S5B Financing Providers of Innovative Sanitation Services by Samuel Parker

8/6/2019 S5B Financing Providers of Innovative Sanitation Services by Samuel Parker

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Water & Sanitation for the Urban Poor (WSUP)

ADB – DMC and Partners Sanitation Dialogue

23rd

May 2011

Financing providers of innovativesanitation services

WSUP

Water and Sanitationfor the Urban Poor



Collection Transport Treatment/Reuse

HHPrivate Utility

Municipal

budget

Urban Total Sanitation Needs Non Municipal Finance

Urban Total Sanitation

$ $ $ $

micro-credit commercial bonds IFI/ DFI

Toilets

$

tax income

Prov/NatDev

budget

..BUT HOW CAN IT BE MOBILISED?



0.0

2.0

4.0

6.0

8.0

10.0

12.0

10 20 30 40 50 60

Number of households served

M o n t h l y t a r i f f ( U S $ )

Tariff for f ull cost recovery

Tariff to cover O&M

Current tariff range, Tchemulane

Current number users

Attract finance by: demonstrating breakeven user base

Communal sanitation services, Chamanculo C Maputo, 2010



Attract finance by: developing multi service models

Commercial Unit – 2,000 customers Nairobi Informal Settlements, 2011Water storage, kiosk, communal sanitation, hires out household de-sludgers and meeting space, transfer station, 2,000 customers

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Inflows:Revenues from Commercial Activities: - 4,059,632 4,150,882 4,251,257 4,361,669 4,483,123

Investment 5,294,933 - - - - -

Total all sources 5,294,933 4,059,632 4,150,882 4,251,257 4,361,669 4,483,123

Outflows:

Capital development and purchases 5,294,933 857,068 1,142,758 - 60,000 -

Recurrent expenditure: - 2,292,000 2,303,443 2,316,030 2,329,876 2,345,106

Reserves and financing costs: - 378,765 438,942 519,136 519,356 523,799Total Expenditure 5,294,933 3,527,833 3,885,142 2,835,166 2,909,232 2,868,905

Net Surplus/Deficit - 531,799 265,739 1,416,091 1,452,437 1,614,218

Opening Balance - - 531,799 797,538 2,213,629 3,666,066

Fund balance carried forward - 531,799 797,538 2,213,629 3,666,066 5,280,284

Return on Investment 9% 4% 19% 20% 22%



Attract finance by: multi-services spread income risk

Commercial Unit Net Cash Flow

-4000

-2000

0

2000

4000

6000

800010000

1 2 3 4 5 6

Year

K S h 0 0 0

toilets 50% of current tariff

water 50 of current tariff

25% uptake of bathroom

service

50% water uptake

base case

Commercial Unit, Nairobi 2011, – robust performance



Attract finance by: improving operational performance

1 load/d

3 loads/d

5 loads/d

7 loads/d

9 loads/d

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1

km2

km3km

4

km5

km6

km7

km8

km9

km10

km11

km12

km13

km14

km15

km16

km17

km18

km19

km20

km Distance from Householdto Disposal Point (km)

Average speeds of ≤ 15 kph

Service charge

per Load

(Taka/2m3)

Service Delivery

Rate (Loads/day)

Distance from household

to disposal point(km)



Innovate: more cost effective ways of pit emptying

De-sludger protoype III, Nairobi, 2011



Innovate: decentralised systems for slum communities farfrom sewer

Kavari Nagar, Bangalore 2010 – DEWATTS in low income settlement



Introduction to UnileverUni-Loo: Kumasi Sanitation project

Innovate



The Business model comprises of:

● Branded domestic plastic moulded toilet with aninnovative removable waste collector

● Meets the requirements for improved hygiene and buildson aspirations for dignity and improved social status.

● Customer payment plans that ensures low upfront costand regular servicing,

● Significantly more affordable and sustainable thantraditional pit latrines.

● Local branded franchise operator setup with training andtools for servicing customers, with opportunities to makeadditional revenue



Testing 2011



What can financing agencies do?

To reach scale, new generation of performancerelated financing mechanisms is needed

• Progress linked finance• Venture capital• SME credit facilities

S5B Financing Providers of Innovative Sanitation Services by Samuel Parker

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