Bluewater Bio’s South African safari

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South Africa’s wastewater infrastructure is failing on a monumental scale. A new agreement between Bluewater Bio and Headstream Water offers an effective way to restore performance and boost capacity.

Bluewater Bio has consolidated its business strategy in South Africa, signing a licence agreement with Headstream Water to roll out its HYBACS technology in the country. Bluewater estimates that at least 60% of South Africa’s 1,600 wastewater treatment plants are not meeting regulatory compliance requirements, offering a strong entry point for its proprietary biological treatment technology.

“The existing wastewater treatment plants were designed to cater for a population of 25 million,” says Headstream’s Justin Moore. “The numbers have now more than doubled, and urbanisation has increased. All plants in urban areas have become severely stressed due to lack of maintenance and management.”

The fact that the majority use activated sludge means that retrofitting is theoretically straightforward. HYBACS’ compact footprint minimises the requirement for civil works, and the potential energy saving of up to 50% on the opex side is particularly attractive given the current energy crisis in South Africa.

Under the agreement, Headstream will supply HYBACS technology under licence, and will design, install and commission both new plants and upgrades. The company is on the verge of signing a joint venture agreement with Fraser Alexander, which operates 80 WWTPs serving mining communities in South Africa. “We intend to roll out in the new year, and our priority is to have reference plants up and running in 2010,” Moore explained to GWI.

While the Headstream/Bluewater team will initially focus on opportunities in the private sector, “there’s a much bigger longterm play we’re doing with the municipal upgrade programme,” according to Daniel Ishag, Bluewater Bio’s CEO. “We have a big advantage in that the majority of the 1,600 plants are based on activated sludge, so in terms of upgrading them, there are very few realistic choices of technology. The focus for at least the first six-12 months will be getting critical mass in our first core market. South Africa will be the springboard to the rest of sub-Saharan Africa,” he told GWI.

The pressure to comply with regulatory guidelines is increasing. “We have very stringent compliance standards, but they’re just not being met,” Moore explains. “Service delivery is becoming a major political hot potato, and there have actually been riots in townships.” The regulator lacks the resources to enforce widespread compliance, though the threat of private sector mining concessions being withdrawn over non-compliance with wastewater discharge requirements is very rea. This is one of the main drivers behind Bluewater Bio and Headstream’s initial push into the market.

“A lot of our work will be in providing packages for the financing of plants, both in the private and public sectors,” Moore asserts. His track record on the investment banking side, where he engineered financing solutions for WWTPs in South Africa in the 1970s and 1980s, should stand him in good stead. Moore estimates that revenues from carbon credits created from the energy savings delivered by HYBACS, combined with the sale of treated wastewater for reuse in mining and irrigation, could contribute up to 70% of the capital costs of a plant upgrade. “HYBACS is a platform for water reuse, and we’re in the unique position of being able to affect core business economics by re-selling the treated water,” Ishag enthuses.

Moore refutes the argument that retrofitting dilapidated plants is just a temporary fix. “It’s going to restore performance and double capacity without significant additional civil works,” he insists. “It’s more than a patch – it’s a technical and volumetric upgrade.”