David Auerbach

David Auerbach has created a scalable, market driven, community-based model for sustainably providing access to hygienic sanitation in densely populated and unplanned slum settlements. By creating value from waste, David is changing what it means to work in waste collection and ultimately building a network of committed citizens who want to change their community and who can earn a living doing so.

David has created the first high-quality toilet that can fit in the small available spaces of dense slum communities and has brought down the cost and time of construction of a toilet to a fraction of what traditional toilets require. Furthermore, he has integrated water saving and waste collection technologies into the toilet unit to reduce the operational costs and incentivize the adoption of the idea.

But the technology is only the starting point. David taps into the social fabric of the slum settlement to spread the idea. Through a franchise model in which local entrepreneurs own and operate profitable, branded Fresh Life toilets, David creates economic opportunity that is community owned, incentivized, and sustained. In addition, he is creating a robust waste management system that relies on appropriate technologies run by a trained and professional workforce that is reliable and consistent in cleaning out the waste at each toilet. In this way, David creates jobs and further reinforces a sense of community ownership which, in turn, significantly increases access to hygienic toilets in the slums.

Furthermore, by showing that human waste can be transformed into highly valuable and in-demand resources such as energy and organic fertilizer, Sanergy is creating incentives for others to provide sanitation and waste management services in slum settlements and hard-to-reach areas.

Nairobi’s slums are home to over 60 percent of the city’s population and this number continues to grow at a rate of 6 percent per annum. The living conditions in these slums, which are worsening with population growth, are characterized by a lack of basic services such as proper housing, sanitation facilities, and clean water. It is estimated that over 90 percent of slum dwellers in Nairobi lack access to clean water and hygienic sanitation options. As such, these slums are a breeding ground for diarrheal diseases that kill thousands of children every year. The child mortality rate in Nairobi’s slums stands at 15 percent compared to 0.6 percent in the rest of the city. Cases of rape and related insecurity toward women and girls is also at its highest within slums, particularly at night when they try to access distant toilets—often up to 0.5km away from their houses. This insecurity forces women and girls to resort to the use of polythene bags as disposable toilets (flying toilets), robbing them of their dignity and pride.

A lack of planning is at the heart of the sanitation challenge in Kenyan slums. Kibera slum, for example, is the world’s most densely populated slum with over 250 households per hectare. There are over half a million people living in 100-square-foot shacks in groups of five to ten per household. There is limited road access and only 5 percent of the slum has access to sewers and water. Therefore, the provision of sanitation facilities and the management of waste are incredibly difficult and expensive. A typical sanitation facility takes the form of a pit latrine, and even though this is quite a basic operation, it costs almost $25,000 to construct and requires hard-to-find space of up to 30 by 30 feet in densely packed slums. Privately owned latrines are often limited to busy market areas or locations close to main roads for ease of emptying by trucks. 20 percent of slum residents use these facilities on a fee-per-use basis but despite the revenue potential high costs of construction and operation of these toilets discourages further investment, further limiting access and availability of sanitation facilities to residents. The remaining 80

percent resorts to the use of unhygienic, makeshift latrines run by independent service providers, flying toilets and open defecation, which is so pervasive that it has been culturally normalized.

In addition, another major barrier to the provision of hygienic sanitation in slums is inadequate waste management solutions. Without cost effective and sustainable waste management options, investors in the sanitation space are discouraged from taking the plunge. 8 million slum residents discharge over four million metric tons of waste each year, over 80 percent of which is directly drained or dumped into water ways without treatment. Three methods have traditionally been used to manage waste in slums. The first is to have “frogmen” empty out latrines by hand and bucket, posing significant health risks to the service provider. The second is to employ the services of an emptier truck to pump out the sludge at a significantly high cost to the service provider. The third solution is simply to abandon the latrine once it overflows, putting the health of residents at risk. 65 percent of pit latrines in the slums have become unusable and abandoned due to waste management challenges. Untreated waste that is dumped in and around the slum doesn’t only provide a haven for disease spreading vectors like mosquitoes and flies but also pollutes the environment, water ways and the soil as the waste leaches into and contaminates the water-table. In the rainy season, most existing toilets take in surface water and flood over onto the streets, thus further accelerating the spread of disease.

To provide an affordable and scalable hygienic sanitation solution in slums, David created an approach that deals with the value chain in its entirety in a way that not only increases access to sanitation but also sustainably manages human waste. David chose to use local resources to create prefabricated building materials in a localized production process to keep his costs down. Through this process, he is able to produce high quality materials that can be assembled into compact toilets in two to three days. The compact nature of these Fresh Life toilets (FLTs) means that they can easily fit in densely populated areas in spaces as small as 18 square feet. The FLTs are brightly painted in blue and are hard to miss—they illuminate what is otherwise a grim and dull slum environment, giving users a sense of safety, cleanliness and convenience. The high quality but low cost prefabricated materials used means that the toilets are not just durable but that they can be built for an unprecedented low price of $350. The toilets are dry and not connected to the sewer system, which saves costs in construction and on water use during operation.

