Renewable energy is well recognized not only as resource that helps to protect the environment for future generations but also as a driver for development. Waste-to-energy systems can provide renewable energy and also improve sustainability in waste management. This article contributes a case study of stepwise reconfiguration of the waste management system in a developing country to the literature of transitions. The conditions for a systemic transition that integrates large-scale biogas generation into the waste management system have been analyzed. The method included a multi-criteria evaluation of three development steps for biogas, an economic analysis, and an institutional and organizational analysis. The results revealed economic as well as institutional and organizational barriers. Clearly, public and private sectors need to engage in sustainability. There is also a lack of pressure – mainly because of fossil fuel subsidies – that prevents a transition and creates a lock-in effect. To break the lock-in effect the municipality's institutional capacity should be strengthened. It is possible to strengthen biogas economically by integrated waste management services and sales of biofertilizer. A stepwise reconfiguration would be initiated by adopting technologies that are already established in many developed countries but are novelties in a Bolivian context – as a response to sustainability challenges related to waste management. The article focuses on the main challenges and the potential for biogas technology in Bolivia and a pathway towards a new, more sustainable system is suggested.