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
WASO
INTEGRATED SELF-FINANCING RURAL DEVELOPMENT PROJECT
NEW
HORIZONS FOR WASO
SAMBURU DISTRICT ,KENYA
INCORPORATING
LETS AND COMMUNITY BANKING
PREPARED
FOR THE NGO "PARAN INTEGRATED PROGRAMME", ARCHER'S POST, KENYA
BY
PETER
GATUNA, READING , ENGLAND
AND
T.E.MANNING,
CONSULTANT, WIERINGERWERF, THE NETHERLANDS
Edition 03: 09 October 2003
EXECUTIVE SUMMARY
01.
INTRODUCTION
The accompanying Integrated
Self-financing Development Project for the Waso area (
The project is strongly demand response oriented. It
has been worked out together with the people concerned, who will execute, run,
maintain, own and pay for it.
The project provides practical working solutions for
sustainable integrated development in the Waso 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 is self-financing, subject to an
interest-free seed loan repayable in 10 years. It is structured for about 10000
households (58000 users). The amount of the loan is Euro 3.750.000 or
approximately Euro 65 per user. This is repaid by a monthly payment of Euro 0,65 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. The government of
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 for productivity purposes.
They are generated by recycling loan repayments and reserves during the loan
term.
02. 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, where
possible locally manufactured)
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. Improved structures for schools, and PV lighting
for study
viii. Rainwater harvesting and storage for cultivation
during the dry season
ix. A local PV powered radio station
03.
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
c)On-going auditing will be on terms agreed with the lenders of the seed
capital, but with the elimination of unnecessary bureaucratic restraints.
Indications for auditing are set out in the main project document.
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
productivity 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 and if possible through the sale of carbon emission reduction
certificates under the
i)The project encourages open competition and free enterprise within the
framework of an interest-free, inflation-free, 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 at current local pay rates
mostly expressed in the local LETS currency when it is set up.
k)The on-going administration costs of the Project Coordinator are set out in
the project budget.
l)Users must make their first monthly contribution in
advance, when their project systems are put into use.
m)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 currency for their work.
n)Regular inspection by individual sanitation installations
will be paid for in the local LETS currency.
o)The operation of the local bank may be supported by a leading Green Bank.
p)The Samburu county council and the government of
q)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) system.
r)Before the project starts, a formal agreement will be made
to ensure ownership of the project structures is vested in the beneficiary
communities.
s)Ownership of existing structures may be transferred to or
vested in the tank and well commissions to be set up under the project.
04.
IMMEDIATE GOALS
The immediate goals of the project are:
a) To
extend existing hygiene education activities by establishing Community Health
Clubs in the Waso area and promoting formal hygiene education courses in
schools.
b) To
install technically appropriate sanitation for the people in the Waso area.
c) To
provide a permanent safe drinking water supply in the project area in all
foreseeable circumstances.
d) To make
safe drinking water available within a radius of 150-200m from users' homes.
e) To
contribute to the fight against water-related diseases through hygiene
education, the supply of appropriate sanitation and clean drinking water
systems.
f) To
reduce the work load on women
g) To
provide for the continuity of health, sanitation and drinking water systems by
establishing appropriate institutional structures.
h) To
support the construction and use of improved school facilities in the project
area.
i) To
enable students and others who wish to study in the evening to do so.
j) To
reduce the use of wood and promote reforestation and sustainable use of the
k) To
introduce efficient bio-mass fuelled means of cooking and solar cookers for
daytime applications.
l) To
create added value through recycling of non-organic waste.
m) To keep
available financial resources (LETS money and formal money) revolving within
the beneficiary communities.
n) To
stimulate on-going local industrial and agricultural development through the
use of local currency (LETS) and micro-credit systems.
o) To set
up water storage facilities to support small-scale cultivation in the dry
seasons
p) To
create large-scale job opportunities
05. 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 and offer meaningful
occupational opportunities to rural youth.
l)To stop migratory movement from rural areas to towns.
06.
INSTITUTIONAL STRUCTURES
The various parties involved in the project application are:
i. The
Local NGO (Paran Integrated Programme)
ii. Project Coordinator, Mr Peter Gatuna, who is from the project area
iii.
Consultant to the Project Coordinator
iv. The
Organisational Workshops
v. Country
programme administrators
vi. Local Funding Authority (
vii. Locally Elected MP
viii. Samburu District council
ix. Department of
x.
xi. The Local Tax Authorities
xii. The
Waso Local Development Bank (to be instituted)
xiii. Barclays Bank -
xiv. The Local Gypsum composites Production Units
xv. Tank
Commissions - the Key Structures
xvi. Well
Commissions
xvii. Zimbabwe AHEAD (NGO)
xviii. EOS CONSULT
xix.
Medical Commissions
xx.
Teachers' Commissions
xxi. 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
07. SHORT
ECONOMIC ANALYSIS
|
Outgo (Capital) |
Phase |
Estimate (Euro) |
|
Total first phase |
1 |
0 |
|
Total second phase |
2 |
483.250 |
|
Total phase 3 |
3 |
1.833.550 |
|
Total phase 4 |
4 |
844.000 |
|
Fees project coordinator |
1/5 |
100.000 |
|
Total supervision Manning |
1/5 |
100.000 |
|
General total all phases |
|
3360.800 |
|
Reserves 10.35% |
5 |
389.200 |
|
Total 1+2+3+4+5 |
|
3.750.000 |
08.
SUMMARY OF ON-GOING COSTS
|
On-going costs |
Euro |
|
|
|
|
Coordinator for administration |
15.000 |
|
Maintenance operators |
5.000 |
|
Tank commissions (271*5 Euro p.m.) |
16.260 |
|
Spare parts |
15.000 |
|
Reserve for theft |
15.000 |
|
Unforeseen (about 17.2%) |
13.740 |
|
Total recurrent costs |
80.000 |
09.
SUMMARY OF INCOME
|
Income |
Euro |
|
|
|
|
Annual contribution for use of all services (58000 people @ Euro 0.65
p.m.) |
452.400 |
|
On-gong costs per year |
80.000 |
|
Net annual income for loan repayment |
372.400 |
10.
COMMENTS
1. The above net income is sufficient to finance and repay an interest
free loan for Euro 3.750.000 over a period of 10 years, taking the various
reserves into account.
2. Interest-free loan for Gypsum composites each factory Euro 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.
11.
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
01-29
TYPICAL PROJECT EXPENDITURE BY QUARTER - budget items
30-58
PROJECT EXPENDITURE BY QUARTER
EXPENDITURE PHASE 2
EXPENDITURE PHASE 3
EXPENDITURE PHASE 4
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
12. THE
INTEREST-FREE MICRO-CREDIT LOANS SYSTEM
GRAPH SHOWING DEVELOPMENT OF MICRO-LOANS
THE INTEREST-FREE LOAN CYCLE
HOW THE ORIGINAL SEED LOAN MONEY IS USED
The funds
recycled are approximately 18.439.540 Euro, or about Euro 1800 per family over
the first period of ten years. They are made up of:
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 (eg repayments for the Gypsum composites factories) 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.
13. LIST
OF SUPPORTING SCHEDULES
The project in detail
BIBLIOGRAPHY ORGANIZATION WORKSHOPS
BASIC INFORMATION
Schedule 3: Project maps.
Schedule 4:
Solar submersible horizontal axis piston pumps.
Schedule 5: Spring rebound inertia hand pumps
Schedule 6: Gypsum composites technology:
NOTES ON GYPSUM COMPOSITES: General description of the Gypsum
composites technology
PREPARATION OF GYPSUM COMPOSITES PRODUCTS: More
information and an example of a more advanced application.
Schedule 7: Health Clubs courses.
Schedule 8: Information on LETS local money
systems
Schedule 9: A list of 25 progressive steps
for development
Schedule 10: Material for presentations
using transparents or Powerpoint
Schedule 11: NGO Paran :
Statutes and information
Curriculum of Peter Gatuna