IFC invests $15M in WaterHealth for filtration in rural India

Thursday, February 19, 2009

Irvine, Calif.-based WaterHealth International [1] is planning to install water purification and disinfection systems for 600 communities across India, funded by a $15 million project finance round from International Finance Corp. [2] this week.

IFC, a division of the World Bank, has previously invested equity in WaterHealth International to grow the business. But this new cash infusion will allow WaterHealth to quadruple the number of decentralized units up and running in Indian communities, said Tralance Addy, CEO of WaterHealth International.

“India has 600,000 villages that would fall into this category where we would want to improve the water conditions,” Addy told the Cleantech Group today. “So 600 is a drop in the bucket.”

The global water market is estimated at $450 billion for purification, desalination and conservation. Spending on infrastructure in emerging markets is expected to reach approximately $180 billion over the next 20 to 25 years, according to the IFC, which has established a $100 million fund, called IFC Infraventures, to provide risk capital for early stage development of infrastructure projects in the poorest countries (see IFC sees big market for H2O [3]).

WaterHealth combines purification technology with sustainable business models. The new project financing will allow communities to make a 30 percent to 40 percent deposit, while financing the remaining cost with long term loans.

“We are enabling the community to own the asset because in many cases they don’t have this infrastructure, but we want to be clear that this is something communities have to want,” he said. “What we’re trying to do is create a highly sustainable commercial business.”

The 600 systems are expected to be deployed in the next 18 months to serve 3 million people.

The WaterHealth Centers use a multi-stage filtration system in conjunction with a proprietary ultraviolet light disinfection technology, dubbed UVWaterworks, which was developed with Lawrence Berkeley National Laboratory for places that don’t have the infrastructure or skilled workers to run the systems. The system purifies and disinfects water contaminated with pathogens including polio, roto viruses, and oocysts, such as Cryptosporidium and Giardia.

“About 70 percent of people in India live in rural communities, and although many of those communities may have some water scheme that they use for irrigation and minimal disinfection, most people do not really have access to potable water of the quality you or I would drink,” Addy said. ?

The decentralized systems are modular and scalable but typically serve communities of 1,500 to 10,000 people. The average system delivers a community of 3,000 residents with up to 20 liters of drinking water per person per day.

The systems use about 40 to 60 watts to purify the water?equivalent to a light bulb?with additional energy needed to pump water in or out of the system.

“The energy consumed to produce the drinking water is 6,000 times less than it takes to boil the water,” Addy said.

To date, the 200 systems in India have been grid-connected but have been designed to incorporate wind, solar or other renewable energy sources if needed, Addy said. India’s power grid can be intermittent and insufficient. It is estimated to have a 15 percent to 17 percent energy shortfall during peak demand (see India to remove cap on wind incentives [4]). ?

WaterHealth has also deployed water filtration technologies in the Philippines, Sri Lanka, and Mexico but is concentrating in India first because the need is so acute, Addy said.

“If we look at the need and the available opportunities in India, even in the next 25 years we won’t get to everyone we need to get to,” he said. “We?re trying to strengthen the business model in India while we pursue some exploratory initiatives in other countries that will unfold gradually in the next couple of years.”

WaterHealth has already started exploring the market in Ghana because of the huge need for drinking water in African countries, he said.

In late 2008, Hague, Netherlands-based foundation Akvo [5] developed a mobile-phone based system for finding, funding and tracking small-scale water sanitation projects across the globe, starting with Asia and Africa (see Akvo tackles water sanitation using Internet, mobile phones [6]).

WaterHealth is also developing household and emergency systems.

In January, WaterHealth said it secured more than $10 million for the first close of its Series D round, which is expected to eventually total $20 million (see Good week for auto technology [7]). The round was led by previous investors Dow Venture Capital and SAIL Venture Partners (see Finding new frontiers in energy investing [8]).

WaterHealth also previously raised financing from Acumen Fund, International Finance Corp., Johnson & Johnson Development, Plebys International, and Dr. Anji Reddy.

Source: Cleantech.com (link opens in a new window)