Business Case Next Generation Hydram Powered Community Water Pump

8/13/2019 Business Case Next Generation Hydram Powered Community Water Pump

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Disclaimer

The designations employed and the presentation of the material in this document do not imply the expression of any opinion whatsoeveron the part of The World Bank Group or The Apex Consulting Group, Catapult Design, Inotek Foundation, or GATD Foundation(collectively theProgram Partners). Moreover, any views expressed do not necessarily represent a decision or the stated policy of theWorld Bank Group or the Program Partners. Any citing of trade names or commercial processes is included for the information of thereader and does not constitute endorsement, recommendation, or favouring by The World Bank Group or the Program Partners.

Some information contained in this document is derived from carefully selected public sources that have been deemed to be reasonableand reliable; however The World Bank Group and the Program Partners cannot be responsible for its accuracy or completeness. Anyopinions expressed reflect the current judgement of the author and do not necessarily reflect the opinion of The World Bank Group or theProgram Partners. All opinions presented are subject to change without notice. This document is provided for informational purposes only,and is not a solicitation of any investment, monetary or otherwise, and should be read in conjunction with additional materials provided bythe Program. No representation or warranty, express or implied, is made as to the completeness or accuracy of the information. Thisdocument contains forward-looking statements. Such statements are subject to certain risk factors which may cause the concept

commercialisation to differ or results to vary from those expected.


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Table of Contents

Business Case Section Page

Opportunity 1Introduction 2Concept 3Customer Profile 5Business Model 6Pilot Market 8SWOT Analysis 9Risks 10Numbers 11Way Forward 13 About the Program 14


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Access to fresh water is a concern for a large part of the targetcommunity. The costly and environmentally harmful fossil fuel waterpumps represent a significant inconvenience. A sustainable energyoptions for water pump that is apparent in the target community is ahydram powered water pump. This pump offers access to flowingwater with flowing water as source of energy to operate instead ofelectricity or fuels.

However, the existing Hydram powered water pumps offer a designthat is in many ways outdated and a range of different implementationseach present different challenges ranging from complex maintenancerequirements to high noise pollution and inconvenience for end-users.

To respond the current challenges, a new concept of Hydram poweredwater pump is being designed. The new concept is a Next GenerationHydram Powered Water Pump that will offer an improved, smaller andlighter-weight solution to existing products on the market. The marketfor Hydram powered water pumps exists in the target location andacross Indonesia, and, the improved technology and design offers aunique opportunity to provide a higher v alue offering at a reduced costfor the end user; with the potential to be profitable within one year ofinitial operations.

This concept offers a solution to fresh water supply challenges throughthe establishment of an off-grid autonomous water pump system thatrelies on a flowing water source and gravity; without dependence onelectricity, wind, or solar radiance.

The Hydram pump is a technology which utilizes high pressure createdfrom upstream water flow to pump water to a higher place using ahammering motion. This technology requires a source of flowing water tobe available near the implementation location.

The proposed concept offers improvements in the design and technicalproperties of existing Hydram pump systems. The next generation ofHydram pumps will bring increased benefits to end-users at an affordableprice.

The road from market partner engagement to validated marketsolution is estimated to take six months consisting of marketexploration, concept development, testing and ultimatelyintroduction of the market solution.

Selected Market Partner(s) may be offered a wide range ofsupport, assistance and guidance from the Indonesia Demand-Driven Green Innovation Program Partners.

A demand has been identified for aproduct, service, and business modelthat provide communities with renewableenergy options for pumping fresh waterfor households at an affordable price.

Currently a community of around 90 households have to spend aroundRp 4.5 million to purchase an electricity pump and spend Rp. 300,000 400,000 every month for the fuel. With the Hydram Powered WaterPump a community will need to spend Rp. 8.5 million in the first year topurchase the pump and a low monthly maintenance cost of Rp 15,000 30,000 in the following years.

