Zulu Biogas Centre

- Kibera, September 2009 -

- A simple entrepreneurial approach to a sanitation nightmare -

Africa Energy & Renewables

Carolina for Kibera

Table of Contents
Contents Executive Summary............................................................................................2 Background......................................................................................................3 About the Kibera slum..............................................................................3 About Africa Energy & Renewables...............................................................4 About Carolina for Kibera..........................................................................4 About the Zulu Group...............................................................................5 The problem: Kiberas Sanitation Nightmare..............................................................6 The Sanitation Entrepreneurs....................................................................6 The Competitive Landscape........................................................................7 About Emptying Tariffs.............................................................................8 The opportunity: The Zulu Biogas Centre.................................................................9 What is biogas? ....................................................................................9 What is a Biodigester? ..........................................................................9 Does it really work? ...............................................................................10 Economic Analysis............................................................................................12 Sources of Revenue.................................................................................12 Required Investment and Costs.................................................................5 Cash Flow Analysis................................................................................5 The Meeting Centre........................................................................................5 Risk Analysis................................................................................................5 Conclusions and Recommendations.......................................................................5

Page |1

Executive Summary
The project aims serve an unmet demand for toilets in the Kibera slum, located in the outskirts of Nairobi, Kenya. By providing a service to the community, the project will generate a sustainable source of income for a local youth association. The project will serve an estimate of 500 people per day that today use foul, dirty latrines or flying toilets (see description below). The project will as well use the gathered human waste to generate clean, renewable energy for cooking purposes and thus offsetting the use of charcoal, a practice that is being condiment by the local authorities given that sources of wood are increasingly becoming scarce. The present project activity will be based in a bio-system comprising a biodigester in which the waste will be digested and methane produced. The fuel gas produced from human waste fermentation inside the bio-digester will be piped to a set of kitchen burners for cooking through gas stoves. The sludge will be automatically discharged to the sewer system, avoiding any operational hassle. Finally, an additional meeting centre floor is proposed to consolidate the presence of the youth group and foster its activities in the community. The proposed project requires an investment of KshXXXXX and has very attractive returns.

Project Contact Information The project is at the business plan stage. For more information/questions please contact the following project proponents: Mr. Joseph Nganga Chief Executive Officer Africa Energy & Renewables jnganga@africarenewables.com Mr. Carlos Dolega Zakrzewski (Karol) MBA Candidate Stanford Graduate School of Business Dolega_Carlos@gsb.stanford.edu

Page |2

Background
About the Kibera slum Kibera, which in the Nubian language means forest or jungle, is a neighbourhood of Nairobi, Kenya. It is the largest of Kenyas slums, and the second largest urban slum in Africa, with an estimated population of between 800,000 and 1.2 million inhabitants1. The slum is located roughly 5 kilometres south-west of the city centre of Nairobi. Encompassing an area of roughly 2.5 square kilometres, Kibera accounts for less than 1% of Nairobi's total area, but holds more than a quarter of its population, at an estimated density of 2,000 people per hectare. The neighbourhood is divided into a number of villages, including Kianda, Soweto, Gatwekera, KisumuNdogo, Lindi, LainiSaba, Siranga/Undugu, Makina and Mashimoni. It is estimated that on average, 3.4 people occupy 10m2single-room structures built from mud, timber and corrugated iron sheets. The high population density, unplanned and crowded housing, and lack of infrastructure have resulted in poor provision of environmental and social services. Most roads in Kibera are inaccessible to vehicles, drainage channels on the sides of the roads are often blocked, pit latrines overflow (especially in the rainy season) and heaps of uncollected garbage lie everywhere. Most of what makes Kibera interesting, though, is what it shares with other African slums. The density (shacks packed so tightly that many are accessible only on foot); the dust (in the dry seasons) and the mud (when it rains); the squalor (you often have to pick your way through streams of black ooze); the hazards (low eaves of jagged corrugated iron); and the litter, especially the plastic. Most striking of all is the smell. With piles of human faeces littering the ground and sewage running freely, the stench is ever-present.

For more information on Kibera, read: "The Strange Allure of the Slums", The Economist, 5th May 2007.

