REUTERS - Of all the problems threatening the world today, two loom large. One is the climate crisis. The other is the fact that billions of people lack access to clean water and sanitation.
A Houston, Texas-based startup with global ambitions wants to attack both, beginning in the tiny, landlocked African nation of Rwanda.
The startup, called Manna Energy Ltd., has an ingenious idea, some high-flying (literally) founders and the enthusiastic support of, among others, The Coca-Cola Foundation and Ashoka, a nonprofit group that connects social entrepreneurs.
The company’s idea, in essence, is this: Collect rainwater, filter it using solar energy and finance the operation with credits generated by reducing global warming pollution.
Manna installs its water-treatment systems at secondary schools and, if all goes according to plan, they will more than pay for themselves.
“It’s the only for-profit model I’ve seen to bring safe drinking water to schools, and it would be pretty remarkable if they can pull it off,” says Paul Faeth, executive director of the Global Water Challenge, a Washington-based business coalition that supports Manna.
The founder of Manna Energy is Ron Garan, a NASA astronaut and aerospace engineer who has logged more than 13 days in space, including three spacewalks, and is preparing for a six-month mission next year.
Spearheading the work in Rwanda is Evan Thomas, Manna’s executive vice president, who got the project started as a volunteer back in the early 2000s and since then has worked on sustainable development in Rwanda, Nepal, Mexico and Afghanistan.
Thomas, who is just 26 and also works at NASA, has a PhD in aerospace engineering and bio-astronautics from the University of Colorado.
His academic research on life-support systems in space informs his work in Rwanda, he explained when we talked last week by phone.
“We’re trying to keep people alive in Rwanda, just as we try to keep people alive and healthy in space, with air and water and energy,” Thomas says.
The Rwanda water project was actually created by Engineers without Borders, a nonprofit founded in 2001 at the University of Colorado.
EWB, as it’s called, raised about $250,000 over the years to from Rotary Clubs, UNESCO and the EPA, among others, in what was then a purely philanthropic ventures.
EWB chapters at Colorado and at the Johnson Space Center in Houston began traveling to Rwanda in 2003, exploring a variety of ideas with local and national officials: the solar-powered water treatment system, biogas generators, drip irrigation for farmers and solar-powered lighting and computers for hospitals and schools.
Being engineers, they did lots of analysis and eventually focused on the water-treatment system and biogas projects because they promised the greatest impact.
After successfully building water treatment projects at several schools and hospitals, they realized that the big challenge was not getting systems built but keeping them in good working order.
Water was given away for free, so there was no money to set aside for maintenance or repairs.
“It was clearly not sustainable,” Evan said. (My 2007 column, Is Water a Human Right?, addresses this problem.)
This was when Manna and its people came upon the idea of using carbon credits to pay for their systems.
(Here is my 2008 FORTUNE story explaining carbon finance.) Because the traditional method of purifying water in Rwanda is to boil it, using firewood, they thought their projects might be eligible for carbon credits under a UN-regulated system that encourages pollution-reduction projects in poor countries.
Manna subsequently applied for credits that are created because the solar systems prevent emissions from burning wood.
Their proposal needed lots of documentation -- the avoided emissions needed to be measured and verified. Most importantly, it needed the approval of a a UN board that oversees credits, or offsets, under the so-called Clean Development Mechanism, which is part of the Kyoto climate treaty.
Getting UN approval is time-consuming and sometimes frustrating, but a big pot of gold may be found at the end of the bureaucratic process: Final approval (which Manna doesn’t yet have) will enable the company to sell the carbon credits onto the European Union’s regulated market, generating a long-term recurring stream of revenues to finance more systems at more schools.
Most likely, the credits will be bought by a financial intermediary which will then sell them to polluters, like coal-burning utilities, that will need them to comply with the emissions caps set by the EU.
If the approvals are forthcoming, Thomas says that Phase I of Manna’s Rwanda project will deliver clean water to about 20,000 to 30,000 people at a cost of about $1.5 million.
They expect those systems to generate about $6 million in carbon revenues, which will be used to pay debt, salaries for Rwanda and U.S. staff, and the operating and maintenance costs of the water systems.
A second phase would serve another 236,000 people, require another $12 million in investment and generate $102 million in carbon revenues over the next decade. Not a bad business model.