Safe Drinking Water and Autonomous Electricity Supply

Safe drinking water and autonomous electricity supply:

Concepts for sustainable implementation and financing in rural areas in Sub-Sahara

Africa

A thesis submitted in fulfillment of the requirements for the academic degree Master of Science (M.SC.) in the study program Renewable Energy Man- agement of the University of Applied Sciences Erfurt

submitted to: First examiner Prof. Dr. Kerstin Wydra Second examiner Dr. Hubert Aulich by: Philip Becker from: Euskirchen, Germany on: 17/08/2017

Author Philip Becker

Title of the thesis Safe drinking water and autonomous electricity supply: Concepts for sustainable implementation and financing in rural areas in Sub-Sahara Africa

Key words Drinking water, Electricity, Off-grid, Sub-Sahara Africa, Rural

Volume 114 pages of text, 15 pages annex, 5 figures, 8 tables

Submitted on 17/08/2017

Abstract Various concepts for the implementation of safe water and electricity supply for under-served areas in Sub-Sahara Africa are developed in this thesis. The major factors that are explicitly analyzed for each concept are technology of water purification and electrification, payment methods, financial terms, ways of implementation and how to identify customers. The first concept analyzes the implementation of a kiosk in a community. The kiosk purifies and sells water and is electricity autonomous, while parallel offering further goods and services. Further concepts that are developed put small scale farmers in the focus. The idea is to enable farmers to irrigate their fields, and to install a water purification and electrification system at the same time. The additional income from farming and the sale of water as well as avoided costs can be used to pay off the devices in regular instalments Another promising concept is the supply of rural communities as a collective with a water purification and electricity system. Avoided costs can be used to pay regular instalments. The last concept analyzes the upcoming pay as you go business model. It is shown this concept can be financially feasible. How- ever, some major difficulties arise that are hard to overcome for widespread implementation.

Concepts for sustainable implementation of safe drinking water and electricity I

Table of contents

Table of annex ...... V

Table of figures ...... VI

Table of tables ...... VII

Table of abbreviations ...... VIII

1 Summary ...... 1

2 Introduction ...... 3

3 Problems in developing countries...... 4

3.1 Unsafe water ...... 4

3.2 Electricity supply ...... 6

3.3 Political risks ...... 7

3.4 Legal risks ...... 8

3.5 Social problems ...... 9

3.6 Financial problems ...... 10

3.7 Other problems ...... 11

3.7.1 Allowance of doing business ...... 11

3.7.2 Employees ...... 11

3.7.3 Logistics ...... 12

4 Water treatment ...... 12

4.1 Required water quality ...... 13

4.1.1 Microbiological water quality ...... 13

4.1.2 Chemical water quality ...... 14

4.2 Water purification technologies ...... 15

4.2.1 Activated carbon filters ...... 16

4.2.2 Activated alumina ...... 17

4.2.3 Sand filtration ...... 19

4.2.4 Reverse osmosis ...... 20

4.2.5 Anodic oxidation ...... 24

4.2.6 UV disinfection ...... 27

Concepts for sustainable implementation of safe drinking water and electricity II

4.2.7 Ozone disinfection ...... 31

4.3 Summary of water purification technologies...... 32

5 Electricity supply technologies ...... 35

5.1 Diesel generators ...... 36

5.2 Photovoltaic ...... 37

5.3 Hydropower ...... 38

5.4 Wind power ...... 39

5.5 Battery systems ...... 41

5.6 Mini-grids ...... 42

5.6.1 Set-up of a mini-grid ...... 43

5.6.2 Design considerations ...... 44

5.7 Summary of electricity supply concepts ...... 45

6 Payment options ...... 47

6.1 Cash payments ...... 47

6.2 Prepaid systems ...... 48

6.3 Mobile payment ...... 51

6.3.1 Mobile money ...... 51

6.3.2 Mobile credit ...... 54

6.3.3 Microcredits ...... 55

6.4 Summary of payment possibilities ...... 56

7 Distribution options ...... 56

7.1 Donations and aid by NGO´s or sponsors ...... 58

7.2 Kiosk concept ...... 60

7.2.1 How to implement a kiosk in a rural community ...... 62

7.2.2 Water purification system ...... 65

7.2.3 Payment method ...... 66

7.2.4 Electricity supply concept ...... 67

7.2.4.1 Electricity consumption ...... 67

7.2.4.2 Electricity production...... 69

7.2.5 Financing for widespread implementation ...... 71

Concepts for sustainable implementation of safe drinking water and electricity III

7.2.6 Concept calculation ...... 73

7.2.7 How to identify customers ...... 77

7.3 Small scale farmers ...... 79

7.3.1 Group of farmers ...... 79

7.3.1.1 Water purification system ...... 80

7.3.1.2 Electricity supply concept ...... 80

7.3.1.3 Financing and payment method ...... 81

7.3.1.4 Concept calculation ...... 82

7.3.2 Single farmers ...... 85

7.3.2.1 Water purification system ...... 85

7.3.2.2 Electricity supply concept ...... 86

7.3.2.3 Financing and payment method ...... 86

7.3.2.4 Concept calculation ...... 87

7.3.3 Island farmers...... 89

7.3.3.1 Water purification system ...... 89

7.3.3.2 Electricity supply concept ...... 90

7.3.3.3 Financing and payment method ...... 90

7.3.3.4 Concept calculation ...... 90

7.3.4 How to identify customers – small scale farmers ...... 93

7.4 Community concept ...... 94

7.4.1 Water purification system ...... 95

7.4.2 Electricity supply concept ...... 95

7.4.3 Financing and payment method ...... 96

7.4.4 Concept calculation ...... 97

7.4.5 How to identify customers ...... 100

7.5 Pay as you go ...... 101

7.5.1 Financing and payment method ...... 101

7.5.2 Water purification system ...... 103

7.5.3 Concept calculation ...... 105

7.5.4 How to identify customers ...... 107

Concepts for sustainable implementation of safe drinking water and electricity IV

7.6 Distribution of water ...... 108

8 Risk analysis ...... 109

9 Social effects ...... 110

10 Conclusion ...... 112

List of references ...... 115

Annex ...... i

Concepts for sustainable implementation of safe drinking water and electricity V

Table of annex

A. Political stability and absence of violence/terrorism by income and region ...... i B. Control of corruption by income and region ...... i C. Rule of law by income and region ...... ii D. Guideline values for natural occurring chemicals ...... ii E. Guideline values for chemicals caused by human actions ...... iii F. Guideline values for chemicals caused by agriculture ...... iv G. Guideline values for chemicals caused by water treatment ...... v H. Contaminants removed by household RO units ...... vi I. PVGIS Calculation – 3 kW PV in Nigeria ...... vii J. PVGIS Estimation – 1 kW PV in Nigeria ...... viii K. Kiosk payback calculation 1 ...... ix L. Kiosk payback calculation 2 ...... x M. Group of farmers payback calculation 1 ...... xi N. Group of farmers payback calculation 2 ...... xii O. Community concept payback calculation 1 ...... xiii P. Community concept payback calculation 2 ...... xiii Q. Pay as you go payback calculation 1 ...... xiv R. Pay as you go payback calculation 2 ...... xv

Concepts for sustainable implementation of safe drinking water and electricity VI

Table of figures

Figure 1 Simplified scheme of the Reverse Osmosis technology ...... 21 Figure 2 Simplified scheme of the Autarcon system ...... 25 Figure 3 Simplified scheme of the UV purification technology ...... 28 Figure 4 Simplified scheme of the Ozone water purification technology ...... 31 Figure 5 Scheme for credit payments in foreign countries ...... 73

Concepts for sustainable implementation of safe drinking water and electricity VII

Table of tables

Table 1 Comparison of water purification systems ...... 35 Table 2 Costs of electricity in Africa for various technologies ...... 46 Table 3 Kiosk concept costs and income ...... 75 Table 4 Group of farmers concept costs and income ...... 83 Table 5 Single farmer concept costs and income ...... 88 Table 6 Island farmer concept costs and income ...... 92 Table 7 Community concept costs and income ...... 99 Table 8 Pay as you go concept costs and income...... 106

Concepts for sustainable implementation of safe drinking water and electricity VIII

Table of abbreviations

AC Activated carbon Ah Ampere-hour

CO2 Carbon dioxide E. coli Escherichia coli h hour ha Hectare HF Health Facility l liter KSH Kenyan Shilling LED Light-Emitting-Diode Li Lithium-Ion log logarithm m² square meter mg milligram ms millisecond MWh Megawatt hour NGN Naira NGOs Non-Governmental Organizations Pb Lead-acid PV Photovoltaic RO Reverse osmosis SDG Sustainable Development Goal SHS Solar Home System Sms Short-message-service SSA Sub-Sahara Africa UN United Nations UV Ultraviolet V Volt W Watt Wh Watthours WHO World Health Organization

Concepts for sustainable implementation of safe drinking water and electricity 1

1 Summary

Various concepts for the implementation of safe water and electricity supply for underserved areas in Sub-Sahara Africa are developed in this thesis. The focus is laid on sustainability in technical, financial and social terms. Thereby, a widespread implementation and thus the supply of as many people in need as possible shall be enabled. The major factors, amongst others, that are explicitly analyzed for each concept are technology of water purification and electrification, payment methods, financial terms, ways of implementation and how to identify customers. The approximately one billion people that do not have access to safe water and electricity are the poorest, making it difficult to implement financially sustainable business concepts. On this basis, various possibilities of doing so are presented in the thesis. The most promising concepts have in common that the financial hurdle can be overcome by supplying as many people in need as possible with one project.

The first concept analyzes the implementation of a kiosk in a community. The kiosk purifies and sells water and is electricity autonomous, while offering further goods and services at the same time. This way the income that is being generated is increased and investments can be paid off faster than by only selling water. The water purification system that is implemented leaves a residual disinfectant in the water, so that the threat of recontamination is minimized. The price for the water is orientated at current prices from street vendors, while offering better quality. Water tapping is being managed by a prepaid system, if possible combined with mobile payments, to allow maximum control, exact tapping and sustainable water supply. Calculations show that the implementation of such kiosks is feasible and that investments can be paid back in around three years, depending on the estimates of income.

The next concepts put small scale farmers in the focus. The idea is to enable farmers to irrigate their fields, whereby they can increase their harvest and income. A water purification and electrification system is implemented at the same time. The additional income from farming and the sale of water as well as avoided costs for kerosene for lighting and mobile phone charging can be used to pay off the devices in regular instalments. This approach has been analyzed for a combination of multiple farmers in one project, for single farmers and for island farmers, which have to deal with sea- and brackish water. Calculations show that the concept is financially feasible if three or more farmers participate in one project, whereby costs are divided and financial benefits increase. The supply of a single farmer or an island farmer is not sustainable with

Concepts for sustainable implementation of safe drinking water and electricity 2

these assumptions. However, additional recommendations to supply single farmers and island populations with safe water and electricity are given.

Another concept that is promising is the supply of rural communities as a collective with a water purification and electricity system. Community members can charge LED-lights and their mobile phones at a central PV system, which also powers the water purification system. Thereby, each household saves on average € 180 per year. Additionally, health benefits are given, whereby costs for medicine are avoided, which are not insignificant. The disposal of water and electricity is regulated with a prepaid system. The rates are estimated to be as high as the costs that are avoided by the customers because they can use the projects devices. Calculations for a village of 1,900 inhabitants show that the avoided costs for kerosene and mobile phone charging alone are sufficient to pay back the investment within less than one year. Estimating fewer inhabitants and less avoided costs the concept is still financially feasible and investment can be paid back in a short period of time.

The last concept treats the upcoming pay as you go business model that is recently having large success in Sub-Sahara Africa for the dissemination of small PV systems to individuals. Analyzing if people can be supplied with safe water using the same concept shows that it can be financially feasible when various parameters are estimated. Yet, there are also difficulties arising by doing so, e.g. the necessity to have a certain amount of customers within a narrow area or the threat of leakages in piping systems. Therefore, this concept does not seem to be optimal. Regardless, the pay as you go concept is partly implemented in the previously described concepts to supply larger number of people at once.

At the end of the thesis a risk analysis for risks that cannot be influenced by investors is given to raise awareness that doing business in this sector can cause unforeseen troubles. Social aspects of the implementation of the concepts are also described. It is important that the poorest people are not excluded from the supply of electricity and especially safe water, because social inequalities would arise. Solution proposals are that community solidarity makes the people provide safe water to the poorest, since prices are as low as possible. Another possibility is to give small tasks to them, e.g. the distribution of water from a kiosk, whereby they can earn a little income and thus can buy water themselves. Further, the recycling of electric devices needs to be implemented into the business plans to prevent environmental damage, which can arise especially from disposed battery system.

Concepts for sustainable implementation of safe drinking water and electricity 3

2 Introduction

Water is a human right, not only so stated by the United Nations (UN) in 2010 (UN, 2016-A), but also by many governments all over the world. Nevertheless, a lot of these governments fail to supply their people with this basic and essential right, especially in developing countries. There are various reasons for this shortage, but the outcome is always the same – people suffer from lack of potable water, resulting in diseases and death. At the same time a large share of the world’s population lacks access to electricity. The people without access to electricity are mostly the same as those who lack access to safe water. Where governments fail, the private sector needs to take action. The intention of this thesis is to develop a concept for implementation of water purification systems in rural areas Sub-Sahara African (SSA) countries in a financially, technically and socially sustainable manner. At the same time options of how to provide access to electricity to the people will be evaluated. The reasons for the link between drinking water and electricity systems are that people who lack one of the two often lack the other as well and that most water purification systems need to be powered by electricity – therefore the provision of electricity to the inhabitants should be envisaged parallel. The region of Sub-Sahara Africa has been chosen among the large number of developing countries because a large share of its population has no access to safe drinking water and electricity. Various similarities can be found between SSA nations, so that the concepts could be adapted to other regions and a large number of people. Therefore, the potential for large-scale adaptation of the concepts is higher, since the concepts are developed for a large region. Nevertheless, data collection, descriptions and analyzes will be conducted for developing countries in general, as well.

The concepts will be practice-suitable for implementation in all aspects. To do so, a list of expected difficulties and problems is needed up-front, because market conditions in developing countries often differ heavily from those in industrial nations. After the challenges are identified, sustainable business concepts for autonomous water purification and electrification systems will be developed. Therefore, different aspects such as water purification technologies, payment possibilities, electricity supply concepts and business ideas will be described separately. After doing so they will be combined to sustainable concepts in the most suitable way. The concept has to be sustainable (financially, technically, socially), because past experiences, as well as the huge amount of people suffering from lack of potable water, demonstrate, that this problem cannot be solved by Non-Governmental Organizations (NGOs) or donations alone.

Concepts for sustainable implementation of safe drinking water and electricity 4

3 Problems in developing countries

Planning and realizing projects in developing countries implicates certain difficulties, which are different from those in industrial nations. To be able to solve these problems, to minimize risks and to deliver a sustainable concept, these challenges have to be analyzed and portrayed, which shall be done in the following chapters. Since the target of this thesis is to deliver a sustainable concept for autonomous water purification system in combination with electricity supply, only difficulties related to these issues will be outlined.

3.1 Unsafe water

A major health issue in today’s world is the lack of safe and healthy potable water for many people in low- and middle-income countries. Unsafe water can result in various diseases, such as cholera, diarrhea, dysentery, hepatitis A, typhoid and polio (WHO, 2017-A), only to name a few. These diseases can result from microbiological contamination.

Microbiologically contaminated water harbors microorganisms, such as bacteria, viruses and protozoa. They are often highly resistant to environmental conditions and thus are able to cause infections even weeks after being exposed to the environment. Fur- ther, they are able to multiply under the right circumstances, which means even the smallest amount of microorganism can contaminate an entire water source, given the right time and conditions (Schoenen, 2011, p.11 ff.). Outstanding among the mentioned diseases are diarrheal related diseases, which often occur and lead to an estimated 842,000 deaths each year worldwide (WHO, 2017-A).

Apart from microbiological contamination, chemicals can be a serious problem, making water unsafe for consumption. Industries which dispose their wastewater into river streams are a great source of chemical pollution. While industrial waste streams in industrial nations are nowadays generally controlled before being released into the environment, this is often not the case in developing countries. In fact, more than 80% of wastewater is released into the environment without any pollution removal (UN, 2017- A). Other sources of pollution can be agricultural waste (fertilizers), power plants and household chemicals (Environmental Pollution Center, 2017). The effects of chemical water pollution to human health are manifold and depend on the type of chemical as well as concentration levels, with short-term as well as long-term effects. Short-term effects are e.g. impairment of immune and reproductive systems, irritations and indis-

Concepts for sustainable implementation of safe drinking water and electricity 5

positions, while long-term effects are impairments such as alteration of liver functions and asthma symptoms. According to the WHO developing fetuses are most sensitive to chemical pollution, as the development of organs and growth can be disturbed (Rich- ards-Gustafson, 2017).

The seriousness of this problem is pointed out by the fact, that access to water and sanitation for all is number six of the UN´s Sustainable Development Goals (SDG´s).1 The UN states that in 2015 91% of the world´s population had access to an improved drinking water source, compared to 76% in 1990 (UN, 2017-A). A closer look at the definition of improved drinking water source shows that this term clearly differs from the definition of safe drinking water. While safe drinking water needs to fulfill certain microbiological and chemical standards2 to be considered safe, an improved drinking-water source simply is a construction which adequately protects water from outside contamination, in particular from fecal matter (WHO, 2017-B). The water quality of the improved drinking water source, which is e.g. a public standpipe or a borehole, does not influence whether the source is defined as improved or not, as long as it is protected from outside contamination. Even though microbiological contamination and chemical pollution can and often does occur in these sources, the WHO states: “Access to safe drinking water is measured by the percentage of the population using improved drinking-water sources” (WHO, 2017-B). This misleading definition and measurement re- veals that the number of people suffering from inadequate drinking water supply if far higher than 9% of the world population. The WHO itself states that worldwide 663 million people rely on unimproved water sources, while at least 1.8 billion people use drinking water sources contaminated with feces (WHO, 2017-A), which confirms the conclusion that access to safe drinking water cannot be measured by access to an improved drinking water source.

It is needless to mention that most of these people live in developing countries. Each day around 5,000 children die due to preventable diseases related to poor water and sanitation supply (UN, 2016-A). This number calculated to a whole year results in 1.825 million annual deaths, only by children. The total number of deaths per year caused by unsafe water will be far higher. It is also important to note that people in low-income countries are especially exposed to the risk of infection in health care facilities with in-

1 The SDG´s are a set of goals to end poverty, protect the planet and ensure prosperity for all until 2030. 2 The standards are defined by the WHO und the WHO Drinking-water Quality Guidelines.

Concepts for sustainable implementation of safe drinking water and electricity 6

adequate water supply. Globally 15% of patients get infected during healthcare, with the proportion being much higher in developing countries (WHO, 2017-A).

More challenges for adequate water supply are population growth and urbanization, both of which occur mostly in developing countries. Population growth determines higher water demand, not only for drinking use, but also, and in much higher quantity for irrigation, electricity generation, livestock and manufacturing. This results in more and heavier water stressed areas. Urbanization is also a major challenge. In 2014 59% of the world population lived in cities and estimates are that this number will increase to 67% until 2050. Most of this growth is happening in developing countries. Urbanization is happening so fast, especially in Sub-Sahara Africa that access to improved water resources, as a percentage of total population, is not improving, but even declining. People in urban regions in SSA who had access to piped water declined from 42% to 34% from 1990 to 2012 (UN, 2015, p.55 f.). This shows that population growth and urbanization, which is population growth for urban areas, can outmatch improvements and that more efforts have to be made to solve these problems.

3.2 Electricity supply

Another challenge in developing countries is insufficient electricity supply. Developing countries often do not have a reliable electricity network. Similar as in the case of water, it depends on the nation as well as the region whether electricity supply from a grid is available and if it is reliable. While cities often do have a grid, which is not necessarily reliable, villages, smaller cities or peri-urban areas are often too remote to make it financially reasonable to connect these areas to a power grid.

Globally 1.2 billion people lack access to electricity which accounts for 17% of the global population. Ninety-five percent of these people live in Sub-Sahara Africa or Asia and 80% live in rural areas (International Energy Agency, 2017). While more than 620 million people in SSA are without access to electricity, it is the only region in the world where this number is even increasing. The reason is that population growth outpaces the efforts of electrification. Since 2000, the number of people in SSA that lack access rose by 100 million. Nevertheless, the percentage of people with electricity supply rose from 23% in 2000 to 32% in 2012 (Van der Hoeven, 2014, p.30). Access to electricity is number seven of the UN´s SDG´s, reflecting the great need for development in this sector, since a lot of other improvements can only be achieved if electricity is available (UN, 2017-B).

Concepts for sustainable implementation of safe drinking water and electricity 7

The lack of reliable electricity infrastructure is also a constraint for local businesses. Since power supply often breaks down, there are two options. Businesses either have to stop their power consuming activities during the breakdown, or they have to generate their own power. In SSA on average 4.9% of sales are estimated to be lost due to electricity breakdowns. Many businesses use a fuel-based power generator to back their supply up. In 2012 alone this led to fuel costs of at least $5 billion, including households and businesses (Van der Hoeven, 2014, p.25). Generating power with fuel- based generators causes some difficulties. Especially in rural areas people are dependent on fuel deliveries. Further, an influence of fuel costs is given, which cannot be forecasted accurately in business plans. Also, these generators cause high carbon dioxide (CO2) pollution.

The cost of electricity from an energy provider varies widely by country and is dependent on various factors such as geographical situation, natural resources, infrastructure, mix of energy sources, taxation etc. Though, end user prices for electricity in developing countries tend to be lower than prices in most industrial nations (Energy Use Calcu- lator, 2017-A). The reasons differ and cannot be presented here, as each nation has its own specific situation. Especially subsidies for fuel distort a view on the real situation. Nevertheless, it has to be kept in mind that high numbers of people in developing countries are not connected to the grid and that electricity supply often breaks down, both of which is less or totally un-common in industrial nations. Also, costs of self-producing electricity such as fuel-costs as well as costs for e.g. photovoltaic (PV) cells depend on a nation’s situation.

3.3 Political risks

Political risks also have to be considered when doing business in a foreign country. More than any other of the difficulties listed here, political risks are very specific and dependent on the nation. Thus, developing countries cannot be summarized in either politically stable or unstable. Nevertheless, they tend to be less stable then developed countries in general, since developing countries and their populations face many challenges and changes. While some developing countries have already undergone political changes, others are currently in this progress and again others are yet to face them.

Political risks can vary in its origin. One can be the risk of governmental intervention by changing laws. This can be for example raising import or export taxes, increase income

Concepts for sustainable implementation of safe drinking water and electricity 8

taxes, launch further regulations or expropriate an investor´s asset (Comeaux; Kinsella, 1994, p.1), all of which decreases investments’ value. Unpredicted change of laws can be done by an already existing government or by a newly established government, which is more likely.

Another political risk is that of social unrest, which can result in civil disturbance or even civil war, both of which can constrain business operations. Disturbances can have various causes, such as social inequality, ethnically diverse regions, changes in social structures, or political changes, e.g. elections. Political risks can also result from different political interests between two nations. This can result in sanctions, trade bar- riers or even war. War is the reason that Middle East and North Africa is the least politically stable region, followed by South Asia and SSA (World Bank, 2017-B).3

Political risks cannot easily be influenced by a company. Nevertheless, an investor has to assess political risks prior to doing investments and then evaluate whether the investment is worth the risk or not.

3.4 Legal risks

Legal risks are closely related to political risks. Legal risks are insufficient, improperly applied or unfavorable judicial proceedings (Financial Dictionary, 2012). The outcome can be diverse. One example of insufficient judicial proceedings is corruption prosecu- tion. If this is the case, it can be very hard or even impossible for a business to perform certain procedures, if it is unwilling to pay corrupt people. According to the World Bank data base, control of corruption is lowest in low income countries and highest in high income countries, with SSA having the lowest rank of corruption control, followed by South Asia (World Bank, 2017-B)4.

Another big issue is the rule of law. Rule of law is defined as the quality of contract en- forcement, property rights, the police, the courts and the likelihood of crime and violence (World Bank, 2017-C), so it basically means how much an investor can rely on the abidance by the law by various institutions, especially by the courts. Thus, this indicator is closely related to corruption levels. Data of the World Bank confirms this view, as the rule of law indicator is lowest in low-income countries, with the lowest rank being in SSA, followed by South Asia and Middle East & North Africa (World Bank, 2017-B).5

3 See annex A 4 See annex B 5 See annex C

Concepts for sustainable implementation of safe drinking water and electricity 9

If rule of law is not appropriate in a nation, the investor cannot rely on uninterrupted process of doing business. In this case, an investor either has to adapt to local rules, which can be e.g. paying money to corrupt people, or he has to think about whether an investment is worth the risk.

Since control both corruption and rule of law levels are lowest in low- income/developing countries, this is also a factor that has to be evaluated prior to going into a new market.

3.5 Social problems

Another challenge of doing business in developing countries can be social difficulties. Those can be very diverse and have different impacts on business operations.

In general, social norms and behavior in developing countries are probably different than those in developed nations. Apart from this, social structures in different regions of the world can be very different, sometimes even within a region or within a nation. For example social structures and the people’s behavior in a rural village in an oasis in the desert of Africa are probably overall different to a crowded urban area in South Ameri- ca or Asia. Thus, such differences can influence chances for success of a business. Therefore, it has to be emphasized, that an investor should get to know social norms and behavior and learn to adapt to it. It is always helpful to partner with local companies. If possible, the place of business operations should be visited to talk to the people, in the best case with a local leader (participative approach). Even though cultures might be different amongst SSA countries, there can be a general understanding of their needs and behavior.