Page |3

About Africa Energy & Renewables

About Carolina for Kibera

Established in 2001, Carolina for Kibera (CFK) is an international, non-governmental organization based in the Kibera slum of Nairobi, Kenya. In the United States, CFK is a 501(c) charitable corporation and major affiliated entity and program of the University of North Carolina at Chapel Hill based at the Centre for Global Initiatives.

Named a TIME Magazine and Gates Foundation Hero of Global Health, CFK fights abject poverty and helps prevent violence through community-based development in the Kibera slum and beyond. CFK envisions a world where the poor have a voice in their futures and opportunities for healthy growth. The organization is rooted in the conviction that solutions to problems involving poverty are possible only if those affected by it drive development.

Concerned outsiders can help by mobilizing communities, advising, networking, and providing resources. Ultimately, however, the community possesses the knowledge and motivation that are necessary to solve its own problems. Run by Kenyans and advised by American and Kenyan volunteers, CFK's primary mission is to promote youth leadership and ethnic and gender cooperation in Kibera through sports, young women's empowerment, and community development. Additionally, CFK works to improve basic healthcare, sanitation, and education in Kibera. Serving as a model for holistic, community-based urban development world-wide, CFK has helped grassroots organizations develop youth-based programs in six other nations and dozens of communities in Kenya. CFK is unique because it is run by youth from each ethnic community, male and female, in Kibera. The American outsiders don't run the dayto-day operations. Residents have ownership in the projects. - Rye Barcott, President

Page |4

About the Zulu Group

The Zulu Group is the visible face of CKFs youth sports program, and it relies on football (soccer) to promote leadership, community development and ethno-religious and gender cooperation. Apart from sports they additionally engage in socio-economic activities to improve the living standards of its members and the community at large. The group aims at empowering group members and the community socially and economically using potential resources available. Some of the main objectives are: Create employment opportunities through initiation of income generating activities Mentor and role model the youths Raise awareness and seek solutions on social, economical and environmental issues Identify and develop potential talents of youths

They draw membership from the youths within Kibera. The members are mainly school leavers, reformed street boys, orphans and jobless youth who have no means of income. The group is based in Kianda village of the sprawling Kibera slums and currently has XX members. The group currently manages a car-wash centre in Kianda, washing an average of 25-30 cars per day and generating close to Ksh3,000 per day in revenue for its members. Additionally, they recently began to operate a garbage aggregation and sorting facility for the local Kibera Market. In response to this initiative, they have been granted ownership to a piece of real estate right on Kiandas main road, where they are looking to develop the Biogas Facility.

Page |5

The Problem:

Kiberas Sanitation Nightmare

Long-term improvement projects have been hampered by the fact that 90% of Kiberas inhabitants are tenants. The owners, who usually live elsewhere, have little incentive to provide services or improve living conditions in the settlement. At the same time the Nairobi City Council does not provide sanitation services to Kibera and, although two sewer lines cross the settlement, most people rely on on-site sanitation. One latrine is often used by several households, or even several plots, which means up to 200 people may be sharing a single latrine. In many cases the latrines lack privacy and security, are unhygienic and in poor condition with gaping holes in the walls, broken doors and filled pits with foul smells.

A typical latrine within Kibera

Where latrines are not available, many residents have to resort to using a tin or a plastic bag that is then dumped in alleys, ditches or the rail tracks a practice called flying toilets2. In an already overcrowded slum, lack of adequate water supply, solid waste management, excreta disposal, drainage and wastewater management impact severely on public health. Of the top most widespread diseases in Kibera, five are linked directly to inadequate water and sanitation provision: diarrhoea, typhoid fever, tuberculosis, malaria and skin diseases3.

The Sanitation Entrepreneurs The Nairobi City Council, as well as the local Utility, have persistently failed to service the demand for improved sanitation. This has generated an important gap and a clear business opportunity, which has been embraced by informal, private small-scale providers of sanitation services. These entrepreneurs receive no government resources but survive by offering services

Watch this 1min introduction to the flying toilet experience http://current.com/technology/90884243_flying-toilets-take-cover.htm 3 Conversations with the Tabitha Clinic MDs.

