Stichting Bakens Verzet

Cruquiuskade 165, 1018 AM Amsterdam, The Netherlands

Reg.nr. 34235506 KvK Amsterdam; BTW/VAT nr. NL8150.17.972 B01;

Bank: Triodos Bank : IBAN NL90 TRIO 078.13.27.598

Directie :
T.E.Manning, Schoener 50, 1771 ED Wieringerwerf , The Netherlands
Tel : 0031-227-604128

E-mail : (nameatendofline)@)xs4all.nl; Homepage: http://www.flowman.nl : bakensverzet

## BAKENS VERZET-HOMEPAGE

"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

"In the end, it's about love for mankind. Freedom begins with love. Our challenge is to learn to love the world"

Nigerian writer Ben Okri, interview in Ode Magazine, Dec 2002-Jan 2003, p.49

Edition 07: 22 March, 2006

### EXECUTIVE SUMMARY OF PROPOSED MULTILATERAL INTEREST-FREE LOAN FINANCED PROJECT

#### 1.0 INTRODUCTION

The accompanying innovative Model Integrated Self-financing Development Project covers a complete package of 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 Model is strongly demand response oriented. Project applications are worked out together with the people concerned, who execute, run, own and pay for them. There will therefore never be a project application identical to the Model, nor will there ever be two project applications identical to each other.

The Model provides practical working solutions for sustainable 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.

Project applications are self-financing, subject to an interest-free seed loan repayable in 10years. The Model is structured for communities of 10000 households (50000 users) but can be adapted to smaller and larger project areas as required. The amount of the loan is Euro 3.000.000 or Euro 60 (or equivalent in Euro) per user. This involves a monthly payment of at least Euro3 per family into the Cooperative Development Fund. This is enough to cover the basic package offered. Services offered can be further extended to projects areas where users are able to pay more than Euro 3 per family per month.

Project applications require 75% financing by an External Support Agency. Regional or state authorities in the beneficiary countries are expected to supply the remaining 25%.

Project applications are self-financing because they allow 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 to be administered by a local bank. They are generated by recycling loan repayments and reserves during the loan term.

#### 2.0 PROJECT APPLICATIONS

Project applications in their minimum configuration are centered on the following components
i. Hygiene education at community level (Health Clubs) and in schools
ii. Distributed clean drinking water (solar pumps with handpumps backup)
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.PV lighting for study
viii.PV lighting and vaccine refrigeration in clinics
ix. Rainwater harvesting
x. A local PV powered radio station

#### 3.0 GENERAL ECONOMIC BASES AND PRINCIPLES OF PROJECT APPLICATIONS

a)The project will be financed by interest-free seed capital in the form of a 'green' loan repayable over a period of 10 years.

b)75% of this capital will be contributed by xxxxxxxxxx and the remaining 25% by the (Regional) Government of xxxxxxxxxx.

c)General financial supervision will be on terms agreed with the lenders of the seed capital, but with the elimination of unnecessary bureaucratic restraints.

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 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.

i)The project encourages open competition and free enterprise within the framework of a 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 mostly in local LETS currencies.

k)Local work will be paid for at current local pay rates expressed in the local LETS currencies.

l)The on-going administration costs of the Project Coordinator will be agreed and set out in the project documentation.

m)Users must make their first monthly contribution in advance, when their project systems are put into use.

n)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 currencies for their work.

o)Individual women or women's groups will, without payment, each look after their own sanitation units.

p)Regular inspection by installations will be paid as necessary in the local LETS currencies.

q)The operation of the xxxxxxxxxx local bank will be supported and supervised by xxxxxxxxxxxxxxxx(Green Bank)

r)The Regional Government of xxxxxxxxx and the Local Council of xxxxxxxxxxx will undertake not to intervene to impede the development of the local LETS currencies either during or after the project period.

s)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.

t)Before the project starts, a formal agreement will be made to ensure ownership of the project is vested in the beneficiary communities.

