Investments in WSS Sector
Global Shortfall in WSS Investment
% OF GROSS PRODUCT REQUIRED FOR SDG 6.1 + 6.2 0.39%
$114B Annual Investment Required
0.12%
Historical Financing
World Bank WSP 2016
Required Financing
Investment Needs Particularly High in South Asia
75M Indians Without Improved H2O Source
World Bank WSP 2016 WHO Joint Monitoring Programme 2015
750M
0.85%
Indians Without Improved Sanitation
% of Regional Gross Product to Achieve SDG 6.1 + 6.2 in S Asia
WSS Financing Needs Greatest Among Poor
% of Financing Required to Become ODF
Highest 3 Wealth Quintiles 42%
World Bank WSP 2016
Lowest 2 Wealth Quintiles 58%
Economic Losses of Inadequate WSS Investment
$260B Annual economic losses associated with inadequate WSS
Guy Hutton, WHO 2012
$5.5 Return per $1 invested in sanitation in S Asia
$3.7 Return per $1 invested in water in S Asia
WSS Suppliers
Financial Institutions
Financial Institutions are Investing in WSS
5.2M People reached
1.2M Number of Loans made
$280M Loan principal amount disbursed
Cumulative People Reached by WaterCredit Partner Financial Institutions Globally 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0
WaterCredit Borrower Income Levels India Over $4/day 6%
$2 - $4/day 21%
$1.25 $2/day 19%
Less than $1.25/day 54%
Private Sector WSS Enterprises Are Growing
$10-14B Size of toilet construction market in India
Monitor Deloitte 2013
54 Sanitation SMEs at 1st Toilet Business Summit Nov 2016
Challenges Remain
14 financial institutions identified constraints to further access: • Lack of access to capital identified as most “severe constraint” on expanding growth of WSS finance • Lack of skilled toilet masons • Lack of toilet construction materials • Lack of community level water infrastructure, e.g. piped water networks
Scale Financing for WSS Leverage sector knowledge to address capital constraints and reach more households with WSS Build Build the market between social impact investors and WSS sector Transform Reduce sector dependency on philanthropic capital Demonstrate Demonstrate potential of WSS sector to additional investors
Social Impact Investment
$77B Social impact investment AUM
GIIN 2016
18% Annual Growth of AUM 2013-2015
WaterCredit Investment Fund 1 (WCIF1) Fund Profile • $11M • 7 years, 2016 - 2023 • Investments from accredited investors, including Water.org Investments in WSS Sector • INR loans to seven financial institutions to support scaling WSS loan portfolios • 3 year bullet loans, quarterly interest payments
What’s Next? WaterCredit Investment Fund 3 (WCIF3) Scale $50M target fund size, 7 year fund Diversify • 4 countries – Cambodia, India, Indonesia, Philippines • Financial institutions and WSS enterprises • Water providers – Piped water utilities, water purification centers • Product manufacturing or sales - Septic tanks, water tanks, water filters, water pumps • Construction companies
WaterCredit Investment Fund 3 (WCIF3) Product •
Dedicated financing to support scale up of WSS
•
Sr. debt, up to 5 year tenor, amortizing or bullet
•
Local currency or USD
•
$250k – $7.5M
Requirements • Minimum two years since establishment, no startups • Profitable • For financial institutions, existing WSS loan portfolio • For WSS enterprises, impact the BOP • Eligible to borrow from US-domiciled lender • Additional financial performance requirements
WCIF3 Timeline
March 2017 Fund opens to investors
July 2017 Begin due diligence on WSS investments
Jan 2018 First WSS investments
Beyond WCIF3? • Continue to support expansion and diversification of investment in WSS • Raise additional funds for investment in the WSS sector • Respond to market demand and further diversify: • Geographies • Eligible candidates for investment • Investment products, e.g. subordinated debt, equity
Additional Information www.WaterEquity.org [email protected]
THANK YOU Safe water and the dignity of a toilet for all.
% OF GROSS PRODUCT REQUIRED FOR SDG 6.1 + 6.2 0.39%
$114B Annual Investment Required
0.12%
Historical Financing
World Bank WSP 2016
Required Financing
Investment Needs Particularly High in South Asia
75M Indians Without Improved H2O Source
World Bank WSP 2016 WHO Joint Monitoring Programme 2015
750M
0.85%
Indians Without Improved Sanitation
% of Regional Gross Product to Achieve SDG 6.1 + 6.2 in S Asia
WSS Financing Needs Greatest Among Poor
% of Financing Required to Become ODF
Highest 3 Wealth Quintiles 42%
World Bank WSP 2016
Lowest 2 Wealth Quintiles 58%
Economic Losses of Inadequate WSS Investment
$260B Annual economic losses associated with inadequate WSS
Guy Hutton, WHO 2012
$5.5 Return per $1 invested in sanitation in S Asia
$3.7 Return per $1 invested in water in S Asia
WSS Suppliers
Financial Institutions
Financial Institutions are Investing in WSS
5.2M People reached
1.2M Number of Loans made
$280M Loan principal amount disbursed
Cumulative People Reached by WaterCredit Partner Financial Institutions Globally 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0
WaterCredit Borrower Income Levels India Over $4/day 6%
$2 - $4/day 21%
$1.25 $2/day 19%
Less than $1.25/day 54%
Private Sector WSS Enterprises Are Growing
$10-14B Size of toilet construction market in India
Monitor Deloitte 2013
54 Sanitation SMEs at 1st Toilet Business Summit Nov 2016
Challenges Remain
14 financial institutions identified constraints to further access: • Lack of access to capital identified as most “severe constraint” on expanding growth of WSS finance • Lack of skilled toilet masons • Lack of toilet construction materials • Lack of community level water infrastructure, e.g. piped water networks
Scale Financing for WSS Leverage sector knowledge to address capital constraints and reach more households with WSS Build Build the market between social impact investors and WSS sector Transform Reduce sector dependency on philanthropic capital Demonstrate Demonstrate potential of WSS sector to additional investors
Social Impact Investment
$77B Social impact investment AUM
GIIN 2016
18% Annual Growth of AUM 2013-2015
WaterCredit Investment Fund 1 (WCIF1) Fund Profile • $11M • 7 years, 2016 - 2023 • Investments from accredited investors, including Water.org Investments in WSS Sector • INR loans to seven financial institutions to support scaling WSS loan portfolios • 3 year bullet loans, quarterly interest payments
What’s Next? WaterCredit Investment Fund 3 (WCIF3) Scale $50M target fund size, 7 year fund Diversify • 4 countries – Cambodia, India, Indonesia, Philippines • Financial institutions and WSS enterprises • Water providers – Piped water utilities, water purification centers • Product manufacturing or sales - Septic tanks, water tanks, water filters, water pumps • Construction companies
WaterCredit Investment Fund 3 (WCIF3) Product •
Dedicated financing to support scale up of WSS
•
Sr. debt, up to 5 year tenor, amortizing or bullet
•
Local currency or USD
•
$250k – $7.5M
Requirements • Minimum two years since establishment, no startups • Profitable • For financial institutions, existing WSS loan portfolio • For WSS enterprises, impact the BOP • Eligible to borrow from US-domiciled lender • Additional financial performance requirements
WCIF3 Timeline
March 2017 Fund opens to investors
July 2017 Begin due diligence on WSS investments
Jan 2018 First WSS investments
Beyond WCIF3? • Continue to support expansion and diversification of investment in WSS • Raise additional funds for investment in the WSS sector • Respond to market demand and further diversify: • Geographies • Eligible candidates for investment • Investment products, e.g. subordinated debt, equity
Additional Information www.WaterEquity.org [email protected]
THANK YOU Safe water and the dignity of a toilet for all.