David knew that he needed to scale his model dramatically in order to increase accessibility. To achieve this, he employed a franchise model that involves partnering with community members (entrepreneurs) who purchase and operate hygienic FLTs as small businesses. The FLT franchise package includes installation of the facility for the entrepreneur and the provision of on-going operational, marketing and business support. Sanergy established a partnership with Kiva to give zero interest loans to the entrepreneurs that needed it. This covers the all-inclusive franchise set-up fee of $650. Each toilet makes at least $1,000 in profit per year for the entrepreneur, thereby guaranteeing that they are able to offset their loan in its entirety within a matter of months. The clear economic and social value created by each franchise means that local entrepreneurs are incentivized and excited to invest in more FLTs. David sees this as the key to rapid, sustainable expansion. To attract more owner operators, David employs three strategies: (i) rewards for referrals (ii) identification of “hot spots” that are good locations for toilets and (iii) pitching directly through youth groups, and microfinance institutions (MFIs). The profitability of the FLTs caught the attention of MFIs, four of which are now working with Sanergy to develop credit products for sanitation finance. Within two years, Sanergy’s franchise model has rapidly grown its network of FLTs in Mukuru slum (with a population of 500,000) to over 200 owned and operated by about 100 local entrepreneurs, approximately 35 to 40 percent of which are women. David’s vision is to grow this network to the point that there is a toilet within 50 meters of every single household in the slum.

With answers to the questions of affordability, access and scale, David now had to ensure that his solution was providing a hygienic sanitation experience to its users. He starts from the outside by setting high standards for the units. The bright blue paint of the FLT conveys an inviting message of cleanliness. All FLT operators are trained as part of the franchise package to uphold the highest standards of cleanliness at their respective toilets. Each toilet must be kept clean at all times and comes standard with hand washing facilities including a water stand, soap and tissue. Engrained in the ethos of the FLT network is the idea that the brand of the entire network is only as strong as the weakest operator. The operators, therefore, keep each other accountable in order not to dilute the brand they all share. They also develop their own ideas for improving the service, such as putting mirrors and hooks in the toilets, which then spread through the network. The network can also be used to sell other sanitation related products, such as sanitary pads.

Also part of the franchise package is a year-long daily waste collection service provided to every FLT by Sanergy. The toilets use a unique Urine Diverting Dry System that automatically separates and captures urine and feces in separate double sealed 30 liter cartridges, avoiding any human waste contact or leaching into the water table. The cartridges are sized to accommodate waste from up to 80 uses. A team of waste collectors removes cartridges at every FLT and replaces them with new empty ones on a daily basis. The cartridges are transported by handcarts—which can easily access most of the slum—to a processing facility for treatment and recycling. The contained waste collection infrastructure enables easy, low cost and daily removal of hazardous waste from the toilets, hence ensuring a hygienic experience for users and health security for the community.

Central to the sustainability of David’s idea is a hybrid model that seamlessly marries a non-profit sanitation and waste collection program with a for-profit waste recycling operation. The two are independent entities with one board member overlapping. All the work in the slum areas is operated through the non-profit, Fresh Life, which sells the toilets, provides service delivery for the operators, and develops ideas and partnerships for reaching the 40 percent of people who cannot afford to pay for sanitation services. The for-profit company, Sanergy, produces the toilets and also converts the waste.

Sanergy treats 100 percent of the waste collected from FLTs and leverages existing technologies to convert treated waste into renewable and valuable natural resources such as fertilizer and electricity. Sanergy is the first organization in Kenya to convert human waste into nutrient replete organic fertilizer on a commercial scale. Africa imports 1.2 million metric tons of fertilizer every year and yet, the prohibitive cost of imported fertilizer means that farmers in Africa use only up to 6 kg/hectare compared to 350 kg/hectare used in the developed world. The fertilizer produced by Sanergy is not only 30 percent cheaper than other options in the market but its organic nature helps to reverse the damaging effects of excessive use of inorganic nitrogen fixing fertilizer. Sanergy has created a market for its organic fertilizer among commercial flower farms in central Kenya. In addition, Sanergy is partnering with distributors of fertilizers to develop targeted fertilizer products for other non-food crops and niche markets such as nurseries and golf courses. David and his team are carrying out extensive research on, and are on track to, developing an expanded range of products, including food-crop fertilizers over the next three years.