The probably biggest difficulty is that of exclusion. If for example water is being sold by locals in an urban area in SSA, even if it is not safe, the population might be skeptical when a European business just appears and starts to sell its own water. The initial existing water sellers would most likely lose customers and thus have negative attitudes towards the market intruder, possibly resulting in vandalism. Other people might not want to buy foreign products in general, e.g. if they have bad experiences doing so. Then again, people might not be used to pay for water at all since they think of water as a right which has to be met by the government – e.g. water as a common. This would make it very difficult to find paying customers.

As being said, social difficulties can vary heavily and are dependent on the region and situation. These facts emphasize even more the importance to get to know these struc-

Concepts for sustainable implementation of safe drinking water and electricity 10

tures and to adapt to them, which is the only way to implement a sustainable business. The real list of challenges is quite long and cannot be treated here in detail. However, the most important social challenges regarding water and electricity supply are outlined here to alert a potential investor.

3.6 Financial problems

Another great difficulty of doing business in developing countries is the financial situation. In this thesis a business model for an autonomous water purification system and electricity supply will be elaborated. The people without access to safe water and electricity are mostly the poorest. The more income an individual has, the more likely it is that he has access to safe drinking water. If the poorest people have any income, it is very low and often just enough to survive. According to the World Bank 766 million people lived with less than $1.90 a day in 2013, which accounts for 10.7% of the world population. This poverty headcount ratio is highest among SSA countries and India, followed by South and Central America and Southeast-Asia (World Bank, 2017-A). Developing countries also tend to have a higher income-inequality, called the Gini- index. The 50 nations with the highest income inequality are with a few exceptions all developing countries. Most of them are based in South and Central America, Asia and Africa (CIA, 2014).

These people with almost no income or money to spend represent a great number of the same population that has no access to safe drinking water and electricity. To develop a financially sustainable business model with customers who are unable to make any investment is a major challenge that has to be overcome.

Another great difficulty is the exchange rate risk. If the inflation of a currency (in a developing country) is high the currency exchange rate drops, e.g. in relation to the currency of the investor´s nation. The exchange rate risk is high, when changes in the exchange rate are unpredictable. These unpredictable changes can lower the value of an investment. Further, if profits shall be transferred into the investor´s currency, profits can decrease due to drops in the currency exchange rate. Of course, this effect can also be beneficial to the investor, meaning the investments value or profits can increase, when the value of the investor´s currency drops in relation to the foreign currency, which would hardly occur with industrialized countries (Investopedia, n.d.). Since inflation rates in developing countries cannot always be forecasted this risk has to be considered as well.

Concepts for sustainable implementation of safe drinking water and electricity 11

Another difficulty in financial terms is access to capital for the investor. As explained in chapter 3.4, 3.5 and 3.5, as well as in this chapter, doing business in low-income countries often faces higher risks. This can make it more difficult to get access to credits from banks, as they are worried about losing their money. Further, if credits are given to a business with a high risk, higher interest rates than those in lower-risk cases will be charged.

Thus, the financial issue seems to be a major issue. It can be difficult and expensive to receive credits for investment, customers do not have enough money to buy products and investments’ or earnings’ value can decrease due to volatile exchange rates.

3.7 Other problems

This chapter shall summarize further difficulties, which can occur doing business in developing countries.

3.7.1 Allowance of doing business

Especially in the case of selling drinking water doing business can be a problem. Na- tional or local water authorities might have the privilege of providing water to the population. Even when they are not able to do so they can interfere and prohibit the sale of water, charge fees or dictate prices. Such experiences have been made in Tanzania, Eastern Africa, where exactly these interventions have been performed by local water authorities (GIZ, 2013, p.5 f). The same problems can occur with the supply and sale of electricity.

If a water or electricity authority in a country tends to intervene they have to be con- tacted before starting to implement a system, since they can bring down the whole project. Water and electricity authorities tend to be more present in urban areas, since rural areas are too remote, too small and not lucrative enough to be governed.

3.7.2 Employees

Another issue is that of untrained or unreliable employees. Educational levels in developing countries are much lower than in developed nations. Fifty-seven million children worldwide do not attend primary school and 69 million children do not attend secondary school. More than half of these children live in SSA and more than 20% in South and West Asia. In SSA, only 56% of children complete a primary school education. This results in 774 million young people worldwide being unable to read and write. Two

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thirds of those are women. The reasons are various. Often, families do not have enough money to send their children to school. Another reason is that the children have to work, even in primary school age, and thus simply do not have the time to attend school lessons. Further, the quality of teaching is often bad, so even pupils which attend school lack basic skills (BMZ, 2017). This situation is a big problem, resulting in a lack of adequately educated people. This results in the problem that people are often not capable to manage and manipulate things correctly. A person that cannot read, write and calculate for example will not be able to work as a cashier. Thus, it can be difficult to find appropriate employees. However, a positive factor is that wages in these countries are low. Therefore, investors are able to invest into education of the people to enable them to do certain jobs. If they are doing so employees are well prepared for their tasks and eventually feel an affiliation to the company, making them more trustworthy.

However, it can be hard to find people to rely on. If an employee earns a certain amount of money per year, and he carries a product to a customer which is worth multiple times that amount, he might be tempted to steal it, especially if rule of law is not good in the specific country and he is unlikely to be caught. Therefore, it is even more important to find people that are trustworthy.

3.7.3 Logistics

Rural villages are often far out and hard to reach. This can make it very difficult to deliver products in a frequent manner. Products which are frequently needed can be for example diesel for a generator, chemicals for water purification or replacement parts for the system. This can be a serious problem, since frequent deliveries or maintenance can be absolutely necessary to operate a system. Rural villagers are often too far out and too poor to make a trip to the next big city by themselves. Thus, logistic activities have to be examined prior to installing a system to make it sustainable. Fur- thermore, the system to be installed has to be robust and fit into the specific environment, so that maintenance is as rare as possible.

4 Water treatment

After describing the difficulties that can occur in developing countries, possible ways of implementing sustainable business concepts shall be described. The first issues being described are the water purification technologies themselves.

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To deliver a sustainable business model an optimal water purification technology has to be found. Difficulties occurring in developing countries have been outlined in chapter 3. Therefore, all technologies shown here will be analyzed by the following factors:

 Quality of water after treatment

 Initial investment costs

 Lifetime of the system

 Frequency and quality of maintenance

 Ease of operation

 Electricity consumption

 Consumption of other materials

 Disinfection byproducts

4.1 Required water quality

Before describing the individual technologies it is necessary to explain different water quality levels. Water quality standards vary by nation. To have a general quality stand- ard for this thesis, the World Health Organization (WHO) guidelines are most suitable. Safe drinking water, as defined by these Guidelines, does not represent any risk to health, no matter for how long and at which age it is being consumed. Even though, the WHO standards represent the minimum requirements for safe drinking water. The Guideline should be seen as a scientific starting point, from which national authorities can develop standards and regulations appropriate to their situation (WHO, 2006, p.1 f).

4.1.1 Microbiological water quality

As described in chapter 3.1, water can be microbiologically and chemically polluted. The WHO chose the bacterium Escherichia coli (E. coli) as an indicator organism. The reason is that it is universally present in high numbers in the feces of humans and other animals, it is detectable by simple methods and it does not occur in water naturally. This indicator organism should not be detected in any water sample, to guarantee its safety, since is not only an indicator for the quality of the water, but it is also very dan- gerous by itself. However, other organisms, such as some protozoa and viruses, are more resistant to disinfection. Therefore, other indicator organisms should be consid-

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ered, regarding regional circumstances, e.g. when the source of water is known to be contaminated by bacteria or parasites. Those indicators can be intestinal enterococci, clostridium perfringens and bacteriophages (WHO, 2006, p.26; 142).

Another problem of water quality regarding microbiological activities is recontamination. Recontamination describes the process of water being polluted by contaminants, after it has been treated already. This can happen when the treated water is stored, e.g. in a tank, cistern or canister, which is not totally clean. Bacteria in the water storage can then grow while the water is stored, making it unsafe for consumption again. Therefore, it is important to clean the storage system regularly. This avoidable mistake can make a whole purification process useless. To avoid recontamination the storage should be constructed in a way that the environmental circumstances, including hands, cups etc. do not touch or affect the water. This can be done by mounting a tap to the storage construction. Further, a residual disinfectant can be left in the water, protecting the water from recontamination (Sustainable Sanitation and Water Management, 2012).

Additionally, the system of logarithm (log) reduction shall be explained, to be able to describe water purification rates of the systems later on. The log reduction level indicates at which rate microorganisms are being removed from the water. Log 4 e.g. indicates a removal rate of 99.99% of all microorganisms, log 6 indicates 99.9999% removal, which means that the number of germs is 1,000,000 times smaller (log 6) than the initial amount (Healthy Facility Institute, n.D.).The higher the log reduction level of a system, the better is the quality of the treated water.

4.1.2 Chemical water quality

Chemical pollutions should not occur in water in high doses, as it often spoils taste, odor and color of the water. The WHO, however, states, that most chemicals are only a concern for health if they are consumed within water for years (WHO, 2006, p.145). Even though there can be some chemicals that do have effects after taken in over just a short period if consumed in high doses (WHO, 2006, p.30).

Chemicals in drinking water can be either organic or inorganic. Organic chemicals occur from the breakdown of plant material in water, e.g. algae. Inorganic chemicals are released by the rocks and soil which the water passes. Most of naturally occurring chemicals in drinking water that are harmful to human health are inorganic. Only a toxin produced by blue-green algae or cyanobacteria is a harmful organic chemical. Specific guideline values have been set for arsenic, barium, boron, chromium, fluoride, manga-

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nese, molybdenum, selenium and uranium. A table with the values is presented in annex D (WHO, 2006, p.184 f).

As discussed in chapter 3.1, chemical pollution in drinking water can also be caused by human actions. These chemicals can be organic or inorganic as well, while the list of harmful organic chemicals is significantly longer than the list of inorganic chemicals. Examples for inorganic chemicals are cadmium and mercury. Examples for organic chemicals are benzene, styrene and toluene. A complete list with guideline values can be found in annex E (WHO, 2006, p.185 ff.).

The World Health Organization also distinguishes between industrial and household produced chemicals and agricultural released chemicals. Therefore, a list of guideline values for chemicals caused by agriculture can be found in annex F. Most of these chemicals are pesticides (WHO, 2006, p.187 ff.)

Further, a list for chemicals which are used for water treatment or from materials in contact with drinking water is given. An example for chemicals used for water treatment is chlorine as disinfection product. An example for chemicals from materials in contact with the water is lead or copper from water pipes. These chemicals can be contaminants in the final drinking water. A list of these chemicals is shown in annex G (WHO, 2006, p.188 ff.).

Another threat to human health can be cyanobacterial toxins. Cyanobacteria can occur in lakes, reservoirs, ponds and slow-flowing rivers. Some of these bacteria produce toxins. The WHO does not give a list for guideline values in this case. Nevertheless, the WHO gives advice for some treatment methods to remove cyanobacterial toxins. This can either be filtration, oxidation through ozone or chlorination (WHO, 2006, p.192 ff.). Chlorine is the most frequently used disinfectant in the world and often used to solve the problem of cyanobacterial toxins.

4.2 Water purification technologies

A major issue about delivering healthy potable water to rural communities is the technology. There are dozens of different technologies to purify water, most of which have their own advantages and disadvantages. In the following, a selection of technologies is presented and the most suitable technologies for an autonomous water purification system in developing countries are portrayed.

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4.2.1 Activated carbon filters

It is often necessary to install a filter upstream to the actual purification system. The reasons can be various. For some technologies it is necessary to have low turbidity in the water, while others are not able to remove some pollutants, so filter and purification technology have to be combined. As it is with different purification technologies, there are also a number of different filtration techniques. A lot of the later described water purification systems use an activated carbon filter.

Activated carbon (AC) filters are widely used in industry and residential water systems. Carbon is being formed when organic matter is burned in the absence of oxygen. When the carbon gets activated, its many pores are opened and unwanted molecules are driven off. The activated carbon has a very large surface, which is able to capture contaminants. There are a number of different types of AC. Its origin can be organic materials such as anthracite coal, bone char or coconut shell.

The characteristics of activated carbon are summarized as follows:

 Quality of water after treatment: AC works best for organic chemicals with large molecules. The type and amount that can be absorbed by the filter depends on the physical and chemical properties, contaminant properties and density in the water, pH-value and temperature of the water and length of exposure, which means how long the water is in contact with the medium (Water Professionals, 2017). AC can generally absorb organic compounds, non-polar contaminants, disinfection byproducts (e.g. chlorine), industrial pollutants, pesticides and some heavy metals such as lead and mercury (Water Quality Association, 2013, p.1), as well as cadmium, chromium manganese, silver and tin. Bacteria, however, cannot be absorbed by AC. The filter might even promote bacterial growth, if maintenance is not done properly, or if the filter is not used for several days (Water Quality, n.D.)

 Lifetime of the system: The filters lifetime depends upon medium volume as well as level of usage and incoming water quality (Water Quality, n.d.). There- fore, a specific lifetime cannot be given. AC can be reactivated, but recommendations are to use reactivated carbon only for wastewater. This means, that AC media have to be removed frequently, which is disadvantageous for rural areas (Water Professionals, 2017).

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 Frequency and quality of maintenance: The AC filter itself does not have to be maintained. The only maintenance that has to be done is to remove the medium after its lifetime and put a new medium in place (Water Quality Association, 2013, p.4). If there is a surveillance system for the filter quality, removal could be done by the end user. However, this is not common. If there is no surveillance the removal may require a technician. The problem here is that end users could forget the removal or think that the medium still works fine. Thus, it can happen that bacteria find a good environment for growth on the AC surface. This can cause problems, when bacteria cannot be removed by the down- stream purification system. Even though, the performance of AC declines steadily, allowing the operator to determine a date of replacement (Water Pro- fessionals, 2017).

 Ease of operation: Once installed in a system, the filter itself does not require any operation expertise by the user.

 Electricity consumption: AC works by gravity and physical forces. Thus, it does not need any electricity directly. The only possible electricity amount that could be added to AC is that of the pumping system, which leads the water to the filter.

 Consumption of other materials: Except activated carbon itself, which is being used and consumed, there is no other material that gets used over time. If the pH-value shall or must be adapted to reach better filtration levels those materials are consumed as well. Which kind and amount of material is used, is dependent on the pH-value of the feed water.

4.2.2 Activated alumina

Another filtration medium is activated alumina. Activated alumina is a granulated form of aluminum oxide. The media has a very large surface which is capable of removing solids.

It has the benefit that it is capable of removing fluoride, arsenic, selenium, beryllium as well as natural organic matter (U.S. Department of the Interior Bureau of Reclamation, n.D.). Especially fluoride is very hard to be removed from water. As fluoride is very harmful to humans’ teeth and bones if consumed permanently in high doses, fluoride definitely has to be removed if present in the feed water.

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 Quality of water after treatment: As mentioned, activated alumina is capable of removing various solids from the water. The most important feature is the removal of fluoride. Efficacy of fluoride removal can be as high as 99%. However, the efficacy is dependent on various factors such as pH-value, contact time and depth of the media bed (Bersillon, Gopal, Tripathy, 2006).

 Lifetime of the system: The lifetime of activated alumina is dependent on usage level, quality of maintenance and level of contamination of the feed-water. If maintenance is done properly, the media can be used between one to three years (U.S. Department of the Interior Bureau of Reclamation, n.D.).

 Frequency and quality of maintenance: Activated aluminia requires maintenance as the medium has to be backwashed to free it from contamination and to prevent growth and clogging from bacteria. System pressure and flowrates have to be observed to guarantee that the backwashing works properly and to check when the medium has to be backwashed or replaced (U.S. Department of the Interior Bureau of Reclamation, n.D.).

 Ease of operation: It is important to control the pH-value of the feed water, which is required to be between pH 5.5 and 6.0. If not so, the efficiency of the filter is reduced due to a negative charge at the alumina surface (U.S. Depart- ment of the Interior Bureau of Reclamation, n.D.). The level of care that has to be taken for the system in terms of operation and maintenance is therefore quite high.

 Electricity consumption: The filtration works only by physical contact and flowrate, which is done by the pump. Since the pump has to be operated for the purification system anyways, no additional electricity is consumed by the filter.

 Consumption of other materials: Despite the activated alumina itself, the filtration process may need further materials to adapt the pH-value to the correct level. The kind and amount of the material that has to be used depends on the pH-value of the feed water.

 Disinfection byproducts: Activated alumina does not transfer any harmful byproducts into the water. However, the wastewater, which leaves the filter during the backwashing process, contains all of the absorbed solids. The waste is caustic and can be considered as hazardous waste, thus it should not be spilled

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onto the ground, into a river or a lake (U.S. Department of the Interior Bureau of Reclamation, n.D.).

4.2.3 Sand filtration

Sand filtration is also a gravity using filtration method. The medium consists of multiple layers of sand (also called multi-media filter), filtering suspended solids from water. The types of the used sands in the media are various in their physical characteristics. The layers are combined to adapt to specific needs to achieve best filtration results. The most common combination of layers is anthracite coal, quartz sand and garnet (Pure- tec, n.D.). Sand filtration is often used as a pre filtration method for membrane systems to avoid fouling of the membranes (Lenntech, 2017-A).

 Quality of water after treatment: Sand filters are used to filter suspended solids such as silt, clay, grit, organic matter, algae and other microorganisms from the water. Particles between 15-20 microns (0.015-0.02 mm) can be filtered, in combination with a coagulant particles in the range from 5-10 microns can be filtered (Puretec, n.D.). Apart from that sand filters can be used to filter iron from the feed water (Lenntech, 2017-A).

 Lifetime of the system: Lifetime of the filter media is dependent on the chosen sands as well as the feed water quality and the quality of backwashing. There- fore, a general time for replacement cannot be given. Replacement should be done by a trained person to improve the performance (Puretec, 2017).

 Frequency and quality of maintenance: The dirt holding capacity of the sands is about three to six kg of total dissolved solids per m² of sand media. When the filter is loaded with particles it is backwashed and can then be used again (Lenntech, 2017-A). A combination of layers, where large particles are filtered at the top and smaller particles at the bottom, allows longer runtimes between backwash and before removal (Puretec, n.D.).

 Ease of operation: Once set-up, the filter does not need to be specifically operated. It only has to be observed when the filter is loaded to determine the time of backwashing. Some water purification systems are capable of doing so by itself, which minimized the operation and maintenance effort.

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 Consumption of other materials: Except for the filter media itself no additional material is consumed.

 Disinfection byproducts: When backwashing is done in correct frequencies no byproducts are generated during the filtration.

4.2.4 Reverse osmosis

For each purification technology an example for a real existing system will be described. Thereby, it is possible to compare various systems better and to implement them into business calculations later on.

A very prominent water purification method is reverse osmosis (RO). The technology is used to remove solids from the water and it is even capable of desalinating water, thus making water from the oceans or brackish water drinkable. The technology is using a membrane which is permeable for water, but impermeable for solved and dissolved solids in the water. Two solutions, of which one has a higher concentration (the untreated water – feed water) are separated by this membrane. Pressure, which has to be higher than the osmotic pressure, which results from the concentration differences of the solution, is being employed on the higher concentrated solution. This leads to the water being pressed into the lower-concentrated solution, while the solids remain in the higher concentrated solution. The lower concentrated solution represents the water intended for drinking, while the higher concentrated solution will be discharged (Hancke, 2000, p.244 f). Usually RO systems are used in combination with an activated carbon filter, to guarantee contaminants can be reduced to safe levels (Oram, 2014-A).

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Figure 1 Simplified scheme of the Reverse Osmosis technology6

To be able to compare the different technologies, a model from the industry has to be analyzed. The Swiss company Trunz Water Systems develops, manufactures and delivers autonomous water purification systems, powered by solar or wind electricity.7 Their systems use either ultrafiltration or reverse osmosis technology. The system TBB 003 is capable of treating up to 650 l/h of brackish water. Brackish water is saltwater, with lower salt content than seawater. It can be found e.g. on islands, where the saltwater from the sea presses into the inland waters. The system is described in the following points (Trunz, personal communication, 2017).8

 Quality of water after treatment: RO is capable of removing solved and dissolved solids from the water, as well as of removing microorganisms, however, it is not recommended for the latter. Bacteria, viruses and protozoa can clog on the membrane and proliferate. Through leaks, which occur in the membrane after a time of use, these contaminants can then contaminate the water proposed for drinking (Oram, 2014-A). Annex H shows a summary of ions, metals, organic chemicals, particles and pesticides that can be removed by a household level RO system in combination with an activated carbon filter (Oram, 2014-B). It is notable that RO is capable of removing a large number of ions and metals, including fluoride, which is quite difficult for other technologies. The TBB 003 system solves the problem of clogging the membrane with back-

6 Source: Xflow, 2017 7 An overview of the products can be seen on http://www.trunzwatersystems.com/water- treatment/products/ 8 The following information has been received in personal communication with Andrea Trunz.

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washing. Backwashing means that the systems membrane is flushed by water in the opposite direction, thus freeing it from contamination. The problem of microbiological contamination can only occur if the system is not operated for a while. The general purification level of the system is reported to be log 4.

 Initial investment costs: Investment costs of the TBB 003 system are quoted with CHF 48,750, which equals about € 45,000 at current exchange rates. This represents the systems costs including active carbon filtration, the pump and the hose. It does not include a tank and factors such as transport and installation.

 Lifetime of the system: The system has some spare parts which have to be replaced after some time. The system’s RO membrane itself has a lifetime of about three years. The systems total lifetime is about five years. Nevertheless, the system itself can be operated far longer, depending on how the term “one system” is defined, since most parts will be replaced after five years.

 Frequency and quality of maintenance: The TBB 003 system is installed with an activated carbon filter. This filter has to be replaced regularly, about every three months. Further, a technician should always be at the site during operational hours to operate the system correctly and to do maintenance, e.g. the backwashing. Data about water quality and operational status should be checked every day to avoid and detect problems as soon as possible. Therefore, it can be said that frequency and quality of maintenance is relatively high for SSA.

 Ease of operation: The operation of the ‘Trunz system’ itself seems to be quite easy, since water flows out after pressing a button. Even though a technician is required and should always be present to operate the system, mainly for maintenance but also for operation. Thus, the system cannot be installed in a remote area and then be left alone with the inhabitants. It requires at least a training course for a person with some technical understanding.

 Electricity consumption: The system requires an electricity supply of 900 Watt (W) including the borehole pump.

 Consumption of other materials: RO wastes large amounts of water, since the higher concentrated solution is discharged. About 75% of the water is discharged with the contaminant, so only 25% of incoming water can be used for drinking purposes (Oram, 2014-A). This can be a serious problem in water

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stressed areas. In coastal areas however it might be insignificant. The ‘Trunz system’ wastes about 50% of brackish water during the reverse osmosis filtration. Another material that is being consumed is the activated carbon, since the filter has to be replaced about every three months.

 Disinfection byproducts: Reverse osmosis does not seem to produce any harmful disinfection byproducts, since it is a physical and not a chemical disinfection technology. The only byproducts that can appear indirectly through the process are the organisms that can proliferate on a clogged membrane. However, the solution to this problem has already been described.

Besides the ‘Trunz Water system’, which is capable of treating brackish water, another system is capable of treating seawater. The Australian based company Mörk Water Solutions offers off-grid reverse osmosis and ultrafiltration water purification systems in Asia-Pacific, Eastern-Africa and Australian regions. Thereby, they realize projects on islands, where often only brackish or seawater is available. The company uses two systems for seawater treatment, one capable of producing 100 l/h, the other capable of treating 200 l/h. General data is equal for both, information about price and electricity consumption are given for both systems in the following (Brezger, personal communication, 2017)9:

 Quality of water after treatment: The greatest advantage of the system is that it is capable of treating seawater and makes it drinkable. After conducting analyzes of the treated water at various realized projects no bacteria were found. The water quality is reported to match WHO standards. Even though no residual disinfectant is left in the water, the chance of recontamination is given. A level of log-reduction could not be named.

 Initial investment costs: The initial investment can only be given including solar photovoltaic systems, battery storage and a pump system, capable of operating the system. The 100 l/h version thereby costs € 30,000, the 200 l/h version € 45,000.

 Lifetime of the system: The lifetime of the system can exceed 10 to 20 years. Though spare parts have to be replaced frequently. The water pump has a life-

9 The data about the systems that they used has been gathered in a telephone call with Mr. and Mrs. Brezger, Director and Business Development Manager at Mörk Water solutions

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time of about three to four years if European or American products are used and one to two years for Asian products, which are cheaper. Which product is used depends on the project and site. Depending on the feed water quality the membrane has a lifetime of three to five years. The included filter has to be exchanged every two to twelve months. The costs of maintenance per year to replace the parts range between € 200 – 1,000.

 Frequency and quality of maintenance: The frequency of maintenance varies according to the environmental conditions and water quality, as described above. The company provides training to people that are willing and eager of learning to do the maintenance. These people do not require a technical pre- qualification to be able to maintain the system after the training. Therefore, the level of maintenance shall be ranked as medium.

 Ease of operation: The system only has to be turned on to operate and turned off at night. While doing so some parameters of the system should be checked to assure that the system operates correctly. The company also gives training to local people to learn maintenance. The operation of the system therefore is not as easy as possible, but feasible.

 Electricity consumption: Direct electricity consumption cannot be given. Yet, the 100 l/h version is equipped with six solar panels á 250 W (1,500 W max.), the 200 l/h system with twelve panels (3,000 W max.) The system is also backed up by battery systems.

 Consumption of other materials: Apart from the filter medium that has to be exchanged no further materials are used. The water that is wasted during the RO process depends on the feed water quality and ranges between 50 – 90%.

 Disinfection byproducts: The clogging of the membrane is reported to be less problematic with seawater than it is with brackish water. If bacterial contamination is that high that clogging could be a problem the systems parameters can be set in a way that clogging does not occur.

