Project: Fresh Life: scaling urban sanitation with results-based finance (RBF)
State of development: Current
Stage of development: Early stage
Stage notes: Early-stage design, Late-stage design
Type of instrument — Impact Bond: No; Outcomes Fund: No; Social Impact Incentives (SIINC): No; Social Impact Guarantee: No; Payment-by-results (no pre-financing): Yes; Technical Assistance and Market-building program: No; Other: 
Part of a larger outcomes-based financing program: No 
Expected launch date: Q1 - 2023
Total expected project development time: 12-24 months
Expected length of project (years): 4.5
Project design process began: March 2021
Rationale for using outcome-based finance: Scaling up Sanergy’s offering will bring economies of scale and efficiencies to the delivery of their services. The long term ambition is to achieve financial sustainability via results-based contracts with municipalies. The proposed outcomes-based model will create a natural bridge from donor subsidies to municipality funding, by allowing external funding to taper out as local funding tapers in, avoiding funding cliff-edges or re-procurement risks
Key challenges to launch: Securing the level of outcomes funding needed to deliver scale and impact
Role of the domestic government — Outcomes funder: No; Service provider: No; Member of project committee: Yes; No formal role: No; Other: 
Service providers identified and selected — Request-for-proposals: No; Direct contracting by outcome funder/investor/intermediary: No; Provider-led deal development: Yes; Other: Stone Family Foundation, an existing grant funder of Sanergy and investor in the Cambodia Rural Sanitation DIB, connected Sanergy with Social Finance with the ambition that SF could support Sanergy in exploring a move towards outcomes-based funding, building off experience from the Cambodia DIB
Feasibility study: Yes
Proposed financing instruments — Debt: Yes; Equity: No; Guarantee: No; Grant: Yes; Other: Other: likely to need to be an investor (or investors)
Technical assistance grant: Yes — Social Finance has been contracted by Sanergy to provide technical assistance to support the financial model and suitability analysis required in order to demonstrate the role of outcomes-based funding
Estimated maximum potential outcome payment: TBD TBD
Social/developmental challenge: Currently, 60 million new residents move to urban areas every year. One in four lives in slums, amounting to over 1 billion people. The vast majority (more than 70%) have no access to safe sanitation services and, in effect, are living in their waste. In Kenya this issue is clear and in Nairobi alone, 60% of the population live in informal settlements and 60% of the city remains unconnected to the sewerage system.
Expected intervention model: Sanergy, established in 2011 to address the sanitation value chain in the low-income informal settlements of Nairobi, provides container-based sanitation services, offering an end to end sanitation solution to residents. These waterless sanitation facilities are leased to local residents, who pay a monthly subscription fee to be part of the network. Sanergy collects the waste through a professional logistics team, provides operational and maintenance support, liaises with government to ensure compliance, and guarantees that all waste is safely treated.
Policy sectors — Employment and private sector development: No; Education: No; Social protection: No; Criminal justice: No; Health: Yes; Agriculture: No; Environment and climate change: No; Water, Sanitation and Hygiene: Yes; Energy: No; Humanitarian: No; Early Childhood Education: ; Other: 
Secondary SDG goals: 3,6,8,11
Target population: Informal settlements in Nairobi
Targeted number of unique service users or beneficiaries: 463000
Unit type of targeted beneficiaries: Individual
Country income classification of beneficiaries — Low-income: No; Lower-middle-income: Yes; Upper-middle-income: No; High-income: No
Notes: Data for this pipeline project was last updated in April 2022. 
Delivery location: Kenya