STICHTING
BAKENS VERZET
1018
AM AMSTERDAM , THE NETHERLANDS
Director,
T.E.(Terry)
Manning,
Schoener 50,
1771 ED
Wieringerwerf,
The
Tel:
0031-227-604128.
Homepage:
http://www.flowman.nl
E-mail:
(nameatendofline)@xs4all.nl : bakensverzet
"Money is not
the key that opens the gates of the market but the bolt that bars them."
Gesell, Silvio The
Natural Economic Order.
Revised English
edition, Peter Owen,
This work is licensed under a Creative Commons
Attribution-Non commercial-Share Alike 3.0 License
SABOTI INTEGRATED SELF-FINANCING RURAL
DEVELOPMENT PROJECT
"NEW HORIZONS FOR SABOTI"
TRANS NZOIA DISTRICT, KITALE KENYA
INCORPORATING LETS AND COMMUNITY BANKING
PREPARED FOR THE NGO "SIMA COMMUNITY BASED
ORGANISATION", KITALE ,
KENYA
BY
JOHNSTONE SIKULU WANJALA, OF KITALE , KENYA
AND
T.E.MANNING, CONSULTANT, WIERINGERWERF, THE NETHERLANDS
Edition 01: 10 April 2003
EXECUTIVE SUMMARY OF PROPOSED MULTILATERAL
INTEREST-FREE LOAN FINANCED PROJECT
1.0 INTRODUCTION
The accompanying
Integrated Self-financing Development Project for the Saboti Division of the
Trans Nzoia District in
The project is strongly demand response oriented. It has been worked out
together with the people concerned, who will execute, run, own and pay for it.
The project provides practical working solutions for sustainable
integrated development in the Saboti area and covers all major development
priorities. It constitutes a practical way of applying modern development
concepts such as those outlined in the DFID "Guidance manual on water
supply and sanitation programmes" (WEDC for DFID, 1998). It integrates in
a practical and feasible manner policy, finance, technology and human capacity
building to offer sustainable solutions to development.
The project application are self-financing, subject to an interest-free
seed loan repayable in 10years. It is structured for about 7500 extended
households (60000 users). The amount of the loan is US$ 4.500.000 or
approximately US$ 75 (or equivalent in Euro) per user. This is repaid by a
monthly payment of US$ 0,75 per user into a Cooperative Development Fund. This
is enough to cover the basic package offered.
The project requires 75% financing by an External Support Agency within
the framework of a country programme with a partner donor. Regional or state
authorities in
The
project is self-financing because it allows the recipient communities to fully
exploit a network of sustainable development activities using:
(i) The interest-free loan itself
(ii) Local Exchange Trading Systems (LETS)
(iii) Multiple re-cycled interest-free micro-credits to be administered by a
local bank. They are generated by recycling loan repayments and reserves during
the loan term.
2.0 THE MAIN PROJECT PACKAGE
The project is centred on the
following main components
i. Hygiene education at community level (Health Clubs) and in schools
ii. Distributed clean drinking water (solar pumps with hand-pumps backup)
iii. Sustainable sanitation (based on the separation of urine, faeces, grey
water, other organic waste)
iv. Supply of efficient stoves for cooking (plus solar cookers)
v. Production of biomass to fuel the cookers
vi. Recycling of non-organic waste products (rubbish collection)
vii. PV lighting for study
viii. PV lighting and vaccine refrigeration in clinics
ix. Rainwater harvesting
x. A local PV powered radio station
3.0 GENERAL ECONOMIC BASES AND PRINCIPLES OF THE PROJECT
a)The project will be financed
by interest-free seed capital in the form of a loan repayable over a period of
10 years.
b)75%
of this capital will be contributed by an external support agency and the
remaining 25% by the Government of Kenya.
c)General
financial supervision will be on terms agreed with the lenders of the seed
capital, but with the elimination of unnecessary bureaucratic restraints.
