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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