WAT E R G L O B A L P R A C T I C E C A S E S T U D Y Evaluating the Potential of Container-Based Sanitation Sanergy in Nairobi, Kenya About the Water Global Practice Launched in 2014, the World Bank Group’s Water Global Practice brings together financing, knowledge, and implementation in one platform. By combining the Bank’s global knowledge with country investments, this model generates more firepower for transformational solutions to help countries grow sustainably. Please visit us at www.worldbank.org/water or follow us on Twitter @WorldBankWater. About GWSP This publication received the support of the Global Water Security & Sanitation Partnership (GWSP). GWSP is a multidonor trust fund administered by the World Bank’s Water Global Practice and supported by Australia’s Department of Foreign Affairs and Trade; the Bill & Melinda Gates Foundation; The Netherlands’ Ministry of Foreign Trade and Development Cooperation; Norway’s Ministry of Foreign Affairs; the Rockefeller Foundation; the Swedish International Development Cooperation Agency; Switzerland’s State Secretariat for Economic Affairs; the Swiss Agency for Development and Cooperation; Irish Aid; and the U.K. Department for International Development. Please visit us at www.worldbank.org/gwsp or follow us on Twitter #gwsp. Evaluating the Potential of Container-Based Sanitation Sanergy in Nairobi, Kenya © 2019 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. 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C ONT E NTS ACKNOWLEDGMENTS • vi EVALUATING THE POTENTIAL OF CONTAINER-BASED SANITATION: AN OVERVIEW • vii EXECUTIVE SUMMARY • viii ABBREVIATIONS • xii INTRODUCTION • 1 Background • 1 Study Objectives • 1 Study Methodology • 1 Report Structure • 2 Notes • 2 CHAPTER 1:  CBS SERVICE AREA CONTEXT • 3 Location • 3 Water and Sanitation Services in Nairobi • 4 Policy and Regulatory Environment for Sanitation Services • 9 Notes • 12 References • 12 CHAPTER 2: OVERVIEW OF EXISTING CBS SERVICES • 13 Background: Brief History of Sanergy • 13 Overview of Services Provided • 14 Legal and Policy Environment and Impact on CBS Services • 22 Notes • 23 CHAPTER 3:  CBS SERVICE PERFORMANCE • 24 Fresh Life Toilets’ Customer Growth • 24 Assessing the Value of the Fresh Life Service to Customers • 25 Note • 29 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya iii CHAPTER 4: FINANCIAL PERFORMANCE • 30 Current Costs and Financing Sources • 30 Improving the Efficiency of Its Operations • 31 Plans to Achieve Economies of Scale through Expansion • 32 Note • 33 CHAPTER 5:  KEY LESSONS • 34 References • 35 APPENDIX A:  PEOPLE INTERVIEWED • 36 APPENDIX B: SANERGY ORGANOGRAM • 38 APPENDIX C:  COSTS, REVENUES, AND CROSS-SUBSIDIES WITHIN SANERGY • 39 Figures 1.1 Key Institutional Relationships for Sanitation Services in Nairobi • 11 2.1 Sanitation Service Chain for Sanitation Options in Mukuru (as of May 2017) • 15 2.2 Fresh Life Operations Department Structure • 18 3.1 Fresh Life Toilets’ Growth over Time, 2011–17 • 24 3.2 New Fresh Life Toilet Installations, by Month, 2011–17 • 25 3.3 Percentage of Fresh Life Toilets’ Issues Resolved on Time • 27 4.1 Projected Costs, Revenues, and Financing Needs for Expansion • 31 Maps 1.1 Map of Nairobi, Showing Sanergy’s Service Area • 4 1.2 Sanergy’s Service Area—Detailed View • 6 1.3 Sewerage Footprint and Expansion Plans for Nairobi • 8 Photos 2.1 Fresh Life Toilets • 16 2.2 Biomax Mixing Machine • 21 2.3 Production of Fertilizer • 21 iv Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Tables 1.1 Population Data for Sanergy Target Population • 5 1.2 Frequency of Different Water Supply Types in Nairobi • 7 1.3 Frequency of Different Sanitation Types for Nairobi • 9 2.1 Sanergy Business Units • 14 3.1 Missed Collections in 2017 (January to April) • 26 3.2 Qualitative Comparison of CBS and Alternatives • 29 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya v A C K NO W L E DG M E NTS The report was written by Julian Parker (independent consultant), with support from Sophie Trémolet (Senior Economist, World Bank) and Ruth Kennedy-Walker (Water Supply and Sanitation Specialist, World Bank). Clémentine Stip (Operations Analyst, World Bank) helped finalize the report. The author would like to thank the Sanergy team for hosting the study and facilitating interviews and field visits. Special thanks go out to David Auerbach and Lindsay Stradley for coordinating various activities; Sanj Sanampudi and Katie Wartman for their work on the financial modeling for the cost analysis; Alex Manyasi for facilitating the governmental meetings; Kennedy Okwany for giving the author a tour of Sanergy’s treatment plant at Kinanie; and Florence Mwikali, Peter Khaemba, and Polycarp Sifuna for facilitating the interviews of the Fresh Life Operators, and guiding the author around Sanergy’s service area. Finally, the author appreciates the various people from the Government of Kenya and Nairobi City County Govern- ment, the World Bank Kenya office, and various donor foundations, who graciously gave their time to be interviewed for this study. vi Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya E VALUATING TH E P OT E NTIAL OF C ONTAIN E R - BAS ED SANITATION: AN OV ERVIE W The World Bank Water Global Practice (WGP) has to support Bank teams and their clients when e ­ ngaging developed an approach to urban sanitation based on in CWIS. One of the aims of this work is to explore inno- citywide inclusive sanitation (CWIS) principles, which vative approaches to provide safely managed sanitation have been developed in conjunction with sector part- services along the whole service chain and to support cli- ners (Bill & Melinda Gates Foundation et al., 2017). This ents in identifying when such options might make sense. approach aims to shift the paradigm around urban sani- The study “Evaluating the Potential for Container-Based tation approaches in World Bank engagements, promot- Sanitation” aims to answer some of these questions for ing the following principles: container-based sanitation (CBS), an emerging sanita- tion approach. • Everybody benefits from adequate sanitation service delivery outcomes. ­ The objective of this study is to document and assess • Human waste is safely managed along the whole ­ xisting CBS approaches, with a particular focus on eval- e sanitation service chain. uating their safety, reliability, affordability, and financial viability. The report also seeks to identify the circum- • Comprehensive approaches to sanitation improve- stances in which CBS approaches are most appropriate ments are deployed, with long-term planning, and whether they could be considered as part of a port- technical innovation, institutional reforms, and folio of options for CWIS. The study was motivated by financial mobilization. growing interest in the emerging CBS experiences and • A diversity of technical solutions, which are adap- by the fact that many governments, city authorities, and tive, mixed, and incremental, is embraced. financing entities are often not familiar with the approach. • Effective resource recovery and reuse is considered. • Cities demonstrate political will and technical and The study builds on four case studies (Sanergy, ­ Nairobi, managerial leadership, and they identify new and Kenya; Sustainable Organic Integrated Livelihoods creative ways of funding sanitation. [SOIL], Cap-Haitien, Haiti; Clean Team, Kumasi, Ghana; and x-runner, Lima, Peru) to provide insights into these • Both on-site sanitation and sewerage solutions, questions. The present document is one of these four in either centralized or decentralized systems, are case studies. The full suite of documents is available at considered to better respond to realities faced in www.worldbank.org/cbs. cities. • Complementary services (including water supply, drainage, greywater, and solid waste) are considered. Reference As part of the implementation of these principles, the Bill & Melinda Gates Foundation, Emory University, The University of Leeds, WaterAid, Plan International, and World Bank. 2017. WGP is developing a suite of tools and other material Citywide Inclusive Sanitation: A Call to Action. Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya vii E XE C UTIV E SU M M ARY This case study, along with three others, is a component chain that converts feces into premium reuse products of a wider study by the World Bank of container-based for agriculture. The structure is based on the concepts sanitation (CBS) models. CBS consists of an end-to-end that excreta end products can be produced and sold to service—that is, one provided along the whole sanitation agricultural markets at a profit and that sanitation ser- service chain—that collects excreta hygienically from vices for the urban poor are a public good for which no toilets designed with sealable, removable containers and market solution at scale currently exists. The activities strives to ensure that the excreta is safely treated, disposed of the for-profit excreta reuse business complement the of, and reused.1 Rather than having to build a sanitation nonprofit CBS toilet service by ensuring pathogen elim- facility, households can sign up for the service. The CBS ination of the feces, thus creating a full value chain from service provider then installs a toilet with sealable excreta containment to safe treatment. receptacles (also referred to as cartridges) and commits to emptying them (that is, removing and replacing them Sanergy provides single-cubicle, branded Fresh Life with clean ones) on a regular basis. Toilets (FLTs) to franchisees for a fee and collects the excreta from the toilets on a frequent basis (daily The objective of this study is to document and assess or every two or three days). There are three business existing CBS approaches with a ­ particular focus on eval- models for these toilet franchises: “commercial” t ­ oilets uating their safety, reliability, affordability, and financial serve the public as pay-per-use businesses, “school” viability. The report also seeks to identify the circum- ­toilets are used by pupils and teachers, and “­residential” stances in which CBS approaches are most appropriate toilets are operated by landlords for use in their com- and whether they could be considered as part of a port- pounds. In the commercial model, toilet operators pay folio of options for citywide inclusive sanitation (CWIS). a US$350 installation fee followed by an annual US$70 renewal fee. Schools pay US$290 for installation and US$60 for renewal. In the residential context, following This case study examines the CBS service provided a successful pilot phase, a new sales model has been by Sanergy and how its business model fits overall in implemented across the toilet network since mid-2017, Nairobi as well as specifically in informal settlements which offers landlords a US$8.50 monthly collection there. The study took place in May and June 2017 and fee and no upfront installation fee. Sanergy is aiming to involved interviews with Sanergy staff, national and local reach the entire addressable market in its service area government officials, business partners (franchisees), by increasing manufacturing capacity for its locally donors, and customers/users. It also involved visits to made toilets and converting existing pit latrines to Sanergy’s service area and treatment site and the collec- FLTs. tion and analysis of relevant data and reports. The emptying and collection processes involve swap- Overview of Sanergy Business Model ping out filled plastic containers with fresh ones and transporting the excreta to a treatment site to produce Sanergy’s basic business concept is to provide safe organic fertilizer and animal feed. At the treatment site, sanitation to low-income residents of informal set- feces is composted aerobically to produce high-­ quality tlements in Nairobi and to create a sustainable value organic fertilizer, which is sold on the open market viii Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya under the Evergrow brand. Sanergy has also developed a by the National Environment Management Authority high-protein animal feed product using black soldier fly (NEMA). larvae (BSFL). The county and national governments have recognized the need for partners in defining more affordable solu- Sanergy’s Operating Context in Nairobi tions to help bridge the gap in sanitation for urban Kenya is the largest economy in East Africa and areas where sewers and septic tanks are not appropriate recently introduced a devolved system of government solutions. In Nairobi, the Nairobi City Water and Sew- in which 47 newly created counties were mandated to erage Company (NCWSC), a parastatal wholly owned provide basic services to their populations. Kenya’s by the Nairobi County Government, is responsible for capital city, Nairobi, has a young and rapidly growing water, sewerage, and wastewater treatment provision. population, with a large number of people living in Sewerage coverage for urban areas in Kenya has been on informal settlements with poor access to basic services a slow decline since 2010–11, when it was at 19 percent, and infrastructure. The urban poor purchase water in to 2014–15, when it was at 15 percent, leading the water jerrycans from public kiosks and disproportionately and sewerage services regulator to recognize that low-cost suffer the impacts of climate change and environmen- options need to be explored in order for Kenya to attain tal degradation, including periodic water shortages and its Vision 2030 target of 100 percent sanitation coverage flooding. for urban populations (Water Services Regulatory Board [WASREB] 2016). The total population without access to sanitation in the area where Sanergy operates is approximately Assessment of Sanergy’s Services 500,000. Water supply in Nairobi is insufficient to meet demand, and the residents of informal settlements are Satisfaction expressed by customers with Sanergy’s the most affected as they purchase water from water toilets was high, including Sanergy’s excreta collec- vendors and public water kiosks. Pit latrines are the tion service, the support received from Sanergy, and, most common alternative to Sanergy’s toilets and almost in the case of commercial toilet operators, the income always result in unsafe excreta disposal. Public toilet that their toilet businesses provided. User feedback was blocks connected to sewers are available in some com- ­ universally positive, with each interviewee raising clean- mercial areas adjacent to informal settlements. liness of the FLTs as a principal attractive feature. CBS is now defined in a policy as a specified cate- Users of Sanergy’s toilets are paying much the same gory of improved sanitation in Kenya (referred to as rates as they would for other toilet options. Sanergy cartridge-based sanitation). The national Kenya Envi- allows franchisees to set their charging system and rates. ronmental Sanitation and Hygiene Policy (KESHP) Operators of ­commercial (public) toilets are mostly pay- 2016–30 includes provisions for increased private sector per-use with a few giving a monthly flat-rate