d)Seed
capital repaid by users in monthly instalments will be retained in the local
area until the end of the loan term. During that time, the repayments will be
used to grant revolving interest-free micro-credits for local development.
e)Seed
capital not required for short term use, will similarly be used to grant
interest-free revolving micro-credits.
f)The
local currency (LETS) systems will form the general method of payment for
(most) local goods and services at community level, including those provided
for the project from within the local community.
g)The
part of the maintenance money destined for long term replacement of capital
items will also be recycled as interest-free micro-credits until it is needed.
h)Users
will be 100% responsible for on-going administration, capital repayments, and
maintenance costs. Each household will pay a monthly contribution sufficient to
cover those costs. The instalments will be to a large extent covered by savings
on funds traditionally spent on fuel, water and waste removal.
i)The
project encourages open competition and free enterprise within the framework of
a cooperative and non-profit-making global financial structure.
j)Administration,
construction and maintenance work will be done by local operators and villagers
who will be paid mostly in local LETS currencies.
k)Local
work will be paid for at current local pay rates expressed in the local LETS
currencies.
l)The
on-going administration costs of the Project Coordinator are set out in the
project budget.
m)Users
must make their first monthly contribution in advance, when their project
systems are put into use.
n)The
tank commissions will be paid a small monthly allowance in formal currency for
their work. The well commissions will be paid a monthly allowance under the
local LETS currencies for their work.
o)Individual
women or women's groups will, without payment, each look after their own
sanitation units.
p)Regular
inspection by installations will be paid as necessary in the local LETS
currencies.
q)The
operation of the local bank will be supported and supervised by (Green Bank)
r)The
Trans Nzoiab District Council will undertake not to intervene to impede the
development of the local LETS currencies either during or after the project
period.
s)The
Project Coordinator will reach a specific agreement with the applicable tax
authorities before the start of the project as to taxation of activities under
the Local Exchange Trading (LETS) systems.
t)Before
the project starts, a formal agreement will be made to ensure ownership of the
project is vested in the beneficiary communities.
4.0 LONG TERM GOALS OF THE PROJECT
The long term goals of the
project are:
a)To
sustain on-going improvement of the general quality of life wellbeing and
health of the local people.
b)To
free more human resources for local production and development.
c)To
reduce water-borne diseases so that medical staff and financial resources can
be re-directed to other health objectives such as vaccination programmes and
preventive medicine.
d)To
decrease infant mortality and promote family planning.
e)To
increase literacy levels.
f)To
eliminate dependency on fuels imported from outside the project area.
g)To
help reduce deforestation and global warming.
h)To
create value added from locally recycled non-organic solid waste.
i)To
create a "maintenance culture" to conserve the investments made.
j)To
increase the local pool of expertise so that local people can improve their
sustainable well-being and development by identifying and solving problems,
including erosion, with a minimum of outside help.
k)To
create full employment in the project area.
l.To
offer meaningful opportunities to youth and help stop movement of population
from rural areas to towns.
5.0 INSTITUTIONAL STRUCTURES
The various parties which
would be presumably usually be involved in project applications are:
i.
The Local NGO (SIMA)
ii.
Project Coordinator, who is from the project area
iii.
Consultant to the Project Coordinator
iv.
The Organisational Workshops
v.
Country programme administrators
vii.
Local Funding Authority
viii.
Locally Elected MP
ix.
Trans Nzoia District council
x.
State Health Authorities and the WATEER AND SANITATION COMMITTEES
xi.
The Ministry of Education
xii.
The Local Tax Authorities
xiii.
The Saboti Cooperative Development Bank (to be formed)
xiv.
The External Bank (Barclays)
xv.
The Local Gypsum Composites Production Units
xvi.
Tank Commissions - the Key Structures
xvii.
Well Commissions
xviii.
Zimbabwe AHEAD (NGO)
xix.
EOS CONSULT
xx.
Medical Commissions
xxi.
Teachers' Commissions
XXII.
