Financing Sanitation Projects

1. Financing Sanitation Projects

2. 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: • 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

3. 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

4. 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

5. 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!

6. Sewer System & WWT Plant, Nuwara Eliya, Sri Lanka • Project Profile • 6 kilometers of sewer lines • Anaerobic Baffled Reactor Tank • Mechanized treatment system • Total estimated Cost - $250,000 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 = $187.50 • TOTAL WATSAN = $155/yr √ Is Project feasible?

7. WTP and Sewer For Public Market, San Fernando, PH • Project Profile • Treatment plant for 80 Cu. Meters/day • Two lift stations • 850 meters low-pressure pipeline • Total 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?

8. 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 bill Pro 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?

9. ADFIAP / ECO-Asia MOU • 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 Help translate DFI interest into action

10. THANK YOU! Niels van Dijk Deputy Chief of Party ECO-Asia T 662 651 8977 ext113 E nvandijk@eco-asia.org