option. participation in providing sanitation services, requires Landlords incorporate charges into the rent and schools local governments to develop annual plans and financ- into school fees. ing/investment plans for sanitation, and aims to tackle fragmentation of responsibilities in the sector. How- Sanergy plans to scale significantly to serve as many ever, legal and regulatory frameworks at the county level as 500,000 people in its existing areas of  operation. were still evolving at the time of the case study, and San- The only current alternatives that provide a full sanita- ergy’s excreta collection service was primarily regulated tion service chain solution are public toilets (pour-flush) Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya ix connected to sewers or lined pits that hire a licensed water scarcity is a challenge. Pit latrines fill up and have exhaustion service. Neither of these provide a completely to be emptied, which is an unpleasant manual process, satisfactory solution for informal settlements. There is and when this is performed at present, the excreta is insufficient access to construct sewer laterals and service often dumped in the nearby environment. lines, and a safe exhaustion service would require a com- plete overhaul of current practices (including pricing, An evolving policy landscape and significant invest- equipment, and treatment facilities). ment by Sanergy and others has radically changed the status of CBS in a short time. When Sanergy began The FLT service had an estimated total annual cost operating, it faced resistance from the Nairobi County of a little less than US$1.5 million in 2017, with a lit- Government, which was skeptical of the legality of CBS tle less than US$290,000 (19 percent) recovered via services. Sanergy introduced a government liaison team fees from operators and from sale of the reuse prod- that established and maintained a dialogue with policy- uct. Revenues from the fees charged to the FLOs were makers at the city–county level and the national level. a little more than US$160,000 in 2017, amounting to Over time, the Nairobi government has come around 11  percent of the total costs, and 19 percent of the to seeing CBS as a high-quality solution and an import- costs of providing the toilet service. Up to this point, ant one for at least the medium term. At national level, the majority of external funding has been provided the KESHP explicitly recognizes CBS as an accepted by 15  family and corporate foundations (the median technology. contribution being US$93,000). Sanergy has been FLTs are generally well-managed and deliver a high deploying various approaches to reduce the exter- standard of user satisfaction. The franchisees that nal funding requirement for the nonprofit, including operate the toilets are usually individuals or small improving its operating model, gaining efficiency, and partnerships so that management responsibility is con- growing the operations to generate economies of scale. centrated. FLTs that do not keep to minimum standards In order to remain financially viable over the medium are shut down (that is, excreta containers removed) and term, Sanergy is looking to mobilize domestic sub- debranded. sidy funding in a predictable manner—for example, through results-based financing arrangements. Users of Sanergy’s toilets are paying much the same rates as they would for other toilet options. Sanergy Key Lessons leaves it to the Fresh Life Operators (FLOs) to set the price per use; hence, market forces prevail, and the esti- Sanergy’s FLT operation fills a gap in sanitation pro- mated annual cost to users of its commercial (public) vision in the informal settlements where it operates, toilets is about US$18. Residential toilet fees are covered ­ which results from the unplanned nature of these in the rent, though some landlords do not increase the settlements and severe space ­ constraints. FLTs have a rent after installing a Sanergy toilet as they see it as a way minimal footprint and only require on-foot access. By to maximize occupancy levels. School toilet prices are contrast, water-based sanitation—pour-flush toilets— included in the school fees. requires access to a sewer, whereas sewers generally do not penetrate into the heart of the informal settlements. The FLT operation shows promise to provide a highly In addition, FLTs have the significant advantage of not cost-effective sanitation solution at scale. Financial requiring water to operate, as the main cover material modeling of Sanergy’s expansion plan, conducted by in use is sawdust, which can increase resilience where Sanergy, shows an increase in cost recovery from the x Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya toilet servicing and fees paid for the feedstock value of and success and has been enabled by a strong funding the feces from 20 to 70 percent. The expansion is pro- base. Sanergy has been very successful in raising funding jected to take seven years, with the addition of 2,000 from donors and investors. This has allowed it to aggres- toilets per year to Sanergy’s Fresh Life network, during sively pilot new approaches, generating growth via new which time the  subsidy required (costs not covered business models where older ones were appearing to face by revenues) per person should rapidly reduce—from headwinds or reach limits. However, this raises a risk as its about US$19 per person in the first year to about US$2 services are highly dependent on receiving a continuous per person per year once expansion is completed. stream of external funding. Sanergy has an ambitious expansion plan that will need to be monitored to verify assumptions, in par- Note ticular, in terms of the number of users per toilet. 1 In this report, the term excreta is used instead of waste to avoid any potential confusion with solid waste. Tilley et al. (2014) Increased dominance of the residential model, should define excreta as “urine and feces that is not mixed with any the commercial model market penetration plateau, flushwater.” Note that for the four CBS case studies and the main report, feces and urine are separated using urine-diverting toi- could lead to the average number of users per toilet fall- let technologies.  Cases where the CBS service provider collects only feces is referred to accordingly as feces. Also note that cover ing as most residential compounds are relatively small material (for example, sawdust or carbon cover) is added to the (eight households or fewer). Sanergy can monitor this excreta in all cases. after having established the mean mass of excreta per use, and it would be important to follow this metric, References adjust the cost model for the expansion, and report this Tilley, E., C. Lüthi, A. Morel, C. Zurbrügg, and R. Schertenleib. 2014. to partners such as donors, regulators, and authorities to Compendium of Sanitation Systems and Technologies. Dübendorf, inform its planning processes. Switzerland: Swiss Federal Institute of Aquatic Science and Technology (Eawag). Continuous research, development, and piloting of WASREB (Water Services Regulatory Board). 2016. IMPACT Report no. 9: A Performance Review of Kenya’s Water Services Sector 2014–15. new approaches has been key to Sanergy’s progress Nairobi, Kenya: WASREB. Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya xi A B B R E VIATIONS avg. average (mean) BMGF Bill & Melinda Gates Foundation BSFL black soldier fly larvae BOD biochemical oxygen demand CBS container-based sanitation CFO chief financial officer CIDP County Integrated Development Plan COD chemical oxygen demand CWIS citywide inclusive sanitation EIA environmental impact assessment FLO Fresh Life Operator FLT Fresh Life Toilet FSM fecal sludge management GDP gross domestic product GoK government of Kenya KESHP Kenya Environmental Sanitation and Hygiene Policy MT metric tons NCCG Nairobi City County Government NCWSC Nairobi City Water and Sewerage Company NEMA National Environment Management Authority NESCRA National Environmental Sanitation Coordination and Regulatory Authority OSS on-site sanitation t ton UDDT urine-diverting dry toilet USAID United States Agency for International Development US$ United States dollar WASREB Water Services Regulatory Board WWT wastewater treatment xii Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya INTRODU C TION Background circumstances in which CBS solutions are most appro- priate. The ultimate objective is to identify whether these This case study, along with three others, is a component solutions could be considered as part of a mix of options of a wider study by the World Bank of container-­ based for citywide inclusive sanitation (CWIS). sanitation (CBS) models. CBS models have emerged over the past 10 years as an alternative model to net- The objective of the case study is to better understand work-based sanitation or on-site sanitation (OSS) ser- how Sanergy’s business model fits in the overall con- vices. Sanergy started operating and providing CBS text of the informal settlements in Nairobi in which it services in the informal settlements of Nairobi, Kenya, operates. Sanergy provides public toilets, school toilets, in 2010. and shared toilets for residential compounds. The toi- lets are set up under a franchise system where landlords, CBS consists of an end-to-end service—that is, one private businesses and businesspeople, and cooperatives provided along the whole sanitation service chain— operate the toilets, and Sanergy provides a regular emp- that collects excreta hygienically from toilets designed tying service for a fee. This is the only example of a ser- with sealable, removable containers and strives to vice model using a franchise system with shared toilets. ensure that the excreta is safely treated, disposed of, and reused.1 Rather than having to build a sanitation facil- ity, households can sign up for the ­service. The CBS ser- Study Methodology vice provider then installs a toilet with sealable excreta The case study was carried out in early 2017 based on receptacles (also referred to as cartridges) and commits interviews with key Sanergy staff, covering the range of to emptying them (that is, removing and replacing them activities and functions of the organization. Relevant with clean ones) on a regular basis. Transport methods data and documents were collected and analyzed until can vary (and may involve tuk tuks, motorcycles, hand May 2017, though major developments and updates carts, and donkey carts) and adapt to a variety of space through May 2018 are reflected. Interviews were held and logistical constraints. Some CBS entrepreneurs with selected officers from the national and county gov- build and operate resource recovery facilities, taking ernments across the health, water and sanitation, and advantage of the high-nutrient content of the relatively environment sector portfolios in order to better under- “fresh” and undiluted excreta, to produce biogas, fertil- stand their perspective on Sanergy’s operations and on izers, or protein for animal feeds. CBS in general, as well as the strategic directions of their organizations. A full list of interviewees is included in Study Objectives Appendix A. The objectives of the overall study are to document and Other interviewees included Sanergy funders, franchi- assess existing CBS approaches with a particular focus sees (the direct “customers” from Sanergy’s point of view), on evaluating their safety, reliability, affordability, and and users, with interviews taking place over several days financial viability. The study also seeks to identify the of visits to different parts of Sanergy’s operational area. Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 1 Toilet facility data, including locations, opening dates, identified the users, and the FLO would make the request. and the type of service model was obtained from Sanergy Many were busy during the workday, and only five were and plotted against a Nairobi road map in QGIS.2 interviewed. Purposive sampling was then used to select toilets with Two schools were selected, and short focus group dis- the following characteristics: cussions were conducted at each with a group of five girls and a group of five boys. • Two “new” commercial toilet operators, operational for fewer than six months • Two “old” commercial toilet operators, operational Report Structure for more than 12 months Chapter 1 describes the CBS operation’s service area • Two “new” residential toilet operators, operational and the basic geographic, economic, and demographic for fewer than six months characteristics of Nairobi and its low-income areas. • Two “old” residential toilet operators, operational Chapter 2 provides an overview of the CBS operation, for more than 12 months with a technical description of the different components • One school with Sanergy toilets, operational for of the operation as well as the management strategies, fewer than six months systems, and processes behind them. The impact of the • One school with Sanergy toilets, operational for policy and regulatory environment is briefly examined. more than 12 months Chapter 3 assesses the performance of the service from the customers’ points of view and reviews customer For each of the first four categories, one male and one growth. Chapter 4 presents a financial analysis of the female operator were selected, though interviews were operation and briefly ­discusses the main cost drivers. often with the husband, wife, daughter, co-operator, or Chapter 5 summarizes key lessons. employee of the registered Fresh Life Operators (FLOs). This way, six of the interviewees were female  and  two were male. The FLOs were operating between one and Notes three toilets each. The period of time that these FLOs 1 In this report, the term excreta is used instead of waste to avoid had been operating the toilets did not have any notice- any potential confusion with solid waste. Tilley et al. (2014) define excreta as “urine and feces that is not mixed with any flushwater.” able impact on their level of satisfaction or responses in Note that for the four CBS case studies prepared for this report, the feces and urine are separated using urine-diverting toilet technolo- general. gies. In cases where only feces are collected by the CBS service pro- vider, this is referred to accordingly as feces. Also note that cover material (for  example, sawdust or carbon cover) is added to the While visiting an FLO, users leaving the toilets were asked excreta in all cases. if they were willing to be interviewed. The consultants 2 Quantum GIS, an open-source geographical information system. 