Promoting Eco-sanitation in Informal Settlements
Main objectives of the project
This eco-sanitation project enables marginalised communities in urban informal settlements to access basic services through the community-led provision of bio-centres, which provide toilets and bathrooms and an additional floor for housing, offices, business spaces, etc. The community development process enables people to gain skills and a strong sense of ownership and to deliver an eco-sanitation facility that fits local needs. To date, over 70 bio-sanitation facilities have been put in place across Kenya.
- Promotor: World Habitat
Country/Region: Kenya, Nairobi
Through this eco-sanitation project, the Umande Trust seeks to involve marginalised communities living in urban informal settlements in accessing basic services through community-led provision of bio-centres. The Trust facilitates community participation and provides training and support to enable informal settlers to lead on the planning, design and management of the facilities. This community development process enables people to gain skills and a strong sense of ownership, and to deliver an eco-sanitation facility that fits local needs.
The facility is made up of a bio-sanitation facility (toilets, bathrooms) with an additional floor for housing, offices, business spaces, etc. The bio-gas generated from the facility provides clean energy for cooking and lighting.
The project started in January 2013 and, to date, has successfully put in place over 70 bio-sanitation facilities across Kenya in five counties: Nairobi (in Mukuru, Kibera, Mathare, Korogocho and Kibagare settlements), Kisumu, Nakuru, Embu and Kirinyaga. Five of the completed facilities also include a total of 23 housing units. These facilities are spread across schools and other institutions, urban informal settlements and market places around the country. The projects have so far worked with 70 self-help groups or community-based organisations and delivered facilities that each receive around 500 people per day.
Aims and Objectives
The overall objective of this particular project is to increase the use of eco-friendly sanitation technologies and their by-products for improved health and livelihoods in the informal settlements in Kenya by means of improved management of human waste, increased access to sanitation services and safe water through the construction of the sanitation facilities (bio-centres).
The initiative responds to issues that communities in informal settlements face in terms of lack of access to sanitation, inadequate housing and water crisis. Beneficiaries include:
- community groups who manage the facility and benefit from economic returns from the use of toilets and from the businesses within the building such as kitchens, internet cafés, nurseries, etc.;
- households living and working near the facility through improved sanitation;
- disabled people, given the provision of accessible toilets;
- children in school through improved sanitation and educational activities linked to some bio-centres such as libraries, gardening and environmental awareness activities;
- community-based hygiene promoters through improved sanitation and increased opportunities to raise awareness of hygienic practices;
- community-based workers who earn an income from being involved with the construction;
- the residents of the five bio-centres (three in Mukuru, one in Korogocho and one in Kibera) that have built 23 houses between them through good quality affordable housing. These residents are from the informal settlements and have been chosen by the community groups;
- the users of the by-products (residents and businesses within the facilities) have cheap access to energy for cooking, lighting, etc.;
- the users of the additional services offered, i.e. internet connection; community courses on environmental issues, micro-credit, social audits; spaces for meetings, rehearsals and the screening of football matches.
Currently, only the occupiers of the building can make use of the bio-products. However, in the next five years Umande Trust plans to have a factory that can process and store the bio-gas in cylinders and the manure in containers. This will serve residents, households and small-scale businesses within the informal settlements.
Around Kenya, houses in informal settlements are characterised by low-lying, non-permanent structures constructed of walls and roofs made of mud or iron sheet and concrete floors. These houses generally lack access to toilets, bathrooms, sewerage systems and proper lighting. As urban growth increases, the quality of the environment across informal settlements is deteriorating at an alarming rate. This is manifested in the loss of bio-diversity, the accumulation of solid waste and faecal matter, the increasing prevalence of disease and other indicators of low quality environmental factors. The geographical location of many informal settlements, which are often found in valleys, high risk zones etc., makes them difficult to access, leading to complex water and sanitation issues.
The limited access to sanitation means that residents have to use inadequate methods for waste disposal such as buckets, flying toilets or open defecation. This hygiene disaster has created numerous disease outbreaks of cholera, dysentery and diarrhea. Various measures have been taken to help improve access to water and sanitation; such as communal pit latrines, portable toilets etc., but had not been able to tackle the scale and depth of the problem.
The eco-sanitation facilities (bio-centres) are designed by the community group to address the issues that the community faces in accessing decent sanitation, and other needs such as the lack of housing and multifunctional spaces.
