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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

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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?

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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

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 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%

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 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

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 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)

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Innovate: more cost effective ways of pit emptying

De-sludger protoype III, Nairobi, 2011

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Innovate: decentralised systems for slum communities farfrom sewer

Kavari Nagar, Bangalore 2010 – DEWATTS in low income settlement

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Introduction to UnileverUni-Loo: Kumasi Sanitation project

Innovate

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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

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Testing 2011

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What can financing agencies do?

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

• Progress linked finance•  Venture capital• SME credit facilities