#### 4.0 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.

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

#### 5.0 INSTITUTIONAL STRUCTURES

The various parties which would be presumably usually be involved in project applications are:

i. The Local NGO

ii. Project Coordinator (from the project area in the beneficiary country)

iii. Consultant to the Project Coordinator

iv. The Organisational Workshops

v. External Funding Authority

vi. Local Funding Authority

vii. Regional Administrative Authority

viii.Locally Elected MP's

ix. Local councils

x. The Local/State Health Authorities

xi. The Local/State Education Authorities

xii. The Local Tax Authorities

xiii.The Local Bank and Micro-Credit Institution

xiv. The External Bank

xv. The Local Beosite Production Units

xvi. Tank Commissions - the Key Structures

xvii.Well Commissions

xviii.Zimbabwe AHEAD (NGO)

xix. EOS ADVISES

xx. Medical Commissions

xxi. Teachers' Commissions

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 Model and in the diagrams and charts part of the project document. The parties participating will vary from one project application to another.

#### 6.0 TYPICAL BUDGET AND BUDGET ANALYSIS

A typical total budget for a project application under the Model, in its minimal configuration, is Euro 3.0 Million.

Outgo (Capital) | Phase | Estimate (Euro)
OW health clubs | 2 | 30.000
Formation of health clubs | 2 | 10.000
Material for health clubs | 2 | 5.000
Training of health workers | 2 | 10.000
OW health courses in schools | 2 | 10.000
Material for school courses | 2 | 2.5000
OW social structures | 2 | 40.000
OW LETS systems | 2 | 60.000
Office and equipment LETS systems | 2 | 30.000
OW Micro-credit system | 2 | 20.000
Office/equipment Micro-credit system | 2 | 10.000
OW Beosite production units | 2 | 30.000
Shovel/preparation anhydrite supply site | 2/3 | 10.000
Construction and equipping anhydrite factory (*30000 FOR EACH FACTORY) ASSUMING 3 UNITS | 2/3 | 60.000
Moulds for anhydrite products (*20000 FOR EACH FACTORY) ASSUMING 2 UNITS | 2/3 | 60.000
Location gypsum depots and quality control | 2 | 3.000
OW recycling system | 2 | 30.000
Setting up recycling centre network | 2 | 150.000
Setting up compost collection network | 2 | 5.000
OW Bio-mass system | 2 | 15.000
OW Drinking water system | 2 | 25.000
Setting up of project workplace | 2 | 12.000
Vehicles and materials for wells | 3 | 150.000
Fuel and maintenance vehicles | 3 | 26.000
Labour for wells - LETS systems | 3 | pro-memoria
30 Washing places- LETS systems | 3 | pro-memoria
30 Platforms for handpumps - LETS systems | 3 | pro-memoria
200 Pumps (300W per pump) | 3 | 257.000
200 Supports for solar panels | 3 | 50.000
Solar panels (200*300 W=60kW) | 3 | 360.000
30 Handpump groups (90 pumps) | 3 | 68.000
Cables, feedpipe for pumps/wells | 3 | 65.000
Pipe lines from wells to tanks - 100000m @ Euro 1 | 3 | 100.000
Labour for laying water pipelines- LETS | 3 | pro-memoria
200 Water tanks (@ 2m * 1.7m)- mostly LETS | 3 | 50.000
200 Bases for water tanks - mostly LETS | 3 | 25.000
Supervision of installation and training maintenance operators | 3 | 15.000
Purchase spare parts supplies | 3 | 20.000
Permits and formalities | 2 | 1.000
Preparation and formulation of project specifications | 2 | 6.000
100 Solar water purification installations for clinics and schools | 3 | 47.500
900 Solar water purification installations (inc.15.000 Wp panels) | 4 | 128.500
200 PV lighting units for study purposes | 4 | 105.000
PV television for study | 4 | pro-memoria
PV lighting for schools | 4 | pro-memoria
PV lighting for clinics outside the project area | 4 | pro-memoria
PV lighting for clinics inside the project area | 4 | 15.000
PV refrigeration for clinics @ Euro 5000/clinic | 4 | 15.000
Water testing equipment | 4 | 5.000
Transport costs Europa-xxxxxx | 3 | 30.000
Transport costs xxxxx | 3 | 22.500
Administration and supervision xxxxxxxxxxx | 3/4 | 36.000
Reserve fee for Project coordinator @Euro 50000/year | 1/5 | 100.000
General project consulting Manning @Euro 50000/year | 1/5 | 100.000
Fund for PV lighting solar home systems | 4 | 100.000
Sanitation facilities with exception of some additvites will be manufactured and installed within the local LETS systems |  | 15.000
OW radio station | 4 | 25.000
Fund for radio station | 4 | 52.000
Reserves 12.6% of total | 5 | 378.000
General total | 5 | 3.000.000