 Use of plastic bags as toilets, which then get ‘flung’ away – hence the term ‘flying toilets’
Umande Trust believes in community-led processes based on the full and effective participation of all stakeholders. The scope of activities within the programme include initial selection of the community group who will lead the delivery of the construction, research to determine the scale and location of the toilets, training the group on hygiene promotion, financial literacy and governance and the construction of the sanitation facility.
Initially, the Trust sends out a call for community groups to apply to manage the bio-centres, using posters placed within the informal settlements or via key stakeholders such as village elders, ward-level local government officers or members of the county assembly as a way of reaching community based groups.
The characteristics of a community group suitable to lead this work include:
- Groups that have been in existence for more than six months.
- A group with a set of values and focus or activity that binds them together already and where the income from the bio-centres is complementary to existing income streams rather than a sole source of income, for example:
- table banking: where members meet once every month, place their savings, loan repayments and other contributions on the table then lend either long-term or short-term loans to one or a number of interested members.
- merry-go-round: where members contribute a small sum of money on a regular basis and each time money is collected, the full sum is paid out to one of the members. The members take turns to receive the pay-out, so after one full cycle, every member of the group has had a turn.
- environmental groups that focus on waste collection, cleaning the environment or tree planting.
- art-based groups such as dance classes, yoga, drawing etc.
- Groups that have been legally registered by the Government of Kenya, under the Ministry of Gender, Children and Social Development. Under the constitution, the group would have outlined how often they should meet and by looking at their records the Trust are able to see if they are following the objectives laid down in their constitution.
- Groups that invest in their members by loaning or buying assets that will increase the membership of the group.
- Some community-based groups involve purely women or girls but where there is a gender mix, the trust operate a 2/3 rule (i.e. a maximum of 2/3 of the management is male).
Once a group has been chosen, a design session is held in which they give inputs into what they want the building to look like as part of developing a work plan. The activities start with a survey to determine the number of users and their attitudes to fees for using the services. This involves quantifying the number of households in the informal settlement to establish potential demand to guide the design process.
The programme aims to build the capacity of the community-based organisation to manage the facility by offering training on financial management, marketing and governance, hygiene promotion, entrepreneurship skills and management skills so they can run the facility in a transparent and accountable manner. The design of the bio-centre is undertaken by the Umande Trust and the community so that the groups have the chance to choose what they want in the spaces built above the sanitation facilities. The groups are also in charge of hiring labourers from within the community. These people are trained on the job and earn some income from their work, while also gaining construction skills that they can use to gain employment. Umande Trust offers technical guidance through the process.
The money for the construction is deposited in the group’s bank account for easy accountability and management and in order to train the group to be accountable. For transparency, periodic accountability sessions are held to determine how much money has been used.
The construction phase itself consists of three stages:
- The construction of a bio-digester underneath the ground.
- Construction of the sanitation facility, toilets (female and male) with both sides containing specific toilets for people with physical disabilities and children.
- Construction of the housing units or other spaces on top of the sanitation facility.
Once the construction has been completed the group takes charge of managing the project with Umande Trust staff monitoring their progress and acting as advisor to the group. The Trust works closely with the county government and relevant ministries who are in charge of approvals i.e. of the land which is acquired through the groups and also the provision of water to the sanitation facility.
They also work with donors, who provide three types of funding:
- Donor funding/grants: these are funds that a donor has provided as they have seen a need that they want to address. These funds are supplemented by the group in terms of sweat equity.
- Loans: under the Umande Trust’s Sanitation Development Fund groups are able to apply for funds for the construction of these projects.
- Social entrepreneurship: this is the consultancy wing of the Umande Trust where expertise in the construction of the bio-centres is sought either from schools or public/private institutions.
What impact has it had?
The project has succeeded in developing an impact on the plans of local authorities and at a county-level, the bio-centre technology has been identified as a priority in ward development plans by the County Government. This has been achieved via a Memorandum of Understanding between the Umande Trust and the County Government which focuses on demonstration projects in the counties of Kisumu, Machakos and Busia. The local authorities in these areas have allocated funds to implement the bio-sanitation model as pilots within schools and market places to the tune of Kenyan Shillings (KES) 23,000 (USD $230,000). There is also an ongoing discussion on the development of a Memorandum of Understanding between the Umande Trust and Nairobi County, on the integration of the bio-sanitation model within health provision.
How is it funded?
The bio-centres are mostly funded through a mix of community contributions and international donor funds from organisations such as the French Development Agency, Oxfam GB, the Bill and Melinda Gates Foundation, the Swedish Embassy, the Finnish Embassy SustainableEnergy, etc. The local or national government and its agencies, such as the Nairobi Water and Sewage Company have also offered support. This income has been achieved as a result of fundraising activities by the Umande Trust but also individual schools/organisations.
