What happens when an organization incorporates compassion throughout its policies, procedures, and culture? What is the impact on all stakeholders in an organization when human needs for care, consideration, and connection and are considered alongside business and impact outcomes? Research, and practice, show that the needs of people and the needs of organizations are not mutually […]
The session aims at highlighting the importance of scaling up social business models to reach the UN Sustainable Development Goals, and the challenge of financing this growth journey. Blended finance has gained increasing attention as a significant lever to unlock private capital by effectively combining it with public money and/or philanthropy. The session will use two case studies from the WASH sector to showcase the importance of blended finance, and a panel discussion will enable social businesses and blended finance investors to share views on how to facilitate blended finance mechanisms.
1- Setting the stage
The opening remarks will highlight (i) the overall trends in the WASH sector and the role of social businesses, (ii) the current funding gap to achieve the UN SDGs’ targets of universal access to safely managed WASH services, and (iii) the potential of blended finance to fill this gap.
2- Case studies from 2 WASH social businesses
1001fontaines and SafiSana both set up decentralized WASH infrastructure in low-income countries, respectively for safe drinking water and waste management. These decentralized models are key to provide long-lasting WASH services, and enable the development of local climate resilience strategies. They have also made the demonstration of their ability to ensure service continuity during the 2020 unprecedented circumstances of the COVID-19 pandemic – a game-changer for local communities who have been needing quality WASH services even more in the crisis time.
Our projects started with philanthropy, gathering a mix of public and private donors, for the initial CAPEX could not be amortized, and the OPEX were not viable yet.We are now in position to shift to blended finance, as our projects have gained maturity.
Both organizations will share their journey from philanthropy to blended finance, the challenges they faced and the learnings for the social business sector as a whole.
Since 2004, 1001fontaines has been a leading pioneer of the water kiosk model, a solution able durably to provide access to safe drinking water.
We set up small water production units, called water kiosks, directly in the target areas. Water is purified using a low-cost technology, then bottled and home-delivered at an affordable price ($2 cents/L).
To ensure sustainability, we hire and train an entrepreneur, who makes a living by managing the water kiosk. We also support the creation of a social business in each country. These entities are responsible for developing new water kiosks, and supporting the active ones through a franchise model. Entrepreneurs pay a fixed percentage of their turnover in exchange for a set of services guaranteeing their viability. Thanks to the fees, the franchise services become self-funded and can run without any need for external financial support.
Today, our network of 260 water kiosks is providing safe drinking water to 800,000+ people on daily basis, across 4 countries: Cambodia, Madagascar, Myanmar and Vietnam.
Our ambition is to accelerate the scaling pace of our approach, and this means being able to faster mobilize funding. With the OPEX being self-funded from 2020 onwards in Cambodia, the local social business will start generating profits that could reimburse private money, and thus finance its growth through a blend of grants / subsidies, and loans.
Safi Sana (http://www.safisana.org/en/):
Safi Sana is a dynamic social enterprise that designs and implements modular waste-to-reuse factories for local governments and industry in sub-Saharan countries. Once operational, the factories are operated on for-profit basis by selling power, compost, seedlings and irrigation water to the local market.
Founded in 2010, Safi Sana has offices in The Netherlands and Ghana. It has successfully constructed its first commercial factory in Ashaiman, Ghana, which can treat 25 tonnes of waste per day and is generating the first green electricity from waste in Ghana, feeding into the national grid (2 MWh/d). It also produces compost for the agricultural market. Safi Sana’s aim is for the Ashaiman plant to run at full capacity and breakeven by 2020 to guarantee long-term sustainability. This demonstration will support the funding of future plant development through a blend of loans and grants, with a finance mix depending on the level of government fee for service and the local business case for fertilizer and energy.
It will serve 125,000 people with better sanitation and waste collection services, bringing vast improvements to health and sanitation in slum communities, as well as providing job creation and valuable end products from the factory.
3- Panel discussion with a blended finance investor
- What are the investors’ expectations from social businesses such as 1001fontaines and Safi Sana, from financial, operational and strategic standpoints?
- What pre-conditions make the intervention possible?
- What challenges / blocking points have been experienced?
- What gaps and needs can be identified?
- Which steps could investors take to facilitate blended finance deals?
4- Q&A with the audience
Facilitator: Ms. Anne Lardoux de Pazzis, Chair and Founder, VERTALIX
With 20 years of international experience in the water and circular economy sectors and a former senior executive of the SUEZ Group, Anne works towards the ecological and social transition through the promotion of new business models, partnerships and blended finance. She supports the scale-up of innovative solutions, namely in favour of decentralised access to water and sanitation in emerging markets. Her commitment is rooted in the desire to promote initiatives with transformational impact on the delivery of essential services, namely for low-income populations.
Her expertise includes public-private partnerships, the development of public policies and the financing of major projects, including infrastructure, in support of national or local authorities, as well as complex negotiations and change management. She organises forward-looking debates on agriculture, food and environment with AgroParisTech Alumni.
1/ Mr. Julien Ancele, CEO, 1001fontaines
Julien has been leading 1001fontaines since 2015, focusing his work on designing the organization’s scaling up strategy, providing support to the current countries of operation, investigating growth opportunities, and contributing to the 1001fontaines’ thought leadership.
Before joining 1001fontaines, Julien worked as a strategy and sustainability consultant within Accenture. He spent 8 years designing and shaping strategic initiatives for global players in the fields of consumer goods, natural resources and logistics.
Julien is a graduate of the French ESCP Europe Business School with academic degrees in England (MSc from CassS Business School) and Germany (Diplom-Kaufmann).
2/ Mr. Aart van den Beukel, CEO, Safi Sana
Aart has over twenty years of entrepreneurial experience of establishing sustainable businesses. Cofounded the bakery Village Bagels Retail BV & Holding BV and headhunted to set up a showcase factory in Accra, Ghana to test the Safi Sana approach. Winner of the Sarphati Sanitation Award (2015) for most promising young entrepreneur, Toilet Board Accelerator Award (2017).and most recently Netherlands-African Business Council Doing Business in Africa Award. Graduated in economics at the University of Amsterdam, Haarlem Business School and University of Madrid.
A representative from a blended finance investing entity will also join the panel. This panelist will already know 1001fontaines and Safi Sana, as one of their financial partners.
The participant is expected to be either from the Stone Family Foundation or from the Vitol Foundation.