Breaking Into Nigeria’s Lucrative Sewage Treatment Market as a New Entrepreneur

Nigeria’s rapidly growing but underserved sewage treatment industry presents tremendous opportunities for aspiring entrepreneurs. With the right strategic approach, new entrants can successfully break into this market and build scalable and socially impactful sewage treatment businesses.

Size the Opportunities in Nigeria’s Sewage Treatment Market

• Nigeria generates over 32 million cubic meters of sewage annually, with collection rates below 30% nationally.
• Less than 10% of collected sewage receives proper treatment due to dilapidated infrastructure. The rest is discharged untreated into the environment.
• 95 million Nigerians lack access to basic sanitation facilities. Pathogens and untreated sewage endanger water bodies and public health.
• The World Bank estimates a funding gap of $8 billion for urban sanitation infrastructure in Nigeria.
• Decentralized and modular systems are gaining traction as lower-cost sewage management solutions for institutional campuses, residential developments, industries etc.

Massive investment is needed to expand collection networks and treatment capacity nationally, signalling strong growth potential for sewage treatment ventures.

Select an Appropriate Sewage Treatment Technology

Conduct in-depth research on technical solutions aligned to market needs and limitations:

• Conventional centralized systems involving large treatment plants – high capital and operational costs make this suitable only for large municipalities currently.
• Waste stabilization ponds are low-cost and low-maintenance but require sizable land. Attractive for peri-urban areas.
• Anaerobic digesters that generate biogas offer an affordable decentralized option. Suitable for industrial sewage.
• Portable/containerized systems provide plug-and-play modular treatment capabilities, lowering capex. Well-suited for institutional campuses and residential premises.
• Decentralized package plants using sequencing batch reactor (SBR), moving bed biofilm reactor (MBBR) and other technologies offer compact, flexible treatment.

Select solutions balancing capital affordability, land needs, modularity, operating costs and local market fit.

Obtain Relevant Licenses and Permits

Comply with all regulatory formalities before commencing operations:

• Incorporate your sewage treatment business formally first.
• Environmental assessment approval and permits from state regulators.
• Site suitability permits from water resources and town planning agencies.
• Trade effluent discharge consent from the state regulator.
• Sludge disposal permissions from municipal authorities.
• Registration and certification from agencies like the Water Resources Regulatory Commission.
• Local government permits in your areas of operation.

Engage experts like environmental consultants to navigate the licensing process.

Analyse Customer Segments and Revenue Models

Targeting the right customer segments with optimal pricing models is key:

• Institutional clients – schools, universities, hospitals, apartment complexes. Charge monthly operations & maintenance (O&M) fees based on sewage volumes.
• Developers – Offer sewage treatment facility development as one-time engineering, procurement, and construction (EPC) contracts.
• Industries – Provide treatment for industrial effluents either through outright sales or sewage treatment-as-a-service.
• Municipalities – Bid for long-term Build-Operate-Transfer (BOT) concessions to upgrade city sewage infrastructure.
• Commercial establishments – Offer desludging, haulage and septic tank cleaning on a subscription or per-service basis.

Scout Locations Based on Sewage Volumes

Ideal locations for sewage treatment operations have:

• High sewage generation – urban areas, industrial clusters, institutional campuses etc.
• Inadequate municipal sewage treatment infrastructure, presenting a gap you can serve.
• Availability of low-cost land with suitable drainage contours.
• Supportive zoning laws allowing for decentralized sewage treatment.
• Access to roads, electricity and water supply.
• Proximity to existing or upcoming real estate projects you can target as customers.

Design and Set Up Treatment Facilities

Work with engineering consultants to design optimal plants:

• Determine correct treatment capacity based on client commitments and growth projections. Over-sizing leads to negative ROI.
• Design modular, phased capacity enhancement to allow scaling up as you add more customers.
• Ensure optimal flow between pre-treatment, primary treatment, secondary treatment and tertiary treatment stages.
• Include sludge handling, water recovery and effluent discharge systems.
• Design infrastructure like piping networks, pumps, power backup, control systems, testing labs etc.
• Allow space for additional value-added solutions like biogas production from sludge.

Source and Install High-Quality Equipment

Research all equipment carefully before procurement:

• Primary treatment – Screening, sedimentation tanks, clarifiers, oil water separators, flow meters.
• Secondary/biological treatment – SBRs, MBR systems, diffused aeration systems, biofilters.
• Tertiary treatment – Filter presses, clarifiers, aerators.
• Sludge handling – Sludge thickeners, digesters, belt filter press, centrifuge, dryers.
• Water recovery – Sand filters, activated carbon filters, ultrafiltration.
• Testing lab – pH, BOD, COD meters, spectrophotometer, microscope.

Prioritize reputable manufacturers offering strong after-sales support. Validate equipment capacities and process design.