For example, the implementation of one of the bio-centres in Mukuru started with an initial grant from the Embassy of Finland in Nairobi, and a Finnish civil society organisation, Wimma Liikuttaa ry. The total amount of this grant was KES 3.5 million (USD $35,000) and was used to cover the capital costs of the construction of the whole project: the toilets, bathrooms, housing, installation of bio-gas cookers and lighting in the houses.
The local community group within Mukuru contributed approximately 20% of in-kind support by undertaking the management of the excavation of the site for the bio-digester, ensuring the wider community were able to participate and managing the labourers, who came from the local community and who were paid for their work within the budget. The members of the group will provide security of the materials that will be in use during and after construction and project staff and labourers are also taken care of as not all settlements are safe. The Kenyan Government also contributed a lump sum of approximately KES 60 million (USD $630,000) to support the programme.
Since starting the project in 2013, the Umande Trust has made some changes to their financing model for the bio-centres, moving from a Build and Transfer model to a social entrepreneurship model which operates on a Build-Operate-Transfer basis. This revised approach works by supporting the construction of sanitation facilities by groups who are capable of managing the process and who have the prerequisite space and approval documents from the Government. The Umande Trust then enters into an agreement to provide a loan which will be recovered from the operation of the facility over an agreed period of time. Upon recovery of the capital investment and agreed interest, the facility is entirely transferred to the group concerned to run as a business venture for the benefit of all the members of the community.
There are three types of bio-centres:
- Bio-centres based in or near market places, serving traders and customers.
- Bio-centres based in residential areas, serving the residents within the informal settlements.
- School-based/community-based bio-centres serving users of these facilities in the area.The design of the bio-centres themselves is chosen by considering the population that will use the sanitation facility and the costs of construction might be as low as KES 1 million (USD $10,000) or as high as KES 5 million (USD $50,000) depending on the size and specification of the facility.In terms of the costs of the housing units, the usual housing costs in the informal settlements range from KES 2,500 (USD $25) to KES 4,500 (USD $45). The lack of access to basic services at home means that the residents are forced to cover the cost of toilets, water services and cost of fuels from their daily income. In comparison, the cost of the housing units at the bio-centres is of KES 5,000 (USD $50) for a large room and as low as KES 2,500 (USD $25) for a small room with amenities included: toilets, bathroom services, water and bio-gas for cooking and lighting. The revenue from the rental of these properties is managed by the community.
The bio-centres have been designed to be self-sustaining through income generated from the services offered: toilets, bathrooms, bio-gas, housing and rental space. As the bio-centres are constructed in different settlements there isn’t one generic model. Some bio-centres earn up to KES 91,000 (USD $900) a month with others earning as little as KES 30,000 (USD $300), depending on the size of the facilities and the levels of usage. The centres achieve an average income of KES 50,000 – 60,000 (USD $500 – 600) a month, which is paid into the bank account of the community group.
Why is it innovative?
Innovative design responding to multiple needs for sanitation, energy, income, community activities/services and housing: The eco-sanitation model of the bio-centre responds to the need for the provision of dignified sanitation and also to the high demand for energy by supplying safe bio-gas to households and by providing natural compost to improve urban gardening. Bio-gas use replaces the use of conventional fuels like kerosene or wood fuel, which in the long run supports the conservation of the environment by protecting forests. Beyond the provision of sanitation, the multifunctional facility provides spaces to include activities, businesses and services that the community has identified for the benefit of their neighbourhood, expanding the benefits to include income generation and social impact.
Use of technology: There are several technological innovations within the bio-centres, such as sensors at the entrance and counter systems in each toilet that provide a headcount of all the people accessing the facility. The bio-centres also include the use of digital platforms for payments such as M-Pesa and Kopo Kopo (operating systems for mobile payments), or BebaPay (a system supported by Equity Bank and Google that uses the Near Field Communication (NFC) technology. Users tap a card on their phone and the service charges are deducted and transferred directly to the group’s bank account). In this way, the community members and bio-centre managers can avoid dealing with cash directly, which has improved the control and security of financial assets, helped increased trust and transparency in handling finances and made the use of the facilities quicker and more efficient.
Community governance through design process and management: Their construction governance procedures ensure that community groups and neighbourhoods are at the driving seat in proposing and determining the architectural design and plan of the proposed bio-centre. Before construction, each community group establishes task specific teams to play key decision-making roles in construction, operation and management.
Examples of sub-committees:
- Procurement and tender committee: ensuring transparent and affordable access to building materials;
- Works team: responsible for planning and implementing works;
- Audit team: responsible for audit reports during regular (monthly and quarterly) accountability sessions between members and staff of the organisation;
- Business management committee: tasked with business planning and development of the facility as well as post construction management (hygiene, bio-gas, accounting etc.);
- Executive committee: responsible for overall coordination and compliance with the Memoranda of Agreement.Community shareholding scheme: This scheme, designed for basic urban services, is to ensure that individual members of the community-based groups managing the bio-centres benefit from a profit-sharing scheme. The business plans in place stipulate that 60% of the incomes are allocated to members as dividends; 30% is set aside for operation and management and 10% is deposited in the Umande Trust’s Sanitation Development Fund.
What is the environmental impact?
The environmental issues addressed include sanitation, land and water pollution, renewable energy and atmospheric pollution. The project promotes renewable energy helping the shift from wood, charcoal, kerosene and gas to biogas for cooking. Bio-sanitation closes the loop in the waste management process by turning human waste into a resource. The bio-centres apply ecological sanitation principles to ensure that human waste is turned into valuable bio-products by producing gas through bio-digester systems and producing fertiliser as a by-product.
One standard bio-digester produces at least 12 m3 of bio-gas (1 m3 of bio-gas will generate 4,500–5,500 Kcal m2 of heat energy when burning effectively). This heat is sufficient to boil 100 litres of water or light a lamp with a brightness of 60 – 100 watts for four to five hours. And 30 m3 of biogas is equivalent to 18 litres of diesel oil. This renewable energy source has been used to power commercial and household activities within the facilities. Estimating an average per capita consumption of 3 kg of wood per day for energy (cooking, heating and boiling water) per household, the daily per capita demand of energy equates to approximately 6 kWh which could be covered by about 1 m3 of bio-gas. Biogas use, replacing conventional fuels like kerosene or firewood, helps in the conservation of the environment, in particular the trees surrounding the informal settlements. In addition, the bio-gas digester effectively reduces the amount of methane directly released into the atmosphere, by trapping it and facilitating its use as a green fuel.
The bio-centres also positively impact on the surroundings of the facility. Cases of flying toilets and open defecation within the informal settlements have dramatically decreased in areas where bio-centres are located. This containment of human waste also reduces the pollution of water bodies and helps to curb water-borne diseases. The bio-slurry produced by the bio-centres is currently used for urban greening in areas with space in the local area, improving the environment for residents and some of the bio-centres have embarked on activities to promote urban farming and tree planting. For example, the bio-centre within Mashimoni Primary School has organised an agriculture club.
Is it financially sustainable?
The project is self-sustaining as the bio-centres generate income from the use of the toilets, bathrooms, bio-gas and the rentals from the business space and housing. Approximately 300 people use the facilities on a daily basis each paying KES 5 (USD $0.05) for a toilet and KES 10 (USD $0.10) for hot water in the bathroom. Bio-gas is charged at KES 10 (USD $0.10) whereas traditional fuels such as firewood, kerosene cost KES 81 (USD $0.80) a litre and briquettes KES 20 (USD $0.20) respectively.
The centres achieve an average income of KES 50,000 – 60,000 (USD $500 – 600) a month which is ploughed back to finance future activities that may arise for consideration from the project and are then distributed as follows:
- 60% is shared out as dividends to group members to be used as savings for members and/or can be used as loans to individual members.
- 30% is used for the operational expenses of the facility including a salary for the caretaker, management fees, repairs and maintenance.
- 10% is paid as a contribution to the Sanitation Development Fund which is a revolving fund financing sanitation owned and operated by Umande Trust for the benefit of the community group and to enable other facilities to be set up across the settlements in order to meet the growing demand for better services.
As donor funding has decreased, this revolving fund has been used as a way to help groups get loans for sanitation facilities and pay these back with 10% interest after completing the construction of the facility. This model was developed given demand from not only community groups but also institutions and landlords who weren’t able to get support from financial institutions or the government. This helps a greater number of people to access the funds lowering the reliance on other funding agencies and allows individuals, institutions or communities get funding and scale up the improvement of sanitation in low-income urban settlements.