Page |6

that the consumers want and are willing to pay for. They are often members of the community who have shown remarkable resourcefulness in finding simple but effective solutions often under the most adverse operating conditions. The Zulu Group is ready to put a big step into this business. The Competitive Landscape There are a number of different models of sanitation systems in Kibera, each differing in ownership, access and management system. The most widespread are the pit latrines, of which there are two main types: either connected to the sewage system or not. Public latrine blocks are also available, though operation and maintenance is carried on by volunteers that usually do not deliver an effective and efficient service. On the contrary, commercial management leads to a much higher quality service and well-maintained facilities, irrespective of whether the block is owned by a private operator or an NGO. Customers appreciate a flexible service adapted to their demands, which include providing toilet paper and sandals for use in the ablution block. Private household latrines are only available to members of the same household or plot. These facilities are fairly decent and clean because they service only a small number of people, who are usually closely related. Nevertheless some difficulties have been reported, mainly poor quality of construction, ownership claims from influential people and overflow during heavy rains because they are not connected to the sewer line. The three main latrine-emptying techniques employed in Kibera are: manual, mechanical, and gravitational. Manual emptying: an irreplaceable activity, it is the main type. It is well suited to slum conditions such as chronic overcrowding, poor vehicular access and heavy sludge, which is difficult to pump up into trucks. This sector comprises small groups of people working together on a regular basis, either volunteers or paid workers. Manual emptying is largely a seasonal activity it is not the main source of income for group. They normally use a 200 litre capacity container drum, and it can take him 10 to 20 loads to empty a simple full latrine. Incomes are irregular and modest, but still above the minimum wage for a general labourer in Nairobi.
A normal day for a latrineemptying volunteer

Mechanical emptying: would be the first choice due to cost, time and hygiene, but limited access roads severely hinders this option. Accessibility is a huge problem for mechanical emptiers and is the greatest deterrent to real competition in Kibera. Also, the presence of sludge and solid waste (regular garbage) in the pit hampers the process. The Nairobi City Council Water and Sewerage Department (NCCWSD) provide truck emptying services in the capital city, but their vehicles can access only the borders of Kibera. The insides are managed by smaller independent vehicle owners. These usually are licensed to discharge their loads in the citys sewage network, but often fail to do so because the treatment centres are far away and it is much easier to dump it somewhere closer (usually a stream). This practice causes severe health and environmental problems and needs to stop at once.

Page |7

Gravitational emptying: is used by most facilities that lie next to a river or drain, allowing the contents to flow directly into the water. About Emptying Tariffs Mechanical emptying tariffs are lowest per trip, but these are equal to or more expensive than private sector services when calculated on a per-quantity exhausted. Manual emptying services have the lowest minimum price, which suits customers with limited financial means who only want to reduce the pit latrines contents as opposed to emptying it completely. However, when the cost is based on the quantity removed, this works out as the most expensive method. Completely emptying a 2.5-3m3- the average pit size can cost Ksh7,500. But if the result is the same, the nature of the work is totally different and accessibility constraints often make this option the only one possible. It is interesting to note that many slum dwellers are convinced that manual emptying is the cheapest option. The poorest people living in the least accessible places have no other option but to pay almost seven times more than those in serviced settlements. Pits need to be emptied on average every 10 months; and it is estimated that more than 30% of the pits in Kibera are currently unusable because they are full4. A connection to the sewage line is a blessing for any facility. It not only eliminates the emptying costs, but also completely eliminates the foul smell and health risks from the accumulation of waste. The chosen location for the Zulu Biogas Centre is located right next to one of the two sewage lines that cross the slum.

Conversation with Josiah Omoto, UMANDE Trust

Page |8

The opportunity:

The Zulu Biogas Centre

Project Description The project consists of building a facility with clean, comfortable toilets that will be connected directly with a collection chamber, or bio-digester (description below). The facility consists of a lower level, that hold the chamber and the piping, and a surface level with the toilets and the kitchen. An initial estimation suggests a total of 10-12 toilets, divided amongst men and women plus children. The beneficiaries of the project will be the Zulu Group, by providing a source of work and income, and the community as a whole, by improving sanitation and providing access to biogas, a clean and renewable source of energy for cooking. What is biogas? Biogas typically refers to a gas produced by the biological breakdown of organic matter in the absence of oxygen. Biogas originates from the decomposition of organic material and is a type of biofuel. Biogas is a renewable fuel and can be used as a low-cost fuel in any country for any heating purpose, such as cooking. It can also be used in modern waste management facilities where it can be used to run any type of heat engine, to generate either mechanical or electrical power. Biogas is usually produced in bio-digester and is then burned to generate clean, renewable energy, usually for heating or lighting purposes. The main components of biogas are carbon dioxide and methane, which, if released in un-combusted form, is harmful to the environment as a particularly potent greenhouse gas. What is a Bio-digester? A biogas digester consists of an airtight reservoir into which a suitable feedstockcow dung, human waste, organic wasteis placed, either in batches or by continuous feed. Small-scale digesters for household use are commonly made of concrete, bricks, metal, fibreglass, or plastic. Larger commercial biogas digesters are made mainly of bricks, mortar, and steel. Digestion is accomplished in two general stages. First, acidogenic bacteria turn biomass into volatile fatty acids and metabolize these compounds into a combination of methane-rich gas and odourless phosphorus- and nitrogen-laden slurry, which makes excellent fertilizer. Depending on temperature and moisture content, it takes about 625 days to fully process a batch. The end product is about 6070% methane and 2030% CO2, with small amounts of hydrogen sulphide and other impurities. The gas can be connected to a household stove for cooking, to a light fixture with a gauze mantle for lighting, or to other appliances with simple natural gas plumbing; it burns like liquefied petroleum gas. It takes 12 cows, 58 pigs, or 4-5 adult humans to supply adequate daily feedstock for a singlehousehold biodigester. The daily input of waste and urine from a common family produces 89 kilowatt-hours of heat. Over a year, this is just about enough to provide sufficient energy for cooking and some lighting.

Page |9

Does it really work? Yes, lots of small-scale facilities are up and running, mainly in Nepal, India and China. The most widespread designs of digester are the fixed-dome digester and the floating-cover biogas digester. The digestion process is the same in each digester but the gas collection method is different. In the floating-cover type, the water sealed cover of the digester is capable of rising as gas is produced, where it acts as a storage chamber, whereas the fixed dome type has a lower gas storage capacity and requires better sealing if gas leakage is to be prevented. Both have been designed for use with human waste or dung. But the floating-cover design is usually more expensive, requires additional maintenance because it has movable parts, and it is harder to operate. On the other hand, the fixed-dome requires only locally and easily available materials and is fairly easy to construct.

A simple design for a biogas chamber with no moving parts

The waste is fed into the digester via the inlet pipe using the force of gravity, and undergoes digestion in the digestion chamber. The temperature of the process is quite critical - methane producing bacteria operate most efficiently at temperatures between 30-40C. Digestion time ranges from a couple of weeks to a couple of months depending on the feedstock and the digestion temperature. The residual slurry moves to the overflow tank and can be used as a fertilizer. However, the composition and value of this fertilizer is very erratic, making it not always commercially attractive. From an economic and practical perspective, the gas should always be available, so those digesters which allow continuous addition of feedstock which displaces spent feedstock is likely to be the most appropriate and acceptable. Batch systems, which require the physical removal of slurry every few days and the addition of new feedstock are both labour intensive and disruptive to supply. The continuous system is hence, much more appropriate.

P a g e | 10

The success or failure of any biogas plant mainly depends upon the quality of construction works. Additionally, there are a number of key criteria that need to be fulfilled in order to successfully build and operate a functioning, successful, and cash flow positive facility of these characteristics.

It is no rocket-science; they can do it

The following is a list of key criteria to take into consideration: The quality of the building materials must be high as the biogas is held under pressure within the dome Skills and know-how are needed both to build and to maintain biogas plants. Many units built in the past have been abandoned for lack of servicing skills Even if the set-up costs are subsidised, those who will use the facilities should have some financial stake in the project or they may not have a sufficient sense of ownership to maintain the plant The temperature has to be high enough to cause the digestion process to work or additional building work to create a warm environment may make it prohibitively expensive Handling human waste is a sensitive cultural issue and even the use of the gas may be unacceptable in some societies Promotion and dissemination of the benefits of biogas will be needed if it is to be accepted in the community This is a win-win solution that not only tackles sanitation and health issues, but provides a clean source of energy for the community.

