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2.4 Topic k: Financing

Financing mechanisms depend mainly on the management system used, but politics also weigh in the decision making process. Some cities, mainly in Bolivia, Colombia, and Ecuador, charge fees through other utility bills (usually through the electricity bill, but this may also be done through the water bill, as in Panama). Fees are set as a percentage of the bill. The utility gives the collected funds, minus an administrative fee, to the solid waste authority. A number of studies show that this system is fair because volume of waste generated correlates reasonably highly with electricity and water consumption. This system is highly efficient and generally finances most, if not all, of the solid waste operation.

Unfortunately, this system is not always feasible, particularly in countries where utilities have been privatized. In these cases, the utility company cannot be forced to carry out this service and often is not interested in doing so as it is considered an additional administrative burden.

In most countries households pay for MSW services through property taxes. This system is not as efficient in raising money for MSW services, because it requires the municipality to have an updated register of households, which is seldom the case. Thus, some households never pay for MSW services. Under this system, costs are seldom recovered, especially for the poorer districts of the cities; thus, the local government frequently subsidizes part of the MSW operation.

Large-scale financing of solid waste operations has become available through bilateral and multilateral agencies such as the World Bank, the Interamerican Development Bank, and the governments of industrialized countries (the German government has provided a significant contribution). These financing projects include technical assistance for institutional strengthening as well as for investment in infrastructure. Some countries receiving financial assistance in this area include Argentina, Bolivia, Colombia, Guatemala, and Mexico.

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