The bio-centre involves many different stakeholders at a local level within communities and has generated both part-time and full-time work opportunities for the local community. Youth groups have particularly benefitted from the income generating opportunities attached to the bio-centres and the jobs associated with the construction of the facility. For example, in Lunga Lunga, the youth groups used their savings from the bio-centre to buy car washing equipment and employed other local young people to wash vehicles. Local people have also been able to access loans to start new businesses using the income from the bio-centres as security. The cashless system used provides more accuracy and transparency, making the project more financially sustainable and reducing risks of financial mismanagement.
The rates charged for renting the housing varies based on the size of the rooms and the local market conditions. They are generally in line with the cost of housing in informal settlements but offer housing of a much higher build quality and with access to sanitation. The costs of the energy coming from bio-gas are lower than conventional fuels and sources of energy/lighting and are relatively affordable for their users.
What is the social impact?
The approach also includes the establishment of working groups of people from the community who focus on areas such as finance, energy and sanitation, all of which helps strengthen ownership and participation. This participatory approach also enhances the involvement of women and young people. Through the project, they have had the chance to contribute towards community development through the setting up and running of the bio-centre and/or by initiating their own projects through the self-help groups within the settlements.
Community groups can manage the bio-centre effectively and this has been made possible through the training provided in the capacity development strategy on a range of topics including accountability, promoting hygiene, leadership, procurement and tendering procedures, record keeping, financial management and reporting, governance, etc. These, and other skills gained, allow members of local communities to have a means of earning a living.
The community spaces provided in the facilities have created a platform for dialogue amongst residents and as an opportunity to share common issues and offer a space for leisure activities (watching football matches, music rehearsals, etc.), and other services such as training, access to the internet etc. Some bio-centres incorporate community halls that allow for meetings and discussions to be held between leaders and residents or just for residents to use discuss issues or undergo training.
The dividends received from the income goes to the community groups and are used to support the community in a variety of ways. Increased access to sanitation facilities reduces the costs associated with seeking medical attention for water-borne diseases thereby reducing household bills. Frequent hygiene promotion activities are carried out by the group members in the neighbourhood and these directly involve residents, who are encouraged to get involved in community ‘clean-up’ activities and to dispose of waste correctly. Community education and sensitisation on conservation and hygiene have increased people’s awareness of the importance of practices such as hand washing after using the toilet to reduce disease outbreaks within the community.
Access to water, proper sanitation and bio-gas fueled stoves has lowered the incidence of common diseases such as eye infections, respiratory disease, smoking-induced coughs, diarrhea, dysentery, cholera and parasites among both adults and children. Women and children experience fewer bronchial problems and can expect to live longer; in turn the money they would use on going to hospital is saved.
The facilities are designed to be accessible to people with disabilities, which makes this an inclusive solution, which is appropriate for all ages and all physical conditions, hence reducing inequalities in terms of access to sanitation. An additional outcome that has been noted is that people living in the areas close to the bio-centres have started upgrading their own housing in line with the improvements made to their local area.
Since the construction of the first bio-centre coincided with the general elections in 2013, there was a fear that the construction area would be unsafe due to civil unrest. This led to delays in the supply of materials and higher costs for materials as suppliers delayed transporting materials as tension was still high at the time and the increased prices were caused by suppliers attempting to protect themselves from losses.
The construction also coincided with a rainy period which led to the excavation site becoming water-logged. Some informal settlements have narrow roads making them inaccessible which made it difficult for lorries to access the site.
These challenges were addressed as follows:
- A partnership with the local administration helped provide security which was maintained through frequent visits by the Local Administration Chief.
- Signing a Memorandum of Understanding with different suppliers delivered a wide range of materials at different prices.
- The lack of access to the site provided employment opportunities for young people in the area as they were used to carry materials from the drop off point to the site using wheelbarrows.
Some barriers remain in terms of resource availability, cultural barriers to using energy from waste and spaces that are linked to sanitation and limited dissemination of knowledge. There is unmet potential in terms of wider provisions of eco-sanitation but the Umande Trust aims to keep on partnering with communities to increase awareness of the benefits of the bio-centres.
- Community participation in the management of services creates a sense of ownership and increases their responsibility.
- Partnerships helped the organisation and communities to achieve their goals, which would otherwise be difficult to achieve.
- Opportunities for joint planning and for periodically reviewing the project proved worthwhile as this helped raise awareness of the priorities for the organisation.
- Community contracting and work-related interventions add value to poverty reduction strategies as they offer employment opportunities.
- Integrating community contributions including at inception and design stages of the project help with a strong sense of ownership.
- Income from facilities can provide an alternative source of finance for landlords.
Clear messages through targeted marketing are key as they can challenge and over the stigma associated with the use of bio-gas and bio-slurry from human waste. Effective marketing strategies have included:
- Open days: where communities are able to access the toilet free of charge on a particular day or cook using bio-gas without paying.
- Hygiene promotion: involving group members training residents on cleanliness and proper hygiene.
- Different pricing: depending on the time of day, with higher rates charged at peak times (early mornings and evenings) helped with income generation and also helped lots of members of the community to access the facilities.
A range of tools are used by the Umande Trust to evaluate the programme:
- Business plan with quarterly monitoring and reporting.
- Financial reports including annual audits to review the progress of the groups.
- Field visits by Monitoring and Evaluation (M&E) officer and Area managers.
Community-Led Infrastructure Finance Facility (CLIFF)
Main objectives of the project
- Promotor: World Habitat
CLIFF starts from the philosophy that the poor are worthy of investment. Instead of giving one-off grants, CLIFF helps establish organisations in Asia and Africa with the capacity to provide slum dwellers with access to affordable housing finance. This approach not only facilitates the construction of affordable homes and neighbourhoods, it also generates enough financial return to allow the organisations it funds to achieve financial sustainability. In Nepal, this approach has enabled CLIFF investment to act as venture capital, proving the viability of projects that then achieve investment from established banks and lenders. Currently operating in fourteen countries, CLIFF has supported more than 70 housing and infrastructure projects in Asia and Africa between 2010 and 2014.
What are its aims and objectives?
CLIFF stands for Community-Led Infrastructure Finance Facility. It defines its core work as, ‘to support slum dwellers to improve their lives and find lasting solutions to urban poverty’. CLIFF aims to address housing and basic services of slum dwellers, which are not adequately addressed by the local government or private sector. CLIFF is a project coordinated and partly funded by UK based organisation Reall (formerly known as Homeless International). It provides affordable finance to its Implementing Partners. Reall then work with these organisations to develop financially viable housing projects for their low-income communities. The long-term ambition of CLIFF is to help the projects achieve significant scale. It does this through:
- Using the projects as demonstration projects.
- Reducing the risk of investment in housing for low-income people.
- Unlocking large-scale, private investment for future CLIFF projects.
CLIFF’s approach is to develop self-reliant housing projects that are capable of creating sustainable settlements, shelter and services. This is delivered through a long-term partnership approach with Implementing Partners, funding partners, and technical partners. Reall play a strategic management and coordination role in this process. CLIFF provides capacity grants and revolving capital funds to the Implementing Partners. The Implementing Partners use the revolving funds to offer loans and to make strategic investments, such as the purchasing of land. Through CLIFF, the Implementing Partners are also able to influence national policies and have amplified the voice of the urban poor at local, regional and national levels.
What context does it operate in?
According to UN-Habitat there are over one billion people living in slums. The vast majority of these slums are in developing countries. The housing and basic services needs of this population are not adequately addressed by local government or private sector. The institutions responsible for land planning, land markets and basic services are often weak or dysfunctional. Most of them lack both resources and capacity. Market-based projects aimed at upgrading slums tend to be short term and not sustained by responsible public institutions, while aid money is insufficient, considering the rate and scale needed to tackle the problem. The CLIFF programme is set up within this context and starts with the premise that the urban poor are worth investing in. The programme is underpinned by the logic that if a financially sustainable implementing organisation is created and maintained, then the programme will continue to grow, irrespective of changing donor climates. CLIFF has 14 partners in 15 developing countries and is involved in 70 projects across 33 cities. Where possible it also works with municipal authorities and is positioning itself to be able to receive loans/funds from both private sector and donor/development bank type organisations.
What are its key features?
What makes CLIFF different is its belief that the urban poor are worthy of investment and lending. CLIFF was established on the belief that housing and basic services designed and built in an appropriate and affordable manner can be paid for by the urban poor themselves. As a result, the programme works to counteract the current exclusion of urban poor groups from appropriate housing finance. To do this, CLIFF builds the capacity of local organisations committed to supporting the urban poor and delivers its vision with a twin approach programme:
- To build capacity of partner organisations, helping them to consolidate their strengths and address their weaknesses. Through the support of CLIFF a number of Implementing Partners have developed the capacity to influence the policies of local and national level governments and financial institutions. For example, in Nepal LUMANTI, a national NGO and long-term CLIFF Implementing Partner, has been able to secure as much as 80 per cent of their total project costs from local banking institutions.
- Alongside and connected to this capacity building, CLIFF provides Implementing Partners with recoverable capital funds to buy land, construct houses and to provide affordable micro-mortgages to slum dwellers. Early on in the CLIFF programme, capital funds were only recycled at a national level. However, as the CLIFF Implementing Partners have matured into sustainable Community Development Enterprises, a change in approach has occurred. Broadly speaking, Reall now distribute capital funds to CLIFF partners as a loan, allowing the recycled funds to be redeployed anywhere across the global portfolio. This approach encourages financial discipline amongst CLIFF’s Implementing Partners and rewards this with access to a larger, more responsive, capital fund.
Through a long-term partnership approach, CLIFF is able to support partner organisations towards a position of operational sustainability. In this way, the programme demonstrates a commitment to building institutions capable of accessing sustainable sources of finance and delivering housing projects at scale and in perpetuity.
How is it funded?
At present, CLIFF is supported by two international donors, the UK Department for International Development (DFID) and the Swedish International Development Cooperation Agency (SIDA). In 2013/14, the largest donor was DFID, its funding is committed until 2015. Discussions are already underway to ensure continued DFID support for CLIFF Phase 3. The project has good economic sustainability strengths, with a number of partners already progressing to a position where they are able to receive their capital funds as a loan. In terms of repayment rates from communities, CLIFF is targeting a 100 per cent repayment rate, with partners encouraged to maintain a Portfolio at Risk rate of between 5 and 10 per cent. During the early stages CLIFF provides grants to help build the capacity of its local Implementing Partners. Overtime, this grant funding is phased out, with organisations covering their operational costs through effective business planning. The reduction of capacity grant funding has the potential to boost the amount of funding available for capital projects. In 2013/14, CLIFF spent £7,685,753 on capital grants and loans to its partners. In the same year it had an income of £10,801,603 (including £1,377,539 carried forward from the previous year). The majority of its income is raised from donors. Reall’s revenue costs for operating CLIFF were £678,355. The excess of income over expenditure in 2013/14 was absorbed by the programme in the opening part of the 2014/15 financial year.
What impact has it had?
The CLIFF project has had a very significant and positive effect on the communities it has served. The housing finance system has created a significant amount of suitable affordable housing that would not have otherwise been built. Indeed there is evidence that this has had a catalysing effect leading to more homes being built. For example, CLIFF funded the construction of 180 houses by the Vashandi Housing Cooperative in Zimbabwe but this led to an additional 500 being built, with a further 500 now under construction. Moreover, the house building has had a positive effect on local economic activity. The Vashandi project has led to the direct creation of at least 200 jobs. In total, the CLIFF 2 programme has approved, commenced or completed the construction of 10,699 homes. As of April 2014, 17,183 people had already occupied their new homes, complete with improved water and sanitation, with a further 35,062 set to benefit.
Beyond housing projects, the CLIFF programme is also set to benefit a further 101,617 people through numerous sewerage disposal and sanitation projects approved in India and Nepal. CLIFF has also influenced the housing policies in many developing countries. Causing policy change is one of CLIFF’s performance indicators. It targeted changes in six countries; in fact there has been change in eight. For example, CLIFF’s Angolan Partner, DWA, was able to secure a reduction in the minimum plot-size requirement; whilst ZINAHCO, CLIFF’s implementing partner in Zimbabwe, gained formal acknowledgement of the cooperative housing model. Some projects have also been successful in changing local investment policy from lenders. In Nepal, LUMANTI have been successful in securing as much as eighty per cent of the total project cost from local banking institutions, a percentage previously unobtainable. The project has received international recognition by receiving the UN Scroll of Honour in 2014.
Why is it innovative?
With its belief that the urban poor are worthy of investment and lending, it delivers its programmes with a twin approach.
The innovation CLIFF brings to the sector is to build capacity of partner organisations, help them maintain their strengths and enabling them to work on more complex dimensions of housing programmes, such as land and financing. A number of CLIFF partners have also developed capacity to influence the investment policies of local and national banks. For example, in Nepal LUMANTI, a national NGO and CLIFF partner, was able to secure 80 per cent of the total project cost from local banking institutions. CLIFF uses donors innovatively. It uses them to build partners’ capacity through ‘capacity funds’ and provide them with additional recoverable capital funds to buy land, lend micro-mortgages to slum dwellers and to invest in physical construction. All capital funds are recoverable from the partners. Once recovered, the funds are recycled through the same or different partners.
What is the environmental impact?
CLIFF projects have the opportunity to reduce the carbon footprint of urban development by championing the cause of appropriate-tech, sustainable settlement solutions. A good example is the use of adobe mud bricks in Tansen, Nepal which have very low embodied energy values and are very locally sourced, saving on transport and energy costs.
Additionally, the design of LUMANTI’s apartment building in Lalitpur, Nepal, tackles the city’s frequent water shortages by implementing a rainwater harvesting system, allowing residents constant access to water for cleaning and cooking with low energy inputs. Similarly, the use of solar powered electricity builds resilience against the cities frequent power outages.
Is it financially sustainable?
The long-term aim is for CLIFF to become fully self-sustaining, although this aim may not be realised for many years. The establishment and growth of CLIFF has been made possible by the significant contribution of donors. At present, there is a continued donor interest in building the capacity of CLIFF. CLIFF was established with financial sustainability built in at all levels. In-country partners are helped to grow sufficiently to generate enough financial return to allow them to operate without grant based support. This has helped the organisations to begin pursuing alternative sources of investment with the aim of becoming fully self-sustaining.
What is the social impact?
The project provides support to those who would otherwise be excluded from participating in the urban development process. It promotes greater community cooperation and encourages gender equality. More than 75 per cent of the programmes beneficiaries are women or children and the model offers particular support to social cohesion initiatives through the empowerment of women-led savings groups. In some countries, CLIFF has supported projects for people with disabilities, offering hope to this uniquely disadvantaged demographic. In all cases, the programme builds the abilities of community organisations to negotiate, advocate and to better manage their operations.
- Dysfunctional local governments are a major challenge for CLIFF. The experience of the project is that the housing sector has been neglected, not understood or financed properly in developing countries. As a result, in some cases CLIFF’s work is seen as a unique solution.
- Linked with the above, CLIFF partners are expected to address a number of sector-related issues, including the complexity of land tenure and sustainable supplies of materials.
- In a number of countries where CLIFF works, there is a certain perception about the role of international NGOs. They are either seen as advocacy organisations or those which deliver free goods. The role of CLIFF in supporting financial and technical capacity has been difficult to communicate.
- CLIFF believes that the urban poor are worthy of investment. However, large financing institutions are under pressure to offer ‘safe lending’ and do not see the opportunity immediately. The challenge for CLIFF is to demonstrate this bankability in order to attract large private finance.
- It is important to deliver such programmes at scale in order to deliver a meaningful impact on the knowledge and practice in the sector. This means changing a number of practices, including community engagement and financing models.
- CLIFF sees the future of partners as new urban institutions which bridge the gap between markets and governments. Therefore business modelling and long term financial sustainability is extremely important for CLIFF partners.
- CLIFF still believes that the urban poor are worthy of investment and that the finance and opportunity to deliver this at scale is available. However, it is important to recognise that housing is not only about finance, the method of delivery is equally important.
CLIFF sets its own performance targets and monitors them continuously. Monitoring reports are produced every three months, with major external evaluations dictated by donor funding cycles. Indicators on finance and growth show the project is on target or exceeding its targets. Indicators on the provision of basic services are, however, below target. The findings of the reports/evaluations appear to be used to make improvements to the programme.
Significant scaling up has taken place within the project. When it started in 2002 CLIFF operated with one in-country partner (in India) it has since expanded to ten countries. The number of homes built as a result of the project has grown each year. There are good reasons to believe that expansion will continue. The in-country partners are also expanding their capacity. There is no evidence of transfer outside the project, but perhaps in a large devolved model there is no need for this to happen.
There is good evidence that local individual projects have expanded and are delivering more homes. Three in-country partners (LUMANTI in Nepal, NACHU in Kenya, and ZINAHCO in Zimbabwe) have grown to become the largest delivery agent of formal pro-poor housing in their countries. Many individual projects have been successful in documenting and disseminating learning and good practice.
There is also good evidence that national transfer is occurring. The number of in-country partners has increased significantly. Many partners are actively engaged in transferring good practice within their country and sometimes beyond. For example, LUMANTI in Nepal has established a research centre and has helped establish new research centres in new CLIFF project areas across the country.
Internationally, significant transfer has occurred. The project has expanded into ten countries. There is good evidence that cooperation and support is occurring between the in-country partners. A highly successful new partner WAT- HST from Tanzania received significant help from partners in Kenya, Malawi and Zimbabwe, enabling it to scale up its activity significantly.