Business Models for Rural Water Sustainability

Transcription

1 Business Models for Rural Water Sustainability Susanna Goodall and Johanna Koehler, Oxford University, UK Jacob Katuva, FundiFix, Kenya

2 1. The FundiFix Model 2. Professional services in Kenya 3. Water Services Maintenance Trust Fund 4. Water Act The FundiFix Model 2. Professional maintenance services in Kenya 3. Water Services Maintenance Trust Fund

3 The FundiFix model

4 Professional Services

5 CUMULATIVE REVENUES RECEIVED (USD) DAILY RECEIPTS (USD) Sustainable Finance $3,000 $2,500 $2,000 $1,500 $1,000 $500 Kwale Handpump Services Ltd. customer payments 2016 $0 $0 January February March April May June July August September Payments (daily) Payments (cumulative) $80 $70 $60 $50 $40 $30 $20 $10 Performance -based finance Mobile payments Water Services Maintenance Trust Fund Mobile payments reduce transaction costs and promote accountability

6 Smart Monitoring Continuous monitoring Condition monitoring Cloud-based computing

7 FundiFix Local entrepreneurs powered by smart data

8 Repair performance of Kwale Handpump Services Ltd. and community-managed in 2015 (416 failure events for 275 handpumps) 100% 3 day benchmark 90% 80% 70% 60% Kwale Handpump Services Ltd. (n=211) 99% 50% 40% 30% 20% 10% Community-managed (n=64) 53% 0% <1 day 1 day 2 days 3 days 4-7 days 8-14 days days >30 days Control (n=171) Treatment (n=245)

9 How much does a professional maintenance service cost? Handpumps = 100 Customer base = 25,000 Kwale Handpump Services Ltd. Annual operating costs (100 handpumps) Total operating cost = USD28,000 Annual maintenance cost (USD/person) = $1.12 Spare parts 32% Salaries 43% Information 4% Admin 8% Transport 8% Rent & Utilities 5%

10 Kenyan Shillings Does scale reduce financial risks? Project income and expenditure projections Annual Income (KES) Annual Expenditure (KES) 4,500,000 4,000,000 3,500,000 BREAK EVEN POINT ,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 - Current Status; 62 HPs registered Number of Handpumps signed up

11 C/21/13 B/18/10 E/01/27 D/102/16 C/23/13 A/05/09 A/05/14 C/32/11 D/68/13 C/08/09 D/113/17 A/05/11 A/11/12 D/118/17 D/151/20 A/14/11 D/04/09 A/09/09 C/17/13 C/40/14 C/45/15 A/06/13 A/12/10 A/05/10 C/51/15 D/84/15 A/13/12 D/67/13 B/16/10 A/01/12 E/30/22 D/40/12 D/63/13 B/15/10 C/16/12 D/71/14 B/14/10 A/06/09 C/02/09 Unit cost of water (per handpump) USD/m3 Asset performance by unit cost of water (handpumps, n=153) % cost >$1/m 3 <1% water production 5% cost 0.5-$1/m 3 2% water production Unit cost of water (USD/m3) 11% cost $ /m 3 7% water production % of handpumps cost $ /m 3 64% water production 32% had no repairs 27% water production -

12 Miambani Ltd. Kitui, 2015 data Operational 98 repairs to 25 handpumps Average repair time <1 day Financial 81% collection efficiency 20% cost recovery Annual maintenance cost (USD/person) = $1.28

13 Maintenance services for all rural water infrastructure - Water Audit, Kitui 48 piped water systems for 110, 000 users Community managed 55% functional Average repair time 3-10 months High demand for professional maintenance services

14 US Dollars Business case driven by operational scale (projections for Kitui County) 300, , , , ,000 50,000 - Year 0 Phase 1 Phase 2 Phase 3 Revenue from users 1,585 6,779 41, ,453 Total Costs 14,523 46, , ,729 % shortfall 89% 85% 67% 43% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 40 HPs 20 Piped 60,000 people 60 HPs 50 Piped 140,000 people 100 HPs 120 Piped 325,000 people

15 Why a trust fund? Rewarding performance with local, sustainable finance

16 How does the fund work? Pooling financial risk so no one is left behind

17 Water Services Regulation fails the rural poor without monitoring linking investments with outcomes 23% of Kenya s population regulated in areas considered commercially viable Results-based payment model for rural water services

18 Further information: