The increasing prevalence of development impact bonds points the way forward. Crucially, these bonds aim to provide a successful, workable financial structure that brings together private investors and corporates, as well as governments, and that shifts credit facility assessment from a solely risk-based model to one that includes impact-based assessment as well.
For government and other outcomes funders, it reduces financial and operational risk, while promoting investment in the creation of positive social outcomes and encouraging innovation; for investors, it offers a “mission aligned” investment opportunity that can create positive impact as well as financial returns; and for social enterprises and other sanitation-focused organizations, it offers upfront funding to develop, refine and scale their business models.
In essence, it’s a new model for public-private partnerships — one that offers huge potential to stimulate the level of investment needed to make real the promise of a transformative sanitation economy.
We sit at a critical inflection point in the pursuit of the Sustainable Development Goal of access to adequate and equitable sanitation and hygiene for all by 2030. With the UN suggesting that achieving universal access to even basic sanitation by 2030 would require doubling the current rate of change, we need to go further, faster in scaling the impact enterprises whose innovative business models are reaching the people that conventional sewerage, waste treatment and processing can’t.
Better answers to the global sanitation crisis already exist in the shape of past and present participants in the TBC’s Sanitation Economy Accelerator program. But unless and until the debate meaningfully shifts from why a transformational sanitation economy is a good idea toward how to rapidly scale and replicate the success of these enterprises, the prize — estimated to be worth US$62 billion a year by 2021 in India alone — is likely to remain elusive.
Building a profitable, sustainable sanitation business serving low-income customers is hard, but as the examples in this report show, it can be done. From bundling sanitation with other services to create a better, broader user experience, to creating demand for transformed toilet resources, to becoming asset light to make invested capital stretch further, Sanitation Economy Accelerator enterprises are illuminating multiple pathways to greater efficiency, profitability and scale. And in so doing, they’ve already brought dignity and a better quality of life to millions of people.
With the right support — particularly innovative forms of finance — EY and the TBC believe that these enterprises and others like them, can bring affordable, sustainable and safely managed sanitation to hundreds of millions more of the people who so desperately need it.