P a g e | 11

The Zulu Biogas Centre

Economic Analysis
Sources of Revenue Income comes from two well-defined streams: the first one is from the use of the facilities and the second one from the sale of the biogas. (A) Toilet use The selected site is located right next two big markets (1) The Main Market: harbours 630 stores with an average 3-4 people working in each of them at all times. This amounts to almost 2,000 people based in the market daily, not taking into account shoppers, suppliers and passers bye. The market currently has a toilet service inside that has 4 latrines for males and 5 for females; it is usually packed, dirty and smelly. They charge Ksh2. (2) The XXXX Market: is a more informal market and holds more than 150 stalls with an average 2-3 people per unit. Though many are temporary or dismountable, rotation is such those at all times there are close to 150 points-of-sale. This location too, has a small latrine service, though very precarious. It charges Ksh5 and lacks a shower service.

A welcoming latrine

In addition to the markets, the location sits in the sidewalk of one of the mayor artery roads and entry points to Kibera, XXXXX Road, where the mayor bus lines and matatus run through. Given these facts, demand for these types of facilities is clearly underserved. In a personal survey conducted during September, 100% of the people interview identified closeness and cleanness as the most important factors at the time of choosing where to go, and 100% answered they would eagerly pay Ksh5 for a good service. Estimated number of people to attend the facility is anywhere between 300-800 per day, with a conservative assumption being 500, rising swiftly once word-of-mouth has established the advantage of Zulu Sanitation Facility Estimated revenues reach Ksh2,500 per day, or Ksh75,000 per month.
Price 5 # per day 500 Ksh per day 2,500 Monthly Income 75,000

P a g e | 12

(B) Biogas Sales A second revenue stream is the income generated from selling the biogas for cooking services. This is trickier, since families usually like to cook their meals at home. Changing this tradition can be hard. The project plans to sell the biogas to the existing restaurants that serve food in the XXXXX Market. There are currently 5 hotel-restaurants inside the markets and 6 in a small radius on XXXX Street. All of The current kitchen at the Owen Hotel the currently use charcoal as the source for fuel, and burn in average between 4 and 7 big charcoal bags per week, at a cost of Ksh 900 per bag. Initial contact was established with Paul Atsula (+254 722-922-069), a friend of the Zulu Group and the owner of two of the hotels (Hotel Owen and Hotel XXXXX) and he expressed interest in supporting the group by using the facilities to pre-cook the meals. Between the two restaurants he uses 2 bags of charcoal per day, meaning Ksh40,500 per month. An initial conservative number would be to sell the gas at a 30% discount, generating an additional Ksh28,000 monthly to the project.
Bags per day Ksh per bag Daily Charcoal Expense

Discount 30%

Ksh per day 1,260

Monthly Income 37,800

900

1,800

This is an initial estimate and the Zulu group is confident that they will be able to capture more customers for their biogas. Note: the slurry or solid remainder in the overflow chamber (see diagram on page XX) could potentially be dried and sold as fertilizer. However, the quality of this fertilizer is very erratic and similar facilities in the region have not been able to market it successfully. Additionally, they have had to incur in additional costs to remove the slurry once the chamber is full, which requires to hire the manual or mechanical emptyers, depending on the accesses. This additional cost is very significant and has a big impact on the bottom line, close to Ksh30,00040,000 every 3-4 months. Given that the chosen location sits right next to the sewer line, the Zulu Biogas Facility will connect the overflow chamber with the sewer line and dump the slurry directly to the sewage system, avoiding additional costs and operational hassles. Costs Infrastructure The required upfront investment for the Sanitation Facility totals XXXXX. These can be divided in the lower level, which include the biogas chamber and the piping installations, and the ground level, which will house the latrines and a small office. The following table describes the detailed investment required to build the infrastructure:

P a g e | 13

Underground Level Biogas Chamber and Toilet Connection

Ground Level Main Facilities

P a g e | 14

Total upfront investment: Ksh821.004 Maintenance The maintenance requirements for the facility will be minimal since it does not have moving part, high-temperatures or high-pressures. The monthly upkeep fees are mainly labour, utility bills (water) and cleaning items (toilet paper, soap, detergent). Labour: only two people are needed at the facility for its operation. One will be charging the fee at the entrance and delivering toilet paper/soap, while the other one will be in charge of cleaning. Hygiene is one of the most important qualities to keep an eye on, since it will impact directly on the customer experience. A market value for these kind of labour requirements would be around Ksh15,000 per month for both roles; however, the Zulu Group members will handle it. Security: a guard will be needed just at night. Could be potentially filled by a member of the group. A regular guard earns between Ksh6,000 7,000 per month Water: ideally the facility will be connected to the water supply line. The estimated monthly fee for a unit of this size is close to 1,500 per month. In the event of water shortages, the Zulu Group owns a water well that is located 200m down the main road and could serve as a resource to keep the facility clean even under these circumstance Electricity: the sanitation facility does not need electricity to operate. However, lighting for evening operation, as well as the potential offering of hot showers (powered by small electric water heaters) is a plus. A connection to the utility or to a steamer can cost around 1,000 2,000 per month

P a g e | 15

 Cleaning items: 8,000 per month

Cash Flow Analysis Under this section costs and income are captured and financial techniques are used to bring the project to a more realistic cash analysis. Benchmarking with similar facilities in the area, the construction of the Zulu Biogas Centre is expected to take about a month and a half. To err on the conservative side, 2 months will be considered to allow for any delays. All the required components will be sources locally. The construction begins with the underground section on month 1 and moved to the ground level on month 2. The toilets can be used as soon as the facility is finished. A significant amount of disruption is expected once it is operational, driving the customers from both markets to use it, as well as local families and passers-by. However, during the two month business will be slow as word-ofmouth disseminates and about half of the normal demand will be considered. Regarding the sale of biogas, three months will be necessary to allow for the filling of the chamber and the biogas pressure building. Hence, revenues will not begin before that. The life of the project to be considered in the DCF calculation is of 2 years. This includes, two months of construction and 22 months of operation for the toilet facility and 19 months of biogas sales. The net present value will be calculated at 20% annual interest rate.

NPV @20% = Ksh457,023 IRR = 88%

P a g e | 16

The Meeting Centre

In addition to the Sanitation Facility, the project can include the addition of a second floor with a multi-purpose room than can serve as a meeting ground for the Zulu Group Football Team. Currently the Group has no formal space and this would be a significant addition to their consolidation as a leading youth group on the Kibera community. The group could harbour their offices there, meet weekly and rally the team and the youth member to have group talks, watch football matches and increase the cohesion of its members. Even though the main purpose of the Meeting Centre would be to consolidate and expand the Zulu Group, it will at the same time bring in revenues from two different streams: (1) Real estate Rent: space is precious in Kibera, and demand for it is very high. Given the location of the chosen site, the is very high potential to attract a number of possible clients that would be willing to rent the space, including NGOs, Microfinance groups, local community boards, guild associations, etc. Price is often associated with space, location and amenities, and range from anywhere between Ksh500 to 5,000 per day. A very conservative assumption for the Meeting Centre would be to rent it twice a week for Ksh 1,500, generating Ksh12,000 per month.

(2) Live Football Matches: football is the king of sports in Kenya, and Kibera is not the exception. Ibrahim, a Kibera local explains: Life in Kibera comes in many shapes. Whereas some people cannot afford a bottle of soda, others can watch the English Premier League anytime while enjoying a meal in a hotel. Every week thousands of inhabitants attend a local screening house to watch the Premier League (England), La Liga (Spain), Serie A (Italy), the African Leagues, and occasional events such as the Champions League, The UEFA Cup, International Friendlys and, of course, the upcoming World Cup in South Africa. As the Economist magazine puts it in its recent the World in 2010 forecast edition: The [English] Premier League, still by far the biggest entertainment in Africa5. For each match spectators pay a market price of Ksh20, and often spend another Ksh20-40 in drinks. About 300m away from the site there is huge place that screens sports daily and can house up to 400 people, though mostly standing. Most of the people surveyed mentioned they love to view matches with in a small crowd, not too big to be able to see and hear well. This is not the case of the mega centre close by, but there are other offerings in the vicinity. The idea is to tap into the Zulu network, friends and neighbours to come and watch the match at the meeting centre. An average of 30-40 paying customers watching 4 transmissions per week would generate Ksh5,000 just in fees, not taking into account the possibility of selling drinks or snacks. Additionally, the Centre can expand its screening offerings to other sports in demand or movies, making these assumptions very conservative.

