“When SHIT happens, we turn it into fertilizer” this was a catch phrase used by Aguas de Portugal who co-organized together with the WICER team from the World Bank a recent knowledge exchange event on Water in Circular Economy in Portugal. Representatives from eight countries (Angola, Belize, Barbados, Botswana, India, Jamaica, Senegal, Turkey) gathered to discuss issues of policies, institutions and regulations, wastewater reuse, social acceptability of reuse, among others, and visited several sites in which Aguas de Portugal is implementing circular economy principles. We saw sites in which water is being recycled for irrigation, urban parks, golf courses, even to make beer! In many sites the utility is also able to recover energy for self-consumption, decreasing the operational expenses of the water recycling plants.

These are the four key lessons that we learned from this knowledge exchange:  

1. To embrace a sustainable water future, we must think beyond conventional and linear water use. We discovered that having a clear strategy and confidence in promoting comprehensive solutions is key. Strategic communications, particularly in rebranding wastewater as a valuable resource rather than a waste product, emerged as a pivotal approach. We learned that wastewater treatment plants are, in essence, water factories, and the sentiment echoed in the room was clear – we should judge water by its quality, not its history. 

2. We must understand the different levels of policy, institutional, and regulatory frameworks (PIR). The successful implementation of circular economy concepts in the water sector is highly dependent on the existing enabling environment both at the national and sectoral level. Understanding the constraints and opportunities of national legislation and regulation will determine the feasibility of implementing circularity at the sectoral level.  

3. Stakeholder engagement since project inception is critical to ensure acceptability, particularly for water reuse. The process of stakeholder mapping and engagement can be lengthy and costly, but it ensures acceptability and project feasibility. During this knowledge exchange, we heard from ESAMUR, the regional entity for sanitation and wastewater in Murcia, Spain, which is reusing 98% of the treated wastewater with full acceptability from the end users. The International Water Management Institute also highlighted successful examples and challenges of stakeholder engagement in the Middle Eastern and Northern Africa region. Ownership and acceptability are achieved through extensive discussions and comprehension of the process, safety, and value of reclaimed water. Building trust and ensuring transparency are essential in achieving successful outcomes. In the workshop participants used the online WICER tool to assess their projects and agreed that tool is a great way to engage with relevant stakeholders to identify circular solutions.  

4. Well-designed projects with circular economy principles make financial sense. Another takeaway was the need to shift our thinking from “who pays for what” to “who saves what.” All the projects that we discussed and visited are financially viable and reduce waste. A well-structured business model that captures all potential co-benefits is the linchpin for project success. Aligning financial incentives with sustainability goals is not just a smart move but an essential one. 

This extraordinary event would not have been possible without the gracious hospitality of Aguas de Portugal. They not only hosted us but also emerged as true partners, sharing invaluable insights. Their innovative communication campaign challenged our perspectives and left a lasting impression. It served as a testament to the potential of circular economy solutions in the water sector in our client countries. It is now our collective responsibility to ensure that these innovative solutions become an integral part of the projects we finance and that the World Bank, through the WICER initiative, is actively assisting teams and countries in integrating circular economy principles. Why? Because these solutions simply make environmental, financial, social, and economic sense, and their integration into our projects is as straightforward as it gets.