2 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya C HA P T E R 1 • C B S S E RVI C E AR E A C ONT E X T Location A large percentage of Nairobi’s population lives in informal settlements, but the exact number is Kenya is the largest economy in East Africa. A new unknown. The GoK defines an informal settlement as constitution in 2010 introduced a devolved system of “an urban settlement characterized by at least two of the government in which 47 newly created counties were following: inadequate access to safe water; inadequate mandated to provide basic services to their populations. access to sanitation and other infrastructure; poor struc- Following a major reform of the water sector in 2002, tural quality of housing; overcrowding and insecure res- piped water supply and sewerage services are provided idential status” (2012). According to the 2009 census, by parastatal water service providers with corporate sta- 36.2 percent (1,124,459) of Nairobi’s inhabitants live in tus. With devolution, each water service provider is now informal settlements. Some estimates have the num- wholly owned by the relevant county government. ber as high as 60 percent (for example, United Nations International Children’s Emergency Fund [UNICEF] Kenya’s capital city, Nairobi, has a young and rapidly 2012). growing population, with a large number of people liv- ing in informal settlements with poor access to basic The impact of climate change exacerbates environmental services and infrastructure. Nairobi is one of three cities degradation due to inadequate enforcement of environ- in Kenya that has the distinction of also being a county mental regulations and disproportionately affects the (it is therefore formally known as a city county). Nairobi urban poor. Poor drainage infrastructure and urban densi- had a population of approximately 3.1  million in 2009, fication leads to flooding in various parts of the city during when the most recent census was taken, but the water and heavy rains. The informal settlements where Sanergy oper- sewerage utilities for Nairobi city had a combined esti- ates—on the eastern side of the central business district— mated population of 3,994,003 in their service areas in are low-lying and adjacent to the Nairobi River system; 2014 (Government of Kenya [GoK] 2009; Water Services therefore, they disproportionately suffer from flooding as Regulatory Board [WASREB] 2016).1 Nairobi has a popu- well as from the high flows of industrial and domestic pol- lation growth rate of about 4 percent with a high propor- lution in the river. Nairobi, which lies within the Athi River tion of people in their twenties due to a net immigration Basin, obtains most of its water supply from the Tana River (about 700,000 between 1999 and 2009, according to Basin, from reservoirs2 as far as 50 kilometers away. The Japan International Cooperation Agency [JICA] 2014). Tana River Basin has insufficient water for all of its abstrac- The gross regional domestic project per capita in 2013 tors during drought periods, which are becoming more for Nairobi City County was estimated at approximately ­ frequent. Siltation of reservoirs is also a major concern. US$1,081, the eighth-highest of Kenya’s 47 ­ counties (Bundervoet et al. 2016). Employment in Nairobi is The total population without access to hygienic san- dominated by the community, social, and personal ser- itation in the area where Sanergy operates, as shown vices sector (52.1 percent), followed by the agriculture in map 1.1, is unknown but is likely to be more than and forestry sector (24.1 percent), and the wholesale and 500,000. This estimate is based on population data retail  trade, (7.2 percent), whereas the manufacturing taken  from a the GoK platform MajiData (WASREB sector accounts for only 3 percent (GoK 2012). 2018) in 2013. Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 3 Map 1.1 • Map of Nairobi, Showing Sanergy’s Service Area N 36˚40’E 36˚50’E 37˚E 37˚10’E Study area 1˚10’S 1˚10’S 34˚E 36˚E 38˚E 40˚E 42˚E 4˚N 4˚N 2˚N 2˚N 0˚ 0˚ NAIROBI 2˚S 2˚S 4˚S 4˚S Sanergy’s 34˚E 36˚E 38˚E 40˚E 42˚E operational area Legend Country boundary Road C District boundary Road D Road A Road E Scale Km Road B Other roads 1˚30’S 0 10 20 30 1˚30’S 36˚40’E 36˚50’E 37˚E 37˚10’E Source: JICA 2014. Table 1.1 sets out the data available and the estimates of average of 40 users per toilet). Hence a figure of about people currently not using a safe sanitation facility, as 560,000 is the best obtainable estimate of people in need defined by the Joint Monitoring Programme, but allow- of safe sanitation from the available data. Sanergy esti- ing shared facilities. mates that it will serve about 520,000 people, including about 50,000 people in Mathare, by 2022. The slums identified in the GoK study data do not cor- respond exactly to the specific settlements included in Sanergy’s service area, which are shown in map 1.2, along Water and Sanitation Services in Nairobi with the location of Sanergy’s collection centers and transfer station. The estimate ranges between 430,000 Water supply in Nairobi is insufficient to meet and 565,000, depending on whether the pay-per-use demand, and the residents of informal settlements facilities that 99 percent of the population of Kiambiu are the most affected. According to the 2009 census, Lower is using are safe sanitation facilities. It is likely roughly a quarter of Nairobi’s population gets water that the vast majority is not, and Sanergy’s 45 ­toilets in piped into their homes. Roughly half gets water from Kiambiu would serve only about 1,800 people (at  an piped sources outside their homes, and 16 percent 4 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Table 1.1 • Population Data for Sanergy Target Population Percentage that Estimated number Sanergy area Estimated Majidata name uses safe sanitation without access to name population facilities sanitation Njenga Mukuru kwa 311,121 31.38 213,491 Njenga Agare Part of Makadara 2,007 No data No data Nyayo Kabaya 35,913 14.23 30,803 Viwandani Viwandani 94,272 6.65 88,003 Kiambiu lowera Kamukunji Kiambiu 138,116 No data, but 99 use 136,624b pay-per-use toilets Kiambiu uppera Kamukunji Kiambiu 14,272 33.56 9,482 Tassia Tassia 18,547 86.81 2,446 Total 614,248 Approximately 480,000 Source: MajiData. a. Not identified as an informal settlement according to MajiData. b. Depends on (unknown) state of facilities used. obtain it from water vendors. The residents of infor- (38 percent in 2014–15, according to WASREB 2016) mal settlements mostly obtain their water from water exacerbate the water supply deficit. When water short- kiosks and water vendors (selling it by the jerrycan), as ages strike, the frequency with which different parts shown in table 1.2. The census questionnaire did not of the piped supply network are supplied with water is specify whether water kiosks constituted piped water or reduced. In informal settlements, where water avail- water vendors, but given that high frequency of piped ability is already low, this means long waiting times and water was a response, it is likely that most kiosks were typically increased prices because water haulers have to recorded in this category. travel farther to collect water (for example, from more distant boreholes instead of nearby water kiosks con- As a result, a rationing system is in place, whereby dif- nected to the Nairobi City Water and Sewerage Company ferent parts of the network get water on specific days of [NCWSC] piped network). the week (which buffers the supply with storage tanks at the household- and compound-level, plus private bore- Whereas the informal settlements of Nairobi are holes in some cases). High levels of non-revenue water generally within the service area of the sewer Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 5 Map 1.2 • Sanergy’s Service Area—Detailed View Legend Collection center Transfer station Operational area Fresh life toilet Tassia Source: Sanergy. network and have trunk mains running through too weak for authorities to make the major invest- them (see map  1.3), the majority of residents do ment this would involve to extend the sewer net- not have access to sewered services for a number of work into them. reasons: • Unplanned and dense housing construction pre- vents access to the existing infrastructure and • The settlements are illegal and, therefore, the legal prevents excavation of the ground and the laying of ­ basis to supply services via fixed infrastructure is new sewers. 6 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Table 1.2 • Frequency of Different Water Supply Types in Nairobi Spring/well/ Piped into Rainwater Piped Water vendor Othera borehole dwelling harvesting Number of households 70,729 230,704 514,943 1,691 162,057 4,892 Number of people 225,350 735,048 1,640,665 5,388 516,331 15,586 Percentage of 7 23 52 0 16 0 households Source: GoK 2009. a. Pond/dam/lake/stream. • Water availability is generally low and prone to settlement of Kibera, which is in a different part of shortages, and water is expensive; hence, maintain- Nairobi. Table 1.3 outlines the frequency of different ing adequate water flows to prevent sewers block- sanitation solutions in Nairobi. ing can be a challenge. Public toilet blocks connected to sewers or biogas Nevertheless, there are sewer-connected public reactors are a viable sanitation option but generally toilets in some of the areas where Sanergy operates. ­ fall below adequate standards of safety due to poor For example, in Shauri Moyo, public ablution blocks are maintenance. These facilities are generally run by operated by youth groups providing toilets and shower ­community-based organizations, typically with about 30 facilities, including disabled facilities in one relatively members who often take turns operating the facility in well-run facility. Their services, however, were affected return for a share of the revenue. Therefore, the level of by the water shortages in early 2017, resulting in tem- motivation and commitment of the individuals is likely porary closures or weekly rationing of shower facilities. to be lower than that of an individual private operator Sewer blockages can occur but are resolved by local who keeps all the profits. private plumbers. The cleanliness of facilities varies, and some ­ provide a sufficient level of safety, yet only Pit latrines are the most common alternative to one of the facilities observed (a twin set of p ­ our-flush Sanergy’s FLTs and almost always result in unsafe toilets rented and operated by a private individual) had excreta disposal. These require emptying, and in a level of cleanliness that  matched that of the toilets most cases, this means manual e ­ mptying due to poor in Sanergy’s network. These facilities were originally accessibility. Manual emptying involves a crew of two built and operated by the Nairobi City Council (prior or more digging out the excreta, often at night, and to devolution) but were taken over by youth groups. transporting it away from the latrine in drums (about 200 liters) mounted on an axle with two vehicle wheels A single biocenter (toilet and shower facility where (referred to locally as ambulances). There is no incen- excreta is collected in a biogas reactor) was observed. tive to dispose of the excreta safely; hence, excreta is Biogas was not being produced, and the toilets were in a dumped in waste ground, rivers, gullies, and so on, poor state of repair with broken doors and overflowing typically within a few hundred meters from the point toilet pans. Biocenters are more common in the informal of emptying. Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 7 Map 1.3 • Sewerage Footprint and Expansion Plans for Nairobi Approximate extent of Sanergy’s service area Approximate location of Sanergy’s treatment site Trunk Sewers (TS) Sewage Treatment Works (STW) Existing TS Existing STW Existing TS Existing STW Rehabilitation/Reconstruction by WaSSIP Rehabilitation by WaSSIP Extension of TS by WaSSIP Existing STW Rehabilitation by NaRSIP Existing TS Rehabilitation by/Reconstruction by NaRSIP Extension of STW by NaRSIP Extension of TS by NaRSIP Extension of STW (year 2030) Source: JICA 2014. Note: Not to scale. WaSSIP = Water and Sanitation Service Improvement Project; NaRSIP = Nairobi Sewerage Improvement Project. 8 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Table 1.3 • Frequency of Different Sanitation Types for Nairobi Sewer Septic tank Cesspool VIP latrine Pit latrine Bucket Bush Other Number of 469,800 95,400 10,500 26,500 370,500 5,200 4,000 3,200 households Number of 1,503,360 305,280 33,600 84,800 1,185,600 16,640 12,800 10,240 people Percentage of 48 10 1 3 38 1 0 0 households Source: GoK 2009. Policy and Regulatory Environment for Container-based sanitation (CBS) is now defined in policy as a specified category improved form of san- Sanitation Services itation. The Ministry of Health has released the Kenya Various legal instruments exist to promote the expan- Environmental Sanitation and Hygiene Policy (KESHP), sion of sanitation services coverage in Kenya. Article which emphasizes the importance of appropriate and 43 of the Constitution of Kenya (2010) states that every affordable technologies and contains a list of technol- person has the right to accessible and adequate hous- ogy options that includes the “cartridge-based toilet.” ing, and to reasonable standards of sanitation, and that This is defined as “a toilet that eliminates human-fecal it is the county governments’ responsibility to ensure contact through safe collection and containment of fecal these rights. Kenya’s Vision 2030 document priori- sludge in sealable cartridges or containers that are easy tizes the rehabilitation, expansion, and development of to remove and transport.” Urine-diverting dry toilets urban sanitation infrastructure in the satellite towns (UDDTs) are also included in the list of acceptable tech- around several large cities and in various medium-sized nologies (most CBS systems are urine-diverting). The towns. Kenya is a signatory of the Ngor declaration on policy also emphasizes resource recovery from excreta Sanitation and Hygiene, which was adopted by African and the consideration of decentralized wastewater treat- Ministers responsible for Sanitation and Hygiene and ment options. A water bill (which includes sanitation) commits its signatories to: for the county of Nairobi has been drafted, based on the KESHP, but it has not yet been signed into law. • Focus on the poorest and most marginalized The policy framework for sanitation was still evolv- ­ members of society, enabling and engaging private ing at the time of the case study. The Water Services ­sector innovation; Regulatory Board (WASREB) regulates sewerage and • Budget at least 0.5 percent of gross domestic prod- wastewater treatment, which are implemented by urban uct (GDP) for sanitation and hygiene by  2020 and municipal water service providers. The disposal (this  requirement is pushed down to the county of excreta was previously regulated by the National level via the national sanitation policy); and Environment Management Authority (NEMA), cre- • Encourage the productive reuse of feces. ated under the Environmental Management and Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 9 Co-ordination Act, 1999, which needs to be revised to to a part of the sanitation chain, such as desludging of take into account the 2010 constitution that heralded ­ containment structures by exhauster trucks. In such the introduction of devolution. The KESHP includes cases, cost recovery relies upon subsidies