Unpopular with many investors, the waste management sector can be as impactful for societies, as clean energy access and climate-smart agriculture. With the streets swamped with garbage, Mali deserves a clean slight. Our partner Macrowaste has risen to the challenge of the trash crisis in Mali.
"The garbage is polluting waters and soil, producing harmful gases, as no one is processing the waste. And sometimes no one even comes to collect our waste because the landfill is full - we have to keep it in our houses for weeks until it is taken away. The start of functioning waste management systems can be transformational for society. And we are here to support businesses motivated to develop the industry," says Mariam Niangado, Investment Manager in Mali.
Cordaid Investment Management's second investment in Mali was in the country's first modern waste management company - Macrowaste. The enterprise is involved in commercial waste collection. Since Macrowaste was founded in 2014, it has diversified its customer base, which has protected the company against shocks such as Covid-19. The company serves a small number of households, but the bulk of its clients are international organizations like embassies, military bases, large companies, hotels and restaurants that generate a lot of waste and understand corporate social responsibility. Little by little, Macrowaste is setting the standard and shifting the framework toward responsible waste disposal.
The promoters are two Malians, Lamine Dembele and Abdoulaye Tangara, who moved to the US as students. Prior to founding Macrowaste, Laminefor seven years with a US waste management company and learned how the business model works, how to do maintenance and collection efficiently, and deal with customer management issues. As Malians, they knew the poor state of the waste sector in their country and were hugely motivated to come back and improve it with the skills picked up abroad. They have introduced the modern disposal practices in Mali. Macrowaste provides a transparent, traceable, and very reliable service that clients are willing to pay extra money for.
Soon after the start of operations, the company saw a huge demand for their services. They needed additional garbage collection trucks to increase their capacity, but the growth capital wasn't available locally, and most international investors deemed the investment too risky.
“No doubt, without Coraid Investment Management we wouldn't be where we are today. Many banks in Mali refused to provide capital. My business partner Abdoulaye and I used our savings to fund our project, but we couldn’t expand our capacity. We talked with many European investment companies about a potential partnership, but only CIM took a chance on us,” says Lamine.
A EUR 608,000 loan in 2019 and a follow-up EUR 225,250 loan were used as growth capital to increase the fleet of waste collection trucks, as well as preliminary investment in a waste transfer station. Since the first investment, the company has shown strong growth. Macrowaste has expanded its operations from only the capital Bamako to Gao as well, where it provides waste management services to a French military base, with a population of 26,000 soldiers. The addition of the 2 military contracts in 2020 and 2021 has been transformative for Macrowaste and set them to explore more business opportunities, like the recently acquired contract with a military base for collection and transportation of wastewater.
In the next phase of their development, Macrowaste will work on separating waste streams and extracting recyclable materials. Scrap metal, as well as plastic, can be sold for additional income and results in less garbage in landfills, which reduces operating costs as well. So it's a win-win for them and a win-win for the environment because this new business development supports the recycling sector within the region and also reduces the reliance on imports of particular materials. What is more, the work of Macrowaste brings in a different mindset: the more value is given to waste, the more likely it is going to be managed responsibly, rather than just dumped.
Furthermore, the enterprise will build a waste processing unit by the landfill in Bamako. The entrepreneurs reached out to the populations in the villages and started to collect waste from them. Suspicious at first, these communities now are fully supportive of the important work Macrowaste is doing in rural areas. Moreover, people in those villages know that there are quality jobs waiting for them once the processing unit is ready. Macrowaste already has provided jobs to many young men and women, whose alternative options are limited.
When introduced to the case, Cordaid Investment Management saw great potential for positive impact. "We stepped in at a time when no other investor would support them. And Macrowaste has delivered both socially and financially. They delivered job creation, responsibly collected and disposed of many thousands of tonnes of garbage, separated hundreds of tonnes of recyclable materials, and have engaged the government in the development of better waste management models for the country," says Brenda Pennell, Senior Investment Manager.
The investment in Macrowaste already created and sustained 126 direct formal jobs, keeping in mind that formal employment is rare in Mali. And Macrowaste will continue to create jobs for residents of Gao with 16 new staff members expected to join the team within a year. Besides, Macrowaste has a policy of employing youth and recruiting locally rather than importing talent from Bamako. Furthermore, the investment will indirectly boost employment in the recycling sector due to the increased supply of recyclables.
The fruitful partnership of CIM and Macrowaste does not end there. We expect to enable further growth and catalyze additional investment capital to establish a scalable and replicable model for waste collection in West Africa. “Macrowaste wants to become the number one waste management and environmental service provider in Mali within the next two years. I think with CIM’s help we'll accomplish our mission. Because having a partner who understands you, who understands exactly where you're going, is truly valuable,” concludes Lamine.