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Hnp co op model


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Hnp co op model

  1. 1. HNP Cooperative Model and Other Topics <ul><li>2011.07.31 </li></ul>
  2. 2. Goals <ul><li>Create a sustainable, cooperative model for the operation </li></ul><ul><li>Encourage owner/stewardship of users/residents of Kibera of their own basic services </li></ul><ul><li>Make the center self-sustaining </li></ul><ul><li>Phase-in services and price appropriately </li></ul><ul><li>Assume initial capital expenditures covered by external funds (HNP USA) </li></ul>
  3. 3. Why a Cooperative? <ul><li>Resource hoarding is a problem in Kibera </li></ul><ul><li>Theft/Looting is also a concern </li></ul><ul><li>A group of 1500 member/users will have a stake in protecting the center </li></ul><ul><li>Local Kiberans with HNP training will provide the labor to operate and manage the center </li></ul><ul><li>No profits returned to outside organization – but re-invested in Co-op to provide sustainability/independence </li></ul>
  4. 4. Services Provided <ul><li>Basic </li></ul><ul><ul><li>Fill water containers for carry-away </li></ul></ul><ul><ul><li>Showers </li></ul></ul><ul><ul><li>Toilets </li></ul></ul><ul><li>Extended </li></ul><ul><ul><li>Adult education </li></ul></ul><ul><ul><li>Internet access </li></ul></ul><ul><ul><li>Marketplace </li></ul></ul><ul><ul><li>Electricity </li></ul></ul><ul><ul><li>Microfinance </li></ul></ul><ul><ul><li>Other services </li></ul></ul>
  5. 5. Price References <ul><li>Approximately 100 Kenyan shillings per 1 USD </li></ul><ul><li>Without HNP: </li></ul><ul><ul><li>To fill a 5 gallon water container: 3-20 shillings, monthly average of 6 KES/5 gallon jug </li></ul></ul><ul><ul><li>Prices unpredictable, highly variable </li></ul></ul><ul><ul><li>Must spend 1-2 hours to source </li></ul></ul><ul><li>Survey results for willingness to pay: </li></ul><ul><ul><li>Shower: 5 kenyan shillings </li></ul></ul><ul><ul><li>Toilet: 2 kenyan shillings </li></ul></ul>
  6. 6. Proposed Pricing <ul><li>Subscriptions (450-510 shillings/mnth) (approx. 15-17/day) </li></ul><ul><ul><li>Includes daily access to shower, water, toilet, adult learning courses, internet café </li></ul></ul><ul><ul><li>Free access for children of member </li></ul></ul><ul><li>Walk-on fees (at an average of 7 KES per person/service) </li></ul><ul><li>Additional fees for premium services </li></ul><ul><ul><li>New water containers, internet Café, Green Marketplace services/products </li></ul></ul>
  7. 7. Size of Co-op <ul><li>Capacity for 1500 members using center on a daily basis at 14,400 gallons/day </li></ul><ul><ul><li>Will consume waste-water treatment capacity at 15,000 gallons per day </li></ul></ul><ul><ul><li>Excess fresh water capacity available </li></ul></ul><ul><ul><li>Creation of grey water for resale/irrigation </li></ul></ul><ul><li>Monthly revenue from subscriptions at full capacity: </li></ul><ul><ul><li>1500 x 510 = 765,000 Kenyan shillings (approx. $8401) </li></ul></ul><ul><li>Monthly revenue from Walk-on fees </li></ul><ul><ul><li>2000 x 7(x 30) = 420,000 KES ($4,612) </li></ul></ul>
  8. 8. Monthly Costs <ul><li>15 full-time employees at $6/day/person = $2,700/month (includes security. Does n o t include all Extended services) </li></ul><ul><li>Maintenance: $900/month </li></ul><ul><li>Reserve for Capital Improvements: $2000/month </li></ul><ul><li>Buffer / Other Misc Costs: $1000 / month </li></ul><ul><li>Oversight/Permits/Training future & present employees: $2000 / month </li></ul>
  9. 9. Cooperative Model <ul><li>Day-to-day operational cost breakdown </li></ul>
  10. 10. Adding on Premium Services <ul><li>Internet </li></ul><ul><ul><li>50 shillings / hr </li></ul></ul><ul><li>Electricity </li></ul><ul><ul><li>TBD </li></ul></ul><ul><li>Other </li></ul><ul><ul><li>TBD </li></ul></ul>
  11. 11. Co-Op Summary <ul><li>Operation is sustainable as a Co-op of 1500 subscribers </li></ul><ul><li>Need to investigate: </li></ul><ul><ul><li>Costs of publicizing services/attracting members </li></ul></ul><ul><ul><li>Future surveys to price extended/premium services </li></ul></ul><ul><ul><li>Specific impact on health of water, as well as other health related activities: food preparation, hand washing, water carrier cleanliness, home cleanliness and nutrition. </li></ul></ul>
  12. 12. Economic Impact <ul><li>Additional research needed </li></ul><ul><li>Preliminary Findings on: </li></ul><ul><ul><li>Value of water services </li></ul></ul><ul><ul><li>Impact of adult education/financial planning </li></ul></ul>
  13. 13. Water Services <ul><li>Water services can be thought of as a health plan for Kiberan residents </li></ul><ul><ul><li>Western countries spend 10-20% of income on health </li></ul></ul><ul><ul><li>Kiberans live on 200-300 shillings/day. </li></ul></ul><ul><ul><li>Price of 510/month for center represents approximately 5.7% - 8.5% of income. </li></ul></ul><ul><li>Consistency of prices/availability allows for backbone on which to plan daily finances </li></ul><ul><li>Time savings of 0-2 hours/day is worth approx. 10-60 shillings/day at average income level. </li></ul>
  14. 14. Impact of Adult Education <ul><li>Based on study of education amongst poor areas in Bolivia* </li></ul><ul><li>ROI on education (annualized): </li></ul><ul><ul><li>For illiterate --> basic level: 20% </li></ul></ul><ul><ul><li>For basic --> intermediate level: 9% </li></ul></ul><ul><li>For each dollar spent on education, 1.09 - 1.20 dollars worth of future value are created. </li></ul><ul><li>Planning water and water-finances provides a starting point for practical financial literacy </li></ul>*