to other parts the creation of a National Environmental Sanitation of the chain. Hence, the tipping fee charged by the water Coordination and Regulatory Authority (NESCRA), utility does not cover the full life-cycle cost of the treat- which is mandated to take leadership of, and to be ment of excreta. accountable for, the national sanitation portfolio. Its responsibilities, however, are to be implemented in The national sanitation policy requires the local coordination with WASREB and NEMA. Going for- government for cities, municipalities, and towns to ward, NESCRA, WASREB, and NEMA also need to develop annual plans and financing or investment coordinate the regulation of fecal waste treatment plans for sanitation.3 Sanitation services should aim and  disposal with county governments. As noted for full direct-cost recovery through user contribu- by senior government officials, it will take a num- tions, with shortfalls covered by the county govern- ber of years for the establishment of NESCRA and ment. County governments are encouraged to mobilize reconfiguration of the regulatory agencies within the funds from the private sector in addition to develop- framework of devolution and the Ministry of Health’s ment partners (donors) and, for suitable projects, a increased role in sanitation. The relationship between new national sanitation fund that will pool donations the key institutions for the sanitation sector is shown from various sources and distribute them with a pro- in figure 1.1. poor focus (in a similar manner to the existing Water Sector Trust Fund). Urban authorities will have san- The KESHP states that the government will support itation steering committees that draw up plans and private sector participation in sanitation provision budgets for sanitation, coordinate the activities of ser- by creating clear standards and guidelines and cre- vice providers, encourage private sector participation, ating legal instruments, such as exemptions. The aim and conduct research into improved services. is to promote private sector innovation and the deploy- ment of a greater variety of feasible technology options. In Nairobi, the NCWSC, a parastatal wholly owned The policy allows for flexibility regarding the legal and by the Nairobi City County Government (NCCG), contractual arrangements and which part(s) of the sani- is responsible for water, sewerage, and wastewater tation chain private sector actors engage in, but services treatment (WWT) provision. Septage and fecal sludge should, where possible, be on a full cost-recovery basis. should be deposited into the sewer systems at a tipping Private ­sector participation is directed toward demand point just upstream of the main WWT plant at Dandora creation, product development, and provision and oper- (see map 1.3 for approximate location), operated by ation of sanitation and fecal waste management services NCWSC. NCWSC has two vacuum tankers for desludg- and infrastructure. It is also directed to take consider- ing septic tanks, whereas about another 60 are privately ation of sanitation in non–owner-occupied houses in operated—these tankers pay a monthly tipping fee of low-income slum and peri-urban settlements. US$150 to NCWSC. However, the legal instruments to support private Sewerage coverage for urban areas in Kenya has been sector involvement are not yet in place. The KESHP ­ on a slow decline since 2010–11, when it was at 19 states that private sector service provision should, percent, and subsequently went down to 15 percent where possible, be on a full cost-recovery basis. This in 2014–15. The water regulator, WASREB, is recog- is currently possible only where the service is limited nizing that reaching the entire urban population with 10 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Figure 1.1 • Key Institutional Relationships for Sanitation Services in Nairobi Government Ministry of Environment Ministry of Water Ministry of Health of Kenya and Natural Resources and Irrigation National Environmental Sanitation National Water Services Regulator Coordination Environment Regulatory and Regulatory Management Board Authority Authority (WASREB) (NESCRA) (NEMA) Department Athi River Nairobi City Department NEMA of Water, Water County of Public branch Sanitation Services Government Health office and Energy Board Septage Nairobi City Operators and Water and Service of public fecal sludge Sewerage providers toilets collection Company operators (NSWSC) Key Regulates Existing institution Waste transfer for fee Owns Planned institution Sets policy Asset development Institution to be reconfigured Future relationship per Kenya Water Act 2016 sewer-based solutions might not be viable given the As in the case of water supply, all urban settings will financial constraints: require some form of water borne system to manage wastewater. To attain the sector target of 100 per- “Sewerage coverage currently stands at 15 percent. cent coverage for the urban population, the sector The trend has been declining from 19 percent in 2010 requires an average growth in sewer connections of due to the rapid increase in population, which is not approximately 350,000 which translates to 3.2 million matched by corresponding investment in sewerage. people annually. It is clearly evident that the resource Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 11 requirements to attain the 2030 ­target are enormous and Notes the sector should explore other low-cost options if access 1 The two utilities are Nairobi City Water and Sewerage Company and is to be progressively realized” (WASREB 2016, empha- Runda Water, a small, privately owned utility. sis added). 2 Sasumua Dam, Kikuyu Springs, Ruiru Dam, Thika, and Ngethu water works. Responsibilities for sanitation policy and regula- 3 Urban areas are classified as towns if they have a population of at least 10,000, an integrated development plan, and sufficient financial tion remain overlapping and fragmented, and they and service delivery capacity. For classification as a municipality, the minimum population is 250,000 and  additional requirements need to be updated to reflect the new devolved include specific infrastructural assets. Cities must have a population dispensation. The environment regulator, NEMA, of at least 500,000 (2011 Urban Areas and Cities Act). regulates Sanergy’s activities across most of the san- itation service chain, but, as mentioned earlier, the References Environmental Management and Co-ordination Act Bundervoet, T., L. Maiyo, and A. Sanghi. 2015. Bright Lights, Big is due for an update. The KESHP attempts to bring Cities: Measuring National and Subnational Economic Growth in Africa from Outer Space, with an Application to Kenya and Rwanda. improved coordination and accountability to the Policy research working paper no. WPS 7461. Washington, DC: sanitation sector and introduces a helpful inclusion ­ World Bank Group. of CBS as a class of improved sanitation facility. The Government of Kenya. 2009. 2009 Population and Housing Census. introduction of a new regulatory agency, while aim- Nairobi, Kenya: Kenya National Bureau of Statistics. ing to address institutional fragmentation, intro- Government of Kenya. 2012. Statistical Abstract 2012. Nairobi, Kenya: Kenya National Bureau of Statistics. duces additional overlapping of responsibilities and will require careful coordination with WASREB and JICA (Japan International Cooperation Agency). 2014. Nairobi Integrated Urban Master Plan. NEMA. The renaming of the Ministry of Water and Irrigation to the Ministry of Water and Sanitation in UNICEF (United Nations International Children’s Emergency Fund). 2012. The State of the World’s Children 2012: Children in an Urban January 2018 is an important development for the World. evolution of urban sanitation in the country. However, WASREB (Water Services Regulatory Board). 2016. IMPACT Report in the continued absence of the president’s executive no. 9: A Performance Review of Kenya’s Water Services Sector 2014–15. Nairobi, Kenya: WASREB. order, any expansion of the mandate of the new minis- try remains unclear. WASREB. 2018. http://majidata.go.ke/maps-data/. 12 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya CHAPTER 2 • OVERVIEW OF EXISTING CBS SERVICES Background: Brief History of Sanergy precisely to the organization of the teams in the organ- ogram, as Farm Star is split across two separate teams The basic business concept of Sanergy is to provide under the operations director and the CFO, ­respectively. safe sanitation in informal settlements in Nairobi and The business units are summarized in table 2.1. create value chains that serve agricultural m ­ arkets. The concept has not changed since the company’s cre- The for-profit supports the nonprofit container-based ation in 2010. Sanergy’s services are provided by two sanitation (CBS) toilet service by providing dis- entities—a nonprofit and a for-profit entity—both of counted waste collection s ­ ervices. The nonprofit pays a which are wholly owned by Sanergy LLC (USA) but are fee to the for-profit for every kilogram of feces ­removed. branded independently of each other: This fee is set below the market rate for waste manage- ment services in the urban context and is based upon • The nonprofit entity, referred to as Fresh Life the rate of an exhaustion truck (which provides lower Initiative, rolls out a public toilet service by setting service and does not ensure safe ­ treatment). This has up toilet business ­franchises. significant implications for the financial flow along the • The for-profit entity, Sanergy, provides excreta man- sanitation service chain: The for-profit cannot be used to agement services to the nonprofit arm and produces subsidize the full cost of the sanitation service, as it must branded fertilizer and animal feed that incorporate return a profit to its ­shareholders. On the other hand, feces as a core ­ feedstock. a supply chain relationship with the for-profit provides the nonprofit with a sustainable, predictable, and quality The structure of the Sanergy entities is based on the collection service and gives the feces it collects ­ value. concept that feces end products can be produced and sold for agricultural users at a profit through effective Sanergy’s conceptual presentation of its costs and rev- innovation and marketing, whereas sanitation ser- enues and the relationships between the nonprofit and vices for the urban poor are a public good for which for-profit arms of the operation can be summarized as no market solution at scale currently ­ exists. Sanergy follows:1 does not consider sanitation facility services in informal • Franchisees subscribe to the nonprofit Fresh Life settlements to be amenable to private sector investment Toilet (FLT) business, paying an installation charge stage. Hence, Sanergy funds the overall costs of at this ­ and an annual renewal fee for the excreta collection the sanitation services through a combination of phil- service in the commercial context or a monthly fee anthropic funding for the collection of excreta and pro- context. and no installation charge in the residential ­ ceeds from the sale of treated feces for the back end of The nonprofit empties the containers and takes the value chain (transport, treatment, and ­reuse). them to the perimeter of the ­slums. The structure of Sanergy and Fresh Life is shown in • The for-profit then transports the excreta on behalf Appendix ­ B. Sanergy’s operation is composed of seven service. The toilet of the nonprofit, charging for the ­­ business units run by three directors/co-founders and service provides reliable quantities of feces to the the chief financial officer ­(CFO). These units do not map ­for-profit. Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 13 Table 2.1 • Sanergy Business Units Unit Branch Function Fresh Life Nonprofit Roll out excreta and sanitation services through sales, toilet manufacturing, and installation; management of network logistics and excreta collection within informal settlements; customer onboarding; and ongoing support of franchisees Future initiatives Nonprofit Research products and services that can be added to Sanergy’s portfolio in order to increase the amount of excreta that can be safely removed Farm Star For-profit Production and sale of fertilizer and animal feed Organic waste For-profit Collects excreta from Fresh Life Consolidation Centers and sources co-feedstock collection for fertilizer and animal feed products Sanergy For-profit Supports companywide operations, including supply chain activities, operations etc.), quality maintenance (treatment site, equipment, toilet fabrication site, ­ etc. assurance, health, and safety, ­ Support teams For-profit Provide the basic business support infrastructure (information technology, legal, administrative, and finance) • The for-profit then treats the feces (to eliminate Collection: Fresh Life Toilets pathogens) at its own ­cost. The ­ for-profit is scaling up its operation and reconfiguring its process flow ­ omponents FLTs are built entirely from prefabricated c in order to achieve ­ profitability. produced in a local plastics factory and Fresh Life/ Sanergy’s manufacturing ­ site. (see photo 2.1) The The full cost of activities along the sanitation service user interface/capture mechanism comprises a custom-­ chain is the cost of the toilet service from sales and mar- designed molded plastic squat plate, a 45-liter feces keting through transport, plus the cost of approximately ­ capture drum, and a 25-liter urine container to hold the two months of composting, which is what is needed to drum and jerrycan and isolate them from the s ­ oil. The bring the pathogen load to levels that would allow for toilet does not use water; instead, sawdust is used as a landfill ­disposal. cover ­material. The small amounts of greywater gener- channels. ated are disposed of in nearby drainage ­ Overview of Services Provided The squat plate is currently on its third design iteration Figure 2.1 illustrates the sanitation service chain for and is grouted directly into a ceramic tiled ­ floor. The Sanergy and the two prominent alternatives in the previous iteration sat on a wooden board, and the first same locality—pit latrines (manually desludged) was an off-the-shelf m­ odel. A large part of the rede- and public pour-flush toilets connected to the sewer sign exercise was aimed at reducing the splashing for ­system. women during ­ urination. The superstructure is built 14 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Figure 2.1 • Sanitation Service Chain for Sanitation Options in Mukuru (as of May 2017) Service chain Demand creation Containment Emptying Transport Treatment End use/Disposal Containerized urine- Waste containers are 20 handcarts, diverting public toilet Cold-call sales visits swapped out with four wheelbarrows, with molded plastic Feces composting Technical details in current areas of clean ones two tuk tuks, Compost squat plate and in windrows operation 11 collection centers, vault line Animal feed Feces bucket is two 7-t trucks, 45-liter feces bucket Animal feed