4.2.5 Anodic oxidation

Anodic oxidation is a water purification technology which is not as well-known as others in public, since there are only a few manufacturers in the world. The technology works as follows: Water passes one or more electrolytic cells, which are under a specific volt-

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age. The chemical process called anodic oxidation uses naturally occurring minerals and salts (NaCl, sodium chloride) to produce free chlorine, which kills microorganisms and thus disinfects the water (U.S. Patent Application Publication, Goldmaier, 2012).

The German company Autarcon produces such a system and distributes it, especially to rural communities in developing countries. Therefore, their system will be analyzed to gather further details. Depending on water quality levels of the water source, a filtration system is installed prior or past the chlorination process, if necessary. The filter technology varies by type of source contamination. Usually it is a pressure filter, using either sand or manganese dioxide as filter medium. The filter medium also uses chlorine to precipitate the chemicals, which are then removed by the system. The following criteria describe the system (Otter, personal communication, 2017)10:

Figure 2 Simplified scheme of the Autarcon system11

 Quality of water after treatment: The Autarcon system is capable of removing microbiological as well as some chemical pollutants. Microbiological contaminants can be removed with an efficiency of log 6-7 which means that bacteria and viruses are eliminated by a rate of 99.9999-99.99999%. The filtration system is capable of removing iron, manganese and arsenic to

10 Data has been gathered in personal contact with Mr. Philipp Otter, Project Coordinator at Autarcon. 11 Source: Autarcon, 2017

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WHO required levels. For other chemicals, such as fluoride, there is no removal solution yet. Microbiological as well as chemical pollutants dissipate the produced chlorine. The system constantly measures water quality levels and repeats the process until 0.2 mg per liter (l) is present in the water for the end consumer, which is recommended by the WHO. The residual amount of chlorine prevents the treated water from recontamination.

 Initial investment costs: Costs of the Autarcon system are highly dependent on the quality of the source water. Including factors such as use of batteries for longer operation and larger production quantities, water tanks, solar panels, filters etc., costs vary between € 11,000 – 20,000. The system is capable of treating 400 – 800 l/h. It needs to be noted that only the SAFE-Version, which does not work with a filter, is capable to provide 800 l/h, all other systems are capable to treat 400 l/h.

 Lifetime of the system: Since the Autarcon system was invented in 2009 and the first system has been installed in 2010 in Gambia, which still remains intact, there can be no ultimate proof about the lifetime. However, the statement of Au- tarcon is that a unit runs for about 10 years if not maintained properly. If maintained properly and some spare parts get replaced, the systems lifetime exceeds 10 years.

 Frequency and quality of maintenance: Generally, the system does not need frequent maintenance. If the untreated water contains levels of calcium car- bonate or iron, the system should be washed once a year, but this is only to improve the visual impact. Nevertheless some spare parts might have to be exchanged after several years. According to Autarcon € 500-1,000 per year need to be generated to ensure that enough money is available for replacements.

 Ease of operation: Once installed, the technology runs by itself, thus making it easy to operate. The system has an included sensor, which measures the amount of chlorine in the water. The process of chlorine production is conducted until the water is safe. No interaction is needed in this process. Further, a GSM chip (Mobile Communication Transmitter) is included in the system sending operational details live to the company. If any misbehavior happens, the

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company can analyze possible problems without having to send a technician to the area of operation.

 Electricity consumption: The Autarcon system is designed to work in rural areas, considering that often no electricity infrastructure is present. The current for the electrolytic cell therefore comes from an attached solar panel. The actual power consumption for the system itself ranges between 10-50 W while an attached pump additionally needs 10-70 W, depending on specifications. Total electricity consumption therefore varies between 20 and 120 W.

 Consumption of other materials: Anodic oxidation produces free chlorine from naturally occurring salts in the water. Therefore, no additives are consumed, as it is mostly the case when water is being chlorinated. The filter also does not have to be replaced, since it can be backwashed. Additionally, the system provides the filter with chlorine by itself, which is necessary to work properly.

 Disinfection byproducts: The chlorination of water can cause some harmful byproducts. There is a distinction between organic and an organic byproducts. Organic byproducts are caused by a reaction between chlorine and organic material. They are called trihalomethanes and are carcinogenic. Therefore, the EU settled that the amount of organic material in the feed water should not exceed 1 mg/l (Lenntech, 2017-B). Analyses of existing Autarcon systems have shown that no critical value of trihalomethanes is produced when the organic material in the water is lower than 5 mg/l. The reason is that the purification level of the system is not compromised. Further, the system oxidizes some of the organic material itself, whereby the concentration decreases. Usually the organic material does not exceed 2 mg/l. Therefore, the problem of trihalomethanes usually does not occur. An organic byproducts are less likely to appear during the treatment with anodic oxidation since the chlorine solution does not have to be stored but is directly produced at the point of use (Otter, personal communication, 2017).

4.2.6 UV disinfection

Ultraviolet (UV) disinfection is also a very prominent technology when it comes to water treatment. Mercury lamps produce UV-C rays, which are a part of light with a specific wavelength, to inactivate microorganisms such as bacteria, viruses and protozoa. The principle is that the rays alter the microorganisms’ DNA and impedes its reproduction.

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Therefore, UV disinfection itself does not remove germs from the water but it inacti- vates them. It is recommended that UV disinfection is performed as close to the point of use as possible, because anything coming in after the treatment could recontami- nate the water (Oram, 2014-C).

Figure 3 Simplified scheme of the UV purification technology12

A disadvantage of UV disinfection is the mercury itself. It is toxic and very harmful for the environment. In regular operation there is no problem, since the mercury cannot escape the glass and thus does not end up in the environment. However, in case of a breakage of glass it is almost impossible to capture the mercury back in due to its nature (quick-silver). Further, mercury vapor could be inhaled in case of a breakdown, which is harmful to human health (State of Victoria, 2017). Especially in developing countries and even more in rural areas it cannot be guaranteed nor really be managed effectively that used mercury lamps are disposed correctly and recycled.

To make UV disinfection comparable to the other technologies a real model has to be considered. Therefore, a product from the company LIT UV, based in Isseroda, Ger- many, will be analyzed. LIT UV is one of the three largest producers of UV treatment for water, air and surfaces. LIT UV is specialized in large scale systems, having capacities of millions of liters per hour. The smallest system DUV-1-21-N is capable of treating up to 3,000 liter per hour with a minimum of 30 liter per hour. Characteristics of the system are (Kühne, 2016)13:

12 Source: Ultraviolet, 2008 13 A visit at the company and conversations with Mrs. Kühne, saleslady at LIT UV, gave the information about this system that will be outlined in the following bullet points

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 Quality of water after treatment: In general all waterborne pathogens can be eliminated by UV-lamps, though level of disinfection depends on contact time with water, intensity of light and quality of water. It is very important that the water is clear and turbidity level is low, since solids such as minerals are non- transparent for UV rays and therefore impede the inactivation. Another concern occurs when UV intensity is too low. Some microbes have the ability to repair their damaged DNA when they are not affected to heavily, so they can reacti- vate themselves. Therefore, the observation of UV intensity is important. The disinfection only happens within the system, while the water is penetrated by the UV rays. No residual disinfectant is left in the water (Oram, 2014-C). Therefore, the treated water can easily be recontaminated if stored in a container where microorganisms occur. The LIT UV system reduces microbiological contamination with an efficiency of log 4 (99.99%). Reactivation does not occur since the light intensity is high enough. Chemicals are not being removed by the system itself, so an additional prefilter has to be installed.

 Initial investment costs: The complete system costs € 375.

 Lifetime of the system: The intensity of mercury UV lamps decreases over time. Therefore, they have to be replaced when intensity falls below the range at which microorganisms are affected (Oram, 2014-C). The LIT UV lamp has a lifetime of one year, after which it has to be replaced by a new one. Costs per lamp are € 58. Further, the control box should be replaced after three years of operation. It accounts for 50% of the costs, which matches € 187.5. The quartz glass has a lifetime of five years. A price is not given, but since a lot of the systems costs are already covered by the lamp and the control unit it is insignificant. Despite these three spare parts and a frequency converter the system mainly consists of a stainless steel frame. If the maintenance is done properly the system will probably last for at least one or two decades.

 Frequency and quality of maintenance: The glass containing the mercury lamp has to be cleaned frequently, since material can build up upon the glass (Oram, 2014-C). This has the same effect like solids in the water, except it is even more lowering the disinfection quality, since the rays are absorbed permanently. The cleaning effort itself is relatively low, since the glass only has to be wiped.

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The same accounts for the LIT UV system. Cleaning of the lamp should take place every three months. Further, maintenance has to be done to replace the lamp, the control box and the quartz-glass, which has to be done every year, every three years and every five years, respectively.

 Ease of operation: Mercury lamps need some time to gain their full radiation output level. In the case of the LIT UV system it takes 15 minutes before operation can start. It is important to respect this build-up time, since full disinfection rate is not given earlier.

 Electricity consumption: The system requires an electricity consumption of 24 W.

 Consumption of other materials: UV disinfection does not add any chemicals to the water (Oram, 2014-C). Nevertheless, UV does not remove any chemicals. Therefore, a prefilter has to be installed, which is activated carbon in most cases. Activated carbon has to be replaced frequently, depending on the quality of the source water.

 Disinfection byproducts: UV disinfection is a physical, not a chemical disinfection method. Therefore, no harmful byproducts occur disinfecting water with ultraviolet light (Lenntech, 2017-B). Only the dead organic matter (bacteria, viruses) that has been altered by the radiation can influence the waters taste.

The mercury is contained in a tube, usually consisting of quartz glass since it has to be transparent for the UV-C rays.

At this point it shall be noted that currently a market for UV-C Light-Emitting-Diodes (LEDs) for water treatment is emerging. LEDs have some advantages over mercury lamps. The most important one is that they are not as harmful to the environment as mercury in a case of glass-break. Further, electricity consumption for LEDs is much lower than for common UV disinfection, which is quite a benefit for rural areas. Lifetime will also be longer than for mercury lamps, since they can be turned on and off more frequently. Also the start-up time for LEDs is only up to few seconds, while mercury lamps can need up to a few minutes (Techneau, 2010, p.7). Though the few UV-C LED water treatment systems are multiple times as expensive as mercury lamps, it can be assumed that prices will decrease heavily with increasing production volume and fall below mercury levels. Efficacy of water purification can be even higher than by mercury lamps, since the LED´s radiance level can be adapted more precisely. LEDs are not

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competitive to mercury lamps for now in terms of price, but the market development should be observed.

4.2.7 Ozone disinfection

Ozone is mainly being used in Europe and Asia for water treatment. For ozone disinfection, ozone is being produced and then introduced to the water. Ozone can be produced when dry, clean oxygen passes a high voltage electric discharge or ultraviolet light. There are several processes capable of doing so (Oram, 2014-B).

Figure 4 Simplified scheme of the Ozone water purification technology14

 Quality of water after treatment: Ozone has greater disinfection effectiveness against microorganisms then chlorine. At the same time it is able to disinfect much faster. Further, ozone is capable of removing iron, manganese and sulfur by oxidizing the pollutants, which then become insoluble particles, which can be removed by filtration. Another advantage is that ozone purifies water without causing an undesirable taste or odor, in contrast to chlorination (Quality Drink- ing Water, 2010). A major disadvantage of ozone in comparison to chlorination is that ozone is an unstable gas. It degrades over a timespan of a few seconds up to 30 minutes. Therefore, no residual disinfectant is left in the water, making recontamination possible (Oram, 2014-B).

 Ease of operation: Ozone production and therefore disinfection is a process which requires a professional technician. Ozone is not so soluble in water, which reasons that special mixing techniques are required. Potentially there is the danger of fire hazards and toxicity issues, so the operator of the system

14 Source: SDK Water, 2017

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should at least be taught in-depth and he needs to have technical understanding (Oram, 2014). If not, byproducts such as formaldehyde and bromate can occur, which are harmful to health (Quality Drinking Water, 2010).

 Consumption of other materials: No additive chemicals need to be introduced into the water (Oram, 2014-B).

 Disinfection byproducts: If bromine is present in the water that is to be treated bromate can be the result of ozone disinfection. Bromate is a carcinogenic sub- stance. The adjustment of the pH value of the water can control the creation of bromate. Other byproducts that can occur are aldehydes and organic acids (Lenntech, 2017-B).

No provider of ozone disinfection systems which are suitable for rural areas that are willing to share information about their systems could be found. Overall, only two producers of such products have been observed. Therefore, no information about pricing, electricity consumption, maintenance and ease of operation can be given from real existing systems. However, it is likely to say that ozone disinfection is more expensive than UV disinfection since the process is more complex and UV disinfection is more popular for water disinfection. The operation is probably also not as easy since very high voltages are being used and the technical complexity is quite high, so that it is probably recommended to have an operator with a technical understanding at the site. It shall be noted that these last notes are estimates.

4.3 Summary of water purification technologies

After describing the most suitable water purification technologies, a comparison in various categories will be presented in the following.

The first point is the investment cost of the system. The UV disinfection system by LIT UV has investment costs of only € 375 and is therefore by far the cheapest solution. With this small investment cost the system is capable of treating up to 3.000 l/h. Never- theless, an additional filter has to be bought to remove chemicals and make the water treatable for the UV rays. The filter has to be large enough to deal with these large amounts of water. At the second place is the Autarcons anodic oxidation system with investment costs of € 11,000 – 20,000, capable of treating 400 l/h. The Mörk Water System costs € 45,000, including solar PV, batteries and the pump and is capable of treating 200 l/h seawater. The Trunz Waters reverse osmosis system also costs € 45,000 and is capable of treating 650 l/h brackish water.

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The costs to replace spare parts are quite similar. The LIT UV system has yearly costs of a minimum of € 120, not going far higher. The Autarcon system needs around € 500 to 1,000 for replacement parts per year. The Mörk system has about the same annual maintenance costs, varying between € 200 – 1,000. The Trunz system only has a lifetime of about five years, which can be exceeded if various parts of the system are replaced. Therefore, the replacement costs for the RO system are the highest.

The next point, not less important than the costs, is the water quality level after the treatment. The UV unit disinfects to log 4 levels, the anodic oxidation system log 6-7 and the Trunz reverse osmosis system log 4 as well. The Mörk system is said to achieve WHO required levels. Apart from that, the anodic oxidation system is the only one leaving a residual disinfectant in the water. If the level of organic matter is below the recommended limit and no fluoride is present in the water, which can only be removed by reverse osmosis, the Autarcon system is therefore clearly the best when it comes to purification levels.

Maintenance and ease of operation shall be concluded here since they correlate. The UV system only needs to be cleaned every now and then due to sedimentary disposi- tion. Further, every year the lamp has to be exchanged. Depending on the filter that is connected to the system some additional maintenance has to be done. The ease of operation will be classified as medium, since the build-up time has to be respected to guarantee disinfection. Further, it is necessary to keep an eye on the radiation level, which decreases over time. The Autarcon system also only needs to be cleaned every three to four months to operate the system properly. If dysfunctions occur, the data can be analyzed by Autarcon because of data transition via the GSM chip to find out what is the problem. If a person has been instructed to the system he is probably able to repair the system after confer- ring with the Autarcon personnel. Once installed, the operation is very easy. The Trunz Waters reverse osmosis system appears to have quite a lot of maintenance since the filter has to be replaced every three months. Additionally, there are a lot of spare parts that have to be exchanged after their lifetime. The company´s managing director advised that a technician should always be at the site for operational as well as for maintenance purposes. Therefore, it can be stated that the Trunz RO system has the highest complexity in this case. The Mörk system also needs frequent maintenance, even though it is not required that a technician is as present at the site as with the Trunz system. Therefore, ease of operation and level of maintenance are ranked slightly better.

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A point that is also quite important in developing countries, especially in areas without adequate electricity supply, is the systems electricity consumption since they require an additive initial investment and/or operational costs. The UV system is the most electricity efficient, since it can treat 3,000 l/h with an electricity consumption of 24 W, which is 8 Wh per m³ of water. The Autarcon system’s electricity demand varies between 10-50 W for the treatment of 400 l/h. The consumption per m³ is therefore 25-125 Wh, which is also very electricity efficient. The Trunz RO system has an electricity consumption of 900 W, including the pump, for the treatment of 650 l/h, which equals 1,384 Wh per m³. The Mörk system has 3 kW of photovoltaic attached to the system. Even though the specific electricity consumption is not known it can be assumed that it is the highest amongst these systems. Apart from the system’s electricity consumption, the water pump, which delivers the water from the borehole, lake or river, has to be supplied with electricity. The pumps electricity consumption depends on the system, flow rate and drilling depth. The higher the flow rate, the higher the electricity consumption. For the Autarcon system the pump needs between 10-70 W. The Trunz RO system needs a much larger pump, since only 25% of the incoming water becomes drinkable. This means 2,600 liter have to be pumped to the system to receive 650 liter of purified water. For the electricity consumption however the pump is already included in the systems 900 W demand. The UV system needs a pump of about the same size. However, the system is also capable of treating only 400 l/h or any other amount if needed. Therefore, the electricity consumption is only linked to the amount of water that shall be treated.

The last point to be compared is the appearance of harmful disinfection byproducts. The UV system does not create any harmful byproducts. Only the inactivated microorganisms can influence the waters taste if present in a large concentration, however, it is not harmful. The reverse osmosis system also does not produce any harmful byproducts. Due to Trunz’ and Mörks backwashing method clogging of microorganisms at the membrane is no problem as well. The Autarcon system uses chlorine, which can produce carcinogenic trihalomethanes. In most of all cases the concentration of organic material in the feed water is too low to cause high levels of trihalomethanes. However, if the use of the Autarcon system could be harmful it should not be considered and a different technology needs to be used to purify the water, e.g. a UV system in combination with a filter.

The following chart gives an overview for the comparison of the four purification systems. It should be noted that the author of this thesis has no personal experience or

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own personal experimental data, but rather lies on the published information or personal communication with personnel of the various companies.

Table 1 Comparison of water purification systems

5 Electricity supply technologies

The second part of the system implementation is the supply of electricity. The main purpose of the electricity system is to power the water purification system, so that the people can rely on the supply of safe water. Additionally, ways shall be found how electrification of the inhabitants can be implemented into the business concepts. In this chapter, however, the technologies themselves and not the implementation concepts are presented.

In general, there are two categories in which electricity supply can be divided: On-grid and Off-grid. On-grid electrification describes electricity supply by a national or at least regional electricity grid. Off-grid electrification stands for every electricity supply that does not come from a larger grid. Small grids, such as mini-grids, which electrify a single community or village for example, also account to Off-grid electrification.

Electricity supply from a national grid can naturally only happen when a national grid is available at the point where electricity is needed. As described in chapter 3.2 the national grid often does not reach into rural areas. When a national grid, which has to be reliable, is available it can be used to supply the water purification system with electricity. Nevertheless, it should also be considered whether it is financially attractive to install an own power supply.

In the following chapters the case of non-availability of grid electrification or non- reliability is being assumed. Thus, methods for autonomous electricity supply, especially for the case of water purification technologies, are described. The UN projects, that about 70% of the population which currently lives without electricity will be supplied by decentralized solutions such as mini-grids or stand-alone units in the future (Groh et.al., 2015, p.xiii). This indicates the huge potential and advantage off-grid solutions

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have over a national grid, especially in spacious countries where rural areas are not electrified yet.

5.1 Diesel generators

The most widespread solution for self-generating electricity where no grid is available are diesel generators. Their advantage is the low initial investment cost, which is the reason why this solution is very popular. Further, it is a well-established market since other forms of rural electrification technologies are just on the rise during the past few years, especially in developing countries.

As mentioned, diesel generators do have the lowest initial investment cost when it comes to autonomous electricity. A generator with an inverter is required, since water purification systems are sensitive instruments.15 A generator from an Australian distributor with an attached inverter for a capacity of around 2.8 kW costs about € 610 by a no-name producer and € 1,400 by Yamaha (MyGenerator, 2017). Another advantage is that the electricity supply from diesel generators is reliable and not dependent on weather (like solar or wind power), as long as fuel is available. The lifetime of diesel generators varies between eight to ten years, depending on the environment it is working in.

The operational costs of a diesel are high, compared to renewable energies. Fuel to run the generator has to be paid. Therefore, the electricity costs are directly linked to fuel costs, which are projected to increase, or at least will not decline in the near future (Global Petrol Prices, 2017-A). Fuel costs in rural areas are even higher because it has to be transported to the area. Further, a generator has some moving parts, which require replacement and regular maintenance, such as oiling (Emirates Greentech,

2017). Another great factor that is disadvantageous is the emission of CO2. The environment is harmed and the earth becomes not only more polluted, but also heats up due to the greenhouse effect. To reach the 1.5°C target if the Paris climate agreement, it is important to avoid as many emissions as possible and to focus on renewable energies.

Summing up, it can be stated that diesel generators are still popular due to the low initial investment costs. Considering the realization of a sustainable business model however makes it seem unlikely that diesel generators are the best solution because of the

15 Personal communication, MyGenerator, 2017

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high operational costs and the dependence on fuel price and fuel supply. Additionally, the CO2 emission should be considered in terms of the climate change effect. The only factor that is quite favorable is the fact that diesel generators can supply electricity reliable at any time it is needed.

5.2 Photovoltaic

Year 2016 has been a record year for photovoltaic, with a 50% higher installation capacity compared to 2015. In 2016 grid-connected electricity provided by photovoltaic became even cheaper than by onshore wind power plants (SolarPower Europe, 2017, p.5 f). This market growth driven by the industry has decreased PV prices constantly over several years (Solarcell Central, 2017). This price decrease makes photovoltaic more and more available and affordable in developing countries as well, not only for industrial purposes, but also for off-grid electrification. Numerous small, medium and big businesses are coming up with various ideas about delivering PV systems to yet un-electrified customers. Photovoltaic systems are in many factors the direct opposite of diesel generators. The advantages and disadvantages are outlined as follows:

Once installed, photovoltaic systems need nothing but the sun to produce electricity. Maintenance is very low and requires only the cleaning of the modules in regular inter- vals. Having no moving parts, a good quality PV system does not need the replacement of any parts over its lifetime, if good quality products are used. Therefore, the operational costs for photovoltaic are extremely low. Over its lifetime the power generated by photovoltaic systems is cheaper than it would be from a grid or from diesel generators, thus a return on investment can be made by installing PV systems. Another advantage is that electricity can be supplied completely autonomous once the system is installed, independent of the supply of any products or fuels and independent of the development of any markets. While PV prices are already on a record low, increasing installation and production capacities make it likely that costs continue to decline in the future. PV systems have a long lifetime. Most module producers give a warranty that the modules still reach 80% of the capacity after 20 years.

Especially in Africa photovoltaic is favorable, since most of the continent enjoys an average of more than 320 days of bright sunlight, with irradiance levels of almost 2,000 kWh/m² per year, which is twice as much as in Germany (Van der Hoeven, 2014, p.57). This makes the technology even more attractive for rural electrification in SSA.

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Despite the advantages there are also some disadvantages for photovoltaic systems. The probably biggest issue is that electricity is only being produced when the sun shines. At night no electricity can be generated from solar cells and on cloudy days electricity generation is declined. The stop of electricity production at night is regular and thus can be planned, whereas the weather cannot always be forecasted. There- fore, the electricity supply is somewhat unreliable, even though PV systems can produce between 10-25% of their capacity in cloudy weather (Momentum Energy, 2017). The second disadvantage is the higher investment cost that has to be brought up to install PV systems. Especially small businesses that need a certain amount of electricity cannot afford this investment and therefore invest in a diesel generator.

The cost of solar PV system depends not only on the modules itself, but also on transportation, installation, mounting and further equipment costs such as inverters. Scaling up a system decreases the costs per Watt since some factors such as transportation, installation and mounting can be broken down. The average costs for a system greater than 1 kW varies between € 2.24 – 6.27 per Watt in African countries, as stated by a study from 2016. These costs do not include batteries or inverters, since the system is designed for direct current application. Battery costs in such systems size varies between € 0.44 - 5.64 per Watt. Costs for systems smaller than 1 kW vary between € 1.61 – 12.45 per Watt, battery costs vary between € 2.24 – 6.09 per Watt (IRENA, 2016, p.10).

Summing up it can be concluded that solar PV systems have higher investment costs but benefit from having no fuel costs and no need for the supply of fuel. Further, maintenance needs to be done less frequently and is less costly. PV prices and the auxiliary components are most likely to decrease further over the next years which make the technology even more accessible to un-electrified communities. A disadvantage of solar PV is that the electricity is not produced at all times, whereby an additional solution might have to be found. However, PV prices have been decreasing greatly in the past few years and it is expected that batteries will follow this trend in the following years. Therefore, PV systems and batteries will be even more competitive to diesel generation for 24 hour electricity availability.

5.3 Hydropower

Another form of clean and renewable electricity production is hydropower. Hydropower is not only capable of delivering large amounts of electricity via large scaled dams in

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rivers. There are some existing systems with capacities in the single-digit kW section which are capable to supply a community or small systems with power.

One supplier of such systems is the German manufacturer Smart Hydro Power. The company offers turbines which can be placed in running waters such as rivers or ca- nals. They are connected with an anchor at the bottom or at the side of a river. They are also protected from debris flowing in the water (Smart Hydro Power, 2017).

The greatest advantage of these systems is that they supply a steady baseload of electricity as long as the river has enough running water. When the river is large enough and the seasonal influences on the river are known, electricity can be generated with almost no operational costs 24 hours a day 365 days a year. Another advantage is that maintenance is low: Depending on the river, the system only has to be cleaned every one to six months. This might require some effort, since the system either has to be cleaned inside of the flowing water or has to be brought out of it, which is quite difficult due to its weight. No further maintenance needs to be done. The systems lifetime is stated to be 20 years.