On the energy front, demand for electricity in Kenya is growing at a rate of 7 to 10 percent every year. To meet this roaring demand, the government has deregulated the power industry and is encouraging Independent Power Producers who are already producing 21 percent of Kenya’s power, to focus on renewable energy. Sanergy is the first IPP with a 15-year contract using human waste to generate electricity. David is transforming what would be a public health disaster into an opportunity for economic development by converting the millions of tons of human waste from Kenya’s slums, currently dumped into waterways, into valuable, highly demanded and renewable resources. This fundamentally changes the incentives and therefore behavior of all stakeholders in the sanitation value chain.

Since David started his work in 2011, 200 toilets have been installed in Mukuru slum, making Sanergy the largest provider of hygienic sanitation in Kenya. The model has created 250 jobs and safely removed 500 metric tons of waste from the slum, 100 percent of which has been treated and converted into nutrient rich fertilizer that has been used on farms. Over 10,000 slum residents now have access to hygienic sanitation but David knows he still has a long way to go. He realizes that in order to have a true public health benefit, at least 75 percent of the slum residents must have access to hygienic sanitation, but only 60 percent are actually able to pay (the threshold income level being more than $2 a day). Hence, he is working in partnership with landlords, who are now required by law to provide sanitation facilities to tenants, to adapt the model for household level use. He is also partnering with the Bill and Melinda Gates Foundation (that is funding R&D work in this field) to adapt the model for public institutions such as churches and schools within the slum. Through a partnership with Oxfam, they have brought 38 toilets to 15 area schools. David is also piloting other ideas such as a mobile voucher program and youth-managed and youth-owned toilets.

Over the next five years, David hopes to grow the network of FLTs in Mukuru slum to 3,500, serving 200,000 slum residents, employing at least 2,000 people and collecting and processing at least 11 million metric tons of waste per year. The growth and expansion will be funded 100 percent by revenue generated from the sale of fertilizer and electricity. The Sanergy model being open source and easily replicable, David has partnered with the Kenya Water Services Trust Fund and the Dutch Embassy to have other organizations in other parts of Kenya trained on how to operate the model. David sees West Africa as the next frontier for his work and has already started conversations with partners in Nigeria and Ghana who are interested in replicating the model there.

David comes from a family of civil society leaders. He recalls being at a family reunion listening to his relatives talk about their work and realizing that of the 75 people present, not a single one was from the private sector, a realization that would go on to shape David’s view of the world and his own professional path. One great uncle, a theologian, joined the Freedom Rides through the segregated southern US during the 1960s. Another great uncle was the first member of President Johnson’s administration to resign in protest of the war in Vietnam. To this day, his grandmother continues to write weekly Amnesty International letters in condemnation of autocratic leaders. His mom is a psychologist who has worked with community organizations and spent a year working with an orphanage in Kenya. His father was an entrepreneur that David looked up to and learned from growing up.

David attended his early school years in London, his first experience of having to adapt to a new culture, where he was singled out and often mocked for being American. Later in life, after college, he was working on foreign policy at a think tank in Washington, DC, but was bothered by the fact that he lacked the credibility of international experience. He was also struck by the aggressive stance of the US toward China. This created a paradox for him because his grandmother had grown up in China and always celebrated the Chinese people. He decided to go live there for two years to try to understand the country better. He taught English at a high school in central China, where he developed more engaging content for his classes than the status quo rote learning and helped several students through the application process for US universities. Among his most memorable experiences in China was when he was using a pit latrine and a swarm of flies flew up over him. This was his first encounter with the indignity associated with unhygienic sanitation, and it stayed with him.

When David returned to the US, he worked with the Clinton Global Initiative, where he built public-private partnerships that focused on entrepreneurship and, in the process, helped to bring prominence to the work of Kiva, among other startup social enterprises. He then moved on to work with Endeavor, where he continued to work with entrepreneurs until he felt he needed to learn more to be able to make a meaningful contribution. David started work on an MBA degree at MIT and visited Kenya for a class project. He went to Kibera to try to understand the sanitation issues in the slums and met a youth group that was running a toilet business. The business was unsuccessful, largely due to the lack of appropriate technology. David was disheartened until the group invited him to see their urban garden, which they had converted from a garbage dump and were running as a sustainable business. In that moment, David understood that there were slum residents with the desire and skill to transform their own community, the central insight on which Sanergy was ultimately built. When it came to sanitation, they just lacked the right technology and financial resources to make it successful. He and two other classmates launched Sanergy in 2011 to bring these missing pieces to the table.