Referrals lined with a plastic one 3-t truck, Urine dumped production using 25-liter urine bag; reusable one transfer station into sewer Credit via Kiva Bank BSFL container and canvas bags are (consolidation into concrete superstructure being trialed 160-liter drums) Sanergy CBS service chain Avg. 47,746 46% emptied daily uses per day Truck makes 17% every two days two trips with 50 Between Minimum sales Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 391 public toilets Quantities target of three per 6% every three days 160-liter drums 10 and 80 t of 4 to 8 mt of feces week per 383 compound toilets per day from transfer finished compost 30% weekdays only processed each day sales associate station to added to stock 228 school toilets Feces: 4–8 t per day treatment site each month 24 toilets for other institutions Urine: 5.5 t per day Customer support Sales team: Sales team: One manager, Treatment team: and credit manager, three assistant One treatment two assistant managers, site manager, Fresh Life Services: Personnel managers, 11 associates one supervisor, One assistant manager, one supervisor, six sales associates, Manufacturing team: one assistant 49 waste collectors one market research One assistant manager, supervisor, officer, two supervisors, 20 workers one credit officer nine manufacturing staff Private individuals River (BOD and Pour-flush Dandora WWT plant: Main alternative and youth groups Sewer COD exceed public toilets treatment lagoons sanitation NEMA limits) services operating private facilities or facilities Indiscriminate dumping built by the Manual Untreated waste to Pit latrine in nearby None government desludging environment unused ground/river Avg. = average; BOD = biochemical oxygen demand; BSFL = black soldier fly larvae; COD = chemical oxygen demand; mt = metric ton; NEMA = National Note: ­ treatment. Environment Management Authority; t = ton; WWT = wastewater ­ 15 Photo 2.1 • Fresh Life Toilets a. Fresh Life Toilet user interface b. Sanergy employees manufacturing toilet components Source: Sanergy. of slim, high-strength reinforced concrete wall panels as the pit latrine is the prevalent form of alternative with a corrugated plastic ­roof. The current manufactur- ­ sanitation. This is roughly double the cost but will ing capacity is approximately 30 toilets per week based allow Sanergy to double its total addressable market on the number of molds for the various ­ components. from about 250,000 to a little more than 500,000. Eighty percent of the FLTs have a raised superstructure and require two days to assemble on-site, whereas the Sanergy sells franchise arrangements to businesspeo- remaining ­ “normal” FLTs have a sunken vault and are ple, cooperatives, landlords, and the management installed in a single ­ day. Painting the logo requires an of schools and other institutions, recruiting them additional ­day. as Fresh Life Operators ( ­ FLOs). Fresh Life has three different types of toilet ­ ­ service model: Sanergy aims to reach the entire addressable mar- ket in its service area by increasing manufacturing 1. Commercial FLTs – Open to the public, generally on capacity and converting the existing pit latrines to a pay-per-use basis, though some have introduced ­FLTs. Sanergy intends to invest in a new manufactur- monthly subscription schemes. Commercial FLTs are ing facility in late 2018, increasing its manufacturing evenly split between those in residential areas (com- capacity to 3,000 per ­ year. Its current manufacturing mercial–residential) and those in local commercial or operation has no idle capacity, which has put a strain market areas (commercial–open market). on ­operations. The approximate cost of fabrication and 2. School FLTs – Operated by the school management installation of an FLT is US$350. Sanergy has intro- for use by the pupils. The price of using the toilets is duced the option of converting a pit latrine to an FLT included in the school fees. In 30 schools, the toilets 16 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya might be made available to local residents or the In one school visited during the study, significant sav- public as well (hybrid–school). ­ ings were made when FLTs were installed due to the 3. Residential FLTs – Operated by landlords and made reduction in water required and the fact that sawdust, a available first and foremost to the tenants within ­ chool. This waste material, was provided for free to the s their compound. The price is generally included in resulted in savings of US$60 per month (US$100 during the rent. In some cases, the toilets are also made water shortages when prices were ­elevated). available to the public on either a pay-per-use or subscription basis. Sales, Onboarding, and Franchisee Support The fees for franchisees are as follows: The process of recruiting and setting up new FLOs • US$350 for the first toilet is split into functions and across two teams, as illus- trated in figure 2.2. The sales and credit team recruits • US$300 for subsequent toilets for the same franchisee new franchisees and, where credit is requested, convenes • US$70 per year for annual renewal a credit committee to evaluate the business case of the Alternatively, a leasing model where there is no installa- ­applicant. Sanergy’s credit officers also visit the proposed toilet location to assess its ­ viability. tion fee but rather a fee of US$8.50 per month (or US$102 per year) was being mainstreamed in late 2017 following Sales activities focus on following up with referrals a pilot in 2016. This allows the challenge of a franchisee and making cold calls within Fresh Life’s areas of not being able to mobilize the upfront installation costs ­operation. Referrals include people identified by exist- for new toilets to be ­overcome. This strategy is discussed ing franchisees and Fresh Life/Sanergy staff, as well as in more detail in Current Costs and Financing Sources existing franchisees that wish to add another (second, (chapter 4­). self-referrals). In the first third, and so on) toilet (that is, ­ quarter of 2017, referrals constituted 50  to  60 percent Operating through a franchise network allows of new s ­ales. Existing franchisees are incentivized for Sanergy to delegate some of the menial but import- referrals via one-off payments of US$10 for referring ant tasks to its f ­ ranchisees. The franchisees, for exam- someone who then signs ­ up. They previously enjoyed a ­ awdust. This ple, are responsible for ensuring supply of s reduction in their annual fee from US$90 to US$50 for avoids the complexity of sourcing large quantities (as adding a second toilet, but in 2017, a flat rate of US$70 would be the case if Sanergy supplied the sawdust itself) replaced this system after Fresh Life/Sanergy assessed and the inconvenience (due to lack of storage space) of that commercial toilet operators do not require an regularly sourcing small quantities for users of house- incentive to add more toilets and franchisee landlords hold CBS toilets should they be ­responsible. are limited in adding more residential FLTs due to space ­constraints. Cover material is more readily available than water for flushing in some a ­ reas. Water is relatively expen- Cold calls are made in existing areas of operation in sive in the informal settlements in Nairobi, where homes pursuit of densification of the Fresh Life network to and institutions are not connected to the reticulation efficiency. This approach is partic- increase logistical ­ network. Water has to be carried in jerrycans, which ­ ularly focused on landlords to whom sales associates takes up ­time. Sawdust appears to be readily available, pitch the problem and cost of not having a sanitation and the quantities required are lighter and less bulky, property. One FLO interviewed men- facility in the ­ flushing. and hence easier to store, than that of water for ­ tioned that he needed to install the toilet due to high Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 17 Figure 2.2 • Fresh Life Operations Department Structure Fresh Life operations Sales and credit Customer support New Future manager (1) manager (1) communities initiatives Assistant Sales support Assistant managers (2) officer (1) managers (3) Sales associates (6) Commercial associates (5) Credit officers (2) Residential associates (3) Market research officer (1) School associates (3) Credit officer (1) competition (that  is, availability of empty properties) is crucial, and it is a key selling point for potential sales area. in his ­ prospects. Although Sanergy has sufficient capital to ­ provide credit itself, partnering with Kiva reduces the Sales associates are given targets and incentivized with risk it has to t­ake. Sanergy also experimented with a a bonus ­scheme. They are expected to conduct five con- partnership with two microfinance institutions (Faulu versations per day and have a minimum target of three Microfinance Bank Limited and Kenya Women’s sales per month each, though one of the sales associates Microfinance Bank) but found that the churn of funds briefly interviewed in passing in the field said he sets was too low—the available capital allowed only a small himself a personal target of eight per m­ onth. The base number of people to borrow money at any one time— monthly salary is augmented with bonuses as follows, and closed down the partnerships after receiving only from which the logic of a self-imposed monthly target three ­sales. of eight sales is clear (a jump from 49 percent of salary bonus for seven sales to 104 percent for eight sales): Sanergy is responsible for assessing the creditwor- • 1 percent of salary for each deposit received, plus: thiness of the prospective franchisees and for fol- • 3 percent of salary per deposit received for one to lowing up on cases of defaulted r ­ epayments. Credit three sales per month, or users pay a US$10 finance fee and a US$5 d ­ eposit. Higher deposits previously led people to turn to local • 6 percent of salary per deposit received for four to “loan sharks” at punitive rates of ­ interest, increas- seven sales per month, or ing the risk of default on Kiva p­ ayments. A Sanergy/ • 12 percent of salary per deposit received for eight Fresh Life  credit committee vets applicants, refusing or more sales per month. or deferring those with poor business cases, those with Credit is made available through loans from Kiva poor creditworthiness, or those engaged in ­ (illegal) Bank, an online microlending p ­ latform. An informal activities considered incompatible with the Fresh Sanergy survey of landlords found that access to credit Life values and b­ rand. Prior to the introduction of a 18 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya credit manager in early 2015, the appraisal process was Customer support operations include the following weak and a dropout rate of 1 to 2 percent at the time activities: of renewal was ­experienced. Since the introduction, dropouts have fallen to almost z ­ ero. Kiva conducts a • Working with the Sanergy collection team on week- borrower verification of the Fresh Life network once by-week adjustments to the collection schedule (for a ­year. example, to take into account school holidays) • Fielding complaints from FLOs (for example, in The customer support team takes over once the pros- cases of missed collections) pect has paid the required ­ deposit. The onboarding • Ensuring that customers are reminded prior to process is coordinated with the government relations their renewal dates and following up on delayed/ department to secure the required government approv- defaulted payments als (including from the local chief ’s office) and to ensure • Organizing networking forums for FLOs to share that the land available is sufficient and ­suitable. If nego- ideas on what is working and what is not (separate tiations with other local actors (for example, other toilet quarterly forums for the three service models and a operators) are required, the customer support team gets combined annual forum) involved, though Fresh Life management believes they are “too involved in the weeds” currently and the com- • Conducting regular inspections to ensure toilets are mercial toilet model currently entails a high overhead being kept clean and equipment and consumables in terms of the time and resources required for these are being provided by the FLO and identifying repair negotiations. Residential toilets are the smoothest to ­ needs, which are reported to the maintenance team onboard, whereas schools have a medium overhead as The principal performance metric for the customer some are leasing land for which toilet installation needs support team is the FLO retention rate, as acquiring to be ­negotiated. new customers is an expensive ­ process. Other perfor- Prior to commissioning the toilets, each franchisee mance metrics are is trained on Fresh Life’s rules and standards, busi- • Case resolution—the percentage of cases resolved ness aspect, and record ­ keeping. They are provided within the specified timeframe for the type of issue a business-in-a-box startup kit, containing movable involved—and equipment (including personal protective equipment) required to operate the toilet, as well as an initial supply • The percentage of collections scheduled that are of consumables (for example, soap, sawdust, and deter- ­done. gents for handwashing and ­ cleaning). If the operation of an FLT is terminated for any reason, Once the toilet is operational, support is provided Sanergy removes the cartridges and squat plate, which by three teams of support associates, one for each remain the property of ­ Sanergy. The superstructure service model (commercial, school, and r ­ esidential). and handwashing station are the property of the FLO Commercial FLTs require more support throughout but are debranded by being painted w­ hite. FLT servicing their life cycles from creating awareness to persuad- can be terminated if the FLO decides to terminate the ing people to use their ­toilets. Residential FLTs require service, Fresh Life/Sanergy deems that adequate stan- more support on weekends when tenants/users tend dards are not being met, renewal payments are defaulted to be at home, are more prone to raise issues, and are on, or the structure in demolished (as happened in one available to receive customer support ­ associates. case due to new road ­construction). Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 19 Emptying and Collection Operations day or, in rare cases, once every three ­days. School toilets are generally emptied daily as urine accumulation is very The emptying and collection process involves swap- high but are on a “special schedule” that allows for no ping out the plastic containers with fresh ones and use over ­weekends. The proportion of FLTs on different transporting the feces to a transfer station for con- schedules as of May 2017 was as follows: solidation into large drums for final transport to the treatment ­site. The feces is hauled away using hand- • 46 percent emptied daily carts, wheelbarrows, and tuk tuks to collection cen- • 17 percent emptied every other day ters, which are composed of rented buildings that are • 6 percent emptied every three days vehicle. Feces containers are relatively accessible by ­ • 30 percent on a special schedule (daily, except for transported from the collection centers2 to the transfer weekends) ­ uk. At the transfer station, the station by truck or tuk t feces in the toilet containers is consolidated into 160- Feces Processing liter drums (approximately one drum per 10 toilets) before being transported on to the treatment side out- Sanergy’s feces processing site currently produces truck. side Nairobi via two 7-ton trucks and one 3-ton ­ organic fertilizer, which is sold on the open market as Sawdust is placed at the top of the drums before sealing ­Evergrow. It is located about 35 kilometers from its oper- to minimize smell emanating from the drums as the ational area, in an area designated for feces processing for lodgings. transfer station is surrounded by domestic ­ the export processing zone near Athi ­ River. It occupies Urine is collected from the household (in a separate about 5 acres of land leased from the government and is ­ ewers— 25-liter sealed cartridge) and disposed of into s split into four different zones or operations: it is not reused currently due to the energy costs asso- ciated with conversion being too g ­ reat. The feces is 1. Pre-processing—Removal of feces from the 160-liter consolidated into intermediate bulk containers at the ­ lastic or canvas lines; drums and separation from the p transfer station and taken away by exhauster ­ trucks. shredding of co-waste where necessary 2. Mixing of wastes—Mechanical mixing in a Biomax The network of transport, collection centers, plant (see photo 2.2) in batches; loading takes about and transfer stations is continually adjusted to three hours and mixing 30 minutes maintain optimal efficiency as the FLT network 3. Aerobic composting in windrows3 ­expands. Pairs of collection centers in Mukuru kwa 4. Sieving and packaging—Producing the branded bags Njenga and Kayaba, respectively, are being replaced of Evergrow organic fertilizer (see photo 2.3) by a single transfer station in each, and transfer sta- tions are being planned for other ­ locations. Sanergy The Biomax plant can process about 7 tons of waste per had previously developed a mobile transfer station, batch and, hence, can comfortably process two batches but it was eventually abandoned as it was too heavy or 14 tons in an eight-hour d ­ ay. It is currently operated to be hauled around the rough terrain of the opera- in this manner every two ­ days. The loading process will tional ­area. likely be sped up in the future via purchasing and bin hopper. tipper as well as a loading ­ Initially, collections were on a daily basis for all FLTs, but in 2016, Sanergy adopted a demand-based collec- Sanergy has trialed 70 different recipes of organic tion schedule to increase collection ­ efficiency. Toilets fertilizer to enable it to manage seasonal availability that that have lower utilization are collected every other and the resulting variation in prices and transport 20 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Photo 2.2 • Biomax Mixing Machine Source: Sanergy. Photo 2.3 • Production of Fertilizer a. Finished fertilizer product b. Bag of Evergrow organic fertilizer Source: Sanergy. Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 21 distances and associated costs for the inputs on non-fe- /ton. Of this total, 195.3 tons were sold to seven US$400­ ces ­waste. To the 4 to 8 tons of feces collected each day, commercial farms and 358.2 tons to ­ smallholders. other organic wastes equivalent to between 20 percent and 200 percent of the fecal waste weight are a ­ dded. On average, 84 percent of the mass of waste is lost during Legal and Policy Environment and Impact on the composting process, resulting in a current average CBS Services fertilizer production of between 0.8 and 4 tons per d ­ ay. The county government has recognized the need months. The shelf life of the fertilizer is 12 ­ for partners to help bridge the gap in sanitation for Sanergy is currently conducting research and devel- areas where sewers and septic tanks are not appropri- opment on the use of black soldier fly ­ larvae (BSFL) ate ­solutions. There is no formal partnership between to produce a high-protein animal feed, which would Sanergy and the county government yet, but Sanergy radically change the treatment p ­ rocess. The plan is to is recognized as a top-tier alternative to conventional first process feces (or a mix of feces with a proportion services as it is perceived to have achieved and consis- of non-fecal organic waste) through the BSFL and then tently maintained high standards of ­service. The Nairobi forward the residue to the organic fertilizer p­ roduction. County Integrated Development Plan (CIDP) includes Sanergy is in the process of scaling up this process to plans to extend sewers into informal settlements in industrial ­production ­levels. low- and middle-­ income areas, but it is recognized that informal settlements will be a challenge due to vari- The key inputs for the feces processing are labor ous constraints (legal, space, and ­ resources). Nairobi (36 percent), water (25 percent), and feedstock County, in early 2018, also adopted a plan for regener- (23  ­percent). Power requirements are minimal, and ating Nairobi River, which is where slums typically are maintenance comprises 10 percent of the c ­ osts. At the located, in an effort to promote new sanitation initiatives end of the first quarter of 2017, revenues were equivalent in a more integrated ­ manner. to 40 percent of the costs of processing, not including sales and marketing and ­ distribution. When Sanergy began operations, concerns about the approach being a regressive “night soil” solution The current processing capacity is approximately appeared to have been common, and government offi- day. This would require a bin tipper and 30  tons per ­ cials recalled strong ­concerns. They now acknowledge loading hopper to be purchased for the processing p ­ lant. that FLTs are filling a gap in their service provision Sanergy plans to add a second 5-acre land parcel to its and will have a place for the foreseeable f ­uture. The processing site in order to increase processing capacity success (or failure) of Sanergy’s system will have a strong to 250 tons of feces input to the composting p­ rocess. As influence on whether CBS is accepted as a long-term the BSFL process comes into mainstream production, solution in Kenya, as one national ­ government official the theoretical limit to fecal sludge processing capacity directly ­stated. will be about 750 tons per day, equivalent to the feces of about 2.5 million ­ people. The collection service is primarily regulated by NEMA, the environment ­ regulator. Each truck and As of May 2017, Sanergy had sold around 550 tons tuk tuk is licensed by NEMA, and the license defines of soil fertilizer—350 tons from March to December what type of waste can be t­ ransported. With devolution, 2016 and 200 tons in the first quarter of 2017. 550 NEMA has branch offices at the county level, but Sanergy tons is worth about US$220,000 at the market price of has obtained its licenses from the national office, as its 22 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya treatment facility is in Machakos County and its vehi- transitional arrangement pending the introduction of a cles, notably the trucks, need to operate across county framework. suitable regulatory ­ ­lines. The processing site is also licensed by NEMA, which Notes licenses all waste treatment and d operations. An ­ isposal ­ 1 Appendix C illustrates the financial relationship between the non- for-profit. profit and the ­ environmental impact assessment (EIA) was required 2 At collection centers, waste is stored for only a few hours and ­ ssued. Currently the hand carts and for the license to be i remains in the containers removed from the t ­ oilets. At the trans- fer station, the waste is removed from the toilet containers and collection centers are not licensed by NEMA due to fre- packed into large 160-liter drums for more efficient use of space quent turnover of facilities/equipment and the lack of filled). (containers from the toilets are only partially ­ 3 Windrows are long rows of (mixed) wastes piled together to com- a clear category or regime for their ­ licensing. Sanergy, post ­aerobically. They are turned periodically to ensure that, over however, informs them in writing of any changes or time, all parts of the pile are exposed to the required conditions (aeration and high temperature) for pathogen destruction and currently, NEMA is satisfied with this as a new facilities; ­ breakdown of the ­ waste. Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 23 C HA P T E R 3 • C B S S E RVI C E PE RFOR M AN C E This section examines customer progression, the factors The first toilets were predominantly commercial toi- affecting this progression, as well as customer percep- lets, which were used to build up the Fresh Life brand tions concerning the service. and market penetration. Commercial toilets led the growth curve until August 2014. From September to December 2014, a focus on school toilets led the growth. Fresh Life Toilets’ Customer Growth This focus was funded by an injection of donor fund- ing and provided an opportunity to build the relation- The customer base for Fresh Life Toilets (FLTs) has ship with the government. From February 2015 to April grown relatively slowly but steadily since the  first 2015, the growth was led by school toilets and residential commercial toilets were opened in November 2011, toilets. From May 2016 on, the residential model began with the residential model taking over from the com- to lead growth as Fresh Life focused on this market mercial model as the main growth driver. Figure 3.1 segment. shows the growth in operational toilets (that is, toilets operational each month, taking into account newly In February 2015, Fresh Life instigated a series of opened toilets and closed toilets), and figure 3.2 shows FLT closures following the appointment of a credit the toilets added each month by type ( ­commercial, manager who cracked down on Fresh Life Operators school, and residential). (FLOs) with overdue ­payments (loan repayments or Figure 3.1 • Fresh Life Toilets’ Growth over Time, 2011–17 1,100 1,000 900 800 Toilets installed 700 600 500 400 300 200 100 0 M 12 M 13 M 14 M 17 Fe 11 Au 12 Fe 12 Au 13 M 15 M 16 N 12 Fe 13 Au 14 17 N 13 Fe 14 Au 15 Fe 15 Au 16 Fe 16 N 14 N 15 N 16 b. b. b. . ay . ay b. b. b. ay g. . ay g. . ay . ay . g. g. g. ov ov ov ov ov ov N Date Commercial Other Residential School Source: Sanergy. 24 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Figure 3.2 • New Fresh Life Toilet Installations, by Month, 2011–17 50 Commercial-led Commercial-led School-led Residential-led establishment growth growth growth 45 40 Toilets (= Customers) 35 30 25 20 15 10 5 0 12 M 3 M 4 M 5 1 Au 12 Fe 2 Au 13 M 6 N 12 Fe 3 Au 14 Fe 4 Au 15 M 7 17 N 13 N 14 Fe 5 Au 16 N 15 Fe 6 N 16 1 1 1 .1 .1 .1 1 .1 1 .1 .1 b. b. b. b. ay ay ay b. g. b. ay g. ay g. ay g. g. ov ov ov ov ov ov Fe M N Date Commercial Other Residential School Source: Sanergy. late annual or monthly fees). Some of the closures were and reduces the sales and marketing overheads. Sanergy temporary; others were permanent. ­ installed 11 commercial toilets over the first two years of operation in Mathare, but after introducing the leas- Sanergy continues to identify and target new customer ing model in one of its subareas of operation, it began segments to maintain its FLO network growth and, in installing about 20 per month. turn, the growth in the sanitation service end users. The residential model ­ continued to lead growth into 2017 as Sanergy identified non-resident landlords (that Assessing the Value of the Fresh Life Service is, landlords not living in the plots where they rent out to Customers dwellings) as a new market segment to target, building on the surge in popularity of the residential toilets. This This analysis shows that container-based sanitation also contributes to the strategy of focusing on densifying (CBS) services provided by Sanergy offer a sound alter- market penetration—that is, focusing on the areas where native to other forms of sanitation in areas where dif- they already operate in for new sales rather than opening ficult access, cramped conditions and restrictions on up new areas. This involves targeting slower adopters. water availability create challenges for these alternatives. Sanergy conducted a successful pilot of a leasing Quality and Reliability of Services model in Mathare, a separate slum where Sanergy undertakes pilots, with a monthly payment of US$8.50 All of the FLOs interviewed expressed satisfaction with and no installation fee or annual fee. This pilot has the Fresh Life service, including the emptying service. since been implemented as the main sales structure in The only minor complaint was from one FLO whose toilet the residential context across the toilet network. This had an old 35-liter drum for feces collection that was a leasing model removes the need for upfront financing few inches too low, leaving a gap between the squat plate Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 25 drop hole and the feces container. The FLO business-in- market forces prevail. The price per use is US$0.05 for a-box kit contains a small stool to set the drums on, but adults and US$0.02 to US$0.03 for children in most he had not received one. One of the two schools selected areas. In Shauri Moyo, a highly commercialized area, for teacher and pupil interviews mentioned that, in 2015, the price for adults was double this at US$0.1 for both excreta collection was organized for the afternoons—after public pour-flush toilets run by cooperatives and FLTs. the school had closed—but it was rescheduled in 2016 for Taking the most common price of US$0.05 for adults, the mornings after the school complained at the inconve- and assuming one visit per day, produces an estimated nience of the schedule. annual cost to the user of US$18.25 or a total estimated cost of US$63 per household (based on two adults and Sanergy tracks the collections and provided data for the three children). The total costs could be much higher, percentage of missed collections for the first four months however, depending on the number of visits per house- of 2017, as shown in table 3.1. The data is insufficient to hold member. establish a long-term trend. Residential toilet fees are covered in the rent and Sanergy tracks complaints that are raised and how school toilet prices in the school fees. Some land- quickly they are resolved. Each particular category lords maintain the same rent after installing the toi- of complaint has a target timeframe for resolution— let, seeing it as an important way of attracting new for example, two days for a broken lock but longer tenants, whereas others raise the rates, generally by for chamber-based issues. Figure  3.3 shows a steady US$1 to US$2 per month (there is no charge per use). improvement in the timeliness of case resolution from Schools are paying US$60 per year per toilet (gener- about 20 percent from July to October 2016 to 80 percent ally two—one for boys and one for girls), which the in April 2017. None of the eight FLOs interviewed had pupils use for “free”—the cost to users is included in a complaint about Fresh Life’s responsiveness to mainte- the school fees. nance requests—the three that had raised maintenance issues experienced a quick and effective response. Customer Satisfaction Cost to the Customer or User Sanergy’s direct customers, unlike other CBS service providers, are the FLOs—franchisees that operate Users of Sanergy’s toilets are paying much the same the FLTs for the public, plot residents, and/or school rates as they would for other toilet options. Sanergy pupils. Interviews were conducted with a small sample leaves it to the FLOs to set the price per use; hence, of FLOs. Table 3.1 • Missed Collections in 2017 (January to April) January February March April Planned collections 19,738 20,372 21,438 20,255 Missed collections 566 473 304 366 Percentage missed 2.87 2.32 1.42 1.81 Source: Sanergy. 