Yet, small hydro power plants also have some disadvantages. The electricity output is dependent on the running water. This means that no electricity at all is produced if the river runs dry or contains too less running water, e.g. during a dry season. Another disadvantage is that the system is only usable in communities located close to a running river. Further, the electricity output is highly dependent on the velocity of the water and can range between 250 and 5,000 Watt. Therefore, the river and seasonal influences have to be known very well to scale the system correctly.

The costs for the turbine system are € 9,500. The company also gave the information about the costs of a full system, including three kW of photovoltaic, a 20 kWh battery system, a distribution system, transportation and installation costs. This would be around € 30,000.16

5.4 Wind power

Small wind power generators can also be used to generate the electricity to supply a water purification system. Since the wind does not always blow and thus electricity is not being produced at all times the systems are not recommended to supply electricity exclusively. They are more likely to be added to other forms of electricity generation

16 Personal communication, Karl Kolmsee, Smart Hydro Power, 2017

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such as PV or diesel systems to increase renewable supply and decrease fuel costs (Bergey, 2014, p.1).

An advantage is that small wind power systems need quite low maintenance once they are installed. An U-S- turbine producer states that the towers can be operated for more than five years without having to be maintained (Bergey, 2014, p.3). An U.K producer, however, states that the system should be checked once a year, which seems to be more likely. Thereby, the systems life expectancy can last as long as 20-25 years (En- ergy Development Cooperative, 2013). Further, wind turbines can reduce the use of fossil fuels significantly in a hybrid system, up to 90% in the most suitable cases (Ber- gey, 2014, p.2 f).

A disadvantage is, likewise to hydro power systems, that the systems can only be used where enough wind blows. The US producer states that the level of wind suffices in most areas around the world to produce electricity. But, small wind power plants are unprofitable areas covered by buildings since the wind is weakened there (Bergey, 2014, p.2). Further, the electricity supply is not steady, since the output is dependent on the wind speed. If wind speed is low only a small amount of electricity is produced, and if no wind blows at all, no electricity is produced. This is unsuitable, since the customers do have a daily need for safe water. Therefore, the recommendation is that wind power should only be used in combination with other sources of electricity supply such as solar, hydro or diesel generators.

After a request the U-S- small wind power system producer Bergey Wind Power named price tendencies for such systems. A 1 kW system costs about € 4,450, including charge controller and disconnect. Additionally, the tower has to be bought. The height ranges from 18 to 30 m with costs ranging from € 1,930 to 2,800. Costs of transportation to the project site are estimated to be around € 900. Installation costs, based on U.S. installation costs, are estimated to be around € 4,500.17 In African countries these costs are dependent on import taxes, transportation and local installation costs, which may include expensive expert travel from Europe or the U.S. In summary the costs for such a 1 kW system are around € 11,780 to 12,650, based on installation costs of € 4,500.

The electricity output of such a system depends on the wind speed, ranging from 0 (no wind) to 100 to 200 W with low winds (5-6 m/s) to 1,200 W with the best wind condi-

17 Personal communication, Michael Soriano, Bergey Windpower, 2017

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tions (13 m/s). The estimated electricity output for a specific site can be calculated with an Excel-Sheet from the company Bergey (Bergey CAD calculator, 2017).

In summary it can be stated that wind power is more likely to be used for mini-grids instead of the electricity supply for single water purification systems. Further, they are definitely more likely to be attractive in windy areas such as coastlines.

5.5 Battery systems

Battery systems can be beneficial or even mandatory for electricity supply by renewable energies. Electricity production of renewable energy technologies is not steady. Therefore, production peaks should be collected by a battery system to be used when electricity demand exceeds production. Further, batteries can be used to decrease or even replace the use of fossil fuels by a diesel generator.

Up to now, lead-acid (pb) batteries have been dominating the market. Such batteries have a limited lifetime of three to five years, dependent on the level of discharge management. Good discharge management means that the battery is not fully unloaded. While this increases the lifetime it also means that a higher capacity is needed to use the same amount of electricity.

Lithium-ion (Li) batteries are recently coming into the market. They have some advantages over lead-acid batteries. One is that the depth of discharge can be as high as 80% of the capacity, comparing to 20% of lead-acid batteries (for good management). Further, lithium-ion batteries have a larger number of loading and unloading cycles they are able to perform during their lifetime. The only disadvantage they currently have is their higher investment costs. However, this might change since the technology is still developing and is connected to the development of the PV market. Therefore, prices are expected to continue to decrease (Irena, 2016, p.10 f).

Apart from the battery itself further components such as inverters and electronics for the store management are required. They increase the cost of battery systems.

Also, the batteries of the Swiss company Power-Blox shall be described here. They offer a battery system comprising all components in a single block, including battery management. The unit can be simply connected to the solar panel and to the electricity consuming device.18 The system does not need any technical skills for maintenance or

18 Personal communication, Laura Blagho, Power-Blox, 2017

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installation (Power-Blox, 2017-A, p.3). Further, it is possible to connect the units to a wall of power-blox or via cables to a mini grid, to increase capacity. The unit’s software automatically manages the system.

There are two options of power-blox units, Lead-acid and Lithium-Ion. Each battery is capable of storing 1.2 kWh with a continuous power output of 200 W. For a few seconds the batteries are able to deliver 370 W of electricity to match peak demands. The Pb unit has 2,500 cycling loads and an estimated lifetime of three to five years with a warranty of two years. The Li unit has 5,000 cycles and an expected lifetime of more than ten years with a warranty of five years. Both systems are capable of being connected to nine more units, totaling in a store power of 2.3 kW (Power-Blox, 2017-A, p.8). The Pb unit has costs of € 1,650, the Li unit € 2,530 (Power-Blox, 2017-B).

Summing up it is concluded that investment costs for battery systems are quite high at the moment. Depending on the individual situation however they can be financially attractive because they enable longer operational hours and are able to reduce fuel costs or to store overproduction of electricity.

5.6 Mini-grids

In industrialized nations renewable energies are not only used in single large plants, but also for decentralized electricity production. This means that electricity is not produced at a central point, e.g. a nuclear power plant or a large scale PV plant, but in many single locations, which are connected to the grid. The same can be done on a much smaller scale, which is called a mini-grid.

Mini-grids are used in rural areas in developing countries to electrify villages, schools, hospitals or other facilities that need electricity supply, but have no connection to the national grid. Often the grids not only have one, but multiple power termination points, thus multiple facilities or households can be powered by a mini-grid. A combination of various technologies is viable and often even beneficial. This is called a hybrid mini- grid.

The forms of electricity systems that can be used and combined are manifold. The most common combination of technologies for a mini-grid is solar PV, a battery system and a diesel generator. While the battery system can store surplus electricity from the PV modules, the diesel generator can lower the required battery capacity, catch peak demands and deliver electricity at night. Yet, it is also possible to install small wind power plants or hydro systems in a mini-grid. A small hydro system can be used to

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provide the base load of a mini-grid, while the wind system can be used to support the grids stability, which is often being done on coastal areas or islands. The design possibilities of a mini-grid are numerous. What is important to do so is to adapt the grid in the best manner to local circumstances and thus to ensure network stability and reliability to the grid, as well as low costs.

The biggest challenge of setting up mini-grids for villages or other rural facilities are mostly the high up-front costs (Groh et.al., 2015, p.55 ff.). As mentioned before, PV systems require quite high initial investments. The same accounts for other forms of renewable energies. Further, more technical components and eventually secondary sources of electricity have to be installed, which increase the investment even more. However, mini-grids are by far cheaper than connecting remote areas to the national grid in a lot of cases. When a financial sustainable solution for revenue collection and billing can be found to specific circumstances, mini-grids are arguably the best way to electrify rural villages at this time. A second challenge for an investor into setting up a hybrid system is the uncertainty that the local utility may establish grid connection after he has made his investment. Therefore, it is important to watch out for national grid expansion plans.

Another form of off-grid electrification are solar home systems (SHS). They exist of only one small PV module in the single to double digit Watt area. Such modules are installed on a house roof to deliver electricity for lamps or other small applications (Hoff- mann, 2014, p. 172). Multiple solar home systems can be combined to set-up a mini- grid. Hence, it is possible to start electrification on a small scale to supply single households with small amounts of electricity. Then the single units can be connected to form a mini-grid, whereby electricity production and consumption (network stability) is improved (Groh et.al., 2015, p.24 ff.).

5.6.1 Set-up of a mini-grid

A mini-grid consists of various technical parts which enable the grid to run properly. To be able to make a better description the set-up of a solar-diesel hybrid mini-grid is described. In the case that other sources of electricity are being used, the parts have to be replaced by the respective technology. Hardware components that are being used in a solar-diesel mini-grid are (Groh et.al., 2015, p.73 f):

 The primary electricity producing system (solar PV in this case).

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 Inverters to convert direct current (from solar panel) to alternating current for the grid.

 Battery system to store excessive electricity.

 Charge controller to charge batteries directly.

 Bi-directional inverter that allows the stored electricity from the batteries to be used for the grid and the battery to be loaded from the grid (in case grid electricity exceeds demand).

 Diesel generator (eventually) to decrease required battery size, prevent black- outs and deliver electricity at night.

 Distribution lines to connect the single sources of electricity production and to deliver the produced electricity to the customers.

5.6.2 Design considerations

These technical parts need to be adjusted in order to make a mini-grid work. Designing the grid in the right way allows lowering initial investment costs, decreasing operational costs, minimizing power outages and increasing autonomy. There are several factors that have to be considered to implement a mini-grid that is reliable and financially sustainable in the best possible way. These factors are (Groh et.al., 2015, p.68 ff.):

 Estimation of load curve and its development over time. Therefore, it is important to know the users behavior patterns and electricity consumptions as good as possible. Seasonal changes have to be considered as well.

 Estimation of day and night consumption. Electricity that is consumed during production time (e.g. daytime for a solar PV cell) is cheaper than electricity that has to be stored, because a battery system has to be installed and electricity losses occur during the storage. The day-consumption should be increased and the night-consumption decreased, if possible.

 Calculation of the technology and size of the primary electricity producing system. Which kind of technology shall be used is dependent on local circumstances. The size is dependent on load curves and electricity production time of the technology.

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 Calculation of battery size based on the previous three points as well as battery specifications. Peaks, where production exceeds consumption, should be collected by battery systems so that the electricity is not simply being lost.

 Consideration of the instalment of a diesel generator to catch peak consumptions times and to have a back-up. Through a diesel generator the required battery size can be decreased to lower investment costs. However, the share of the electricity demand supplied by a diesel generator should be as low as possible to reduce operational costs and to minimize effort of fuel transportation.

 Design of electricity distribution lines, considering voltage drops at the end of the line.

 Electricity tariff and revenue collection. Hereby it is also important to get an understanding of the individuals financial situation, to identify whether they are able to pay the tariff that is necessary to install the system.

In conclusion, the importance of adapting the mini-grid to local circumstances in all ways shall be pointed out again. Adaptation is important for locality of the systems itself, for selection of the most convenient technology, sizing of the systems and last but not least the tariff and payment system.

5.7 Summary of electricity supply concepts

The electricity supply in general is a topic which is highly dependent on local circumstances. Operating a water purification system with a diesel generator in an urban area can be the cheapest solution over a short period of time if diesel is available and does not have additional transportation costs. Considering a longer time-frame, however, renewable energy systems are cheaper in most cases since no fuel cost needs to be paid. Further, the electricity supply works autonomous and is not dependent on market developments or fuel prices and costs for transportation. A study from the year 2012 compared the costs of off-grid applications for diesel with two price scenarios and small PV, hydro and wind systems; electricity costs in this scenario are calculated over the whole lifetime of the systems.

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Table 2 Costs of electricity in Africa for various technologies19

In this analysis renewable energies are already cheaper than diesel generators assuming a price of $ 1 per liter. It is very important to consider that these data are from 2012. Large scale PV systems had a price of $ 175 per Megawatt-hour (MWh). Ever since PV prices dropped enormously. Nowadays in 2017 feed-in tariffs are on a record low. Pric- es below $ 50 per MWh are not rare and even prices as little as $ 24 per MWh can be achieved using large scale solar PV (BPVA, 2017). The costs for off-grid applications are much higher, but since the module prices decreased heavily they also became cheaper. Diesel prices nowadays vary between $ 0.60 – 1.12 per liter in most developing countries, while the average price is about $ 0.90 (Global Petrol Prices, 2017-B). These costs represent official prices e.g. in petrol stations. Prices in rural areas are higher due to extra transportation costs. Unfortunately, no up-to-date direct cost comparison is available, due to the search. Nevertheless, the enormous price decrease of solar PV gives reason to suppose that solar PV systems are the cheapest solution over time nowadays. Small hydro and wind systems have also been cheaper than diesel generator with $ 1 per liter in 2012. Price decreases have not been as vast in these segments, however they are comparable. Additionally, it needs to be stated, that fossil fuels are heavily subsidized in many SSA countries nowadays. Without these subsidies petrol would be a lot more costly, whereby renewable energies are even more competitive. Further, fiscal, environmental and welfare gains can be achieved if governments reduce petrol subsidies and invest into renewable energies (Bertheau et.al., 2015, p. 675).

As mentioned, the ideal solution depends on the location of the project. To guarantee a constant supply of electricity, which is very important since the people rely on the supply of drinking water and to cut costs to a minimum, a combination of different ap-

19 Source: International Energy Agency, 2014, p.58

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proaches in form of a mini-grid can be reasonable. For Sub-Saharan countries the most appropriate solution in general is solar PV backed up by a diesel generator and maybe a battery system. Hereby the PV share of electricity production should be as large as possible in a financially attractive way. Thereby, the operational costs and difficulties related to fuel can be minimized. However, the choice of electricity supply depends heavily on the location.

6 Payment options An aspect that should not be underestimated is the way in which payment is performed to pay for the water and electricity. Different possibilities of payment have various influences on the business model. Therefore, this aspect is described in detail. This chapter is only intended for business models where the system is not purchased completely, but where it is installed and the water is being sold in a way to generate constant revenue. Bank and credit card payments will not be described , since the banking sector is largely underdeveloped in rural areas in developing countries and not available to the rural population.

6.1 Cash payments

The most common way of paying for goods is cash. The definite biggest advantage of cash is that it is available to everybody who has money and that people are used to it. No further investment or technology is needed to use cash. Even though, despite these advantages cash has a large number of disadvantages for companies, especially doing business in rural areas in developing countries. To keep a clear view, the disadvantages of cash payments are listed in the following:

 Cash can easily be stolen. In case of a robbery one either has to protect his money physically or give the money straight away – both of which are not good.

 But not only robbery is a possible reason for cash to be stolen. Employees can embezzle money for their own profit. Especially with water systems it is a serious business threat since employees can tap water and sell it without writing it into the books or give it for free to family and friends. The same accounts for sale of electricity, e.g. to charge mobile phones.

 Another disadvantage is that the cash has to be transported to a bank to be accessible to the investor. Therefore, a constant transport only for the money has to be managed. This is an extensive effort, especially when the system itself is

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completely autonomous and does not consume anything. In this case the system could be used on a fee basis without any logistical contact to the outside world, if there would not be the problem of cash to be paid into a bank account.

 When the water is paid in cash it is most likely necessary to constantly have an employee at the site during operational hours. If there is no employee users could just tap water without paying or paying less than they would have too. If a mechanism is installed where cash can be paid to tap water, that mechanism can probably be destroyed and the money gets stolen. Since the constraint of robbing a human is higher than robbing a machine an employee should be at the station at any time.

At this point it shall be noticed that cash payments do not only include the direct payment for goods while buying. Especially with electricity it is not possible to directly pay for the used electricity in cash. It is also possible to manage regular cash collections. Customers could pay e.g. on a weekly or monthly basis a certain amount of money to a responsible person. This would allow the customer free use of electricity until the next payment is due. The same could be done for safe water. This form of revenue collection has the advantage that one responsible contact person is available to both the customers and the business operator. However, the disadvantages of cash payments remain. Additionally, the concept of a regular payment for unlimited access promotes the waste of these goods.

In conclusion it can be stated that cash payment is the most common and on the first view most comfortable way for customers to pay for goods, while it is very disadvantageous for businesses in this case. The only advantage of cash payments for businesses is that everybody is used to it and thus the business does not lose any customers, which are unwilling or unable to switch to different payment possibilities.

6.2 Prepaid systems

Prepaid systems are a slight improvement to cash payments that have some additional advantages, but also disadvantages. Before specifying these factors, prepaid systems are described.

A prepaid card is a card with a magnetic strip or chip that is able to safe information. A customer can pay an adjustable amount of money to put credits on his card. Afterwards these credits can be used to tap water (or to pay for other goods). The payment for the credits can be done either at a person that governs the system and has a specific de-

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vice for it, or at an automatic machine. For some systems it is also possible to load the cards via mobile payment. Mobile payment is explained in chapter 6.3. For further details the prepaid system of the German company iSAtech Water is described. The water credits can be bought either at a terminal, which means at an authorized person, or via mobile payment (iSAtech, 2017).

Prepaid cards solve some of the disadvantages of cash payments:

 It is not possible for employees to embezzle money, since the system safes data about the cash amounts that have been paid.

 Further, some prepaid systems, e.g. the iSAtech system, contain a Water Man- agement System. This allows to monitor data about water consumption, credit bookings and even to set the water price without having to be present at the site itself (iSAtech, 2017). Thus, the owner can detect system failures or any irregu- larities directly when they appear. Without such a control mechanisms it might take weeks or even longer before the owner finds out about any problems. To use the water management system the unit has to be online via a GSM or UMTS chip However, the system can also be operated offline.

 The need to constantly have an employee at the site is eliminated. The water is paid up-front so customers can use the water tap regardless whether an employee is present or not. If credit charging is done with cash payment to an employee, his working hours can be reduced clearly.

 Another advantage is that the water tapping becomes automated, increasing accuracy and reducing the need for manpower.

In the case that the credits are paid via mobile payment even more problems get solved, such as:

 The cash cannot be stolen.

 The cash does not have to be transported to a bank, therefore making it possible that the water purification system is completely autonomous.

 Further advantages of mobile payment are described in the following chapter 6.3.

Apart from the numerous advantages a prepaid system has, there are also some disadvantages:

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 When no employee is present at the time and credits can only be bought via cash payment, customers may be unable to buy credits and thus unable to tap water. This leads to revenue losses at the one hand and is disadvantageous for the customer on the other hand. If customers keep an eye on their credit amount this should not be a problem, though.

 The prepaid system represents additional investment costs. In the case of the iSAtech this is about € 1,030 for the system itself including a manual unit to buy water credits. If multiple water taps shall be installed it is required to install multiple iSAtech disposal systems as well. Therefore, each additional tap costs € 400 only for the prepaid system. Further, costs of € 2.30 per customer have to be calculated (costs for registration and the card).20

 The embezzlement of money is not completely excluded. The responsible person who has the device for loading credits onto the watercard can charge fees for doing so, if this process is not being done by mobile payments. Such fees would nowhere be displayed in the system. Therefore, the responsible person could exploit his position to embezzle money.

 In case of a breakdown of the prepaid system customers are unable to pay for and to tap water until the system is repaired. Customers rely on the supply of water. Being unable to tap water only because the payment system is not working while the water purification system itself is fine can lead to trouble and to loss of trust and acceptance into the system. In this case an operator could be authorized to detach the prepaid system from the water supply.

 If the credits are bought in cash payments, some disadvantages of cash occur as well with this system. The greatest disadvantage hereby is that the cash still has to be transported to a bank.

 Prepaid systems that are designed for water distribution only work for the tapping of water. Electricity or other goods cannot be paid with the same system. To do so a second system would have to be installed.

Summing up it can be concluded that prepaid systems do have a number of advantages over pure cash payments. Despite the initial investment there is nothing that would really be an argument against prepaid systems.

20 Personal communication, Emanuel Mey, iSAtech, 2017

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6.3 Mobile payment

Mobile phone use in the developing world has been growing fast over the past few years and is still growing. This development enables new possibilities to offer services for rural communities, which have been difficult or impossible for businesses in the past. The most exciting innovation is that of mobile money and mobile credit. Mobile money and mobile credit are two different businesses which are closely related to each other.

6.3.1 Mobile money

Mobile money describes the possibility to deposit money into a virtual wallet that can be managed via mobile phone. The provider of this virtual wallet enables the customer to transfer and receive money via an app or short-message-service (sms), thus making it possible to pay for goods and services without having to use cash.

One of the biggest providers of mobile money in developing countries is M-Pesa. M- Pesa stands for mobile (M-) money (Pesa in Swahili) and is a program offered by the mobile networks operator Safaricom and Vodafone, which are the largest telecommu- nication providers in Kenya and Tanzania. Currently there are 17.6 million active M- Pesa users and more than 10.3 million transactions are done every day, in Kenya and Tanzania alone (Safaricom timeline, 2017, September 2016). Nowadays, ten years after the service has launched, Vodafone has brought it to ten countries (Albania, the Democratic Republic of Congo, Egypt, Ghana, India, Kenya, Lesotho, Mozambique, Romania and Tanzania), having 29.5 million active customers, 287,000 agents and around 614 million transactions every year (Vodafone, 2017). This development within only ten years shows the rapid expansion of the market and it can be assumed that it will keep growing. The service will be explained at this example, using data from Ken- ya:

Individuals can register for the service at a Safaricom retail shop without any fees if they already have a fitting sim card, or for a fee of 50 Kenyan Shilling (KSH), which equals € 0.43. All the customer needs is a document of identity and the Safaricom mobile number. M-Pesa works with every type of phone, not only with smartphones (Sa- faricom, 2017-A). As registration is imaginable easy, the only hurdle could be the availability of a retail shop. Since mobile phone users have been in a place where phones are sold at least once anyways and Safaricom is the largest provider in the region, this is a hurdle that can be overcome.

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Money can be deposited into the mobile account in a retail shop as well. The user only has to give his ID and the phone details and the cash can easily be transferred into the mobile account free of any charges (Safaricom, 2017-B).

The provider earns money by charging fees on withdrawals and money transfers. These fees are either free for very low transaction amounts between KSH 1-100 or vary between KSH 11-110, which is between 0.15-10.8 percent of the transaction amount. The larger the transferred amount of money, the lower the percentage of the fee. Transfer fees to non M-Pesa users are more costly and vary between 0.86-43.5 percent. Normal users’ accounts are limited to a balance of KSH 100,000 (€ 860) and transaction amounts of KSH 140,000 (€ 1,204) per day. Fees are also due for with- drawing money from the mobile account at an ATM or at a retail shop (Safaricom, 2017-C).

For businesses there is an extra solution called PayBill. It is used to collect money from customers on a regular basis. Charges are higher than for regular accounts, but three options are given. The fees can be either shared with the customer or be paid completely by the business or by the customer. Fees are free for transactions between KSH 1-100 and then account for 0.31-21.7 percent (Safaricom, 2017-D).

Since M-Pesa has built up a very large customer base in a short period of time mobile money seems to be a payment possibility with a bright future. The advantages are numerous and will be outlined as follows:

 The user’s money is stored in a virtual wallet, which can only be accessed with a pin. Therefore, he does not have to carry cash with him, which could be stolen. The same applies for the businesses’ money. Since it is online it can neither be stolen nor be embezzled without being noticed.

 Goods and services, including water, can be paid with M-Pesa. Transaction amounts up to KSH 100 (€ 0.86) can be transferred free of any charge. Since water will definitely be sold for lower amounts, the service can be used free of any charge for the customer and the business.

 If combined with a prepaid system the water purification system can be operated mostly autonomous without the need of a constant employee. Only maintenance would have to be done regularly.

 Revenues of all installed systems can be transferred into a single M-Pesa account or into various ones. The money does not have to be transported any-

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more. Further, revenues are directly available and can be transferred to the investor’s bank account.

Apart from these advantages, which practically remove most of the disadvantages of cash payments, there are also some disadvantages:

 Even though there is a very large number of M-Pesa users in Kenya and Tan- zania (17.6 million) this number only represents a share of about 18% of the population, since the population of the two countries combined roughly hits 100 million people (CIA, 2017-A&B). It can be estimated that a larger share of the users live in urban areas rather than in rural areas. A large number of people does not use mobile money and thus are not able to pay with this kind of service. In SSA it is mostly available in Eastern Africa, but starting to swap to Western Africa as well. This payment possibility can only be used where the industry already exists and has reached a large penetration rate. At this point it shall be said that M-Pesa is not the only large mobile money provider in developing countries. The provider Mobile Telephone Networks for example offers a similar service in 15 African countries, serving over 22 million customers (MTN, 2017).

 Cash can only be transferred into the account at a retail shop. This can be a problem, since rural communities cannot go to a retail shop and deposit money every time they earned some cash. This problem reduces with increasing numbers of mobile money users, since users also receive their income directly into their mobile wallet. However, the market might not be popular enough yet for this to be a reasonable argument.

 The fee rate is very high in the lower region of transaction amounts, where they make up around 10%. It is an advantage that the service can be used free of any charges for transactions lower than KSH 100. For larger amounts however, the fee is a clear loss for the customer and the business.

Summarizing on mobile money it can be stated that it is a market development that is definitely beneficial to both businesses and individuals. For now the greatest hurdle is the market penetration rate, since it is far away from 100%. This factor can change in the future given that mobile money is on the rise. However, it is still a restriction for now. Therefore, mobile money cannot be seen as the universal payment possibility. Its use has to be evaluated on the target country and user percentage in the specific community.

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6.3.2 Mobile credit

Banks are often unable to reach rural communities because the overhead costs are too high to deal with the small money amounts these people need and have. This changes through mobile credit.

Mobile credit is an extension of mobile money. As the name states, credit can be given to users of mobile phones and mobile money. This possibility opens a huge new market for the financial industry, which has been largely untouched so far.