In the pilot market, Yogyakarta, there are 438 administrative villageseach of them averagely has 10 hamlets, therefore there are a total ofminimum 4,380 hamlets in Special Region of Yogyakarta. At least 10%of this number is potential to utilize Hydram Powered Water Pump asthey have adequate supply of flowing water and water head pressures.

The value proposition formarket partner/s: Access to asignificantly improved technologywith commercialisation support toprovide sustainable water pumping innew markets with a potential forimplementation in a number of high-demand locations across Indonesia.

The value proposition for target community: Improved access tofresh water with minimal manual labour needed, no fuel or electricityrequired to operate the solution and an improved efficiency and reducedinstallation cost through next generation technology and design.

The total variable cost to assemble a HydramPowered Water Pump is Rp. 6,000,000 whichcovers the cost of the pump system, labour,sales costs, and distribution. Targeted salesprice for each pump is Rp. 8,500,000 with agross profit for the each unit sold ofRp. 2,500,000.

Total required Investment: Rp 244,700,000(Covers operations 12 months with no sales assumed)

Revenue year 1: Rp 2,762,500,000

EBITDA year 1: Rp 567,800,000

Profit Margin: 20.6 %

Return on Investment: 20.9 %


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Over the past several months, ProgramPartners of the World Banks IndonesiaDemand-Driven Green InnovationSubprogram (IDDGIS) have explored andscreened energy related challenges fromthe target community. These challengeshave been narrowed down to the fivemost pressing energy-related challengesfacing the target community. From thesefive challenges, a number of conceptshave been generated to provide solutionsto improve conditions for rural

Indonesians. Program Partners work toprovide specific information and analysisin areas that affect commercial andfinancial viability as well as the impactpotential on the target community.

The next stage of the IDDGIS is to source potential Market Partner(s) to support and assist in delivering themost commercially viable concepts to the market. The design concepts are presented to potential MarketPartner(s) through this Business Case as well as through the delivery of business presentations.

This Business Case seeks to assist potential

Market Partner(s) to make an informed decisionof whether or not to engage further with theIDDGIS in the commercialization of thetechnology. Through this Business Case,potential Market Partner(s) will gain an insightinto the technical and commercial details of theconcept, provide answers to questions such asthe concepts target market, where is theconcepts target location, what are thecharacteristics of the ideal Market Partner(s) forimplementation of this concept, the commercialviability of the concepts implementation in the

target location, what social and environmentalbenefits are likely to be generated from thisconcept, and what is the recommended wayforward to commercialize the concept.


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Each concept in IDDGIS is developed to meet a particularchallenge identified as a key energy related challenge in thetarget community. The underlying challenge for this conceptwas to provide renewable energy options for communityscaled water pumps to supply fresh water.

This concept is a Next Generation Hydram Powered WaterPump that will offer an improved, smaller and lighter-weightsolution to the existing products on the market. Existingmodels are large, expensive, need regular maintenance, andare prone to failure. The concept focuses on creatingimproved design and technical specifications for usability,ergonomics, maintainability, simpler installation, affordability

and modularity. The next generation pump will be sold as an off-grid and autonomous water pump system thatrelies on a flowing water source and gravity, without dependence on electricity. The pump can be installedsingularly but has an embedded modular scalability to meet the increasing needs of a community as they canafford to do so. Existing electric pumps cost approximately Rp. 300,000 per month for on-grid electricity, with aproposed sales price of Rp. 8.5 million, the Next Generation Hydram Powered Water Pump will represent a Rp.300,000 per pumping unit monthly saving after 24 months of operation. Maintenance is less frequent and lesscostly at an approximate amount of Rp. 15-30,000 per repair as opposed to electric water pumps ranging fromRp. 250,000 to Rp. 4,500,000 per repair.

