Carbon Finance Boosts iDE’s Clean Water Business in Cambodia
For the first time in Asia, a sustainable and market-based water filtration business has been registered under the voluntary Gold Standard scheme, and will benefit from carbon offset funding, illustrating that carbon markets can support sustainable technologies that improve the lives of poor populations. iDE’s Cambodian social enterprise, Hydrologic, manufactures ceramic water purifiers which provide clean water to rural households, reduce the amount of wood burned to boil water, create local jobs, and bolster economic development. Hydrologic was recently named winner of a 2012 Ashden Award. Start-up resources for Hydrologic came from several sources including the USAID WaterSHED project in form of grants and technical assistance.
Nearly 40% of rural Cambodians still have no access to safe drinking water. Untreated water and poor sanitation result in about 10 million cases of diarrhea and 10,000 deaths per year in Cambodia, mainly affecting children in rural areas. iDE’s Hydrologic produces and sells ceramic water filters that provide safe drinking water to rural households of Cambodia. By displacing water boiling practices, the filters allow Cambodian households to avoid the unsustainable burning of 18,000 tons of wood per year, saving 41,000 tons of CO2 emissions annually. Thanks to this impressive environmental impact, the project has completed its registration under the voluntary Gold Standard scheme, an award winning certification standard for carbon mitigation projects.
The project has two major features:
• It uses a market based approach: Hydrologic Social Enterprise believes that sustainable business is a powerful way to provide clean water for as many people as possible. It created a market for water purifiers in Cambodia by selling affordable filters to NGO programs, and via shops and rural sales agents. Households benefit from a low cost water filtration technology, and the local economy is bolstered by the establishment of production and distribution facilities.
• Carbon offsets ensure a sustainable business model, as the carbon revenue is directly re-invested into further scaling up project activities.
Hydrologic joined Nexus, a nonprofit cooperative of NGOs and social enterprises that scale up development solutions by leveraging sustainable funding from the sale of high-quality carbon offsets, a concept referred to as “Carbon for Development.” Nexus provided financial and technical assistance with the carbon certification process, and is supporting the commercialization of carbon credits by engaging companies and public institutions on a fair approach to offsetting.
Hydrologic’s sustainable business model and its numerous benefits for the environment have also attracted private sector support. An impact investor, Impact Finance, provided a loan to support the development of the project, and a multinational company, Deutsche Post DHL, has committed to purchase carbon credits originating from the project.