Whoever uses mobile phones and especially smartphones leaves a digital footprint behind – a large amount of data about the user of the phone. Some companies have found a way to use these data to generate credit ratings. They use algorithms, which interpret the digital footprint, to automatically generate a rating of the phone users’ cre- ditworthiness. Since the process is done automatically by a program the costs for the lender decrease dramatically. This allows giving credits to customers in developing countries at much lower interest rates than it would be done the traditional way. The generic term of this use of mobile data is called Big Data Small Credit (Costa, Deb, Kubzansky, 2015, p.3 f).

Estimates say that the amount of data in the internet in 2020 will be 44 times higher than in 2009, with 70% of these data coming from individuals. It is also estimated that the costs of giving a loan of US$ 200 (€ 178) in Tanzania can be decreased by 40% due to the new way of assessing customer data (Costa, Deb, Kubzansky, 2015, p.6 f).

One of the providers of mobile credit is M-Shwari. As the name lets it assume it is linked to M-Pesa and offered by Safaricom as well. It allows customers to open a bank account without having to visit a bank. Customers can deposit money via M-Pesa and get interests on their savings. Of course they can also withdraw money via M-Pesa, all free of charge. The main feature of mobile credit is that a rating is given to each individual customer, allowing him to take credits to his mobile wallet. M-Shwari was launched in 2015 and reached 7.2 million customers within the first two years of implementation (Costa, Deb, Kubzansky, 2015, p.8), giving loans of more than KSH 10 billion since then (Safaricom timeline, 2017, August 2016). The system uses data from the customer to generate a rating. On request customers can see the size and interest rate which they can get a loan for. The interest rate for loans is about 3.66% per month of which 2.5% are a fixed amount based on loan size. Interest rate for savings is up to 7% per annum. Repayment is due after 30 days and credits between KSH 50- 1,000,000 (€ 0.41-8,140) can be taken, depending on the rating one scores (Safaricom,

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2017-E). The customer does not have to give any securities. Therefore, only small loans are given to the customer at first, so that the company can see if the credit will be paid back. Regular repayments of credits cause better ratings, whereby higher credits can be taken afterwards.

The largest percentage of mobile credit customers in Kenya takes this kind of loans in the case of unforeseen emergencies (61%). While 39% use loans for business or home improvements, 33% took loans for routine expenses (Costa, Deb, Kubzansky, 2015, p.17). This shows that mobile credit is indeed an extension of mobile money that can help customers to buy safe water. Especially in cases of unforeseen shortage of money it makes it possible that the customer or his family does not have to suffer from lack of water as well. A disadvantage is definitely the high interest rate that has to be paid. Lower interest rates would be preferable. Since the market is still young it is possible that interest rates will be lower in the future. However, being able to receive credits for emergency cases without having to visit a bank is a great progress for developing countries, especially considering that these people usually do not have access to credits at all.

6.3.3 Microcredits

Microcredits are used to give small credits to poor people that have no possibility to receive regular credits from banks, since the amount is too low and they often cannot provide any securities. Microcredits can be given to people by banks that offer such services, or by platforms, where people can apply for a credit. Their case is displayed on a website, where people from all over the world can decide whether they want to give a credit to this person at given conditions. This possibility is similar to crowdfunding, where people can decide whether they want to invest in a start-up company or to pre-finance a project. Mobile credit can also be seen as a form of microcredit.

While microcredits give millions of people access to loans, the interest rates that are being charged are often far higher than those that are being charged by regular banks. This is because the costs of administering many small loans in rural surroundings are higher than serving few large loans in urban surroundings. Further, the risks are higher, which supports higher interest rates as well (MicroWorld, 2017). The Grameen Bank is being referred to as the innovator of microcredit. They are the largest bank that focuses on solely on microfinance today. The maximum interest rates that they charge are 20%, while they also offer loans for 8% or lower in specific cases (Grameen Bank, 2017). While this is an example for a good microcredit bank, other banks often charge

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far higher fees. A study conducted that the average interest rate for microcredits has been about 27% in 2011 (Rosenberg, Gaul, Ford, Tomilova, 2013, p.21). However, there are also a lot of non-profit microcredit platforms. On such platforms only very small interest rates to cover field expenses are charged. One example for such a platform is Kiva. Kiva works in 84 countries and has reached 1.6 million people with loans so far, whereby a repayment rate of 97.1% has been achieved (Kiva, 2017).

Microcredits are not a payment method. Yet, they are a possibility for poor people to get access to money, whereby they can eventually by equipment for safe water and electrification.

6.4 Summary of payment possibilities

Summing up it can be concluded that higher safety, controllability and autonomy of payment for both customers and businesses increase with more advanced financing technology. Yet, at the same time costs increase and availability for customers decreases.

For a rural water purification and electrification concept a payment system as autonomous as possible would be most advantageous. Therefore, a combination of a prepaid system and mobile payment appears to be the best solution. However, regarding that the payment system has to be available to all possible customers, this approach cannot be implemented everywhere, since mobile money is only available in several countries.

As it becomes apparent there is not a “one fits all” solution for payment systems, especially not in this specific case. The choice of an appropriate concept has to be made in respect to local circumstances as well as the distribution concept itself.

7 Distribution options

After describing different water purification technologies, electricity supply concepts and payment possibilities the business concepts themselves shall be described. The concepts shall be technically, socially and financially sustainable. Only this way it is possible to supply as many underserved people as possible with safe water and electricity.

At first, the concept is described, including the idea itself as well as advantages and disadvantages. After the idea has been outlined the most suitable approach from the previous chapters (water purification system, electricity supply concept, payment method) is chosen for the specific concept. Further, discussions are made regarding financ-

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ing. At the end of each described concept a financial calculation for a single project will be made to analyze if the concept is practicable and which factors are most important. Nigeria is chosen to be the nation for data research for this calculation. The reason is that it is the most populous country in Africa and that good quality data is available.

Concerning all of the concepts it shall be mentioned, that prior of installing water purification systems it is always absolutely necessary to make a water analysis of the source of water. There are two reasons for this. On the one hand, it needs to be analyzed whether the source of water is contaminated. If the water is safe for consumption, it might not be required to install a water purification system. However, water purification, e.g. with an anodic oxidation system, still makes sense in some cases. If the water is not directly consumed at the borehole, the threat of bacterial contamination, from human interaction, from the storage container or from other factors, is always given. Therefore, it can be reasonable to place a residual disinfectant in the water. On the other hand, if the water is contaminated, the amount and types of contaminants need to be analyzed to check if the chosen water purification system is capable to make the water safe for consumption.

It is also important to mention that the company that implements the concept always needs to observe the previous source of water supply in the area. This source of water is the projects direct competitor. What the company offers must always be better than the alternative source, from the customers’ point of view. If water is being sold at the streets for a certain amount of money, it is important that the price of the water that the company offers is not (much) higher, while health benefits are given at the same time through safe water. If individuals fetched their water from a public well or from a lake or river, it is important that the price for the water is not higher than what the individuals are willing to pay. The willingness to pay arises from the customers understanding of the health benefits that arise for them, as well as eventually time savings, because they do not have to walk vast distances anymore. If widespread implementation takes places in cooperation with the government it should also be agreed that no company competitor comes into the same area with the same concept to sell its own water, because this would eventually make the concept unsustainable. The same accounts for the distribution of electricity. The potential customers have no direct access to electricity most of the time. However, prices that are being charged must be reasonable for them. If they lighted their house with candles for example, the price for lighting it with electricity must not be much higher than that.

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Further, it is important in every concept to avoid theft of the equipment. The areas where the concepts are implemented are mostly rural villages. Social cohesion in such villages is often strong. A major factor to avoid thievery is the community’s identification with the equipment. When the equipment is seen as something positive where the community benefits from, no community member will dare to steal the equipment. If someone from the village would steal the equipment it would not be unnoticed and the thief could probably not live a regular life in that village anymore. Therefore, it is important that the community sees the equipment as something good which improves their life’s significantly.

7.1 Donations and aid by NGO´s or sponsors

Non-governmental organizations, sponsors and other aiding institutions are a great advantage for people suffering from lack of safe water and electricity. If a community is in the lucky situation to be chosen by a donor organization they do not have to raise any money, which is not present anyways, but still get an improved water supply. The quality of the improvement depends on donor and project, but the supply will be better as it was before for no costs to the villagers. Water supply projects are carried out more often than electrification projects, since water is a more basic human need, which is important for health. However, electrification projects are carried out as well, e.g. to prevent health impacts from air pollution of kerosene lamps, which are commonly used to light houses at night.

However, there are several problems donating equipment to rural communities. In the past it has been observed quite often that some form of improvement is given to a community and afterwards they are left alone with it. In case of a breakdown or after the lifecycle of the equipment the villagers find themselves in the same situation they have been before receiving aid. Therefore, the more modern motto of many organizations is ‘to help people help themselves’. Another problem is that donations are not a sustainable business model at all. The equipment becomes financed, but no income is being generated. At first, this leads to the problem that villagers are often unable to maintain the equipment when spare parts have to be replaced. Therefore, only one part of a system has to be defect and the whole investment is useless. Second, as mentioned in chapter 3.1 and 3.2, hundreds of millions of people lack access to safe water and electricity. Institutional aid is a good thing and reaches a lot of people, but in comparison to the amount of people that lack these essentials it is vanishingly small. With the background of a largely increasing population, especially in developing countries, it

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becomes even clearer that donations alone cannot solve these problems and that it is necessary to help people help themselves. Another problem occurring with donation gifts is that the people become used to receiving things for free. If one village is being supplied with a water purification system by a NGO for free and a company wants to implement a business model for a water purification system in a village close by, it can easily happen that the villagers are unwilling to pay for it since their neighbors got it for free.

Nevertheless, institutional aid has a significant advantage. It can be used to gain information about technological operation and maintenance, minimum payments to keep the systems in good operation conditions, social behavior and regional circumstances and to test business models. Gathering information about operational functionality is important when a system is not yet tested intensively in harsh conditions and with various sources of water. While communities receive aid by NGOs, companies can test their systems in real conditions more precisely due to field operation and at the same time receive some income since the system is largely being paid by the NGO. Financial aid can also be used to gather information about business model possibilities. Of course NGOs do not want that they pay for a project which generates large amounts of money afterwards, since therefore they would not have to finance the project. Never- theless, an arrangement can be made with the NGO or sponsor that a financed project is being used to test models on a small scale. The company Autarcon together with the American University in Cairo for example installed a system in an oasis in Egypt. The inhabitants choose themselves that a payment system shall be installed, since individuals from other villagers came to their water purification system to tap water. They could decide themselves how much they want to pay for water and how much visitors from outside of the oasis have to pay. The result was that information about the people’s behavior regarding payment for water, about distribution options for the water and about the functionality of the payment system has been obtained.

A description of the most suitable applications in form of water, electricity and payment method is not given for this concept. The reason is, as mentioned, that basically every method can be tested using the factors explained so far. The minimum requirement is that the project is sustainable and can be maintained properly. Further, they should conform to climate change and local environmental targets. Inhabitants should be advised how to use and maintain the systems. The provider should always find a way to stay in contact with the users to be able to gather important information and to make sure the system runs correctly.

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In summary it can be concluded that institutional aid is not a financially sustainable business model for widespread implementation, but it can help to test systems or models and to gather information, thus preparing the case of a real business rollout. Never- theless, aid is necessary and should definitely be conducted for catastrophes and dis- aster relief. For a company working to bring safe drinking water and electricity to rural populations the support from NGO`s and private sponsors as well as institutional sup- porters is a good way to introduce the technology and demonstrate it to get certainty about economic and sustainable success. This experience can then be used to find private and political support for massive dissemination.

7.2 Kiosk concept

The next concept described is that of a kiosk, which has been implemented by some companies in SSA already, e.g. SolarKiosk. Nevertheless, the concept is quite new.

The main idea is to shorten the payback time of large investments by offering and selling multiple products and services at a central kiosk. The kiosk, a stand-alone container, is powered by electricity. The container can either be a customized box designed specifically for that purpose or a converted ISO freight container, which can be cheaper in developing countries having a large excess of imports.

The main reason for the kiosk is the sale and supply of water and electricity. A water purification system is installed and operated within the kiosk. An employee charges fees so that customers are able to collect water at a tap that is directly located at the kiosk. A study of the German Development Cooperation GIZ about water kiosks found out that around 50% of all customers at water kiosks use the kiosk as their one and only water supply. At the same time they state the customers seem to be quite satisfied with the kiosk solution, since the main reason to stop visiting water kiosks is that customers get connected to a water network at their house (GIZ, 2013, p.7). While water is being sold, the facility can be used to offer further goods and services as well. Goods that can be sold are various and can be customized to local needs, for example (cold) drinks, hygiene articles, food, tools etc. Thereby, the income can be raised largely. At the same time surplus electricity which is not used for water purification can be used to deliver electricity to the community. To keep costs low this should not be done by a mini-grid, but by selling the electricity directly to the customers at the kiosk. Applica- tions for this kind of service can be manifold. It is important to plan the electricity and water purification system carefully to keep costs low.

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The probably greatest customer attracting point would be charging mobile phones. Mo- bile phone penetration in developing countries has been growing rapidly during the past few years. In SSA for example more than 60% of the population has a mobile phone (World Bank, 2016), in India alone there are 650 million adults with a mobile phone (Costa, Deb, Kubzansky, 2015, p.3). That is four out of five individuals, the same percentage accounts for countries such as Cameroon, Ethiopia, Rwanda, Tan- zania and Uganda (World Bank, 2016). Since electrification rate is much lower in these countries, most mobile phone users do not have an own power supply (Groh et.al., 2015, p.185) and thus are not able to charge their phones by themselves. Therefore, they have to walk to the next available charging station. Either the charging station is close to the customer’s living place or he has to walk vast distances, so that he probably does not charge his phone often. In both cases the customer has to pay someone else to charge his phone. Thus, mobile phone charging can be a good additional earning. Another form of electrification could be charging dismantled car batteries. These can be used to power electrical devices at the customer’s home or wherever the electricity is needed.

Selling goods and electrification can also be combined. A good example is rechargeable LED-lights. These can be sold at the kiosk and be used to light the customer’s home at night. When the battery of the light is empty he can bring it back to the kiosk and recharge it for a small fee. Hence, it is possible to lighten rural villages, or at the least the inhabitants home, without having to connect each individual house to a grid. Costs of lightening households are therefore very low compared to (mini)grid connection, while the kiosk can generate constant income. Since the kiosk owner can expect that the customer returns to charge the light he can also lower the price to set down the barrier of investment. Another possibility of lighting households is to sell pico- PV modules. Such modules can simply be installed at an individual’s house to deliver small amounts of electricity for light and mobile charging. When an adequate amount of such modules is sold and installed in a closely located area, they can be combined to form a mini-grid. Thereby, stability and availability of electricity can be improved. It has to be considered which form of electrification shall be done with a kiosk to not make the business concept unprofitable. An approach could be that both services are offered, since the pico- PV systems are more costly and thus cannot be bought by all customers immediately.

Another service that can be offered is connection to the internet via Wi-Fi. A kiosk can bundle the data amount of its customers and thus offer internet connection at lower

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costs than they would pay individually to the internet provider. The internet can be either sold in minute or data packages, or it can be offered for free to attract customers. Attracting customers would have synergy effects. On the one hand, the kiosk would become a sort of a meeting place for a community. This would automatically lead to more sales of water and other products. On the other hand individuals that use the internet have to charge their phones more frequently, which leads to higher income of the kiosk as well. Of course internet connection can only be offered when the area is covered by an internet provider. Making the kiosk a meeting point in a community could also be achieved by installing a television to show any kind of sport events or news, or by playing music, whatever is popular in the area.

Advantages of the kiosk model are numerous. Payback time of large investments can be decreased. The different services have synergies, thus an increment of sales is achieved by offering a larger variety of goods and services. Internet connection attracts customers and increases mobile phone charging sales. Since the kiosk is a provider of daily needs itself, the meeting point effect is even intensified. The advantage of these synergy effects is that an income can be generated that is largely higher than the income that would be generated if only water would be sold. Thus, the concept can become financially sustainable, whereby a larger amount of people can be supplied with safe drinking water.

But there are not only advantages for the kiosk model. The advantage that goods are sold is at the same time a disadvantage, because a constant delivery of restock has to be managed. This can be increasingly difficult with the level of remoteness of the served community. Another disadvantage is that the initial investment cost is higher than for a water treatment system alone. Every aspect of the kiosk represents additional costs at the beginning, even though they also represent additional income over time. It also needs to be said that a kiosk contains quite valuable goods, being located in underserved areas. Therefore, the equipment and the goods have to be protected from robbery and vandalism. Vandalism is reported to take place quite often, even if the ‘kiosk’ only consists of a stand pipe (GIZ, 2013, p.8).

7.2.1 How to implement a kiosk in a rural community

It is very important to involve the community in the process and operation of the kiosk to ensure that the business is accepted. If not so inhabitants can see the kiosk as a shop being put into their neighborhood, which charges money for water in their own territory. It is important to gain a high level of acceptance from the community. This

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increases the willingness and satisfaction of buying products there, but also decreases the possibility that the kiosk becomes a victim of vandalism.

To gain high levels of acceptance the business operators need to get in contact with the inhabitants prior to setting up the kiosk. At first the community, or the community leader(s), should be asked if a kiosk is needed and wished for their place, which also is an indicator for business potential. The community can also be asked for advice for the placement of the kiosk, if various options are available. Yet, this should only be done if the investors are willing to listen to that advice. If people are asked and their opinion is just ignored afterwards the acceptance of the kiosk will definitely not be increased.

Kiosks could also be used to help the community in some form, therefore increasing the acceptance. One form of doing so could be to place kiosks on the land or next to so called Health Facilities (HFs). A HF is a building for medical assistance for the community or a larger region to serve a population of 10,000-20,000. However, the number of served population per HF is often far higher. HFs shall not be mistaken for Hospitals, since HFs are only small buildings consisting of two rooms most of the time, one for the waiting patients and one for the ambulant treatment. Due to lack of governmental fund- ing such HFs are often in desolate conditions. Walls can be cracked and the building can often not even be identified as a HF. The equipment often even lacks the minimum standards. A study about Nigerian Health Facilities also found out that only 38% of the investigated facilities are connected to power supply and most of them have no safe water supply, if any water is present at all (Christian Aid, 2015, p.16 f). The situation is of course dependent on nation, regional and at last local circumstances, so the HFs condition cannot be generalized. Yet, if a HF lacks supply of electricity and even more important water the kiosks production could be used to supply the HF with certain amounts, either free of charge or at lower tariffs. This would increase the acceptance on a high level, while at the same time the customer base would be increased and last but not least sick people become some sort of needed aid. The electricity of the kiosk could also be used to store vaccines in a fridge at the kiosk. Thereby, availability of medicine and therefore health conditions in the area can be increased. To receive some compensation for the aid, it can be tried to get access to the HFs property, e.g. to place the kiosk on the governmental ground free of charge.

Another form of community involvement is to let them select the kiosk salesman themselves. When a well-respected, accepted and popular person of the community is responsible for the kiosk to the outside, acceptance will be far higher. This could also

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lead to fewer cases of vandalism and robbery since the operator is respected and knows the people of his community. While this kind of employment can cause the named benefits it can also cause some troubles. The chosen person could be so pow- erful in the community that he forces other peoples to vote for him. Such a person is of course not a ‘good face’ to represent the kiosk. Therefore, the choice of the kiosk salesman should not be left alone to the community, but an involvement is definitely a good choice. A possibility would be to use a tender system where the community can favor some of the applicants.

It is always important to have trustworthy employees. This can be achieved through various incentives. At first, the company should give a good training and eventually education to the employee so that he is able to do the job properly. Further, he should be satisfied with his job, which can be achieved by a good and fair salary. Responsibil- ity should be given to him, which is most likely the management of the kiosk. Addition- ally, friendly contact should be kept up, including consideration of the employee’s recommendations. Motivation is also an important factor. While this is mostly achieved through the salary itself, which is probably far higher than the average income in the area, a wage increase of a certain amount after an arranged time of employment, e.g. a 5% increase every year could be helpful. Another incentive is achieved through the complaint mechanism. Official prices should be displayed at the kiosk in a way that they are not changeable easily by the employee. The business operator should make it clear to the employee, that embezzlement will not be tolerated and that complaints will be respected, up to hiring a new employee.

To gain high customer satisfaction it is important to charge fair prices, have good customer service and to adapt the kiosk to local needs. If water has been sold prior to the kiosk at the locality the water price should not be a lot higher. Prices for goods, e.g. the rechargeable light, should also be adapted to previous expenses. Usually homes are lightened by kerosene lamps in SSA. These are not only harmful to health due to their emissions, but also costly. A study from 2012 found out that a solar home system powered lamp is paid off in eight months because no more kerosene has to be bought (Lightning Africa, 2012). In the kiosk model it is not even necessary to install a solar home system. Therefore, the costs for the lamp and the charging of the lamp can be offered at equal or even lower prices than the price the customers paid for kerosene. At last, the service and goods the kiosk offers should be adapted to local needs. Since a

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regular delivery of goods is required anyways it is easily possible to react to customers’ demands for goods.

To guarantee and keep the level of customer service high a complaint mechanism should be made available at the kiosk (GIZ, 2013, p.15). Customers might not use this possibility if it can be seen publically by everybody. A box where letters can be put in could also be emptied by the salesman so that he does not have to face any conse- quences. A possibility to avoid this problem and to guarantee anonymity the kiosk could have a website where critic and suggestions can be posted via the internet connection. This service should be free of charge since it is a benefit for the kiosk and an increment for the customer satisfactory.

Daylight time in SSA, especially in the equatorial area, is around twelve hours a day all year long. Therefore, operational time of the kiosk is estimated to be around twelve hours a day at maximum. Villagers are able to fetch water, use services and buy products all day. With an installed prepaid system it is possible to enable the people to fetch water 24 hours a day, without the need of an opened kiosk. Therefore, twelve hours of opening time are estimated, with the possibility to tap water 24 hours a day.

7.2.2 Water purification system

The water that is sold and tapped at kiosks is mainly not being consumed directly at the site. Customers carry canisters of 20-40 L, tap water into it and bring it home to be used over a day or the next few days. Since the water is therefore stored over a certain amount of time the threat of recontamination is occurring. If recontamination happens and the customer becomes ill of it he is, with good reason, unsatisfied with the product (the water) and probably unwilling to pay for it again. There are two possibilities to prevent recontamination. Keep the storage containers clean or leave a residual disinfectant in the water.

To keep the container clean disinfected water has to be used. The only disinfected water probably comes from the kiosks water purification system. The customers will most likely not be willing to pay for water to clean the container where they store even more water afterwards. A different method would be to have a recycle system for the containers. The containers could be brought back to the kiosk and be cleaned there, while the customer gets a container that is already cleaned. However, it takes a lot of effort and needs a lot of place to store all the containers. Further, the purified water that could be sold is wasted in large amounts to clean the water. Customers would probably

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be aware of the large amounts of water the cleaning process takes and become less willing to pay for the water. At the same time the price for the water that is being sold has to be raised to compensate the expenses for cleaning the containers. Even when the container is clean it is still possible that the water gets bacterial contaminated, for example by contact of human hands.

The easier way of preventing the water from recontamination is leaving a residual disinfectant in the water. Of the analyzed technologies the anodic oxidation system is the only one doing so. The system also has the highest log reduction level, so that it is guaranteed and most likely that waterborne diseases are eliminated by buying water from the kiosk. Therefore, customer satisfaction about the quality of the water will be the highest possible. One of the top factors which make customers abandon water kiosks in Tanzania is that waiting lines to tap water are too long. If water supply is irregu- lar most of the water is fetched during the first half of the day (GIZ, 2013, p.7). To prevent long queues it is mandatory to install enough tapping stations at the kiosk. The amount is dependent on the served population. The system is capable of treating 400 l/h. That is 6.66 liter per minute. At peak times this is definitely not enough, especially when multiple tapping stations are installed at the kiosk. Therefore, a water tank should be installed next to the kiosk. Of course, it should be ensured that the water tank, as well as the customers containers are as clean as possible, to have the best water quality possible.

Yet, it has to be considered that the system can cause carcinogenic trihalomethanes. This has to be analyzed prior to installation. Further, it has to be checked whether fluoride is present in the water. If so an activated alumina filter should additionally be installed with the system. If the water quality is not treatable by the Autarcon system a different technology has to be considered. In the case of brackish water this would be reverse osmosis. Otherwise UV treatment would be the technology of choice. Yet, as previously described, it has to be made sure that water containers are free of bacteria in this case.

7.2.3 Payment method

Since a lot of payments are done every day at the kiosk, it is not recommendable to do manual bookkeeping. Especially the water cannot be tapped precisely without having a control mechanism. Further, the study about water kiosks in Tanzania has shown that salesmen tend to charge prices for water that are mostly higher than what is agreed, even if the official price is displayed on a store sign (GIZ, 2013, p.14). Therefore, a sys-

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tem which works automatically and where as much controllability as possible is given should be implemented.

The best possibility to do so is a combination of a prepaid system and mobile payments. Mobile money can be used to load credits onto the watercard. The prepaid system is only capable of managing the water tapping, other goods and services are not covered by it. However, a slightly different price for each product could be charged. The business operator would then be able to see which and how many products and services have been sold and compare this to the list of restocking. For the sale of electricity only estimates can be made to check whether the salesman’s statements are correct, since no restocking has to be made. The conversion from cash to mobile money could be done directly at the kiosk. Thereby, the problem that customers do not have their money on a mobile account can be avoided. However, an agreement with the mobile money provider has to be made so that the kiosk is authorized to sell mobile money for cash. The provider would definitely benefit from that by reaching additional customers, so it is not unlikely that a kiosk salesman gets the status of a mobile money agent. Apart from the advantages named in chapter 6.3.1 the customers might get access to mobile credit as well. Therefore, they are able to overcome financial hurdles and to get safe water even in those times where they would not be able with other payment systems. Mobile money can only be used, if mobile phone penetration in the community is high and mobile payment services are available in the country. If mobile money services are not available, the use of a prepaid system without mobile money is recommended.