The independent auditor
The
details of the roles of each of the above and how they all interact with one
another are set out in detail in section 2.6 of the project and in the diagrams
and charts part of the project documents.
5. Short indicative budget
|
Item |
Outgo (Capital) |
Phase |
Estimate (US$) |
|
01 |
OW health clubs |
2 |
30.000 |
|
02 |
Formation of health clubs |
2 |
10.000 |
|
03 |
Material for health clubs |
2 |
5.000 |
|
04 |
Training of health workers |
2 |
10.000 |
|
05 |
OW health courses in schools |
2 |
10.000 |
|
06 |
Material for school courses |
2 |
2.500 |
|
07 |
OW social structures |
2 |
40.000 |
|
08 |
OW LETS systems |
2 |
60.000 |
|
09 |
Office and equipment LETS systems |
2 |
30.000 |
|
10 |
OW Micro-credit system |
2 |
20.000 |
|
11 |
Office/equipment Micro-credit system |
2 |
10.000 |
|
12 |
OW Gypsum composites production units |
2 |
30.000 |
|
13 |
Shovel/preparation anhydrite supply site |
2/3 |
10.000 |
|
14 |
Construction and equipping anhydrite factory (*20000 FOR EACH FACTORY)
ASSUMING 3 UNITS |
2/3 |
60.000 |
|
15 |
Moulds for anhydrite products (*20000 FOR EACH FACTORY) ASSUMING 3
UNITS |
2/3 |
60.000 |
|
16 |
Location gypsum depots and quality control |
2 |
3.000 |
|
17 |
OW recycling system |
2 |
30.000 |
|
18 |
Setting up recycling centre network |
3 |
150.000 |
|
19 |
Setting up compost collection network |
3 |
5.000 |
|
20 |
OW Bio-mass system |
3 |
15.000 |
|
21 |
OW Drinking water system |
2/3 |
25.000 |
|
22 |
Setting up of project workplace |
2 |
32.000 |
|
23 |
Project transport |
2 |
100.000 |
|
24 |
Vehicles and materials for wells |
3 |
150.000 |
|
25 |
Fuel and maintenance vehicles |
3 |
26.000 |
|
26 |
Drilling/lining costs |
3 |
300.000 |
|
27 |
Labour for wells - LETS systems |
3 |
pro-memorium |
|
28 |
58 Washing places- LETS systems |
3 |
pro-memorium |
|
29 |
58 Platforms for hand-pumps - LETS systems |
3 |
pro-memorium |
|
30 |
276 Solar Pumps |
3 |
357.000 |
|
31 |
276 Supports for solar panels |
3 |
75.000 |
|
32 |
Solar panels (82.8 kW) |
3 |
496.800 |
|
33 |
Hand-pumps groups (142 pumps) |
3 |
80.000 |
|
34 |
Cables, feed-pipe for pumps/wells |
3 |
98.000 |
|
35 |
Pipe lines from wells to tanks - 150000m @ US$ 0.65 |
3 |
100.000 |
|
36 |
Labour for laying water pipelines- LETS |
3 |
pro-memorium |
|
37 |
276 Water tanks (@ 2m * 1.7m)- mostly LETS |
3 |
60.000 |
|
38 |
276 Bases for water tanks - mostly LETS |
3 |
30.000 |
|
39 |
Supervision of installation and training maintenance operators |
3 |
15.000 |
|
40 |
Purchase spare parts supplies |
3 |
20.000 |
|
41 |
Permits and formalities |
2 |
1.000 |
|
42 |
Preparation and formulation of project specifications |
2 |
6.000 |
|
43 |
100 Solar water purification installations for clinics and schools |
3 |
47.500 |
|
44 |
900 Solar water purification installations (inc.15.000 Wp panels) |
4 |
128.500 |
|
45 |
276 PV lighting units for study purposes |
4 |
300.000 |
|
46 |
PV television for study |
4 |
pro-memorium |
|
47 |
90 PV lighting systems for schools |