Assemble a Skilled Technical Team

Staff your treatment facilities with:

• Process/chemical engineers to design, implement and optimize treatment processes.
• Mechanical engineers to oversee equipment installation, operations and maintenance.
• Technicians and operators to run different treatment stages – aeration, clarification, filtration etc.
• Lab technicians to test samples and ensure effluent quality compliance.
• EHS specialists to implement safety protocols.
• Sales and business development staff to acquire new customers and manage client accounts.

Invest in ongoing training and skills development to build a professional, customer-focused team.

Implement Strong Process Monitoring and Quality Control

• Continuously monitor process parameters like pH, and dissolved oxygen at different stages.
• Regularly test samples from influent sewage, treated effluent, sludge etc. for quality.
• Ensure treated effluent meets all regulatory parameters for discharge or reuse.
• Inspect the functioning of mechanical and electrical equipment daily. Plan preventive maintenance schedules.
• Track treatment capacity utilization against sewage inflows.
• Maintain detailed process documentation and logs for each client’s sewage.
• Plan for NABL or other accredited certifications for your testing lab.

Robust quality control and reliable plant operations build trust with regulators and clients.

Identify Revenue Sources Beyond Core Treatment Fees

Boost income by providing value-added solutions:

• Supply treated wastewater to industries located nearby for process use.
• Treat and supply biogas from anaerobic sludge digestion to nearby factories.
• Sell dried sludge as fuel or fertilizer.
• Provide desludging, collection and haulage services using tankers.
• Offer septic tank cleaning and maintenance contracts.
• Run modular bio-toilets at public places and events on a rental basis.

Diversified offerings provide multiple revenue streams and smooth seasonal fluctuations.

Project Operations Costs Realistically

Account for major cost components involved:

• Labor – technicians, operators, drivers, administrative staff.
• Utilities like electricity and diesel for running equipment.
• Chemicals like coagulants and disinfectants.
• Equipment maintenance and parts replacement.
• Vehicle O&M and fuel costs.
• Testing lab expenses.
• Licensing, compliance and contracted services.
• Finance costs if taking loans.
• Insurance, safety gear and other overheads.

Keep overhead costs lean until you gain operating experience and scale.

Determine Optimal Pricing for Services

Balance customer affordability and ability to pay against your profit targets to arrive at pricing for:

• Monthly O&M contracts – Price based on sewage volumes and quality; offer tiered pricing.
• One-time EPC contracts – Mark up equipment, material and construction costs by 15-20%.
• Pay-per-use desludging/septic tank cleaning – Benchmark vs. competitors; offer subscriptions.
• Effluent supply – Link pricing to market rates for freshwater.
• Biogas supply – Factor costs of biogas generators.

Getting pricing right is crucial to drive adoption across customer segments while generating returns.

Build Strong Customer Relationships and Service Quality

• Train all client-facing staff on professional conduct, transparency and addressing complaints promptly.
• Educate clients on the treatment process and how to interpret reports.
• Support customers in complying with effluent discharge regulations.
• Offer comprehensive maintenance contracts for equipment upkeep.
• Make payment processes flexible and convenient.
• Have clear and transparent communication at all times. Avoid hidden charges.
• Handle issues like equipment failures promptly through service guarantees.

Excellent service keeps customers engaged and reduces churn.

Secure Funding from Investors and Lenders

Sewage treatment projects require significant capital expenditure. Financing options include:

• Loans from commercial banks and development finance institutions.
• Private equity investment by infrastructure and climate tech funds.
• Partnerships with real estate developers and municipalities to fund projects.
• Grants and soft loans from donor agencies for socially impactful projects.
• Crowdfunding through online platforms.
• Bank guarantees to fund initial operations of BOT projects.

Present detailed project reports and financial models to secure investor confidence and favourable terms.

Ensure Full Regulatory Compliance

Keep up-to-date on all rules and regulations covering:

• Sewage discharge standards stipulated by state regulators.
• Hazardous waste handling guidelines for sewage sludge disposal.
• Zoning restrictions around setting up decentralized treatment plants.
• Environmental clearances for new treatment facilities and process changes.
• Workplace health and safety stipulations.
• Licensing and certification requirements.

Non-compliance entails severe penalties. Take expert guidance from consultants well-versed in sewage treatment regulations.

Stay Ahead of Competition with Value Added Offerings

Differentiate your business from competitors by:

• Offering complete sewage management solutions encompassing collection, haulage, treatment and disposal.
• Providing superior after-sales service and maintenance.
• Customizing treatment solutions based on each client’s sewage profile.
• Helping customers analyse sewage streams to identify recoverable resources.
• Using proprietary treatment microbes and process enhancements.
• Investing in R&D for innovative treatment solutions.
• Tapping into adjacent opportunities like biogas utilization.

Conclusion

Nigeria’s expanding but underserved sewage treatment industry offers tremendous scope for market entry and growth to aspiring entrepreneurs. With in-depth planning, smart market positioning, efficient operations and quality focus, sewage treatment can be built into a scalable and socially impactful business. Initial challenges in financing, licensing, winning customers and building expertise can be overcome by persistence and leveraging partnerships. Aspiring entrepreneurs who enter this space today with passion, innovation and grit are poised to become market leaders.