7.2.4 Electricity supply concept

The community that is served on the water kiosk should be able to rely on it. Otherwise they might look for other ways to get their water and might fall back to it, thus abandon the kiosk. Therefore, the electricity supply of the kiosk has to be reliable as well.

7.2.4.1 Electricity consumption

The Autarcon water purification system only needs a relatively small amount of electricity, ranging from 20 to 120 W. Backed by a battery the Autarcon system is capable of treating 9,600 liters per day. The WHO states that an adult requires a minimum of two liters drinking water per day, whereby consumption can be as high as 7,5 liter per day under harsh conditions (WHO, 2006, p.83). Thus, a population between 1,280 and 4,800 can theoretically be supplied by one system. For further investigations an imagi-

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nary rural village of 2,000 inhabitants (~ 5 liter per person per day) will be assumed. The prepaid system has a peak electricity demand of 2 W for about 100 milliseconds (ms) when the controller unit builds up a contact voltage to operate the outlet. These 2 W are needed for each tapping station. For the example village kiosk three tapping points will be installed, to guarantee good customer service and no long queues, even at peak times. Therefore, the prepaid system has an electricity demand of 6 W at maximum.21 Additional electricity is needed for phone, light and battery charging, the Wi-Fi system and other devices such as a fridge or a television. Charging a phone requires 2-6 W (Energy Use Calculator, 2017-B), while charging is usually done in one hour with modern mobile chargers. As mentioned, mobile phone penetration can be as high as 80% in developing countries in SSA (World Bank, 2016). Penetration will not be as high in a rural area, so estimates are that penetration reaches 40%, which means that 800 mobile phones are present in the village. Because phones are not used as frequent as in western societies, it is estimated that a phone battery can last for three days. There- fore, it is estimated that a maximum of 266 phones are empty in the village each day. Assuming that not everybody charges the phone immediately when it is empty, 200 phones will be charged per day in the scenario. With four watts of consumption this requires 800 Wh per day. Administered evenly across the day around 70 W will be needed constantly to charge phones. The electricity consumption of a LED light bulb is around 0.74 W while it is being recharged, recharging takes eight hours, summing up to a total of 5.92 Wh. Such a light is able to shine around 4-5 hours.22 The amount of people that live in a single household is typically relatively high in SSA due to high birth rates as well as other factors. Assuming that at least six people live in a single building, the scenario-village has around 333 households. Probably not all households are willing or able to buy a LED-light. Thus, a maximum 250 LED-light using households are assumed. It is estimated that each light is recharged every second day, so that light is given for two to three hours each night. This results in electricity consumption of 740 Wh per day (125 recharges/day * 0.74 W * 8 hours). Therefore, 92.5 W needs to be on hold. Recharging car batteries is a quite energy intensive process. The battery of a compact car has a store capacity of 28-50 Ampere-hour (Ah), middle class cars have 40-70 Ah. Fifty Ah are assumed as the average capacity for the example village. The voltage is usually 12 Volt (V). The formula P [Wh] = U [V] * I [Ah] shows that 600 Wh

21 Personal communication, Emanuel Mey, iSAtech, 2017 22 Personal communication, Zhongshan ALLMAY TECH LIGHTING CO., 2017

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can be stored within a single battery. Only a small share of the households in rural areas will be in possession of a car battery. At the same time this battery only needs to be recharged every few days or once a week, depending of usage. Therefore, it is assumed that only one car battery is being charged at the kiosk each day. A car battery needs around eight hours until it is fully charged, so electricity consumption while charging is around 75 W (600 Wh / 8 h). Since there is no internet cable connected to the kiosk, there is the need for a stationary LTE-Router to be able to offer Wi-Fi. This device allows high-speed internet connection to multiple devices (mobile phones), without having to be connected to a broad band internet connection, which is not present in rural areas in SSA. The device connects to internet transmitters itself, once it is installed correctly. It is mandatory that the region is covered by mobile internet. How- ever, this is the case in most areas nowadays. Such a device costs around 200 € in Germany. The electricity consumption for a specific device from the company Fritz! accounts for 6 W (Amazon, 2017-A). It should be turned on at all times during kiosk operation, so electricity consumption per day would be around 72 W. The last recommended electricity consuming device is a fridge. It can be used to offer cold drinks to the customers, which is quite an attractive product in rural areas in Sub-Sahara Africa. Further, the fridge can be used to store vaccines, so it is important for health as well. An energy efficient fridge can be powered by 100 W (Energy Use Calculator, 2017-D), resulting in 2.4 kWh per day. The use of a television is possible, but not required. Elec- tricity consumption is around 30 W on average (Energy Use Calculator, 2017-E), however it can be lower as well. Nevertheless, it needs to be surveyed in the specific situation whether a TV or radio brings additional benefits.

Summing up, the baseload of the kiosk (water purification system + fridge) is 220 W at maximum. Additional electricity consumption during operational hours of the kiosk accounts for around 280 W. Thus, the kiosk has a maximum electricity demand of 500 W. Since the kiosk is opened twelve hours a day, electricity consumption at this time accounts for 6,000 Wh and electricity demand during the twelve night hours accounts for 2,640 Wh, which sums up to a total of 8,640 Wh per day.

7.2.4.2 Electricity production

The 220 W are needed 24 hours a day. Therefore, it is mandatory to have a battery system that is capable of storing and delivering enough electricity. The remaining 280 W are only needed during operational hours, so the battery system does not need to supply this amount at regular.

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The kiosks are placed in inhabited areas. Wind speed therefore will be low in most cases, which makes small wind turbines unattractive. Rivers which are large enough to supply steady electricity for small hydro plants will also be available only at a small share of potential kiosk localities. The river might also be heavily polluted which dis- turbs the rotors of the hydro plant. If not, business potential might be low because the inhabitants might take their water for free from the river. Further, difficulties would occur supplying the kiosk with hydro-electricity, such as damaging of the power cable, which has to be laid from the river to the kiosk. The technology of choice is photovoltaic, since sunshine is largely present in SSA and the system can be installed directly at or on top of the kiosk.

The PV system needs to be large enough to deliver enough electricity for consumption during operational hours. Apart from that there must be additional electricity production that can be stored in the battery, to be used at night. Electricity production of PV modules is dependent on its locality and orientation. A locality in the middle of Nigeria, at the height of the city Abuja is chosen to be used for the calculation of the system size. The sun in Nigeria shines about twelve hours a day over the whole year, yet the country has dry and rain seasons, of which the latter are more cloudy and thus electricity production is lower (Time and Date, 2017). The PV system is estimated to be installed on top of the kiosk, with an optimal slope and azimuth (orientation). Thereby, the electricity production in the cloudiest month (August) accounts for 62% of the electricity production of the sunniest month (January and December) and for 73% of the average production over the whole year. Even though, it is not beneficial to downsize the system to avoid surplus production in the sunnier months, since only a slight downgrade could be achieved. A calculation from the Photovoltaic Geographical Information Sys- tem program from the European commission gives the information, that 3 kW of photovoltaic are enough to power the kiosk over the whole year. Electricity production in Au- gust is at a minimum of 8.53 kWh, while the average over the year is 11.7 kWh per day (European Commission, 2017).23

Storing electricity in batteries causes losses. Therefore, some additional PV capacity has to be installed. The other possibility is to install a diesel generator at the site as a backup. This generator can be used for shortages in electricity production, e.g. when consumption exceeds production on cloudy days, and to serve as a hybrid system in July and August, where it should be mainly operated at night to minimize losses. Since

23 See annex I

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the kiosk needs to be supplied with goods that are sold anyways, the supply of fuel is not a great barrier. It has to be calculated for the specific project, whether the larger PV and battery capacity are less costly than the costs of a generator including fuel costs. In the calculation for this project, pure PV electricity supply will be chosen.

The battery system is loaded at day from the production of the PV system. It needs to be capable to deliver 2,640 Wh of electricity during night hours (12h * 220 W). To have a constant and reliable supply of electricity, also at sunrise and sunset times, the battery size should be at least able to deliver 3,000 Wh.

It shall be noted that some of the PV´s fluctuating electricity production can be absorbed by the water tank. The Autarcon system purifies water and stores it in a tank. Thereby, a reservoir of purified water is available, which can be used when only a small amount of electricity is available at the moment. This makes the availability of safe water less dependent on steady electricity production.

7.2.5 Financing for widespread implementation

In this chapter financial options for implementation of the kiosk concept shall be described. The target of this chapter is not to calculate whether the concept is financially sustainable, but in which ways the investment can be raised to finance not only one kiosk, but to do a larger business roll-out. Calculations for a single project will be done in chapter 7.2.6.

Prior of doing a large roll-out, experience for kiosk operation has to be gathered and it has to be shown that the concept is financial feasible. Therefore, some demonstration projects must be implemented. Financing these projects differs from financing later kiosks, since the outcome is more uncertain and the project is more likely intended for collection of experience measuring consumer response and satisfaction as well as col- lecting data to develop a reliable business model, rather than focusing on the collection of revenues. To realize several demonstration projects money has to be raised. There are various options to do so. The amount of the investment of one kiosk is about the cost of a new car. Therefore, the company can eventually bring up the money by itself. Apart from doing so the company can apply for support from a sponsor. Further, it can be tried to get financial aid from governmental institutions. They could finance a whole kiosk or a share of it. Another possibility is crowdfunding. However, people investing via crowdfunding want to have status reports and receive profits, so this might not be an optimal solution for the demonstration phase. If none of these possibilities are feasi-

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ble, a credit from a bank needs to be considered. As it has been described in chapter 3.6 the interest fees charged by banks are high, whereby costs increase.

In the demonstration projects experiences and information about sustainability of the concept are gathered for the specific environment where the kiosks have been placed in. If the projects show that the concept is financially sustainable, the roll-out phase can start. Circumstances of the newly installed kiosks should be similar to the circumstances of the project phase. Assuming that there is potential for hundreds of kiosks, several million euros are needed. The company cannot bring up the capital by itself, since the sum is too high. Therefore, the company has to make a good business plan, based on the demonstration projects, to convince investors. It is not likely that a single investor gives all of the capital, so multiple investors have to be found. Sources of capital can be the Worldbank, governmental institutions like the GIZ or KfW (both German), private investors as well as the Government of the nation where the kiosks shall be implemented.

It is assumed that the company is domestic. However, in the case that a foreign company wants to make the investment an exchange rate risk is given. Therefore, the foreign company should take the credit in the currency of the nation where the kiosk is being operated. Thereby, exchange rate risk decreases, because the initial investment costs regarding products from other countries, e.g. the German Autarcon system, can be transferred to the foreign company right at the beginning. Further costs, such as wages, costs for restocking, maintenance etc. as well as loan payments for the credit can be paid by the income from the kiosks, since the income is in the domestic currency. Therefore, exchange rate risk is minimized. The only risk exists if profits shall be transferred into the investor’s country. Profits decrease if the currency in the nation of operation weakens. However, this is not seriously impeding business rollout in the nation itself. The following scheme portrays this concept. It will be used for other concepts as well. The customer is the kiosk in this case. It shall be noted that the customer pays the instalments to the company, which then pays off the credit in the local currency. On the scheme this process is simplified.

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Figure 5 Scheme for credit payments in foreign countries

Another way to finance the kiosks is the idea of a franchise model. Thereby, some of the investment, that is necessary to install hundreds of kiosks, does not have to be raised by a single company, but by franchisees. The company gives the investor the brand name as well as economical, technical and logistical support, so they let the franchisee be a part of the business concept. The franchisee brings up the costs for setting up a kiosk and is thereby the financial owner. Earnings as well as costs are in his own hands. In exchange for the support the investor pays an agreed monthly payment or a share of revenue to the company.

Yet, the franchise model also has disadvantages. Depending on the nation and the Gini-index, it could be hard to find people that are able to invest in this sector and at the same time willing to manage one or multiple kiosks and to take the risk of a failure of the investment. To increase the amount of people that are willing to do so, it is very important to run a few or a dozen of kiosks that operate financially sustainable. Another disadvantage is that the operation of the kiosk is left to the investor. If he does poor management, the poor experiences that customers make are transferred to the brand name. However, this risk is considered as relatively small, since the investor himself wants to operate the kiosk in a good way to make money. Further, it can be included in the contract that the franchisee has to guarantee great customer satisfaction.

7.2.6 Concept calculation

This calculation shows costs and income for one single unit, in this case for one kiosk. It is estimated that the company operates the kiosk itself and that electricity is supplied

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completely by photovoltaic. The water comes from a newly drilled borehole and is purified with an anodic oxidation system.

The costs that are needed to implement the equipment are outlined in Table 3. The lending rate in Nigeria varies between 17-19% p.a. in most cases. For the calculation 18% p.a. are estimated to finance the project (Trading Economics, 2017).

The sources of income have been explained already (see chapter 7.2). Water is being sold at the kiosk for one Naira per liter (€ 1 = NGN 370), which is the price that street sellers charge in Nigeria for less than one liter. Costs per mobile charge are set to be 25 Naira, while LED-light charges cost 15 Naira. It is estimated that the sale of goods and products, including the sale of LED-lights and PV modules, can make a profit of € 3,000 per year for an estimated population of more than 2,000 that is being served by the kiosk. The sale of Wi-Fi data connections can only be assumed. For the calculation it is estimated that 10 Naira can be charged for a Wi-Fi connection for a certain amount of time and that 50 people buy this service every day.

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Table 3 Kiosk concept costs and income24

24 Source of data: 1 = Estimates; 2 = DHIA Laboratories, 2017; 3 = Personal communication with Philipp Otter, Autarcon; 4 = Personal communication with iSAtech; 5 = Amazon, 2017-B; 6 = Jumia, 2017; 7 =Trading Economics, 2017; 8 = Salary Explorer, 2017; 9,11 = Personal communication with Hubert Aulich, SC Sustainable Concepts; 10 = Personal communication with Anthony Ighodaro

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Investment costs for the set up and installation of the kiosk and all the equipment add up to around € 37,000. Operational costs are around € 11,000 per year. The income of the kiosk is around € 27,000 per year with these estimates. All calculations are made in NGN, they are displayed here in € for a better perception. Two calculations for the payback period were conducted, one without considering the inflation rate, meaning that income and operational costs in Naira stay constant over the years (calculation 1), and one considering inflation rate of 8% per year (calculation 2).

Calculation 1 results in a payback time of 37 months25, calculation 2 results in 32 months26. Calculation 2 has a shorter payback period, because the numeral income and operational costs in Naira are estimated to rise by 8% p.a., or by 0.66% per month due to the inflation rate. The credit from the bank includes the inflation rate with the height of the interest rate of 18% per year, but the numeral amount of Naira that have to be paid back does not rise, despite the interest. Thereby, the credit from the bank can be paid back quicker, which also causes lower interests. The interest fees that have to be paid in calculation 1 add up to € 10,400. After the investment has been paid back one liter of safe water can be purified at the costs of € 0.003 (1.2 Naira), if all operational costs of the kiosk are considered to account for water purification (all of the wages, transportation costs etc.).

The costs are mostly backed by data. Most of the income has been estimated and is also dependent on local circumstances of the kiosk. While it is possible that income is higher or lower in practice, cost reductions can be achieved when a larger number of kiosks are implemented. If it is calculated for example that five instead of one car battery is charged at the station each day, income rises to € 35,000 and the payback time decreases to 22 months. Since businesses in Nigeria that charge car batteries are present and serve up to 10 customers a day this assumption can definitely be realistic in some cases. It should also be noted that the calculation is highly dependent on the interest rate, which is estimated at 18% p.a. The calculation shows that the kiosk concept has a high potential to serve as a way to supply underserved populations with both water and electricity. It could be considered by investors to be financially attractive, since the payback time of around three years is acceptable. However, investors might want to achieve a shorter payback period for an investment in this sector, since the level of risk is high for doing business in this sector in developing countries.

25 See annex K 26 See annex L

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7.2.7 How to identify customers

To get a best as possible understanding of the market it is important to research all available international reports, e.g. from the World Bank or the GIZ. Such surveys often give a lot of important knowledge and allow getting a feeling of the possibilities and difficulties of a market. Apart from this general market understanding, specific data about the customers has to be observed. Informational data on a detailed scale for rural areas in Sub-Sahara Africa is very rare, if at all existent. Therefore, it is not possible to find and attract customers or locations just via internet search.

For the kiosk concept not one specific customer, but suitable localities with good customer potential need to be identified. Data that needs to be collected is about the individuals’ behavior, income, social status, employment and amount of potential customers. Further data that needs to be elaborated is about the locality itself, volume of passenger traffic, present situation of water supply and future development plans, e.g. if there is a plan from the government to connect the area to a national grid.

If the franchise model is implemented, franchisees gather information themselves and search for the best locality. The quality of information and thus the identified business potential will be higher as if a foreign company conducts studies, since locals know their country, their regions and their people the best. Further, it is possible that franchisees want to open a kiosk in a village where they grew up, so they know the inhabitants behavior precisely. However, with this concept it is required to find franchisees themselves. For a franchise model it is important to have a strong brand name, which is being recognized by customers and which is known for safe water, reliability, quality and good customer service. The more popular and known the kiosk brand and its franchise model are, the easier it will be to find franchisees. In the beginning, however, this takes some effort. The first franchisees have to be found in personal contact or via advertisement, e.g. on exhibitions. It might be necessary to have some kiosks running in a sustainable way to attract franchisees. Therefore, it is also possible to run several kiosks by the company itself and to run a franchise model at the same time, or afterwards.

If kiosks shall be installed and operated by the company itself information cannot be taken from franchisees. In this case the government could be asked for help. This is especially possible, if the kiosks are placed on Health Facility grounds. The government should be in possession of data about its Healthcare Facilities and about the locality they are placed in. These data can be used as groundwork for further investiga-

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tions. If the kiosks shall not be located on HF land or the government is unwilling or unable to share information, it has to be collected in a different way. It is important and often required to have a local partner to start business in Sub-Saharan African countries. One way of observing appropriate customers and localities is using their expertise and knowledge about local circumstances. Another way is to use contacts from personal, own-networks to identify localities. Such contacts can be business partners, NGOs, governments or individual. Basically everybody that might have information should be asked, as this is the cheapest way of gathering information. It is not mandatory to be in contact up-front to ask for information, however, it is beneficial.

Further, alternative sources of information, e.g. companies which are specified on the field of data gathering, can be used. Such a company is e.g. mWata, which provides information about water supply systems in several African countries. Such services are not available in all regions and quality of data is often not sufficient. Yet, they can be used in combination with other ways to gather the largest amount of information that is possible.

A possibility to increase the amount of information is to deploy a local middleman that observes villages and collects information about the potential for the business concept. Yet, this is not only very time consuming, but also costly, regarding that rural villages are located in far distances from each other and that not every village is suitable for a kiosk. To avoid unneeded travels to villages that are not suitable, the internet and other data bases (e.g. governmental reports) should be checked for basic information. There- fore, potentially suitable villages can be identified and then observed. This can also be done by company employees themselves. However, this is a question of resources, costs and quality of data that will be received.

The company must use all ways of gathering information that are possible. The possibilities that are listed here are only a few examples. They can be used to implement a few projects, most likely for the demonstration phase. For massive implementation of the kiosk concept it is necessary to conduct surveys and work to work together with the government. This might also increase the willingness of the individuals to share information about their life. Regardless, the locality should always be observed personally by an employee or a middleman prior of doing serious business investigation. This is to check if the data are correct, to analyze business potential and to talk to the people, their needs and whether a kiosk is wanted and needed.

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7.3 Small scale farmers

In developing countries agriculture is mostly practiced by single farms being smaller than 10 hectares (ha). These farms provide up to 80% of the food in SSA and Asia (FAO-UN, 2012, p.1). Considering the huge populations of SSA and Asia, the actual number of these farms is very high. They produce mostly rain fed, having no further irrigation system. The percentage of agricultural land that is being irrigated worldwide is lowest in SSA, reaching from 0.6% in central Africa to a maximum of 6.8% in Southern Africa in 2008 (International Fund for Agricultural Development, 2010, p.259). The farmers themselves often have the same problems as many other people in SSA, suffering from lack of safe water and electricity. There are various possibilities to supply small scale farmers with safe water and electricity. Farmers are able to produce food and often to sell a part of it at local markets, thus generating income.

Farmers can use water not only for drinking, but also for irrigation. For irrigation purposes it is not necessary to disinfect the water, it is just important that no water contaminated by human feces is used to irrigate the field. Serving small-scale farmers with water solutions has the benefit that on the one hand they do not have to suffer from waterborne diseases anymore. This not only improves health, but also reduces costs for medicine. On the other hand yields can be increased largely by irrigation. Thus, the farmer’s income increases and security of food supply for the farmers themselves as well as for the region increases. In Zambia e.g. farmers that are able to irrigate their fields earn around 35% more than those farmers that cannot do so (The Guardian, 2013). The major benefit that arises through the combination of enabling farmers to irrigate their fields and to supply them with safe drinking water at the same time is that costs can be shared (mostly the installation of a borehole) and that the additional income that arises from irrigating the fields can be used to get access to safe water.

There are various scenarios for the water and electricity supply of small scale farmers, depending on the specific situation. To keep a clear view, the three concepts “Group of farmers”, “Single farmers” and “Island farmers” will be described in all aspects.

7.3.1 Group of farmers

When some small scale farms are located closely to each other, they can form an investment group to purchase a water purification and irrigation system. In some cases farmers may have already formed such a group to invest in farming gear which cannot be bought by one farmer alone. The absolute necessity of this model is that the farms

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are closely located to each other, so that all farmers are able to access the water easily. The borehole should be constructed in reach of all participating farmers. The water can be fetched in buckets, canisters or watering cans and then be transported to the field to water it manually. If the locality of the borehole is not too far away from the field, hoses can be installed. Additionally, a water purification system with a separate outlet should be installed directly at the borehole so that drinking water and irrigation water can be fetched independently.

7.3.1.1 Water purification system

The water purification system will not be located directly at the house of the individual farmer, but on a place nearby. It would be beneficial when the farmers’ houses are part of a community or village. The purified water could then be sold to the inhabitants as well so the farmers can generate additional income, which would be used to pay off the system. Since the water is not being consumed immediately after tapping, a residual disinfectant should be placed in the water. Thus, the anodic oxidation system is the technology of choice for this concept. It can purify enough water for the farmers’ families as well as additional villagers, while the water is absolutely safe and maintenance and operation is easy.

To be able to pump enough water to irrigate all of the farmers’ fields, an additional pump has to be installed, since the Autarcon pump only delivers enough water for the system. Solar pumps for small scale irrigation are reported to cost about € 600, including a PV module that powers the pump (Futurepump, 2017). It is not stated how deep this pump can reach. Therefore, and because three farmers need to irrigate their fields instead of one, costs of € 2000 for the additional pump are estimated.

7.3.1.2 Electricity supply concept

A PV system is the technology of choice for this concept, since only small amounts of electricity are needed and PV systems are suitable for most regions. The electricity is mainly used to power the pump and the water purification system. Directly at the system devices to charge LED-lights as well as mobile phones should be installed, so that farmers can avoid costs for kerosene and mobile phone charging. Mobile phone charging and internet connection is especially advantageous for farmers, since they can compare market prices for their crops in various near-by localities.

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7.3.1.3 Financing and payment method

How capital for the demonstration and roll-out phase can be raised has been explained in chapter 7.2.5. This chapter will explain the how the investment capital can be paid back.

The group of farmers would not buy the water or electricity like in the kiosk concept, but the whole system, which supplies them with a certain amount of water and electricity per day. Therefore, the initial investment cannot be paid back to the company by buying single amounts of water. In most cases the farmers do not have the capital purchase the system at once, even if they form an investment group. Thus, the investment needs to be paid back in regular instalments, which occur from the farmers’ regular income, the additional income due to irrigation and the sale of water and cost reductions, since no more kerosene or diesel, as well as fewer medicine have to be bought. Payment periods of the instalments should be adapted to the farmers’ situation, e.g. at the end of farming seasons, and not during seasons where the farmers cannot sell any crops.

The company either has to provide the system to the farmers first and then wait for the payback, thus pre financing it, or the farmers have to take a credit from a bank themselves. The latter is less risky for the company. Farmers usually do not have access to regular banks and credits. Thus, they would need to take the loan via microcredits. While this is a possibility to receive money, the loan might be too high to be considered as a microcredit. Further, interest rates for such credits can be higher than 20%. This is not only costly to the farmers, but also makes the business concept more costly and therefore less attractive. If the company gives the equipment to the farmer group prior of payment, it needs to take a credit by a bank itself. Since the company should be able to provide some securities, the interest rate will be lower than what will be offered to the farmers. To avoid the exchange rate risk the credit should be taken in the local currency (see chapter 7.2.5). If mobile money is available it should be used as it is the easiest way. If not, cash has to be used and to be transferred via a bank in regular periods. Since the farmers sell their goods on markets it is likely that they regularly drive to localities where such services are offered.

To make sure that the farmers pay the instalments, mechanisms that stop production in case of payment defaults should be installed within the system. Thereby, the farmers are motivated, or forced, to pay. If payments default anyways, the system should be uninstalled and be located to another site, after several warnings have been made. To

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protect the system from theft, they should also be equipped with GPS trackers. Yet, it should always be checked why payments default. If a region is suffering from unforeseen climate changes, catastrophes etc., the peoples situation should not be worsened by stopping their water purification system.