4 |
88.000 |
|
48 |
PV lighting for clinics outside the project area |
4 |
pro-memorium |
|
49 |
PV lighting for clinics inside the project area |
4 |
80.000 |
|
50 |
PV refrigeration for clinics @ US$ 5000/clinic |
4 |
80.000 |
|
51 |
Water testing equipment |
4 |
5.000 |
|
52 |
Transport costs US$ to |
2/3 |
30.000 |
|
53 |
Transport costs internal to Saboti |
2/3 |
22.500 |
|
54 |
Administration and supervision at Saboti |
3/4 |
36.000 |
|
55 |
Fee Project coordinator @US$ 50000/year |
1/5 |
100.000 |
|
56 |
General project consulting Manning @US$ 50000/year |
1/5 |
100.000 |
|
57 |
Fund for PV lighting solar home systems |
4 |
180.000 |
|
58 |
Sanitation facilities with exception of some additives will be
manufactured and installed within the local LETS systems |
3/4 |
15.000 |
|
59 |
OW radio station |
4 |
25.000 |
|
60 |
Fund for radio station |
4 |
52.000 |
|
60 |
Reserves 14.67% of total |
5 |
648.200 |
|
61 |
General total |
5 |
4.500.000 |
SHORT ANALYSIS
|
Outgo (Capital) |
Phase |
Estimate (US$) |
|
Total first phase |
1 |
0 |
|
Total second phase |
2 |
534.500 |
|
Total phase 3 |
3 |
2.153.300 |
|
Total phase 4 |
4 |
964.000 |
|
Fees project coordinator |
1/5 |
100.000 |
|
Total supervision Manning |
1/5 |
100.000 |
|
General total all phases |
|
3.851.800 |
|
Reserves 14.4% |
5 |
648.200 |
|
Total 1+2+3+4+5 |
|
4.500.000 |
ON-GOING COSTS
|
On-going costs |
US$ |
|
|
|
|
Coordinator for administration |
15.000 |
|
Maintenance operators |
5.000 |
|
Tank commissions (276*5 |
16.560 |
|
Spare parts |
15.000 |
|
Reserve for theft |
15.000 |
|
Unforeseen (about 21%) |
17.940 |
|
Total recurrent costs |
84.500 |
INCOME
|
Income |
US$ |
|
|
|
|
Annual contribution for use of water (60000 people @ US$ 0.75 p.m.) |
540.000 |
|
On-gong costs per year |
84.500 |
|
Net annual income for loan repayment |
455.500 |
Comments
1. The above net income is sufficient
to finance and repay an interest free loan for US$ 4.500.000 over a period of
10 years, taking the various reserves into account.
2. Interest-free loan for gypsum composites units each factory US$ 40.000, for
repayment over a period of 3-5 years is included in the above figures.
3. At the end of the ten years' period, on repayment of loan, large capital
reserves will be built up for use in Micro-credits and, subsequently, for the
extension and renewal of the capital goods.
4. Payments for water facilities for schools and clinics are included in the
users' monthly contributions.
5. Payments and financing for eventual PV lighting and refrigeration facilities
in clinics within the project area are covered in the users' contributions.
Those for clinics and schools outside the project area partly serving users
within the project area to be discussed.
6. Payments for PV lighting installations for study purposes will be financed
by each tank commission area separately.
7. Savings on the purchasing of bio-mass for cooking and the costs of drinking
water will at least partly offset the costs of the project.