26 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Figure 3.3 • Percentage of Fresh Life Toilets’ Issues Resolved on Time 100 90 Issues resolved on time (percent) 80 70 60 50 40 30 20 10 0 16 16 16 16 16 6 17 17 7 17 .1 .1 y ct. g. p. c. n. b. Jul ov r. ar De Ja Au Se Ap O Fe N M Date Source: Sanergy. Those interviewed were operating between one and expenses (but excluding the annual US$70 fee to Fresh three toilets each, and all were very s ­ atisfied with the Life). The only negative point raised was the lack of business and the service from Fresh Life​ /Sanergy. The water for Muslim users (for washing themselves after period of time for which the FLOs had been operating going to the toilet), which was resolved by providing a the toilets did not have any noticeable impact on their small jug of water and asking users to clean themselves level of satisfaction or responses in general. over the urine collection part of the squat plate. Commercial FLOs were motivated by the revenue and Residential (plot) FLOs were motivated by the need the recognition of a need for safe and clean toilets for a toilet solution for their residents that does not in the neighborhoods in which they live and work. take up too much space, is clean and hygienic, and They were particularly satisfied with the cleanliness has a payment schedule that can be matched to the of  the toilets, Fresh Life/Sanergy’s customer service, monthly rent payments to protect the operators’ cash and the provision of handwashing facilities (for which flows. the FLOs supply the soap). The toilets were also said to provide more safety at night because they are located User feedback was universally positive, with each closer to their users (some alternative public toilets are interviewee raising cleanliness of the FLTs as an in large blocks that tend to be located far apart and on attractive feature. When asked to identify something the periphery of the informal settlements where there they did not like, all responded that there was ­nothing is more space for these large toilet blocks). The FLOs while giving between two and four things that they were generally happy with the income, which ranged did like, including security/accessibility, hygiene, the between US$50 and US$150 per month after deducting presence of a handwashing station, and convenience. ­ Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 27 Users in schools indicated strong satisfaction with cited the lack of a need for water as a major advantage of the services. The two schools visited installed FLTs their new FLTs. An ongoing water shortage in May in the after Fresh Life sales calls. In the case of Gate of Hope area saw the cost of (borehole) water rise from US$0.3 to Academy, the installation of two FLTs in October 2014 US$0.5 per 20-liter jerrycan. The pour-flush toilets they followed a cholera outbreak in which two pupils died. relied on prior to installing  their FLTs one year prior The school decommissioned and sealed two pit latrines needed about 10 jerrycans per day for flushing; the cost that were starting to smell. They also built two new pit was about US$60 per month (US$100 with the price at latrines to complement the FLTs, but the pits filled with US$0.5). Sawdust, the main input required for FLTs, on subsoil water and are not used. the other hand, is provided for free to the school by local carpentry businesses. All but one of 20 pupils interviewed in the four focus groups expressed a preference for FLTs over other toi- lets. The one exception preferred the flush toilet because Sanergy Services vs. Available Alternatives in the it does not have the urine separation mechanism and is Service Area therefore easier to use. The cleanliness, lack of smell, and the fact that the toilets do not consume water (a very The only current alternatives for Sanergy’s areas of scarce resource) were the most commonly raised attrac- operation that provides a full sanitation ­service chain tive features of the FLTs. Unlike the adults and FLOs solution are pour-flush toilets connected to sewers or interviewed, the pupils raised some negative points. One lined pits whose excreta is safely emptied, transported, group from a school where FLTs had been in use for a treated, and disposed. These two alternatives are shared year raised the issue of a smell during collection and a options as virtually no one in the informal settlements challenge urinating for girls. in Sanergy’s service area has a household toilet due to space restrictions. The teachers interviewed at both schools stated that it took a few weeks for pupils, particularly the girls, to get Constructing sewer lines in the tightly packed infor- used to the toilets. However, overall, this was not raised mal settlements would require the removal of prop- as a barrier to usage. Pupils from both schools raised erties to lay sewers and access the trunks.1 Similarly, issues with shortages of sawdust, even though one was constructing water-based public toilets on septic tanks getting it for free and had a good stock when visited. would be difficult for the same reason, and they would Two of the four groups—one of boys and one of girls— not be accessible to vacuum tankers for emptying. had no complaints with the FLTs. Existing large public toilet/ablution blocks on sewers settlements, are largely limited to the peripheries of the ­ The resilience of FLTs to water shortages is a key including commercial centers, where there is space for advantage over water-based public t ­ oilet blocks. Two their construction and sewer lines are available and commercial centers within Sanergy’s operational area accessible. Although smaller units of one or several with water-based public toilets were visited. In Shauri pour-flush toilets connected to sewers do exist within Moyo, piped water was unreliable, so public toilet the informal settlements, they are limited in number ­ operators had to purchase water in jerrycans several and are more likely to block frequently due to the lower days a week; in Kayaba, a public t ­oilet  adjacent to the volumes of water used compared to large ablution blocks chief ’s office had not received piped water for more than that generally include shower facilities and hence pro- a month due  to the  ongoing water shortage and was duce greywater to help wash the pour-flush along the closed. The head teacher of pilot school m ­ anagement sewer pipes. 28 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Table 3.2 • Qualitative Comparison of CBS and Alternatives Safety of sanitation service chain Potential reach Containment Emptying Transport Treatment Disposal/reuse Sanergy CBS CBS In sealed containers Composting/BSFL Extensive Sewer-based Public pour- Sewer WWT River Limited mostly to flush toilet ponds periphery Lined pits + Lined pit Manual Drum on None To river/waste Manual FSM wheels ground Note on color-coding: Green = safe; yellow = partially safe; red = unsafe; BSFL = black soldier fly larvae; CBS = container-based sanitation; FSM = fecal sludge management; WWT = wastewater treatment. Note on potential reach: Potential to provide defined sanitation service to all households in specific targeted geographical area. Pit latrines are mostly manually desludged with the Table 3.2 compares the safety of Sanergy’s CBS s ­ ervice excreta disposed of unsafely in the nearby  environ- with the alternatives at each point in the ­ sanitation ment. The manual emptying process is unsafe and chain, as well as their potential reach—that is, how unpleasant for the workers.  Exhauster trucks (vacuum well they can penetrate into the informal settlements tankers) cannot access the majority of the pit latrines, given the space constraints. Public pour-flush toilets and most owners would not be able to afford their rates on sewers would mostly be limited to peripheral areas anyway. Currently, no facilities exist in Nairobi for the of the settlements, to which they could provide a safe treatment of septage and fecal sludge, and exhauster sanitation service if the WWT plant was functioning waste (mostly septage) is deposited in the sewer to be properly 100 percent of the time (currently it is not). treated in wastewater treatment (WWT) ponds at the Lined pits with manual emptying do not provide a safe Dandora plant. Safe disposal of the excreta would there- sanitation chain; the emptying is unsafe for the opera- fore require either transport to centralized treatment tors and there is insufficient space to construct them in facilities or the development of decentralized treat- some places (and excavation of pits is not possible in ment facilities or collection/transfer stations. Sanergy is some areas). developing a pilot to incentivize safe pit latrine exhaus- tion by  setting up collection centers and developing Note a branded certification scheme to professionalize the manual exhausters, but it was at too early a stage to 1 Some areas of informal settlements have trunk mains passing under them, but laterals and service lines would still need to be assess at the time of the case study. constructed. Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 29 C HA P T E R 4 • FINAN C IAL PE RFOR M AN CE This section reviews the financial performance of Sanergy projected that the net costs—that is, the Sanergy. The financial analysis was p ­ erformed  using annual subsidy requirement—would increase to available data and analysis provided by Sanergy. approximately US$1.9 million in 2018, stay between US$1.8 million and US$1.9 million until 2024, and then drop to a stable level of a little less than US$1.1 Current Costs and Financing Sources million. The total annual cost for the Sanergy suite of com- These projections rely on assumptions about scaling up panies was a little less than US$1.5 million based production for the reuse product and sales. This is illus- on annualized projections for 2017, with a little less trated in figure 4.1. than US$290,000 (19 percent) ­ recovered via fees from Fresh Life Toilet (FLT) operators and from sales of Until May 2017, the majority of external funding for the reuse product. Revenues from the fees charged to Fresh Life (the nonprofit) had been provided by 15 the Fresh Life Operators (FLOs) were a little more than family and corporate foundations (the median con- US$160,000 in 2017, amounting to 11 percent of the tribution being US$93,000). About 3 percent of this total costs and 19 percent of the costs of providing the funding was restricted, specifically funding school toilet service. programs or research, development, and piloting of an in-home toilet.1 The remainder of the funding was unre- The cost (to the for-profit) of collection between stricted. In May 2017, Sanergy raised US$12.5 million January and April 2017 was between US$0.06 to for the for-profit entity: US$5  million in debt, US$5 US$0.07 per kilogram of feces, roughly double the million in equity from four investors, and US$2.4 mil- amount charged to the nonprofit. In the first quarter of lion in grants from the Bill & Melinda Gates Foundation 2017, an average of 13 tons of feces and urine combined (BMGF). It had previously raised US$5 million in equity was collected per day (approximately equal weights of through two financing rounds and about US$4 million each), with daily values of feces arriving at the treatment in grants from United States Agency for International site ranging between 4 and 8 tons. The feces is weighed at Development (USAID) and BMGF. the collection center. The resulting charge to Fresh Life was about US$12,000 per month. The cost of feces col- Sanergy has been deploying various approaches to lection had reduced from US$0.15 in 2014, and Sanergy reduce the external funding requirement for the non- was targeting US$0.04 by the end of 2017. profit, including by improving its operating model, generating efficiency gains, and growing the oper- Total annual costs are projected to rise to a peak of about ations to generate economies of scale. Some of the US$4.2 million around 2023, when full market penetra- strategies to improve financial viability are discussed in tion is achieved, before dropping and stabilizing at about more detail in the next section as well as in Overview of US$3.4 million thereafter. Annual revenues are projected Services Provided. Despite these strategies, however, the to rise steadily to a plateau of about US$2.3 million, rep- financial analysis shows that securing reliable flows of resenting 55 percent cost recovery by 2023 and 69 per- external subsidies will be critical in order to ensure the cent from 2024 onward (due to the lower total cost). financial viability of the operation. 