financing sanitation projects
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Financing Sanitation Projects. Sanitation - important Millennium Development Goal. Defining Sanitation Safe management of human excreta. Sanitation MDG target looks at improved sanitation facilities Improved facility prevents contact with human excreta: - PowerPoint PPT PresentationTRANSCRIPT
Financing Sanitation Projects
Defining Sanitation• Safe management of human excreta. • Sanitation MDG target looks at improved sanitation
facilities• Improved facility prevents contact with human
excreta:– Flush or pour-flush to latrine pit, septic tank or piped sewer– Ventilated improved pit (VIP) latrine– Pit latrine with slab– Composting toilet
• Having (access to) a toilet is important, but what happens after defecation is even more important
• 66% of SE Asians have a toilet. Only 4% connect to piped sewer
Sanitation - important Millennium Development Goal
800 million East Asians lack adequate sanitation
Some dirty realities• 190,000 deaths each year from diarrheal disease,
mostly children• Millions suffer indignity and deprivation
associated with the need to defecate in public• Many more millions, their neighbors, suffer the
unpleasant outcomes• Marginalized poor are burdened most by invisible
costs of inadequate sanitation• Reaching the Sanitation MDG is unlikely to benefit
the worst-affected
Strategic investments needed to close sanitation gap
In the past• Emphasis on building infrastructure rather than delivering
sustainable improvements to sanitation services• Poor arrangements for operation and maintenance resulting
in disrepair• Very little community involvement
In the future• Promote self-financing of sanitation facilities by households• Use public finance to stimulate demand for improved
sanitation, subsidize large scale public infrastructure to make it bankable
• Involve private sector and stimulate innovative local solutions
Are sanitation projects bankable?
• Micro-financing of household toilet and on-site disposal is especially feasible with households in dense urban areas
• Communal discharge and treatment solutions can be feasible if users pay cost-recovering fees
• Rehabilitation of defunct wastewater treatment plants is feasible if user fee is charged to those connected to sewer
• Government subsidies may be needed to cover some capital costs
User fees are key!
Sewer System & WWT Plant, Nuwara Eliya, Sri LankaProject Profile• 6 kilometers of sewer lines• Anaerobic Baffled Reactor Tank• Mechanized treatment systemTotal estimated Cost - $250,000
280 Homes
$250,000 infrastructure cost
60% subsidy amount
$100,000 Amount to borrow
$10,000Annual depreciation payment (10 years)
$10,000 Annual interest payment
$20,000 Total annual payment
$71 Cost per home per year
$9 Operation cost per year
$0.22 Dollars Per Day
Pro forma:5% rule: Pay no more then 5% of annual income on WATSAN:• Annual income = $3750• Annual water bill = $75• Annual sewer bill = $80• 5% of $3750 = $187.50TOTAL WATSAN = $155/yr
Is Project feasible?
√
WTP and Sewer For Public Market, San Fernando, PHProject Profile• Treatment plant for 80 Cu. Meters/day• Two lift stations• 850 meters low-pressure pipelineTotal estimated Cost - $110,000
Pro forma:
Willingness to Pay & Sustainability:• Supported by Social Marketing• Strong support of Mayor• Good technology • Positive balance sheet projections
Is Project feasible?
√
Expenses $29,268 Annual Amortization $9,756 Operating Expense
$39,024 Annual Expense
Revenues $25,447 Market fee increase $12,804 Comfort room fees
$2,012 Connection fees
$40,263 Annual revenue
Septage Management Program Dumaguete City, Philippines
Project Profile• Desludging for 22,000 homes• Project owned by city to be turned over to water district• Fee based on water consumption (2 pesos per cubic meter)• Fee will be collected as add on to water billPro forma:
Sustainability:• Project widely supported by community• Annual fee of $4.91 (average) less then one day’s wage – very affordable• Project supported by IEC campaign
Is Project feasible?
√
Costs $414,634 Infrastructure cost
$80,000 Annual Operating Cost 26,829 Annualized capital cost
$107,300 Annual cost to be recovered Revenue
$4.91 Annual septage fee per house
22,000 Number of houses
$108,200 Total Revenue
Help translate DFI interest into action • Member survey - determine interest in water/sanitation financing• Regional workshop – water/sanitation champions• Regional workshop - risk mitigation for water/sanitation
financing • Development of toolkit on risk mitigation• Support development of water sector loan products • Facilitate co-financing and credit guarantees
ADFIAP / ECO-Asia MOU
THANK YOU!
Niels van DijkDeputy Chief of PartyECO-AsiaT 662 651 8977 ext113E [email protected]