http://www.economist.com/theworldin/displayStory.cfm?story_id=14742447&d=2010

P a g e | 17

The addition of a second floor would require an additional investment of XXXXXX. The detail uses of cash are described below: An additional investment is required to build the second floor and buy the necessary equipment to operate it. The following chart describes the main uses of cash: Maintenance of the Meeting Centre Maintenance of the Meeting Centre would be negligible, and limited to cleaning. The project can lever on the human resources and cleaning products from the Sanitation Facility, and could tap on to the Zulu youth for any additional labour requirements. The only significant cost would be the subscription to satellite TV to view the football matches and some other miscellaneous items, estimated in 7,000 per month. This would brig the total operational cost of the Centre to Ksh40,000 per month.

NPV @20% = Ksh250,781 IRR = 44% The financial indicators are lower but still very attractive. Additionally, these numbers do not capture the social impact that the Meeting Centre will generate. Also, the revenue assumptions are very conservative, and the Group is confident that given the location and proximity of the Centre to Kiberas Main Market, the real estate value rent will be higher.

P a g e | 18

Risk Analysis
This section intends to demonstrate there is awareness of the risks associated to the project and below are the risk categories with some likelihood of occurrence and how to mitigate them. Poor construction or design: lead to gas pressure problems or water leakage. Biogas digesters are not as simple as they look, and an attempted to build one without detailed know how will certainly fail. If an unqualified person attempts to build a digester, he will probably run into problems. It took the UMANDE Trust Fund a number of trails until they got it right. Hence, it must be properly designed and constructed. Fortunately, the Chief Biogas Engineer at UMANDE, Michael Francis (+254 721-759-068), as well as Michael Odjambo, a graduate from environmental studies at the University of Nairobi, have both expressed their support for the project and will work together with the Zulu Group to ensure the correct design is used. Poor maintenance: proper care of the digester is crucial to maintain its smooth operation. The facility requires minimum maintenance, but nevertheless it needs to be handles properly and taken care of, especially the repair of the gasholder. Annette (+254 725-382-010), the manager of the TOSHA1 biogas centre (a similar facility) in the Gatwekera region of Kibera, has offered her help in training the Zulu Group to conduct the necessary maintenance of the Zulu Biogas Centre. Land claims: ownership of the land in Kibera is still a matter of controversy. The Zulu Group has a letter of intention from the local authorities granting them the authorisation to develop the current plot where the facility will be located. Nevertheless, to avoid possible conflicts of interest, this issue should be further addressed to make sure the necessary requirements are met.

P a g e | 19

Conclusions and Recommendations

This preliminary research has shown that the project presents a great opportunity for a real business that is responsive to consumer demand. The project has the potential to improve sanitation services in Kibera at comparatively low investment costs, and will generate a huge impact on the Zulu Group and on the Community as a whole. For the Community: Fulfil the underserved demand for sanitation in the region. Both toilet facilities in the nearby markets are overflow and overused. Avoid the use of flying toilets and improve overall health of the community. Provide a clean alternative fuel for cooking. This will avoid the use of charcoal, which is almost entirely sourced illegally from the felling of nearby trees (a practice that has been highly condemned by the current government) There is an urgent need for the space in the slum, and the project will increase the supply of the demanded real estate.

For the Zulu Group: Provide a second sustainable source of income for the members of the group Consolidate the Group as a clear example of young, working members of the Kibera Slum Provide a fix and comfortable established meeting centre for the group and increase its appeal and reach to the younglings in the region.

In addition to this, the project is a good investment opportunity with conservative, clear positive cash flows that can be financed by donors and/or fellowships. Before advancing with the project it is recommended that dialogue between the various stakeholders (the Zulu Group, the Nairobi City Council, Public Authorities, community leaders and development organizations) would help to clarify issues and obstacles, to better articulate activities of the various actors, and to make better use of the skills and know-how. Especially the coordination and involvement of Carolina for Kibera and the UMANDE Trust, who are project pioneers and can access potential donors.

P a g e | 20

P a g e | 21