Build-Operate-Transfer- modality for scale and adaptation
Submitted by: Anders Bech Tharsgaard, Head of Business Engagement, Danish Refugee Council
Email: [email protected]
Introduction to the project
The project started in 2017. It is ongoing and is planned to be scaled up in 2020 and beyond.
In accordance with the objective of the Global Compact on Refugees to ‘ease pressure on countries that welcome and host refugees.’, the Build-Operate-Transfer (BOT) Model offers predictable and equitable responsibility-sharing modality for collaboration that is needed for sustainable solutions to refugee situations. DRC and Grundfos established the Business-Humanitarian Partnership Lab to collaborate on ways to provide sustainable water solutions to displaced people in 2016. The partnership have matured into a joint offering that combines the best of two worlds; a needs-based approach coupled with a robust and commercially efficient technical solution, effectively making technology work for people – displaced and hosts alike.
The backbone of the concept is a Build-Operate-Transfer model, on top of which sits an output-based contract and strong focus on delivering a cost efficient, environmentally friendly, robust solution with low operation and maintenance costs, along with high quality community sensitization and WASH training.
The project frame is a committed partnership with local stakeholders and impact investors to deliver clean drinking water and on-site training for a 3 year concession period. Water will be delivered at either an agreed set cost annually or flexible cost based on performance – taking responsibility for all operation and maintenance, as well as preparing for the future operation and maintenance of the system.
The project is informed by a study by the Technical University of Denmark, calculating that solar-powered systems create cost savings within the first year of operation compared to trucking and over a 10-year period, solar water pumps are 7-10 times more cost-effective. The environmental benefits are manifold as well with a minimal carbon footprint.
The BOT-model is a robust solution with low operation and maintenance costs. Repayment of investments made by DRC, Grundfos and, where required, impact investors, will happen over a 3-year period – a novelty in the humanitarian sector defined by short term funding logic. The commercially efficient as well as risk sharing modality between multiple parties makes the model attractive and has potential to generate interest across other sectors.
The BOT model is founded on a concept ready for scale and adaptation due to its modular design, why it is a good practice that offers perspectives for multiple sectors – including high-costeen humanitarian and development s sectors like energy and infrastructure, challenged by shortcomings such as short planning and financing horizon. Due to its adaptable and scalable nature, the gap betwectors are concretely bridged, while a private sector partner makes business out of supporting cost-effective basic needs provision.
- Financial resources to conduct research (Life Cycle Assessments) and set up pilot projects.
- Investment capital by the partners for later repayment.
Main activities of the Good Practice
The practice case in point is solar powered systems for water provision that are more desirable than expensive and environmentally damaging practice of water trucking. The water supply solution is equally accessible to both refugees and locals and has helped reduce the pressure on local utility infrastructure. The BOT model promotes solutions and further support a stronger and more cost-effective responsibility-sharing via not just cost-effective but also more sustainable approaches to providing basic services like water.
Building solutions rooted on the needs of the refugee and local population, operating the systems with regular training and monitoring and in the end transferring ownership to local governing bodies. Exiting after thorough operations & maintenance (O&M) training will ensure a stable supply of water for years to come.
There are derived positive contributions of the BOT model on refugees’ self-reliance as it is designed to provide long term, sustainable provision of water unlike the unreliable practice of water trucking. Derived effects of relying on market-based solution, is known to increase economic activity in specific areas of operation. This further provides a system where returns are generated, however small they may be, that can attract the interest of prospective investors including for scale up. Capacity building via local trainings on hygiene practices and O&M of the system is an integrated feature of the model, essential to promote local ownership and sustainability. Social cohesion is further promoted through collective usage of the services – refugees and hosts alike. Furthermore, conditions for vulnerable populations are improved as they spend less time on queuing up to meet their basic water needs (effectively more than 3-5 hours are often spent daily on getting water).
- Government of Uganda (dialogue ongoing)
- UNHCR (dialogue ongoing)
Challenges and how they were overcome
- Identifying ways to work with short term funding logic of the humanitarian system
- Taking partnership talks from the general level to the development of a specific, joint offering
How they were overcome:
- Work in progress. Full transparency about structure of offering (public-private partnership). Build case on concrete work done on the ground. Utilizing existing, trustful partnerships with donors to discuss news ways of working.
- Senior level management engagement.
Results of the Good Practice
- Cost efficiency and economic opportunity: Shared risk, minimizing period of water trucking, resulting in substantial savings for donor, capacity building and potential for economic activity in the host and refugee communities.
- Transparency: A turnkey solution with costed modular components and full visibility for all stakeholders. Connected data enable remote monitoring, mobile payment and transactional transparency.
- Sustainability: An environmentally sustainable solution, backed by social sustainability through equal access to water. Additionally, it ensures minimum maintenance and operation costs for medium and long-term value to host communities.
- Accessibility: Host and refugee communities can count on regular and reliable water service, moving away from late deliveries and other complications associated with water trucking.
DRC joint by UNHR is in talks for scaling the project in East Africa.