To allow other villagers to use the water purification system a prepaid system should be installed at the site. Thus it is not required that an employee is constantly at the site. The management of the prepaid cards can be done by one of the farmers.

7.3.1.4 Concept calculation

It is estimated that three farmers participate in one project. Water for irrigation comes from a newly drilled borehole, irrigation is done manually. Water for consumptions is purified by an anodic oxidation system. Electricity is produced with small photovoltaic systems. The costs that are needed to implement the equipment are outlined in Table 4. Income and cost reductions are as follows:

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Table 4 Group of farmers concept costs and income27

27 Source of data: 1 = DHIA, 2017; 2 = Personal communication with Philipp Otter, Autarcon; 3 = Personal communication with Zhongshan ALLMAY TECH LIGHTING CO.; 4 = Personal communication with iSAtech; 5 = Personal communication with Hubert Aulich, SC Sustainable Con- cepts; 6 = The Guardian, 2017 & Olalekan et.al., 2015, p.4; 7 = Futurepump, 2017; 8 = World Bank, 2017-D; 9 = IRENA, 2016; 10 = Trading Economics, 2017; 11 = Estimates

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It is estimated that crop production can be increased by about 35% due to irrigation (The Guardian, 2013). The average income of a farmer’s household in the year 2013 in Nigeria, Ekiti state, has been about Naira (NGN) 900,000 (Olalekan et.al., 2015, p.4). Studies from 2009 and 2010 showed lower income, while increasing in this timespan already. Nigeria has high inflation rates of 8-15% p.a. (Länderdaten, 2017). This means that products became more expensive, but also that the income has risen ever since. Considering the inflation rates from 2013 to 2017, the average income of a farmer household is about Naira 1,324,862 per year in 2017 (estimating 8% inflation in 2017), which is about € 3,585 at current exchange rates. For the calculation it is assumed that 3,000 L per day are sold at the price of 2 Naira per liter to other villagers. Estimating 5 liter of consumption per day, 600 villagers are supplied with safe with this assumption. The system is capable of supplying more people with safe water, whereby the income would increase. The price of 2 Naira is required to make the concept financially possible. If twice as many people tap water at the station the price can be set to 1 Naira. Expenditures on health are reported to be $ 118 per capita per year in Nigeria in 2014 (World Bank, 2017-D), which equals € 100. Not all diseases are related to unsafe water, though most of them are, when drinking water quality is bad. Therefore, it is dis- cretely estimated that each farmers family (> 5 individuals) safes € 100 on medicine per year due to fewer diseases. It needs to be stated here that this assumption is highly speculative. The health benefits that arise through the supply of safe water cannot be expressed in monetary terms. However, it is very likely that individuals suffer from fewer diseases when drinking better water. Therefore, it is expected that the individuals have to spend less on medicine. Costs for kerosene and mobile charging are reported to range between € 145 - 207 per household per year in Nigeria (IRENA, 2016, p.11). Therefore, it is estimated that each of the farmers’ households saves € 180 per year due to electricity from the PV system. In the calculations for this concept, as well as for the upcoming concepts, it is estimated that the customers (the farmers in this case) are willing to use the additional money they have due to the avoided costs to pay the instalments for the system. Since these costs would not be reduced if the system was not implemented the farmers should agree to this plan, especially because the costs are still decreased after the investment has been paid back.

Calculations show that initial investment sums up to € 26,628, while maintenance costs are about € 875 per year. Income and cost reductions add up to € 10,530 per year, for all three farmer households. Instalments are paid every three months. As in the kiosk concept, two ways of calculation have been conducted here as well. Calculation 1 re-

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sults that the credit is paid back after four years28. Calculation 2 results in a payback time of three years and six months29. After the investment has been paid back one liter of safe water can be purified at the costs of € 0.0002 (0.09 Naira).

There are numerous factors that are estimated, which are important for the calculation. Most important are the income and cost reduction estimates. An income from agriculture of € 3,585 per year per farmers household seems to be quite high. If an income of € 2,000 per year is inserted both calculations have a payback time that is too long to be considered by investors. Another important factor is the height of the interest rates from the bank. Estimating 18% p.a., the interests sum up to more than € 10,400, which is around 40% of the initial investment sum. Higher interest rates can overthrow the whole project. Yet, there are also factors that could be better than in the calculations. If more than three farmer households take part, the income is largely increased, while the investment rises only slightly. Calculating that four farmers participate, the payback time shortens to 36-39 months. Other factors, such as costs for borehole drilling for example, could be higher or lower, depending on the project. While this concept does have the potential to be financial feasible, the actual feasibility depends on local conditions.

7.3.2 Single farmers

Small-scale farmers are not always located closely to other farms, yet they need to be supplied with safe water and electricity as well. The difference is that a single farmer has a smaller income than a group of farmers. Thus, the implementation concept must be downsized in general, while safe water and electricity is still offered to him. The basic idea is the same. Non-purified water shall be pumped from a borehole for irrigation, while a part of it is being purified to make it potable.

7.3.2.1 Water purification system

The water purification system can be installed directly at the farmers’ house so it is not strictly necessary to have a residual disinfectant in the water, even though it is beneficial. Since costs must be kept as low as possible, the UV system is the technology of choice. Since it is not necessary to have a flow rate of up to 3,000 liter, a downsized UV system with costs of € 150 will be used for the calculations. Additionally, a filter must be installed. The choice of filter depends on the specific quality of water. Further,

28 See annex M 29 See annex N

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the farmer and accordingly his family need to be told that the water should always be fetched from the system as fresh as possible. If the farmer’s families stick to this rule water is safe for consumption while costs are being kept as low as possible.

It needs to be mentioned here, that no information about field experience with small UV systems is present for the author of the thesis. To implement projects where such small UV systems are used it is therefore required to test them extensively. However, the LIT UV system works well and no specific reason why a downsized system would not operate well can be observed.

7.3.2.2 Electricity supply concept

The electricity is mainly used to power the water pump and the purification system in this case. Apart from that, it can be used to light the farmer’s house with rechargeable LED-lights and to charge his mobile phone.

As it is with the group of farmers concept, a small PV system is the choice as well. The UV-systems electricity consumption is low (24 W), additional electricity is needed for the pumps, as well as light and the phone. The PV systems size does not need to be larger than 200 W to deliver enough electricity to power these devices in most cases. Since electricity consumption can completely be done during the day no battery should be installed. If further electricity is needed at later stages, the system can be extended.

7.3.2.3 Financing and payment method

How capital for the demonstration and roll-out phase can be raised has been explained in chapter 7.2.5. While costs are kept as low as possible, the single farmer is also unable to bring up the initial investment. Since the investment amount is lower, it is more likely that the single farmer can apply for a microcredit. By applying for a loan on microcredit platforms such as Kiva, where small loans are given for a relatively small interest rate the interest rates can be kept low. Since this practice cannot be used by thousands of farmers, the company should also be able to pre finance the system, while the microcredit approach can be used for the demonstration phase.

The farmer generates money from larger yields and cost reductions he makes by not- purchasing kerosene, diesel and eventually medicine due to waterborne diseases. This money can be used to pay the instalments. As mentioned in chapter 7.3.1.3 instalment periods should be adapted and the money has to be brought to a bank to transfer it to the companies account. If mobile money is present in the area this possibility should be

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used to make the process of payment easier. GPS and production stopping devices should also be installed.

7.3.2.4 Concept calculation

Income data are the same as in the group of farmers concept, with the exception that no water is sold to other villagers and no higher prices can be achieved due to storage of crops. Another great difference is that a UV system is used for water purification, because costs are lower. Electricity is produced with a photovoltaic system. The costs and income for this concept are shown in Table 5.

Calculations show that the initial investment of around € 6,900 cannot be paid back within six years from the additional income and fewer expenses of € 1,535 per year. The main reasons are the estimated costs of € 4,000 for the borehole. Only with borehole costs of € 1,000 or less the investment can be paid back after more than 48 months (calculation 1), or after 45 months (calculation 2).

The reason is that the additional income needs to be used largely to pay interest fees. When the borehole costs are € 4,000, the interest fees within 4 years are € 4,400, when the costs are € 1,000 the fees are only € 1,600, since the income can be used to pay off the credit.

It is possible, yet not very likely that a new borehole has costs of € 1,000 or less. If so, the project is feasible and can be prosecuted. If a borehole is already present the project might not make sense, since the farmer is already able to irrigate his field, whereby no additional income can be generated. Yet, these boreholes can be contaminated as well and therefore are inappropriate for drinking purposes. In this case another concept, described in chapter 7.5, has to be considered.

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Table 5 Single farmer concept costs and income30

30 Source of data: 1 = DHIA, 2017; 2 = Personal communication with Philipp Otter, Autarcon; 4 = Personal communication with LIT UV AG; 5 = Sustainable.co, 2017; 6 = Personal communication with Zhongshan ALLMAY TECH LIGHTING CO.; 7 = Personal communication with Hubert Aulich, Sustainable Concepts; 8 = Trading Economics, 2017; 9 = Alibaba, 2017; 10 = The Guardian, 2017 & Olalekan et.al., 2015, p.4; 11 = World Bank, 2017-D; 12 = IRENA, 2016; 13 = Estimates

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7.3.3 Island farmers

Another form of a small-scale farmers concept is that of island farmers. They are often the most vulnerable to weather conditions, since they are completely dependent on rain for watering the fields due to brackish groundwater and surrounding seawater. Some islanders are even dependent on the delivery of fresh water via boats. Thus, the supply of water via a reverse osmosis system is beneficial for both drinking and irrigation in this case. The RO systems have a relatively small water flow at a higher price compared to non-saltwater purification systems. Nonetheless, the water can be used to increase yields.

7.3.3.1 Water purification system

On an island it is required to operate a reverse osmosis system, because the groundwater is brackish and thus cannot be used for irrigation without being treated. Because of the high investment and maintenance costs and difficult operation and maintenance of the ‘Trunz system’, the ‘Mörk System’ is more suitable. It is capable of treating 200 l/h at a cost of 45,000 €, including PV system, battery and pump. As much water as possible needs to be desalinated. Therefore, the system should operate 24 hours a day, while the water should be stored in tank for daytime use. Thus, the system is able to deliver 4,800 liters of freshwater per day.

The quantity of water that crops need is dependent on the type of crop, the climate (temperature, humidity, level of sunshine, wind speed), the soil and the growth stage (FAO-UN, n.D.). SSA in general is a hot place with a lot of sunshine, which raises the crops’ need for water. Windy areas and low humidity increase water need further. In a sub-humid to semi-arid area with temperatures of more than 25°C a large number of crops are served with 8.8 l/m² per day, though there are also crops with lower water needs (FAO-UN, n.D.). Since the farmers already harvest fields and thus rainfall is present, not the entire amount needs to be provided by the water purification system. The purified water serves more as a support to increase yields. Yield increases cannot be described here since they are dependent on too many factors. However, additional irrigation definitely supports growth of crops and thus is a benefit for the farmers.

If no rainfall at all is present, e.g. during dry seasons, the water purification system is the only way to irrigate the field. If 400 liters per day are used for drinking purposes, an area of 500 m² (0.05 ha) could be irrigated completely by the system. If some rainfall is present, or the crops’ water need is lower, this area can be expanded. If larger fields

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shall be irrigated, reverse osmosis systems from other companies need to be revised. Thereby, the economic viability should always be kept in mind. These numbers also show that one of these RO systems cannot be used to irrigate multiple fields. Since only a relatively small amount of water is available for irrigation it is estimated that the yield cannot be increased by 35%, but by 15%. This is only an estimate. The actual increase is possibly even lower.

7.3.3.2 Electricity supply concept

In the case of the island farmer the electricity supply should be completely autonomous since the delivery of oil is inefficient and expensive. The ‘Mörk System’ comes with an electricity system that allows 24 hour operation, consisting of 3 kW PV modules and a battery system. Since the experience of the Mörk company is that this concept is the most suitable and allows 24 hour operation of the water purification system, it is recommended as well at this place.

7.3.3.3 Financing and payment method

Financing and payment method for the farmer are generally the same as for the single farmer (chapter 7.3.2.3). The only difference is that it is even harder for island farmers to come to a facility where he can deposit money to transfer it to the borrower’s account. If mobile money is present this is not a problem. If it is not present the way of how to do the instalments can be a serious problem. No general way of solving this problem can be given here. Possibilities have to be analyzed for each specific case. If no sustainable way can be identified, the water purification and electricity system cannot be installed without the investment being paid immediately.

7.3.3.4 Concept calculation

Water supply of the reverse osmosis system is not enough to supply multiple farms for irrigation, as it has been outlined in chapter 7.3.3.1. Thus, one single farmer has to be the owner of the water purification system. Electricity is supplied by a photovoltaic system. The initial investment cost is quite high and can neither be covered by the farmer up-front, nor can he pay it back from yield increase and discontinuation from buying water. With a system installed on his ground, the farmer is in possession of safe water and electricity. Apart from the yield increase he can make an additional income by selling water and electricity to other inhabitants. The scenario is that fresh water is deliv- ered via a boat to the island, so the farmer could offer the water with less effort and

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possibly for cheaper prices. Selling electricity to other people might not be as easy. However, the farmer could generate a small additional income from charging mobile phones. Additionally, expenditures such as purchasing drinking water and oil for diesel generators, both of which have high prices on islands, can be reduced. Costs and income are outlined in the following Table 6.

The costs sum up to more than € 51,000, while additional income and less expenses account for only € 1,200. The cost of interest rates is additionally € 51,000 within four years, while operational costs reduce the additional income to € 600. These numbers reveal that the system cannot be paid by a single island farmer, since the costs of the reverse osmosis system are far too high. The same concept cannot be used for multiple island farmers, like in the group of farmers concept, since the water output of the RO system is too low to irrigate multiple fields. Therefore, the concept based on the assumptions that have been made here is not financially feasible.

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Table 6 Island farmer concept costs and income31

31 Source of data: 1 = DHIA, 2017; 2 = Personal communication with Philipp Otter, Autarcon; 3,6 = Estimates; 4 = Personal communication with Zhongshan ALLMAY TECH LIGHTING CO.; 7 = Personal communication with Hubert Aulich, Sustainable Concepts; 8 = Trading Economics; 9 = Personal communication with Mr. Brezger, Mörk Waters; 10 = The Guardian, 2017 & Olalekan et.al., 2015, p.4; 12 = World Bank, 2017-D; 13 = IRENA, 2016

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Nevertheless, some additional recommendations to improve the water supply situation of underserved islanders shall be stated here. If the produced water is used solely for drinking purposes, 4,800 Liter could be sold each day. Due to the higher investment costs a higher price per liter would have to be charged. Charging a price of 5 Naira per liter € 23,600 could be earned each year. Estimating that each person consumes 5 liter of water each day, 25 Naira, which equals about € 0.07 would have to be spent per person per day. It is possible that even people living of less than $ 1.90 could afford this price, or even higher prices. This could especially be the case with islanders, since water can be very scarce and the people often have to buy water from the inland anyways, which is costly as well. Depending on the specific situation on an island (water scarcity, current prices for fresh water etc.) a different concept using a RO system could be financially sustainable. If a larger village is present, the kiosk concept using a RO system could be implemented for example. It needs to be noted here, that it might be required to install another system to prevent recontamination. Summing up it can be said that the implementation is generally possible, but highly dependent on the price that villagers are able to pay for water.

Another recommendation is to install rainwater harvesting systems, in the case that the island is located in an area where seasonal rainfalls occur. Thereby, sweet water can be saved from times of abundance (rainy season) for times of shortages (dry season). When the water is being stored in a tank for a long time it is likely that the water becomes bacterial contaminated. It is important to disinfect the water before consumption. When enough water can be harvested, the kiosk concept (chapter 7.2), the community concept (chapter 7.4) or the pay as you go concept (chapter 7.5) could eventually be adapted to serve the population. Since the tank would have to store hundreds of thousands of liter, this is not very likely however. Therefore, easier and less costly solutions should be considered, e.g. the installation of a UV system directly at the tank. A different solution for the supply of islanders with safe water is a large scale RO system. Such systems are widely implemented in the Arabian region and work very electricity and cost efficient. To implement such a system, the island must have enough inhabitants (water demand), a proper infrastructure and capital, since the investment costs are high.

7.3.4 How to identify customers – small scale farmers

Data that needs to be collected is about the farmers’ life, crops they are growing, harvest seasons, income, family situation, willingness to invest in an irrigation and water

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purification system and about local circumstances in the farmers’ area, such as market conditions for agricultural products.

Many farmers are part of a farmers’ association which serves as a lobby platform to protect the farmer’s rights and to give them a voice. Examples for such associations are Eastern and Southern Africa Small Scale Farmers Forum (ESAFF) which has member nations such as Kenya, Uganda, Burundi, Zambia, Zimbabwe, South Africa and Lesotho, the Tanzanian Graduate Farmers Association or the African Famers´ Association of South Africa. Such associations can be used to get in contact with a large number of farmers, to gain trust and to form groups of farmers to enable them to do investments. This can be done either by receiving contact details by the association itself and by contacting the farmers one by one, or by letting the farmer association inform its members. For the latter it is important to convince the association from the benefits for the farmers and maybe to make incentives for the association itself, possibly via a provision.

Other ways to identify customers is to use all forms of contacts to receive information, similar to the kiosk concept (see chapter 7.2.7). Further, it is possible to advertise the business concept on places that are in contact with potential farmer-customers. Such places can be food markets or companies that sell seeds or farming gear. To do this in the most effective way and to get response, personal advertisement and acquisition should be used. To win the farmers trust this should be done by a local, at best by a person that is already in contact with the farmers. How he is approaching farmers is dependent on the specific situation. However, the probably easiest way is to get in contact with farmers associations and to convince them from the business model.

As mentioned in chapter 7.2.7 these approaches are only a few examples. They can be used to implement a few projects, e.g. in the demonstration phase. To do a widespread implementation it is required to conduct surveys and to work together with the environment.

7.4 Community concept

The community concept is like an expansion of the group of farmers concept. The idea is that multiple people form a group to be able to make a larger investment, of which all of the participants are able to benefit from. The larger the number of people, the smaller is the amount of money each individual has to put in. Every participant of the project benefits by avoiding costs for kerosene and mobile phone charging, as well as medi-

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cine. These avoided costs are used to pay instalments for the system, until the investment has been paid. The limit of this concept is set by the capacity of the system, meaning the quantity of safe water and electricity it is able to produce.

To realize such a project it is most important that strong community solidarity is present. If solidarity is high, the individuals have more trust in the other participants, in terms of payment of their share as well as the use of the system. Further, it is a lot easier to install a system in a community where everybody participates, because access to water and electricity can be made openly available. If only few individuals take part, they have to find a private area to install the system and protect it from others. It is also easier to find a community leader or spokesperson. Such a person can be the contact point between the company and the community. He can supervise the whole system and that everything is being done correctly by everybody, to guarantee that the community has the most use of the system. Since everybody is part of the group, everybody takes care of the system. Without the community solidarity the concept is prone to fail. Theft, vandalism, non-payment and unfair use (e.g. tapping too much water) are only some of the factors that could possibly go wrong.

7.4.1 Water purification system

The water purification system should be placed at a public space. Based on the capacity of the system and number of inhabitants, a certain amount of water that is allowed to be tapped per day per person needs to be allocated. Through the high solidarity the people should behave and act in a sustainable way.

Since it would be too expensive and also unnecessary to connect the individuals houses to the water purification system, people will be tapping the water at the public place and then bring it home in containers to use it over the day. Thus, the threat of recontamination is given. As described before, the Autarcon system is the most suitable for such scenarios. It is able to purify up to 9,600 liter per day. Estimating water consumption of 5 liter per person per day, approximately 1,900 people can be supplied by the system. Since the water will not be tapped constantly over the day, it is necessary to install a water tank. It shall be noted again that it is important to keep the tank and the containers clean to ensure the highest water quality.

7.4.2 Electricity supply concept

The electricity is used preferential to power the water purification system and the pump, since this has the most use for the community. Whether the electricity system shall be

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designed to create surplus electricity right from the beginning can be chosen by the community. Nonetheless, it should at least be recommended to replace the villagers’ kerosene lamps by rechargeable LED-lamps, since costs can be avoided by doing so. Some mobile phone chargers are also installed at the site, since their electricity consumption is low as well.

Circumstances are basically the same as for the kiosk concept. Therefore, a photovoltaic system, backed up by a battery is the technology of choice. The water system has a maximum electricity demand of 120 W. A 1 kW PV system is capable of delivering this electricity all over the year (e.g. in Nigeria), most of the time even twice as much.32

A maximum of 1.44 kWh are needed each night to power the water purification system. A battery system can be used to power the purification system at night. A diesel generator can also be used as a back-up. Thereby, it is guaranteed that the villagers always have safe water and do not get upset about their investment. The generator, however, should not be calculated into the systems design calculations but only serve as a back- up, to make the system as autonomous as possible and to keep costs low over time. Apart from this it should be considered, if it is beneficial to upgrade the PV and battery capacity instead of using a diesel generator.

7.4.3 Financing and payment method

How capital for the demonstration and roll-out phase can be raised has been explained in chapter 7.2.5. This chapter will explain the how the investment capital can be paid back and which payment method will be used.

The sum of the initial investment will be in the range of € 20,000-30,000 (see chapter 7.4.4). In most cases the community members will not be able to bring up this investment at once. The community will not receive a loan from a bank for this amount of money. Therefore, the company has to pre finance the system, install it and thus give a credit to the community. The community needs to pay regular instalments to pay off the system. The height of the instalments per household is set to be as high as the costs for kerosene and mobile phone charging (€ 180 per year) and medicine (€ 100 per year) that are avoided. As mentioned in chapter 7.2.5 the company should implement demonstration projects at first. When these projects turn out to be successful investors for widespread implementation have to be found.

32 See annex J

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To avoid manual bookkeeping and to have good control, a prepaid system should be used for payments. A responsible person collects money to load credits on the prepaid cards, whereby the villagers can tap a certain amount of water and charge their devices. The responsible person then needs to visit a bank, most likely located in the next city, to transfer the money to the company’s bank account. This should be done on a monthly basis to receive the money back as quick as possible. It is also possible that a company employee is sent to the various communities to collect the money. This has the advantage that the community is aware that someone supervises everything. Fur- ther, direct technical support is possible this way. If mobile money is commonly used in the community it should be used in combination with the prepaid system, so money collection would not be necessary.

If the community fails to pay the instalments reasons for this behavior have to be observed and solutions need to be found. If they are unable to pay at the moment, due to special circumstances like environmental catastrophes, adapted solutions for the continuation of payments should be found. If they are unable to pay because they are unwilling, the system needs to be uninstalled. This option is the least favorable and it should always be tried to find adapted solutions for continuous payment.

When a certain amount of money has been paid and the investment costs and a profit for the company are covered the system goes into possession of the community. The fees that have to be paid at the prepaid system can be lowered significantly. However, the villagers should still pay money for the water and electricity so that enough money for maintenance and spare parts can be collected.

7.4.4 Concept calculation

For basic information on the calculation refer to previous chapters. To be able to deliver enough electricity for all LED-lights and mobile phone charges 2 kW of photovoltaic has been calculated in the costs. Water is being purified with an anodic oxidation system from a newly drilled borehole. Costs and income are outlined in Table 7.

The costs for the community system comprising 316 households with 1,900 individuals add up to around € 30,000. No additional income for the customers is generated in this concept. The financial benefit is given due to the fact that the households avoid costs since there are no expenses for kerosene and mobile phone charging anymore. Fur- ther, less money has to be spent on medicine. Spending on light and phone charging is about € 180 per year per household, while it is estimated that the spending on medi-

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cine can be reduced by € 100 per household per year. This amount shall be paid per household per year in regular instalments at the prepaid system. The households should be willing to do so, since the costs are only reduced due to the system and thus they do not have to pay any more money than that to get access to safe water and electricity. A population of 1,900 people can be served by the system (5 L per person). Estimating that on average six people live in a household, 316 households can be served. This results in less expenses of € 88,480 per year, which is more than enough to pay the investment within a few months33. After the investment has been paid back one liter of safe water can be purified at the costs of € 0.0008 (0.3 Naira).

33 See annex O & P

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Table 7 Community concept costs and income34

34 Source of data: 1 = DHIA, 2017; 2 = Personal communication with Philipp Otter, Autarcon; 3 = Estimates; 4 = Amazon, 2017; 5 = Personal communication with Zhongshan ALLMAY TECH LIGHTING CO.; 6 = Personal communication with Hubert Aulich, SC Sustainable Concepts; 7 = Trading economics, 2017; 8 = Salary explorer, 2017; 9 = World Bank, 2017-D; 10 = IRENA, 2016

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The numbers appear quite positive. However, even when cost reductions are estimated to be only a third (€ 33 + € 60) the investment can already be paid off within 18 months. Estimating that only 200 households are served and only a third of cost reductions can be realized, the investment can be paid back within two and a half years.

This shows that this concept is beneficial and that cooperation can be a key factor for rural supply of safe water and electricity. The costs of implementing this service might be higher in practice, yet the concept is financial attractive even when the costs are twice as high. Because of the fast payback time, the concept can also be used to supply the poorest members of communities, which are not able to pay the instalments. Due to the high solidarity these individuals can either be supplied with safe water without having to pay instalments, or by paying smaller amounts, which are manageable for them.

7.4.5 How to identify customers

For the community concept it is most important to find a suitable community. Data that needs to be collected is about the community in terms of solidarity, general social situation, present water supply, willingness to agree to pay the instalments, employment rate etc. To get a general understanding of a community’s situation it is necessary to do interview as many individuals as possible. Further data that needs to be elaborated is about the locality itself, volume of passenger traffic, future development plans, e.g. if there is a plan from the government to connect the area to a national grid. Such information is often not documented, neither by the government, nor by NGOs, companies or businesses.

