#### STICHTING BAKENS VERZET

#### 1018 AM AMSTERDAM, THE NETHERLANDS

Director,

T.E.(Terry) Manning,

Schoener 50,

1771 ED Wieringerwerf,

The Netherlands.

Tel: 0031-227-604128.

Homepage: http://www.flowman.nl

E-mail: (nameatendofline)@xs4all.nl : bakensverzet

## MODEL (PROJECT) FOR SUSTAINABLE ECOLOGICAL SELF-FINANCING INTEGRATED RURAL AND POOR URBAN DEVELOPMENT FOR THE WORLD'S POOR.

Sustainable fully ecological self-financing poverty alleviation in rural and poor urban environments, incorporating an innovative package of social, financial, and productive structures, with basic services necessary for a good quality of life for all, a leading role for women, and numerous renewable energy applications.

"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, London 1958, page 228.

Edition 16: 26 November, 2006.

(EN FRANÇAIS)

### 01.02 SAMPLE EXECUTIVE SUMMARY FOR (INTEREST-FREE LOAN FINANCED) SUSTAINABLE ECOLOGICAL

### INTEGRATED DEVELOPMENT PROJECT (NAME AND PLACE OF PROJECT)

#### 1.0 INTRODUCTION

The accompanying project has been prepared following an innovative Model for Sustainable Ecological Self-financing Integrated Development. It covers a complete package of social, financial, and productive structures and basic services for sustainable development in beneficiary communities. It includes hygiene education, the provision of drinking water and sanitation services, PV lighting for study, PV lighting and refrigeration in clinics, waste removal, high-efficiency stoves and bio-mass to fuel them. It provides a strong thrust for on-going local development, productivity, and employment. It contains many decentralised solar energy applications.

The project is strongly demand response oriented. It has been worked out together with the people concerned, who execute, run, own and pay for the social, financial and productive services set up.

The project provides practical working solutions for sustainable ecological integrated development 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 in the project area.

Where initial seed capital is not available by way of grant, project applications can be self-financing, subject to an interest-free seed loan repayable in 10 years. Projects under the Model are structured for communities of 10000 households (50000 users) but can be adapted to smaller and larger project areas as required. The nominal value in Euros of a project is usually Euro 4.000.000 – Euro 5.000.000. The amount of the foreign currency or formal money seed loan necessary for the project is typically Euro 3.000.000 – Euro 4.000.000 or usually less than Euro 100 per user. This means that project applications require about 75% financing in the form of a grant or an interest-free loan by an External Support Agency together, eventually, with the state and/or public institutions in the host country. The local people in the project area contribute the remaining 25%. They are responsible themselves for most of the activities necessary for project execution. They carry out this work for full payment under the local money systems set up during an early phase of project execution. The debits to cover the cost of this work are distributed amongst the adult population in the project area. For the purposes of calculation of the total value of the participation of the local people, the local contribution is typically converted into Euros at an agreed rate for each eight-hour working day. This rate is often about Euro 3 per working day.

The present project is for a nominal value of (Euro 5.000.000). It is structured for (10.000 households) (50.000) users. The (formal money grant or interest-free seed loan) necessary is (Euro 3.707.150).

The beneficiary populations make a monthly payment of (at least Euro 3) per family into a Cooperative Local Development Fund. This is enough to cover the entire basic package of services offered. Where water sources are deep-set throughout a project area, boreholes need to be drilled and costs will tend to be higher than those in areas where protected wells can be dug under the local money systems set up. In this project the water-table is (deep, shallow) and the professional services of a drilling company (are, are not) needed.

Extra services can be made available in project areas where users are able to pay more than Euro 3 per family per month. For this project, the following extra services are made available for an extra monthly sum of (amount in Euro).

(List of services)

Project applications are self-financing because they allow the recipient communities to fully exploit a network of sustainable development activities using:
(i) The initial capital grant or interest-free seed loan itself
(ii) Local Exchange Trading Systems (LETS)
(iii) Multiple re-cycled interest-free micro-credits administered by the people themselves. The micro-credits (typically at least Euro 1500 per family during the first ten years’ period) are generated by recycling as rapidly as possible the monthly contributions paid by families into their Cooperative Local Development Fund, the repayments of loans for productivity structures established as part of project execution, and any project reserves available during the loan term.

#### Since in this case the capital funds (are, are not) made available by way of grant, users (are, are not) not required to pay the capital back in a lump sum at the close of the first period of ten years.

#### (In this case, the capital funds collected in the Cooperative Local Development Fund, equal to the original capital grant, can either be used for extensions of project services or continue to be fully exploited for interest-free micro-credits.)

#### (In this case, the capital funds made available by way of an interest-free ten year loan are paid back in a lump sum after ten years. The amount in the Cooperative Local Development Fund then drops temporarily back to zero. However, since the families continue to make their monthly contributions to the Fund, the amount in the Fund gradually builds up again during the second ten years period as it did in the first period of ten years, and is again recycled interest-free for micro-credits for productivity development until it is needed to pay for capital extensions and replacements after twenty years.)

#### At that point, the Fund dips back to zero again and slowly builds up again during the third ten-year period and so on in an inherently permanently sustainable way.

#### 2.0 THE PROJECT APPLICATION

The project application, in its minimum configuration, is centred on the following components:

01. Hygiene education at community level ((200) Health Clubs) and in schools.
02. Distributed clean drinking water ((200) using solar pumps at tank commission level, with (35) sets of hand pumps at well-commission level as backup), in (46) schools and (4) clinics.

03. Sustainable sanitation (based on the separation of urine, faeces, grey water, other organic waste) in all (10.000 houses in the project area).
04. Supply of (20.000) efficient stoves for cooking (plus solar cookers).
05. Contracts (400) for the production of biomass and (35) production units for mini-briquettes to fuel the cookers.
06. Recycling of organic (200 structures) and non-organic waste products (rubbish collection) (35 structures).
07. Study rooms (200) with PV lighting for study.
08. PV lighting and vaccine refrigeration in (4) clinics.
09. Rainwater harvesting structures in (10.000 homes)
10. Other services the local people may be particularly interested in having included in the project activities. Typical examples of these are the setting up of a local radio station, setting up local milk shops for the pasteurisation and distribution of milk, the creation of cooperative storage facilities for food, especially for food for local consumption, the creation of a seed bank, and the draining and re-structuring of market squares and public places. Many such poverty alleviation initiatives may require some project-level formal money funds. Other typical initiatives, for instance, creating sports clubs, theatre groups, local consultants’ offices, communications centres, plant nurseries, reforestation etc are carried out under a combination of the LETS local money systems and the interest-free micro-credit systems set up.

#### 3.0 GENERAL ECONOMIC BASES AND PRINCIPLES OF THE PROJECT APPLICATION.

01.The project encourages open competition and free enterprise within the framework of a cooperative and non-profit-making project level financial structure.

02. 75% of the formal money project costs are financed by seed capital in the form of a capital grant or in the form of an interest-free seed loan repayable over a period of 10 years. The remaining 25% is contributed by the local inhabitants themselves in the form of payment for work carried out for the project. The onus of this payment is equably debited within the framework of the local money systems set up by the project to all the adult beneficiaries in the project area.

03. General financial supervision will be on terms agreed with (donors or the lenders of the seed capital), but with the elimination of unnecessary bureaucratic restraints. Project execution is the responsibility of a single project coordinator. The coordinator is supported by a single consultant for the application of the sustainable ecological self-financing integrated development concepts involved, and, for periods varying between six months and twelve months, by an expert on Moraisian capacitation workshops, an expert on hygiene education courses, and an expert on gypsum composite technologies. (In this case, since the level of the water table in the project area is deep, the services of a specialist well-drilling company are required.) The coordinator and his small team are the “government”. The NGO responsible for the project, (name) is the “parliament”. Its job is to carry out on-going specialist independent monitoring of project progress. Once it has approved the project, the NGO responsible will not intervene in project execution. The project coordinator may not be a member of the NGO responsible. The NGO responsible for the project answers in turn to an auditing commission.

04. Seed capital repaid or contributions made by users in the form of monthly instalments typically of about Euro 0,60 per person into the Cooperative Local Development Fund are retained in the local project area until the close of the first ten years’ project operation period. During that time, the repayments in the Fund are used to grant revolving interest-free micro-credits for local productivity development. Seed capital not required for short term use, and any part of the maintenance money destined for long term replacement of capital items will similarly be recycled as interest-free micro-credits until it is needed. Interest-free seed loan funds are repaid at the end of the first ten years’ period.

05. The Cooperative Local Development Fund is run by the Central Administrative Office of the project by local people chosen by the Well Commissions.

06. The local currency (LETS) systems set up during an early phase of the project 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 and most of the costs of on-going administration and maintenance of project structures. Local work will be paid for at current local pay rates expressed in the local LETS currencies. It is expected that the average rate be based on 10 local money units for one hour’s work.

07. Users will be 100% responsible for on-going formal currency administration and maintenance costs. A part (about 25%) of the monthly contributions paid by users into the Cooperative Local Development Fund is sufficient to cover these costs. The monthly contributions are paid by each family into the Cooperative Local Development Fund. They are expected to be to a large extent covered by savings on funds traditionally spent on fuel, water, batteries, waste removal and similar.

08. The on-going administration costs of the Project Coordinator have been agreed and are set out in the project documentation.

09. Users must make their first monthly contribution in advance, when their project systems are put into use. This is expected to be after about 9 months, when the interest-free micro-credit structures are in place.

10. The tank commissions are paid a small monthly allowance in formal currency. This allowance can be used to subsidise poorer families temporarily or permanently unable to make their (full) monthly contributions to the Cooperative Local Development Fund, the aged, the sick, and the handicapped.. The members of the tank commissions and the well commissions are paid a monthly allowance under the local LETS currencies for their work.

11. Individual women or women's groups will, without payment, each look after their own domestic composting eco-sanitation units. Regular inspection of the installations will be paid for under the local LETS money systems as required.

12. (The Regional Government of (name)) and the Local Council of (name) have undertaken to fully support the development of the local LETS money systems during both the first two years’ project execution period or during the agreed period of tax-moratorium ( period in years) following execution. 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.

13. The ownership of all project structures by the beneficiary communities has been ensured, and when and how this will take place is clearly set out in the project documents for each structure.

#### 4.0 LONG TERM GOALS OF THE PROJECT

The long term goals of the development project are:

01. To sustain on-going improvement of the general quality of life well-being and health of the local people.

02. To stop financial leakage from the project area.

03. To free more human resources for local production and development.

04. 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.

05. To decrease infant mortality and promote family planning.

06. To increase literacy levels.

07. To eliminate dependency on fuels imported from outside the project area.

08. To help reduce deforestation and global warming.

09. To create value added from locally recycled organic waste and non-organic solid waste.

10. To create a "maintenance culture" to conserve the investments made.

11. 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.

12. To create full employment in the project area.

13. To offer meaningful opportunities to youth and help stop movement of population from rural areas to towns.

#### 5.0 SHORT TERM RESULTS OF THE PROJECT.

#### Typical expected short term results (figures vary from one project to another and are therefore indicative only) include, but are not limited to:

- 001 Environmental impact study completed.
- 001 Permanent central system coordination structure.

- 200 Self-sustaining local social and financial structures created.
- 200 Tank commissions (1000 women responsible) established.

- 035 Well commissions (200 women responsible) established.

- 001 Capacitation workshop for water structures completed.

- 001 Central water management structure set up.
- 035 Bore holes (sometimes wells) with a diameter of at least 8” dug.

- 100 Back-up hand pumps installed.
- 200 Tank commission level distributed drinking water structures installed.

- 200 Solar water pumps installed.

- 050 Kilowatt photovoltaic panels for distributed drinking water systems installed.

- 200 Kilometres of channels for drinking water pipeline dug.

- 200 Km of pipeline for drinking water laid.

- 001 Solar and hand pump maintenance structure set up complete with spare parts stocks.

- 035 Well-level water management structures created.

- 035 Washing places at well level built..

- 035 Back-up systems for drinking water treatment installed in schools and clinics in the project area.

- 001 On-going drinking water quality testing structure set up.
- 001 Capacitation workshop to set up 200 health clubs completed.
- 001 Capacitation workshop for the formation of 200 social structures completed.
- 001 Capacitation workshop for the formation local money systems in the project area completed.
- 035 Local money LETS transaction registration centres formed.

- 001Capacitation workshop for the formation of micro-credit structures completed.
- 001 Complete structure for the management of micro-credits set up.

- 001 Capacitation workshop for the sourcing quality control and operation of gypsum deposits completed.
- 003 Factories for production of articles from gypsum composites built..

- 001 Capacitation workshop for study, and design of gypsum composite products completed.
- 001 Capacitation workshop on recycling structures completed.

- 001 Compost collection network set up.

- 001 One non-organic waste recycling network set up.
- Installation of 10.000 eco-san systems in private homes begun (about 500-1000 systems installed by end of 24 months’ execution period.)

- Installation of 10.000 water harvesting structures in private homes begun (about 250-500 systems installed by end of 24 months’ execution period).

- Production of 20.000 high efficiency cookers for private homes begun ( about 1500-2500 delivered by end of 24 months’ execution period).

- 001 Capacitation workshop for bio-mass production completed.
- 035 Units for the production of mini-briquettes for the high-efficiency cookers set up; production of the mini-briquettes will just have begun by the close of the 24 months’ execution period.

- 400 Agreements for the production of bio-mass for the mini-briquettes signed; production of bio-mass commenced.

- 200 Study rooms built.

- 200 Photovoltaic lighting systems for study purposes installed.

- 005 Kilowatt of photovoltaic panels for the study rooms installed.
- 035 Photovoltaic lighting systems installed in schools.

- 005 Kilowatt photovoltaic panels installed in schools for study purposes.

- 001 Reproducible integrated development project for emulation elsewhere in the host country completed.

Funds for the “productive structures” included in the above list are individually listed on the balance sheet to cover the formal money costs of their formation. These interest-free formal money loans are paid back into the project’s Cooperative Local Development Fund, over a period, usually 4-5 years, considered realistic by the participants in the capacitation workshops in question. The repayments are financed by the sale until loan repayment is completed of a part of the production for formal money OUTSIDE THE PROJECT AREA. In the case of the waste recycling structures by the “exportation” of non-organic wastes which cannot be recycled in the project area.

#### 5.0 INSTITUTIONAL STRUCTURES

The various parties involved in this project application under the Model include:

01. The Local NGO, responsible for the project.
02. Project Coordinator who is (from the project area), (from (area of origin)) responsible for project execution.
03. Consultant to the Project Coordinator for the application of the innovative concepts incorporated in the project.
04. A consultant for the Moraisian Organisational (capacitation) Workshops.
05. External Funding Authority (typically 75% of project funds).
06. (Local Funding Authority, where applicable.)
07. Regional Administrative Authority
08. Locally Elected MP's
09. Local councils
10. The Local/State Health Authorities
11. The Local/State Education Authorities
12. The Local Tax Authorities
13. The Project Level Micro-Credit Institution
14. The External (International) Bank to handle Euros accounts.
15. The Local Bank to handle national currency transactions.
16. The Local Production Units for the manufacture of items using gypsum composites.
17. Tank Commissions - the Key Structures
18. Well Commissions
19. Africa AHEAD (NGO) for the formation of the health clubs foreseen.
20. Consultant for gypsum composites.
21. Medical Commissions
22. Teachers' Commissions
23. On-going auditing committee (5-7 members).
24. Independent auditor.

The details of the roles of each of the above and how they all interact with one another as provided in the Model are set out in the section describing the various parties participating in the project and in the drawings and graphs.

#### 6.0 Short analysis

Outgo | Phase | Estimate (Euro)
Total first phase | 1 | 0
Total second phase | 2 | 1.593.480
Total phase 3 | 3 | 2.384.310
Total phase 4 | 4 | 707.510
Total phase 5 | 5 | 8.750
Unforeseen | 1/5 | 228.800
Administration | 1/5 | 77.150
Total |  | 5.000.000

#### 7.0 On-going costs

On-going costs : formal money | Euro
(excluding activities under local money systems) |
Coordinator for administration | 15.000
Maintenance operators | 5.000
Tank commissions (200*5 Euro p.m.) | 12.000
Spare parts | 15.000
Reserve for losses | 15.000
Unforeseen | 7.500
Total recurrent formal money costs | 69.500

#### 8.0 Income

####

Income | Euro
Annual contribution for use of water (10.000 households @ Euro 3 p.m.) | 360.000
On-gong costs per year | 69.500
Net annual income for loan repayment or reserve capital build-up | 290.500

#### 9.0 Comments

1.The budgeted net income of Euro 290.500 is sufficient to finance and repay an interest free formal currency loan for up to Euro 3.750.000 over a period of 10 years, taking the various reserves and loan repayments set out in comment 2. into account. Should payments out of reserves be higher than expected, the project administration may choose to increase the monthly contribution of the families after four or five years, as their standard of living improves.

2. Interest-free loans for various project structures transferred to private persons or cooperatives are paid back into the Cooperative Local Development Fund over a period of 3-5 years. They are taken into account in the calculations in point 1. These loans include those for the gypsum composites manufacturing units, the briquette manufacturing units, public transport cooperatives (buses), and the maintenance and installation cooperatives (vehicles). In case of loan repayment after ten years, funds available for interest-free micro-credits will be reduced to zero. Since the families continue to make their monthly payments to the Cooperative Local Development Fund, the capital in the Fund for micro-credits will gradually build up again as it did during the first period of ten years. Where the original seed funding was by way of grant, the large amount of capital in the Fund at the close of the first period of ten years will continue to circulate to finance interest-free micro-credits. It can also be used to finance extensions to project structures.

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.

6. Savings on the purchasing of bio-mass for cooking and on the costs of drinking water and batteries etc. will at least partly offset the costs of the project.

7. Funds may be made available to the project through the sale of rights under Carbon Emission Reduction certificates under the Kyoto Treaty.

Forward: list of drawings and graphs.

Back: General information.

Block 1 of the working files: general information.

Blocks of working files.

Complete working file index of the Model.

Homepage of the Model.

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