#### SHORT ANALYSIS

Outgo (Capital) | Phase | Estimate (Euro)
Total first phase | 1 | 0
Total second phase | 2 | 668.500
Total phase 3 | 3 | 1.293.000
Total phase 4 | 4 | 460.500
Fees project coordinator | 1/5 | 100.000
Total supervision Manning | 1/5 | 100.000
General total all phases |  | 2.622.000
Reserves 12.6% | 5 | 378.000
Total 1+2+3+4+5 |  | 3.000.000

#### ON-GOING COSTS

On-going costs | Euro
Coordinator for administration | 15.000
Maintenance operators | 5.000
Tank commissions (200*5 Euro p.m.) | 12.000
Spare parts | 15.000
Reserve for theft | 15.000 |
Unforeseen | 7.500 |
Total recurrent costs | 69.500 |

#### 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 | 290.500

#### Comments

1. The above net income is sufficient to finance and repay an interest free loan for Euro 3.000.000 over a period of 10 years, taking the various reserves into account.
2. Interest-free loan for Beosite (R) each factory Euro 50.000, 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.

#### 7.0 ACCESS TO THE COMPLETE MODEL PROJECT

The project has been placed in the pubic domain and can be freely accessed and downloaded together with drawings, charts and graphs in colour together from the home page of the website : www.flowman.nl

#### 8.0 LIST OF KEY WORDS

Anhydrite, use of; Banks, role of in development; Beosite (R) products; Bio-mass, for cooking; Briquettes, bio-mass; Capacitation workshops; Chain control, integral; Clodomir Santos de Morais; CO2 emissions, reduction of; Communication flows in development projects; Compost, recycling; Composting toilets; Cookers, high efficiency; Cooperation, role in development; Development projects, structures for; Development, sustainable; Drinking water supply; Economy, developing countries; Economy, development projects; Economy, foreign aid; Economy, industrial development; Economy, interest-free development; Economy, Local Exchange Trading (LETS) systems; Economy, nominal local currencies, development of; Economy, micro credits; Economy, self-financed development; Economy, taxation and development; Education, hygiene; Gender, role of women; Gypsum, cheap; Hand pumps; Health Clubs, development projects; Hygiene, education; Industrial development; Information flow in development projects; Integral chain control; Integrated development projects; Interest, role of; LETS systems; Loans, interest-free; Local currency systems; Local Exchange Trading (LETS) systems; Micro-credit systems; Morais Clodomir Santos de; Organizational workshops (OW); Photovoltaic (PV) home systems; Photovoltaic (PV) lighting; Photovoltaic (PV) pumps; Photovoltaic (PV) refrigeration; Poverty alleviation; Products, regeneration of; Pumps, solar; Pumps, hand ; Rainwater, harvesting; Recycling, compost; Recycling shops; Recycling, waste; Regeneration of products; Rural water supply; Sanitation, developing countries; Sanitation, dry; Self-financing development projets; Solar pumps, submersible; Stoves, high efficiency; Sustainable development; Tanks, Beosite (R), local manufacture; Toilet facilities, Beosite (R); Toilets, dry; Urine disposal; Washing places; Waste collection systems; Water purification, UV; Water supply projects; Water supply, rural; Water tanks, Beosite (R); Women, role of in development; Workshops Moraisian.

"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

#### COMPLETE MODEL PROJECT

#### CONCISE PRESENTATION

#### THE MICRO FINANCE ASPECTS

#### THE WATER SUPPLY ASPECTS

#### INFORMATION NEEDED TO PREPARE PROJECT APPLICATION (IN ENGLISH)

#### INFORMATIONS NECESSAIRES A LA REDACTION D'UNE APPLICATION AUX TERMES DU MODELE

Model for integrated self-financing development

Homepage