Safe Drinking Water: Hydrologic, Cambodia - GIZ

Business Case for Mitigation and Adaptation
Dissemination of Climate Technologies for
Mitigation and Adaptation with the Private Sector
Safe Drinking Water: Hydrologic, Cambodia
Challenge
The sales strategy is built around three distribution channels that
serve two different customer segments: the poorest customers (earn-
Degradation of water quality and water supply is expected to be one
ing less than 1 USD/day) are reached via institutional sales, where
of the key impacts of climate change. Increased precipitation varia-
NGOs acquire the basic Tunsai filter from Hydrologic and distribility
and shifts in water run off have both direct and indirect effects
bute it to households in need through donations or subsidized sales.
on water quality. With growing populations and increasing demands
The main customer segment is served through both retail sales and
on water resources, emerging and developing countries need to dedirect
sales which are managed through village meetings. In covelop
innovative climate change adaptation technologies.
operation with the microfinance institution Vision Fund, financing
Almost two million Cambodian households do not have access to possibilities are offered to customers at a 2.8% interest rate per
safe drinking water, and climate change exacerbates the situation as month. During the village meetings, Hydrologic's sales agent is acwater
quality and availability is even further degraded. Hydrologic companied by a representative of its microfinance partner who con-
Social Enterprise (Hydrologic) markets ceramic water purifiers, a ducts on the spot loan approvals.
climate-friendly technology that enables users to improve water
Hydrologic is on track to be financially profitable in the beginning of
quality at the point of use. It provides an alternative to other ener-
2013. Through the support of "Nexus Carbon for Development",
gy – intensive ways of water treatment like boiling – helping house-
Hydrologic also aims at incorporating carbon finance.
holds not only to adapt but also contributing to the mitigation of
climate change. Less boiling of water results in a considerable reduc-
Company Background
tion of greenhouse gas emissions from the burning of fuel wood and
charcoal, and thus reduces pressure on local forest resources.
Hydrologic is a private limited company founded in 2009 by
iDE. Hydrologic began as a project of iDE, which first introduced
Business Model
ceramic water purification to Cambodia in 2001. The company
The water sector offers many business opportunities related to currently employs 40 people.
adaptation. Hydrologic's main business target is to deliver an effective
and affordable water treatment solution to rural and urban
households in Cambodia, with a special focus on Base of the Pyra- Partners
mid customers. This is achieved through locally self-produced ceramic
water purifying units which are sold under the name “Tunsai”. International Development Enterprise (iDE) is a non-profit
Each unit consists of a plastic container and an urn made from an in- international NGO with a unique market-based approach to
novative mix of clay, rice husks and silver nitrate. The filter has an es- poverty reduction. They provide start-up guidance and support
timated lifespan of about two years. To access all possible customer Hydrologic through a loan investment.
segments, Hydrologic developed two different filter versions: the Start-up resources for Hydrologic came from several sources inbasic
“Tunsai” with a water storage capacity of 12 liters, sold at cluding PATH and the USAID WaterSHED project, in form
$13.50, and the more aspirational “Super Tunsai” with 14 liters of of grants and technical assistance. Loans have also been received
storage, improved aesthetic design and an elevated stand at a price of from the social investment fund Impact Finance.
$23.50.

Benefits
iDE
The water sector is heavily affected by climate change, which has problems. An emission-free ceramic water filter improves public
direct effects on the consumption of water by households. health and in-house air quality, which is particularly beneficial for
Hydrologic's technology improves drinking water quality, allows women and children who spend a lot of time in the kitchen.
some water savings, and therefore helps local households to adapt to Subsequently school attendance of the children is increased, lost
climate change. In 2011, Hydrologic sold more than 45,000 water productivity from waterborne diseases is reduced, and less financial
filters. With over 230,000 filters sold in the last ten years and an resources are needed for medical care. Due to the passive nature of
estimated filter lifespan of about two years, more than 80,000 tons the purification process more time can also be spent in gainful actiof
wood has been preserved so far. Furthermore considering the fact vities and childcare.
that onefilter eliminates about 0.46 tons of carbon dioxide during
each year of use, Hydrologic managed to achieve a total carbon offset
As a social enterprise, Hydrologic improves the living conditions of
of 188,500 tons since its start of operation as an iDE managed pro-
poor populations that are more exposed to the risks of climate
ject in 2001.
change by providing them with a safe water supply, but also by in-
countryfilter fabrication that creates local employment opportuni-
Almost 60% of the households in Cambodia that rely on boiling for ties, but also by creating local employment opportunities through
water purification purposes burn fuel wood or charcoal within their
houses.This results in severe respiratory illnesses and heart and eye
the local fabrication of the filters.
Contact: Mr. Michael Roberts, Director, Hydrologic: mroberts@ide-cambodia.org
Website: http://www.hydrologichealth.com/
Sources: “An excellent idea” (2011): in Healthcare in Asia. The innovation imperative by Economist
Intelligence Unit: http://download.economistconferences.asia/HIA_White%20Paper_2011.pdf,
retrieved on February 9, 2012.
Photo credits: Hydrologic
Founding partner
“Economic Impacts of Sanitation in Cambodia” (February 2008): in Economics of Sanitation
Initiative, World Bank:
https://www.wsp.org/wsp/sites/wsp.org/files/publications/ESI_Cambodia_full.pdf, retrieved
on February 9, 2012.
Authors: adelphi: Rainer Agster, Anais Mangin, Jona Liebl
Hydrologic
NGO Retailer
Donation or
subsidized sale
Poorest customers
( <
1 USD/day)
Sale
Sale
Main customers
(1-5 USD/day)
Carbon Finance
Project
Direct Sale
(with a possible micro-credit)
Nexus Carbon for Development
Micro-Finance Institution
(e.g. Vision Fund)
Project:
“Dissemination of Climate
Technologies for Mitigation
and Adaptation with the
Private Sector”
Project responsible:
Ms Heike Bürskens
heike.buerskens@giz.de
www.giz.de/ibf
Source: Hydrologic