One possibility to collect such information is by personal contact, e.g. employees, but also other contacts, which eventually grew up in such a community or know other communities well for various reasons. However, the number of suitable communities that can be found this way is limited.

Further, a sociologist from an education institution in the country or a governmental institution should know the situation of communities, e.g. native communities with good, grown social structure, in comparison to ‘new’ communities of many groups of people who recently moved to the area. Also communities dominated by a church which already runs a school or hospital should be suitable due to a probably stable, social structure. Here, contact to the religious ‘leader’ who is often a well-respected person in the community would be a point of entrance.

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Another way is to promote the concept via advertising on crowded places, where such villagers might appear. The idea of the concept could spread and the villagers could contact the company themselves. While the number of communities that apply for such a service could be quite high, if the advertisement is performed in the right way, the information about whether community solidarity is high enough is not given at all. The system would have to be given to a complete stranger, while the promise of payback and truth about his community solidarity is unproven. In this case further investigations have to be made.

These ways of data collection, along with further possibilities described in chapter 7.2.7 are ways to find suitable communities for a few projects, most likely for the demonstration phase. To be able to implement widespread implementation it is required to involve the government and to do large surveys, as mentioned before.

7.5 Pay as you go

Pay as you go is a business model that has been newly introduced in developing countries in the small-scale solar photovoltaic market in the past few years. This approach’s success can be found in the sheer sales volume that it reached in 2016. While $ 114 million have been spent on small scale, off-grid solar products in cash payments, $ 41 million have been spent on the same products via ‘pay as you go’ in SSA. The company Mobisol thus provided over 85,000 households in Tanzania with PV modules (Mobi- sol, 2017). The market is still in its infancy but already holds a large share of the sales’ volume for this market segment (Tweed, 2017). The ‘pay as you go’ concept can be used in a group consensus and thus be implemented as a payment method into the group of farmers or the community concept models as a payment method. In the corre- sponding chapters it has been mentioned that the devices should be connected to a control unit that is able to turn the supply off in case of payment default. This chapter, however, it intended to find a concept for single households. The main feature of the concept is the way of financing.

7.5.1 Financing and payment method

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The business concept works as follows: A stand-alone unit is being installed at a customer’s home to supply him with electricity. The homeowner is not able to come up with the initial investment for the device. Therefore, the unit is being given to him for free, or for a small sum of money, but still owned by the company. The PV unit is paid off in regular instalments. It is connected to a central control unit of the company, which can turn the electricity supply for the customer on and off. When the customer has paid for the system, the control unit unlocks electricity supply until the next payment is due. If the customer does not pay, the supply is cut off until payments have been made. After an arranged amount of installments the customer owns the system and can continue to use electricity, for free. This approach is for example used by Mobisol in Tanzania and by my M-Kopa in Kenya, which is closely linked to M-Pesa (see chapter 6.3).

Instalments are paid via mobile money mostly, as it is the easiest, fastest and most spontaneous way to do such payments. The customer’s user data is linked to the mobile money account. He wants to avoid problems with his mobile bank account, since such events are noticed and saved by the banking operator and influence e.g. the credit amount that is offered to the customer via mobile credit (see chapter 6.3.2). Thereby, the percentage of default payments is low. Another way to unlock the unit is to buy prepaid cards with a code that can be sent via short message service (sms) (Rolffs et.al., 2014, p.21 ff.). While this possibility allows it to use pay as you go service without mobile money the advantage of low default rates is not as likely anymore.

The approach is very beneficial to the customer, as he does not have to bring up large initial investments. Instalment rates are mostly set to be lower than what households would pay for the use of kerosene lamps and phone charging. Therefore, the customer starts to make savings from day one. The value of instalment rates can be adapted by the length of the payback period. Thereby, the company´s capital commitment increases, yet it is more important to reach a large amount of customers through affordable prices. As the service provider is interested in continuous payment of instalments a maintenance and repair guarantee is mostly also given. Therefore, the customer does not take any risks buying a system with a ‘pay as you go model’. The service provider benefits in a way that he is able to reach a far larger amount of customers than he would be able to reach by usual purchases and that default rates are low.

Financing from the company’s point of view means that all systems that are being sold have to be pre financed by the company, while the payments of the customers arise over a certain time period. The rates of instalments need to cover all of the company’s

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expenses. Those are e.g. costs of the devices, overhead costs, interest fees, payment defaults, loan payments, maintenance services and all other expenses.

7.5.2 Water purification system

The concept is practicable for electrification systems, as recent business success has shown. To use the same concept to supply people with safe water is more difficult. The water purification itself might be affordable by a single household, especially with UV systems that are adapted to water demand of single households (see chapter 7.3.2.1). Further, LED-UV systems are in development, which will be even cheaper in the future. However, it is required that water is present at the house, to purify it. Thus, a water connection is needed. If the house is not closely located to a river, it would be necessary to drill a borehole. Costs for doing so are unpayable by single, low-income household.

There are various options to solve this problem:

 A public borehole is already existent in the neighborhood: If the borehole or well is public, an automatic pump and a tank can be installed next to it. Costs for doing so would need to be paid by the company, since single households would not be able to do so. An approach that could be made is that contracts with various customers are made at first. If a certain number of customers in a neighborhood have been found, the company can install the pump and tank. To attract single household customers it is then required to lay water pipes from the tank to the houses. The costs for the additional expenditures have to be included in the instalment rates. It should also be possible for the villagers to draw water directly from the well, so that their initial source of water is not taken away from them.

 No public borehole is present in the neighborhood: Circumstances are basically the same, with the exception that a borehole has to be drilled by the company as well. Thus, costs for the company are much higher. Therefore, a larger customer base has to be found. Prior of doing such attempts it should precisely be analyzed whether the money can be brought back in by the customers. Since the borehole has been installed by the company it is its property. To bring the money back in only customers should have advantage of this water source at first. When the investment has been brought back in the company can make the well public to serve the poorest who cannot pay.

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 A private borehole is present: If a single household is already in possession of an own borehole, undertaking the ‘pay as you go’ concept is quite easy. Electri- fication and water purification devices can be offered to the owner at low instalment rates. Further, it can be offered to the customer that he allows other households to use his borehole. By doing so his instalment rates can be lowered. Hereby it is necessary that the owner of the borehole does not cut off the supply of other households at will. Depending on the number of additional customers it is also required to install a tank.

 Rainwater harvesting: In regions with large quantities of rainfall it would be possible to install a rainwater harvesting system. Rainwater is collected and led into a large tank. This tank needs to be large enough so that the amount of water is enough for times of no rainfall. To reduce costs such a system should also be installed for the use of multiple customers. Whether the amount of water that can be collected is enough and the costs are not too high, needs to be evaluated individually before doing such an investment.

 A river is present: If a river is present near the customers’ house, the water can be led via a pump and a water pipe. Therefore, it needs to be evaluated if the river contains water over the whole year and if the water can be made safe by a UV system.

It is very important that costs are low in this concept, so that single households are able to pay instalments and the system is paid off in an acceptable time. The UV technology is by far the cheapest among the here presented. Further, the systems are easy to operate and maintain. Depending on the feed water quality a certain filter has to be installed prior to the UV treatment. If a public tank is installed and individual water connections from this tank lead to the houses, the filter media could be installed prior to the tank. Thus, costs can be decreased. It needs to be mentioned, that the piping from the water tank to the individual houses can be quite problematic. Pipes often have leaks, especially in harsh conditions. To operate such systems it is important to have someone to look out for leakages and to maintain them properly. The filter needs to be replaced periodically. This can either be done by a company employee, in combination with other maintenance services, or by a person that is being chosen for this task. An incentive for a person to do the maintenance could be a slight reduction of instalment rates. In the case that the water is not withdrawn from a public tank each purification system needs to be equipped with a separate filter.

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Previous explanations have shown that small PV systems are the electrification technology of choice for this concept.

7.5.3 Concept calculation

It is estimated that a borehole has to be drilled and a tank attached to it is being installed. These costs are shared per customer. The UV water purification system and the PV solar home system are purchased by each individual customer. The concept does not generate an additional income for the customer. However, the customer is able to reduce costs from spending less on kerosene and mobile phone charging (€ 180 p.a.) and medicine (€ 100 p.a.). As in the community concept these cost savings shall be used to pay the instalments for the system. Calculation methods are the same described before.

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Table 8 Pay as you go concept costs and income35

35 Source of data: 1 = DHIA, 2017; 2 = Personal communication with Philipp Otter, Autarcon; 3 = Sustainable.co, 2017; 4 = Personal communication with LIT UV; 5 = Estimates; 6 = Amazon, 2017; 7 = Personal communication with Zhongshan ALLMAY TECH LIGHTING CO.; 8 = Per- sonal communication with Hubert Aulich, Sustainable Concepts; 9 = Trading economics, 2017; 10 = Alibaba, 2017; 11 = World Bank, 2017-D; 12 = IRENA, 2016

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In the case that a new borehole has to be drilled to supply the customers with a source of water for their purification system, at least 29 customer households have to be at- tracted in reach of the borehole. The costs are about € 650 per customer with operational costs of € 50 per year. The cost savings of € 280 per year shall be used to pay the instalments in monthly periods. Thereby, the payback time is 48 months in calculation 136 and 42 months in calculation 237. In the case that no new borehole has to be drilled the investment is not so dependent on the amount of participating households anymore. Estimating that 20 households take part the investment can be paid back within 39 or 33 months. If more people take part the timeframe is shortened. This shows rural people can be supplied with safe water by a pay as you go model if large investment costs are divided to as many customers as possible. After the investment has been paid back one liter of safe water can be purified at the costs of € 0.0007 (0.25 Naira).

It should be considered, that these calculations are done exclusively on cost reductions, which means that the customer does not pay anything but the money he saves by buying the product. Since health conditions rise significantly due to drink safe water and not inhaling gases from the kerosene anymore they might be willing to invest some additional money to buy these products. Yet, it also needs to be noted that the piping solution to distribute water is not optimal and might fail in reality due to leakages.

7.5.4 How to identify customers

The data that has to be collected in the pay as you go model differs from the data for the other concepts. At first, it is required to observe villages that are suitable to implement a borehole, a water tank, piping and that have enough customers that make it financially possible to implement the concept. To do so it is not only necessary to observe a village, but also to interview a lot of the villages inhabitants to find out about their financial and social situation and if they are willing to take part at the concept. Fur- ther, the initial source of water needs to be researched.

Recent pay as you go solar businesses do not seem to struggle with finding customers. Methods of gaining attention are advertisement in cities where rural inhabitants appear, word-of-mouth advertising or directly via sms sent to individuals phones. This can be done because mobile money agencies also benefit from the expansion of use of their

36 See annex Q 37 See annex R

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services. Further, this business concept requires that employees are present in the areas of distribution. They sell the devices in shops and also do maintenance. The maintenance can either be done when the customer brings the device to the shop, or by sending an employee to the customer. The latter might be more costly for the company at first. However, it might have a greater return, since other people see the great customer service. The employee is on the ground and thus able to do direct acquisition and to answer the people’s questions. Since they are aware that the system works fine, costs are low and service is good, it is likely that the customer base can be largely increased through such methods, as it can be seen on recent business successes. These methods can be used to advertise the concept in combination with safe water purification systems as well. However, while electrification systems can be sold without any further investigations, it is very important to do investigations for the sale of water purification systems, especially when no private borehole is available. Therefore, it is required to observe the villages of potential customers, e.g. when a certain amount of customers from the same village has been found. While costs increase through such investigations, it also saves costs by preventing payment defaults and by making sure that the systems will work fine – thus giving the company good reputation and attracting more customers.

As mentioned in the previous chapters identifying customer this way should only be used to implement projects in the demonstration phase. To do a widespread implementation large surveys, in cooperation with the government, need to be conducted.

7.6 Distribution of water

Distribution of water is a business concept which gives the possibility that the water is not only being sold at one location, but can be distributed to various locations, thus increasing the customer base. It cannot be seen as a standalone business concept, but more like an option for the owner of the system to generate an extra income. The idea is that people, working for a provision, tap water at the place of site installation. After- wards they bring it to a distant public place, business or directly to known customers to sell it. Doing so the customer has the advantage the he does not have to go to the place himself, while the operator can increase his customer base and thus his income. Since the water is not directly consumed, but is transported in containers to distant places, the threat of recontamination is given. Therefore, only water with a residual disinfectant should be used for distribution.

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Distribution can be done in various ways: by foot, bicycle with a hanger, car or trans- porter, sorted by rising costs. With rising costs however, the possibility of passing distances and volume of water that can be transported increases as well. If financially sustainable and the capacity of the water purification is large enough even other villages and communities closely located could be supplied with safe water.

Distribution causes higher costs such as paying the distributor, eventually costs for a vehicle and fuel and the costs of containers to store the water. The costs for the containers can be decreased with a recycle system. Therefore, the price for distributed water needs to be higher than it would be at the water site itself. It has to be examined whether customers are willing to pay this higher price and if a profit can be generated from the operation.

The sale of water at the point of purification is always to be preferred since costs are lower and thus the water can be sold at lower prices, which benefits the customer and increases satisfaction. However, if circumstances allow the distribution of water (customers are willing to pay the costs of distribution) it can increase the customer base greatly and create an additional income. The distribution does not have to involve an extra investment necessarily, since the distributors do not have to be employed.

8 Risk analysis

Some of the risks that have been described in chapter 3 have been solved within the description of the concepts. Other risks cannot be eliminated and sometimes not even be influenced by a company. They are described in this chapter.

At first, there are the risks that arise from the concepts themselves. The calculations that have been made here are strongly dependent on assumptions and estimates. Real experiences can differ from these estimates, so it is always important to do demonstration projects in the markets that shall be entered. It is also possible that demonstration projects are successful, while further projects, even under similar circumstances, turn out to be not sustainable due to various reasons. Therefore, it is important to know the market and customers behavior as good as possible. Further, rural villagers cannot be forced to pay the instalments or to buy water or electricity. If the customers decide to abandon the project before the payback period has ended it is not financially sustainable any more. This can have various reasons, e.g. dramatically changes in the customers’ life, whereby they become unable to pay the instalment rates or the water and electricity. If the situation does not change, the company has to consider dismounting

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the system to use it somewhere else, so that the investment is not completely lost. A further risk that would be even worse is that the whole equipment, or essential parts of it, get stolen. Even when the devices are equipped with a GPS tracker it is unlikely that it can be retrieved. As mentioned, the community should identify with and feel responsible for the equipment to prevent theft, but it can never be completely excluded, especially when the equipment is installed on public ground.

Other risks that cannot be influenced are of political nature. At first, political disturbances can arise. As described in chapter 3.3 the company should always choose politically stable regions. Further, water and electricity supply is a highly political activity. To implement widespread solutions it is required to work in cooperation with the government. If the government has special requirements or does not support the concept being widely implemented for any reason the whole business plan can be overthrown. Therefore it is important to get in contact with various instances of the government as early as possible and to reveal the business plans, so that cooperation can take place in a good way.

9 Social effects

The social effects that arise through successful implementation of these concepts are various. Most important is the steady and reliable access to safe water for the affected people, whereby their health conditions are improved greatly. While avoided costs such as less need for medicine are included in the calculations, the real value cannot be measured in terms of money: The people, especially infants and kids, do not have to suffer from deadly waterborne diseases anymore, meaning that countless lives could be saved. When child mortality decreases the average amount of kids per woman will decrease over time as well. This is an important factor, since population growth in Afri- ca is very high and needs to be slowed down so that it does not outpace improvement in infrastructure anymore. Further, the people do not have to walk vast distances to fetch water, which is not even safe most of the time, anymore. Thus, they also have additional time that can be used more productive, e.g. for going to school. Similar effects arise through electrification. People save time and money that is being wasted to charge their mobile phone and to buy kerosene. Additional health effects arise through the use of LED-lights, since no gases from kerosene lamps harms the inhabitants’ lungs anymore. Another positive effect is that the people generate additional income or are able to avoid costs. If the people safe this money they can become able to improve

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their life even further, step by step. A good example is the LED-light again, which show that investment costs are quickly earned by avoided costs.

In all concepts, the affected people have sufficient access to safe water, as long as the instalments are being paid. The concepts are solutions to supply the people with equipment to make the water safe for consumption. They are based on the assumption that a new borehole is drilled. Thereby, the initial source of water of the people is not taken away from them, but an additional source of water, probably closer and more important, safe, is given to them. To be able to do so and to supply as many in need as possible, it is necessary that the affected people pay for the equipment. The calculations have shown that most of the concepts investments can be paid back within few years exclusively by financial benefits that arise through the implementation of the concept – thus, the customers do not have to pay any additional money. Since the water itself is not being sold in the concepts except for the kiosk concept the water is not being privatized.

In the kiosk concept, on the other hand, water is clearly being sold for a certain amount of money. The same arguments as mentioned previously justify the implementation of water kiosks: A new borehole is drilled, whereby the initial source of water is not being taken away from the people. The concept gives the people access to safe water, which they did not have before. Further, a price that is lower than what the people currently pay for water from street vendors, which is mostly not as safe, has been assumed. Therefore, the costs of water for the people do not rise, but even decline, while their health conditions improve. Thereby, the lives of many people can be improved and even be saved.

The poorest might not be able to afford this water, whereby social inequalities arise. On the one hand, as mentioned, these people are still able to get their water the way they got it before. On the other hand, these people’s life´s need to be improved and saved as well. There are different solutions to solve this problem: If the people can be clearly distinguished from average people who are able to purchase drinking water, the community can identify them for the kiosk and the kiosks gives their daily need for free, or for a lower price, to them. However, this might result in exploiting this system and un- willingness of other customers to pay for the water. Another possibility is that the customers themselves care about the poorest by buying water for them. Since the price for water is set very low this is possible, when the community has a sense of social responsibility. Another solution could be that the poorest are chosen to execute simple

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tasks for the kiosk, e.g. distribution of water to customers’ houses. Thereby, they could generate a small income, which they can use to buy safe water for themselves. The same solution to supply the poorest can be done in other concepts where water is being sold, e.g. at the farmers or the community concept.

Apart from these advantages in health in financial terms, there are also difficulties. The biggest difficulty is probably the environmental damage that is being done after the lifetime of the devices, especially with batteries. In rural Bangladesh the disposal of battery systems into the environment has become a real harm. It cannot be guaranteed that the customers dispose the equipment correctly after their lifetime or whether this possibility exists at all, yet it should be supported, for example by technicians that do the maintenance, inform about the danger and do collection and a recycling system. The company supplying the devices to customers should be responsible for collection and recycling. Another possibility for recycling implementation is to give a certain amount of money to the customer when he brings the exhausted battery back.

10 Conclusion

Various concepts for the supply of underserved people with safe water and electricity have been developed. Technologies of water purification and electrification, payment methods, form of financing and implementation methods have been combined to form sustainable concepts. Sustainability is most important to achieve not only short-term effects, but long-term development and improvement of the people’s lives in Africa.

Most of the concepts turned out to be financially feasible. The kiosk concept is very promising. A large number of people can benefit by being able to buy safe water, electricity and other goods from a centralized shop, which was not possible before. The kiosk is managed by a company. Thereby, optimized solutions to supply as many people as possible with water will be developed. Further, management etc. can constantly be monitored to adapt the kiosk to local circumstances. When sufficient background information is available and people are willing to pay for water the concept should be feasible for widespread implementation, whereby a large number of people can be supplied with safe water and electricity. Though, a social responsibility system should be identified to supply poorest people with a minimum quantity of drinking water; options for doing so were suggested.

Another concept that is very promising is the community concept. The cost reductions that arise for households are more than enough to pay back the investment within less

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than one year. The customers do not have to pay more than they paid before, while having a great source of electricity and safe water at the same time. The major hurdle that has to be overcome in this concept is to find communities where everybody participates and where the inhabitants are willing to pay the amount of avoided costs until the investment has been paid back. Since the avoided costs arise only by implementing and using the system, the customers should be willing to do so.

The small-scale farmers’ concept showed that the combination of irrigation and water purification is only feasible when multiple farmers take part in the concept, whereby costs can be divided. The combination of the two factors irrigation and water purification is good from my point of view. However, not all farmers will be willing to use the additional income they earn from irrigation to pay for a water purification system. Prob- ably they only want to invest in an irrigation system, earning more income and rely on the previous, unsafe source of water. The implementation of irrigation systems is mostly beneficial for farmers. Their willingness to invest the additional income in water purification systems must be observed in larger surveys. Island farmers cannot financially sustainably be supplied with safe drinking water and irrigation at the same time. How- ever, it has been described that a reliable supply of drinking water can be implemented for islanders, when the price per liter is set to be higher, due to the higher investment costs of RO systems. To do so it needs to be analyzed what the islanders are willing to pay and what they currently pay for water.

The pay as you go concept seems to be difficult to be implemented. Theoretically it is financially sustainable. However, too many practical difficulties, such as finding enough customers in a narrow area and the correct maintenance of the piping to each household can cause projects to fail. The pay as you go concept is suitable for electrification of single households. Water purification on the other hand needs better infrastructure for correct implementation.

Individuals benefit from having access to safe water and electricity through purchase at a kiosk. The other concepts even allow the customer to lower expenses or even to generate additional income. Thereby, not only the basic needs are served, but the first step towards further development is being made. To accomplish the sustainable development goals of water and electricity supply for all, not only one, but various concepts have to be adopted to be able to react to individual circumstances.

To actually implement the concepts it is necessary to do further investigations on the ground. In the countries more research and information are needed, networks should

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be built, concepts tested and as many projects as possible implemented if the models turn out to be positive. While the latter needs to be pursued by business orientated people, research can also be conducted by students and NGO´s. Doing so it is most important to collaborate with groups and institutions in the country, so that additional value can be given to this thesis through more accurate data and experiences. Espe- cially the aspect of how to identify customers is complex and needs to be investigated by large organizations in order to enable widespread implementation. The concepts can be adapted and might even have to be changed, according to local circumstances. Further, research can be performed on the continuation of the concepts after the investment has been paid back. This can be e.g. the implementation of mini-grids or other possibilities to improve the customer’s quality of life and to generate income or lower expenses. Also, a collection and recycling concept for waste from spare parts, batteries, replacements etc. has to be elaborated.

Another aspect that shall be mentioned at this place is that the concepts themselves, from the customers and the businesses point of view might be sustainable, but no long- term sustainability is given. When the groundwater of Africa is used to supply a large number of people with drinking water and at the same time to irrigate countless hectares of agricultural land, it is clear that the groundwater level will fall in a foreseeable timeframe. To solve this problem at large scale, continent wide infrastructure projects need to be developed by governments and international organizations. One possible solution to do so is the desalination of large quantities of water from the oceans, based on the use of renewable energy. Another possibility that can be implemented on a local basis is the recycling of wastewater, as it is being done in developed nations. Both of these solutions are unlikely to be developed for rural areas, however. Yet, numerous solutions need to be found to avoid water crises that would end in human catastrophes.

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Statutory declaration

I declare that I have developed and written the enclosed Master Thesis completely by myself, and have not used sources or means without declaration in the text. Any thoughts from others or literal quotations are clearly marked. The Master Thesis was not used in the same or in a similar version to achieve an academic grading or is being publishes elsewhere.

Erfurt, 17/07/2017 Philip Becker

Concepts for sustainable implementation of safe drinking water and electricity 127

Acknowledgments

The success and final outcome of this this thesis would not have been possible without the help of many people who have supported me. I want to give special thanks to Prof. Dr. Kerstin Wydra, who has done an outstanding job in supervising the thesis and who has given lots of recommendations and suggestions. Without her guidance and time commitment the thesis would not be as professional as it is now. Further, I want to give great thanks to Dr. Hubert Aulich, who has taught me invaluable information and years of experience about the work in developing countries. I hope to be able to keep working with him in the future and to reach great success in the field of human development. I want to thank Philipp Otter and everybody else who participated in this thesis by providing a lot of requested information, which made the work of this thesis possible.

At last I want to thank my family. They have greatly supported and enabled me to do all the years of education, amongst countless other things. Thanks for everything you have made possible for me.

Concepts for sustainable implementation of safe drinking water and electricity i

Annex

A. Political stability and absence of violence/terrorism by income and region

B. Control of corruption by income and region

Concepts for sustainable implementation of safe drinking water and electricity ii

C. Rule of law by income and region

D. Guideline values for natural occurring chemicals

Concepts for sustainable implementation of safe drinking water and electricity iii

E. Guideline values for chemicals caused by human actions

Concepts for sustainable implementation of safe drinking water and electricity iv

F. Guideline values for chemicals caused by agriculture

Concepts for sustainable implementation of safe drinking water and electricity v

G. Guideline values for chemicals caused by water treatment

Concepts for sustainable implementation of safe drinking water and electricity vi

H. Contaminants removed by household RO units

Concepts for sustainable implementation of safe drinking water and electricity vii

I. PVGIS Calculation – 3 kW PV in Nigeria

Concepts for sustainable implementation of safe drinking water and electricity viii

J. PVGIS Estimation – 1 kW PV in Nigeria

Concepts for sustainable implementation of safe drinking water and electricity ix

K. Kiosk payback calculation 1

Concepts for sustainable implementation of safe drinking water and electricity x

L. Kiosk payback calculation 2

Concepts for sustainable implementation of safe drinking water and electricity xi

M. Group of farmers payback calculation 1

Concepts for sustainable implementation of safe drinking water and electricity xii

N. Group of farmers payback calculation 2

Concepts for sustainable implementation of safe drinking water and electricity xiii

O. Community concept payback calculation 1

P. Community concept payback calculation 2

Concepts for sustainable implementation of safe drinking water and electricity xiv

Q. Pay as you go payback calculation 1

Concepts for sustainable implementation of safe drinking water and electricity xv

R. Pay as you go payback calculation 2