural wastes which will be provided by manufacturing plants, farmers and / or stables and then fed into a two stage anaerobic digester. There will be closed, ventilated buildings for animal manure storage equipped with bio filters and activated carbon for odor management. Produced compost will be dewatered, where the waste water will be discharged back to the digester and solid digestate will be composted. Composting will take place at the waste segregation facilities. In the existing facility in Pamukova, there are tunnel type closed batch composters as well as plastic and/or metal roofed windrows. Windrows will be constructed from concrete with a HDPE liner to contain leachate. The compost production capacities will be 40,000 tpa in Pamukova, 25,000 tpa in Bilecik, 20,000 tpa in Soke and 20,000 tpa in Odemis. A new technology, called the Rapid Thermophilic Digestion system, is on trial which will allow composting process to be completed within 24 hours, instead of 20-30 days via the tunnel and windrow composting process. The technology utilizes a system into which any kind of farm or animal waste is mixed with an enzyme. The waste is then heated at 80°C and the output is a fertilizer rich in organic matter and free of pathogens. In addition, as the waste is processed in a closed and controlled system, any offensive odors are eliminated during the process. The new projects’ design includes use of windrows; however, if the new technology is approved by HKA, the design will probably include the installation of the new reactors to replace windrows.After composting, the product is either packed for sale, or transported to the fertilizer production process where the compost will be enhanced by the addition of chemical additives including nitrogen, phosphate and potassium (N, P, K) to produce organic fertilizer. The Company has already started supplying to a national distributor of fertilizers with 3,000 regional retail outlets For the Pamukova facility the open windrow composting plant will be constructed in the town of Bozoren while the Bilecik fertilizer plant will be constructed in the town of Pazaryeri. For Soke and Odemis, a shared fertilizer facility will be constructed as a part of the project; however the current location of the facility has not been defined yet. According to HKA’s management, it will be either in the organized industry zones of Odemis or Ortaklar.The anaerobic digesters will produce biogas with a methane content of 50% - 70%, which will be used for electricity production by use of gas engines. The produced energy will be sold to national grid. Facilities will be constructed by qualified third party construction companies. At the time of the appraisal, the construction companies were not selected.