GRAPHS FORMING AN INTEGRAL PART OF THE PROJECT DOCUMENT
GRAPH
SHOWING DEVELOPMENT OF MICRO-LOANS
CASH FLOW DIAGRAM
THE INTEREST-FREE LOAN CYCLE
HOW THE ORIGINAL SEED LOAN MONEY IS USED
TYPICAL PROJECT EXPENDITURE BY QUARTER –
BUDGET ITEMS 01-30
TYPICAL PROJECT EXPENDITURE BY QUARTER –
BUDGET ITEMS 31-60
DETAILED EXPENDITURE FIRST QUARTER
DETAILED EXPENDITURE SECOND QUARTER
DETAILED EXPENDITURE THIRD QUARTER
DETAILED EXPENDITURE FOURTH QUARTER
DETAILED EXPENDITURE FIFTH QUARTER
DETAILED EXPENDITURE SIXTH QUARTER
DETAILED EXPENDITURE SEVENTH QUARTER
DETAILED EXPENDITURE EIGHTH QUARTER
DETAILED EXPENDITURE NINTH QUARTER
DETAILED FINAL EXPENDITURE
RECYCLING OF FUNDS FOR MICRO-LOANS
GRAPH
SHOWING DEVELOPMENT OF MICRO-LOANS
THE INTEREST-FREE LOAN CYCLE
HOW THE ORIGINAL SEED LOAN MONEY IS USED
The
funds recycled are approximately 19.380.000
a) Repayments of the interest-free seed loan itself. These are shown as
horizontal lines at the bottom of the micro-loans graph. They are constant.
During quarters 42-45 the amounts left for repayment UNDER THE PROJECT are
reduced to zero. However users continue to make monthly contributions on their
own account, so the recycling of funds will in practice continue. The capital
fund will build up again as shown in the micro-loans graph. It will drop again
when replacements of the original capital goods are made or the system services
extended. It will then build up for a third time to cover further collective
capital investments and so on for so long as the users continue making their monthly
contributions.
b) Certain capital sums (e.g. repayments for the gypsum composites
production units) and reserves.
c) Repayments under the micro-loans. These are seen as diagonal lines in
the micro-loans graph. Towards the end of the project period, payback times are
shortened to ensure capital re-enters in time for repayment of the original
seed loan.
LIST OF KEY WORDS
Anhydrite use of, Banks role
of in development, Bio-mass for cooking, Briquettes bio-mass, Capacitation
workshops, Chain control integral, Clodomir Santos de Morais, CO2 emissions
reduction of, Communication flows in development projects, Compost recycling,
Composting toilets, Cookers high efficiency, Cooperation role in development,
Development projects structures for, Development sustainable, Drinking water
supply, Economy developing countries, Economy development projects, Economy
foreign aid, Economy industrial development, Economy interest-free development,
Economy Local Exchange Trading (LETS) systems, Economy nominal local currencies
development of, Economy micro credits, Economy self-financed development,
Economy taxation and development, Education hygiene, Gender role of women,
Gypsum cheap, Gypsum composites products,
Hand pumps, Health Clubs development projects, Hygiene education,
Industrial development, Information flow in development projects, Integral
chain control, Integrated development projects, Interest role of, Kenya
development Saboti, LETS systems, Loans interest-free, Local currency systems,
Local Exchange Trading (LETS) systems, Micro-credit systems, Morais Clodomir
Santos de, Organizational workshops (OW), Photovoltaic (PV) home systems,
Photovoltaic (PV) lighting, Photovoltaic (PV) pumps, Photovoltaic (PV)
refrigeration, Poverty alleviation, Products regeneration of, Pumps solar,
Pumps hand, Rainwater harvesting, Recycling compost, Recycling shops, Recycling
waste, Regeneration of products, Rural water supply, Saboti Kenya development,
Sanitation developing countries, Sanitation dry, Self-financing development
projects, solar pumps submersible, Stoves high efficiency, Sustainable
development, Tanks from gypsum composites local manufacture, Toilet facilities
gypsum composites, Toilets dry, Trans Nzoia district Kenya development, Urine
disposal, Washing places, Waste collection systems, Water purification UV,
Water supply projects, Water supply rural, Water tanks from gypsum composites,
Women role of in development, Workshops Moraisian
RETURN TO:
The
Saboti project.
Maps
of the project area.
List of draft projects in English and in
French.