30 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Figure 4.1 • Projected Costs, Revenues, and Financing Needs for Expansion 4,500,000 80 4,000,000 70 Cost recovered from revenues (percent) 3,500,000 60 3,000,000 50 Amount (US$) 2,500,000 40 2,000,000 30 1,500,000 20 1,000,000 500,000 10 0 0 22 23 25 26 27 28 29 30 31 32 33 34 35 36 18 19 20 21 24 17 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Date Revenue FLTs Revenue from reuse cross-subsidy Required external subsidy Percent of costs covered by fees and reuse cross-subsidy Source: Sanergy. Note: FLTs = Fresh Life Toilets. Improving the Efficiency of Its Operations As of May 2018, Sanergy was examining the potential trade-offs, in terms of reduced sales costs, of rolling Sanergy maintains a close focus on operational effi- out a leasing model that had been piloted in Mathare ciency and the elimination of idle capacity. Sanergy’s across all zones and customers of this area of opera- collection operation has current idle capacity, which tion. This model resulted in accelerated uptake in a pre- continues to be filled as more toilets are leased through viously dormant market. Although charging an upfront the fee-for-service monthly collection charge model. The installation fee to franchisees reduces the capital expen- toilet manufacturing capacity, however, was being fully diture that Sanergy has to cover, the extra time and effort utilized as of early 2017. Toilet installations will become to reach a sale is much higher when an installation fee is more expensive in the immediate future due to the addi- paid, including that required to organize and administer tion of pit latrine conversions (which are required to any necessary credit. In addition to the costs associated achieve 100 percent coverage of the service area with with making the sale, a significant amount of customer safe sanitation, utilize the space, and remove competi- support consists of following up with franchisee debts, tion from unhygienic toilets). Pit latrine conversions will some of which pertain to credit for the installation cost. represent half of the new toilets going forward—and cost Thus, the model in which the installation is leased to twice as much as a standard toilet. the operator (rather than the operator having to pay Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 31 an upfront fee) was developed, deemed successful, and plastic bags introduced in September 2017—Sanergy rolled out as the predominant operating model. piloted the use of reusable canvas bags in 80 toilets. By May 2018, the use of reusable bags (with industrial Labor is the predominant cost driver for the empty- washing) had been generalized to fully comply with ing and collection, forming 60 percent of the total the ban. cost. Hence, efforts to optimize the cost of the empty- ing and collection service have been focused on max- imizing labor productivity. Sanergy did not increase Plans to Achieve Economies of Scale staffing for the approximately 1,000 toilets it serviced in through Expansion 2017 from its 500 toilets in 2015. Currently, one excreta collector serves, on average, 24 toilets, though for the Sanergy plans to expand the Fresh Life network to a various collections routes, this figure ranges between 16 ­ little more than 13,000 toilets in order to cover the and 34 toilets per excreta collector. The configuration whole of its service area and serve about 520,000 of transport means is constantly being adjusted and people. As of May 2017, Sanergy’s forecast model for optimized, with a focus on optimizing the use of labor expansion was to have 1,582 toilets by the end of 2017, rather than other transport costs (fuel, maintenance, increasing by 1,500 to 3,082 in 2018 as the new factory and so on). comes online and then by 2,000 a year until 2023, with a final network of 13,082 toilets, serving 40 people each Densification is also a key strategy for improving on average. This expansion rate would be a significant cost-efficiency and is resulting in a shift toward step up from what it has achieved so far—it previously more reliance on low-tech transport means. At the added 1,000 toilets in seven years of operation. However, same time, Sanergy is looking to increase consolida- this relatively slow growth is partly linked to the need tion of excreta closer to the toilets so that excreta col- for developing the business model and technical pro- lectors, some of whom might complete their collection cesses. After 2023, the factory is assumed to produce duties within as little as two hours, can be engaged 2,000 toilets a year for replacements (a conservative in excreta consolidation. Hence, they are looking estimate) and would therefore not result in new toilets at upgrading collection centers into consolidation being added to the network. Sanergy estimates the max- ­ collection centers might be too far from facilities. The ­ imum number of users for a toilet to be 80; hence, the the excreta collectors’ areas of operation to allow this. final network of 13,082 toilets could cater for additional Sanergy is currently trying to identify suitable sites users due to natural population growth. The actual num- with the communities and has slowed down expansion ber of users will vary considerably; however, residential into new areas in order to concentrate on developing toilets might have fewer than 40 users, and commercial a “­ densified” operation from which a replicable finan- toilets might have more. Additionally, school toilets will cially sustainable model in other communities, cities, likely be serving children that use other toilets—FLTs or or countries can be derived. alternatives—when not at school. ­ Another major cost driver is the management of In 2017, Sanergy estimated the cost of serving one the plastic bags that line the feces containers. These person—after revenues from franchisees and the mar- ­ had to be removed from the feces (as plastic is a con- ket value of the feces are taken into account—was about taminant) and incinerated in suitably accredited local US$18 (US$23 before ­ revenues are taken into account). incinerators at US$0.35 per kilogram. Due to this It also estimated that the cost could drop to a little cost—and the introduction of a nationwide ban on less than US$2 per person once the operation reached 32 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya a full scale of a little more than 500,000 users. This Note assumes sales of 2,000 toilets per year and an average of 1 The Fresh Fit Toilet. The pilot involves 60 in-home container-based 40 users per toilet. If, as seems likely, the residential model sanitation (CBS) toilets, of which about one-third were rolled out at becomes the main driver of growth, the average number the time of the case study. This case study is focused on the Sanergy’s shared toilet main business model. of users per toilet could fall below this level. Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 33 C HA P T E R 5 • K E Y L E SSONS Sanergy’s Fresh Life Toilet (FLT) operation fills a gap in Users of Sanergy’s toilets are paying much the same sanitation service provision in the informal settlements rates as they would for other toilet options. Sanergy where it operates that results from the unplanned leaves it to the Fresh Life Operators (FLOs) to set the nature of these settlements and severe space con- price per use; hence, market forces prevail, and the esti- straints. FLTs have a minimal footprint and only require mated annual cost to users of its commercial (public) on-foot access. By contrast, water-based sanitation— t ­ oilets is about US$18. Residential toilet fees are covered pour-flush toilets—requires access to a sewer, whereas in the rent, though some landlords do not increase the sewers generally do not penetrate into the heart of the rent after installing a Sanergy toilet as they see it as a way informal settlements. In addition, FLTs have the signifi- to maximize occupancy levels. School toilet prices are cant advantage of not requiring water to operate, as the included in the school fees. main cover material in use is sawdust, which can increase resilience where water scarcity is a challenge. Pit latrines The FLT operation shows promise to provide a fill up and have to be emptied, which is an unpleasant highly cost-effective sanitation solution at scale. manual process, and when this is performed at present, Financial modeling of Sanergy’s expansion plan, con- the excreta is often dumped in the nearby environment. ducted by Sanergy, shows an increase in cost recovery from the toilet servicing and fees paid for the feed- An evolving policy landscape and significant invest- stock value of the feces from 20 to 70 percent. The ment by Sanergy and others has radically changed expansion is projected to take seven years, with the the status of container-based sanitation (CBS) in a addition of 2,000 toilets per year to Sanergy’s Fresh short time. When Sanergy began operating, it faced Life network, during which time the subsidy required resistance from the Nairobi City County Government (costs not covered by revenues) per  person should (NCCG), which was skeptical of the legality of CBS ser- rapidly reduce—from about US$19 per person in vices. Sanergy introduced a government liaison team that the first year to about US$2 per person per year once established and maintained a dialogue with policymakers expansion is completed. at city–county level and the national level. Over time, the Nairobi government has come around to seeing CBS as a Sanergy has an ambitious expansion plan that will high-quality solution and an important one for at least the need to be monitored to verify assumptions, in par- medium term. At national level, the Kenya Environmental ticular, in terms of the number of users per toilet. Sanitation and Health Policy (KESHP) 2016–30 explicitly Increased dominance of the ­ residential model, should recognized CBS as an accepted technology. the commercial model market penetration plateau, could lead to the average number of users per toilet fall- FLTs are generally well managed and deliver a high ing as most residential compounds are relatively small standard of service, leading to high user satisfac- (eight households or fewer). Sanergy can monitor this tion. The franchisees that operate the toilets are usually after having established the mean mass of excreta per individuals or small partnerships so that management use, and it would be important to follow this metric, responsibility is concentrated. FLTs that do not keep to adjust the cost model for the expansion, and report this minimum standards are shut down (excreta containers to partners such as donors, regulators, and authorities to removed) and debranded. inform its planning processes. 34 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Continuous research, development, and piloting of References new approaches has been key to Sanergy’s progress Ernst & Young. 2014. Feasibility Study on Charging Sewerage and success and has been enabled by a strong fund- Services Levy to Cover Part of the Collection, Treatment, and Disposal ing base. Sanergy has been very successful in raising Cost in Kenya’s Urban Centers. WASREB (Water Services Regulatory Board). funding from donors and investors. This has allowed it to aggressively pilot new approaches, generating JICA (Japan International Cooperation Agency) and the Government of Kenya. 2013. “Final Report Volume IV, Sectoral growth via new business models where older ones were Report 1/3 Section D: Sanitation.” In The Project on the Development of the National Water Master Plan 2030 in the Republic of Kenya. appearing to face headwinds or reach limits. However, A report by Nippon Koei Co., Ltd. for JICA; the Ministry of this raises a risk as its services are highly dependent on Environment, Natural Resources and Water; and the Water Resources Management Authority. receiving a continuous stream of external funding. Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 35 A P PE NDI X A • PEOP LE INTE RVIE W E D Organization Position Name Sanergy Co-founder/director David Auerbach Sanergy Co-founder/director Lindsay Stradley Sanergy Co-founder/director Ani Vallabhaneni Sanergy Chief financial officer Sanj Sanampudi Sanergy Customer support manager Joseph Githinji Sanergy Fresh Life chief operating officer Titus Kuria Sanergy Fresh Life services manager Eric Machango Sanergy Government relations manager Alex Manyasi Sanergy Head of operations Michael Lwoyelo Sanergy Residential customer support assistant manager Florence Mwikali Sanergy Commercial customer support assistant manager Peter Khaemba Sanergy Schools customer support assistant manager Polycarp Sifuna Sanergy Treatment site manager Kennedy Okwany Nairobi City County Public Health deputy director Jairus Musumba Nairobi City County Water and Sanitation director Kainga Mario Ministry of Health Public Health director Kepha Ombacho Ministry of Water and Irrigation Sanitation director Rose Ngure National Environment Management Compliance and enforcement officer Maurine Njeri Authority Imara Daima location Assistant chief Mark Nyasera Mukuru kwa Njenga location Senior chief Jonathan Musila Shauri Moyo location Assistant chief Hezekiah Obongita table continues next page 36 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya Organization Position Name Shauri Moyo location Chief Florence Mbwika Land Mawe (Kayaba) location Chief Solomon Muragori Goeta School, Mukuru Teacher James Mutonga Goeta School, Mukuru Boys’ focus group (five, from classes 4–7) Anonymous Goeta School, Mukuru Girls’ focus group (five, from classes 4–7) Anonymous Pilot School, Mathare Head teacher Aloyss Oyoma Pilot School, Mathare Boys’ focus group (five, from classes 6–8) Anonymous Pilot School, Mathare Girls’ focus group (five, from classes 6–8) Anonymous Fresh Life Operators (FLOs) FLOs (eight: three residential, three commercial, Anonymous two hybrid) Community Fresh Life users (five) and non-users (one) Anonymous Bill & Melinda Gates Foundation Demand-Led Sanitation senior program officer Jan Willem Rosenboom World Bank Kenya Office Senior Water and Sanitation Specialist Chris Heymans World Bank Kenya Office Operations Analyst Lewnida Sara Osprey Foundation Managing director Louis Boorstin Vitol Foundation Head of Water, Sanitation, and Hygiene Regis Garandeau Vitol Foundation Board member Richard Carter Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya 37 A P PE NDI X B • SANE RGY ORGANOGRAM Director Director Fresh Life Government Business Talent Communications business relations development Chief operating officer Fresh Life customer Fresh Life sales support and New Future and credit onboarding communities initiatives Chief Director financial officer Information technology Black soldier fly Farm Star Operations Finance Legal and administrative larvae business sales services Black soldier fly New technology Head of larvae services commercialization operations Farm Star Fresh Life Quality health safety Supply chain services services and environment Infrastructure services 38 Evaluating the Potential of Container-Based Sanitation: Sanergy in Nairobi, Kenya  OSTS, REVENUES, AND CROSS-SUBSIDIES APPENDIX C • C WITHIN SANERGY Minimize subsidy through cost-efficiency Tipping point (“gate”) Cost of treatment via alternative means improvements at treatment site (utility treatment operation)—this would be the extra cost of treatment if there Nonprofit costs for toilet service were not resource recovery operations Sales and Overhead Containment Emptying Transport Treatment and disposal marketing For-profit costs for reuse product operation Best alternative Sales and Shareholder Resource recovery Overhead feedstock marketing returns For-profit subsidies price charged to nonprofit for waste collection service up to the cost of the best alternative feedstock (pig manure) CBS revenue For-profit entity revenue (sales of compost and animal feed) Profits Gap between revenues and costs for nonprofit requires subsidy For-profit ventures will not pay more than the cost of the best alternative feedstock for fecal sludge; as compost revenues grow beyond costs, they will be allocated to debt repayment and dividends and will not be used to further subsidize the toilet service Note: CBS = container-based sanitation. 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