Our research indicates that the commercialization of this concept will generate the following commercial Benefitsfor Market Partner/s:

Additional innovative product features to be sold to existing and new customers; Reduced R&D costs for product innovation; Access to expanded markets in new countries; Reduced risk and cost for international expansion; Access to local networks and customer channels; and Targeted support to ensure sufficient social preparation and creation of an ownership model for product

sales.

Our research indicates that the introduction of this concept to the market will generate the following value forrural Indonesians:

Provides access to fresh water sources closer to the home for rural communities; Requires no fuel or electricity; saving money on energy spending; Automatic, continuous operation requires little supervision and human input; Improved usability, ergonomics, maintainability, affordability and modularity; Lighter weight and sized product; The pump can be multiplied in series or parallel to satisfy the needs of the community as they can afford it

(i.e. modular scalability); Removes the need to use concrete and complex installation mechanisms; and Cuts CO2 emissions.


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Next Generation Hydram Pump

This concept is a Next Generation Hydram Powered Water Pump that

will offer an improved, smaller and lighter-weight solution to the existingproducts on the market. A Hydram Pump uses the water pressure of anelevated water source to hammer 30% of that water to a much higherstorage point (it requires no electricity). The concept focuses on creatingimproved design and technical specifications for usability, ergonomics,maintainability, simpler installation, affordability and modularity. The nextgeneration pump will be sold as an off-grid and autonomous water pumpsystem that relies on a flowing water source and gravity, but has anembedded modular scalability to meet the increasing needs of acommunity.

OLD vs NEW


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The value proposition for market partner/s: Access to a significantly improved technology withcommercialisation support to provide sustainable water pumping in new markets with a potential forimplementation in a number of high-demand locations across Indonesia.

The value proposition for target community: Improved access to fresh water with minimal manuallabour needed, no fuel or electricity required to operate the solution and an improved efficiency andreduced installation cost through next generation technology and design.

Commercialisation StrategyThe commercialisation strategy for the Next Generation Hydram Powered Water Pump is as follows:

CommercialPillars

Phase I (Pilot)January to June 2013

Phase II (Scaling)June 2013 to June 2014

Market - Sleman and Gunung Kidul, Jogjakarta consisting of 1,200 hamlets- Jogjakarta and surrounding areas- Sumatra

- SulawesiCustomers - Individual community hamlets with a minimum of 50 households

- Individual community hamlets with a minimum of 50households

Manufacture

- The Hydram pump will be sourced from an established modernHydram pump manufacturer

- Design support will be provided to make the necessary technicalproduct improvements

- This manufacturer will then manufacture the improved Hydrampump in their central manufacturing facility

- The Hydram pump will be sourced from an establishedmodern Hydram pump manufacturer

- This manufacturer will manufacture the improved Hydrampump in their central manufacturing facility

Distribution

- The manufacturing facility will be centralized in Asia anddistribution will be based on direct sale orders.

- The pumps will be distributed from the manufacturing facility directto the customer location for installation.

- The local sales representative will organise for the installation andany required maintenance including scheduled system check-ups.

- The manufacturing facility will be centralized in Asia anddistribution will be based on direct sale orders.

- The pumps will be distributed from the manufacturing facilityto regional hub offices.

- Offices will be established in key regional market hubs in

Jogjakarta, Pekanbaru and Makassar- The regional offices responsibility will be to manage salesactivity, distribution, installation, and provide regularmaintenance for customers.

- The local sales representative will organise for the installationand any required maintenance including scheduled systemcheck-ups.

Sales &MarketingStrategy

- The Hydram pump is a community scaled product thereforecommunity agreement to purchase the product will be made inadvance before manufacturing takes place.

- A local motor bike sales team of four people will be deployed toeducate and inform the communities of this product until the firstinstallation is made.

- A community marketing strategy to invite communityrepresentatives to observe the successfully installed communitypump will also be implemented with follow up visits from the localsales team.

- All sales staff will require training in the use, installation andmaintenance of the systems from the manufacturing partner.

- The Hydram pump is a community scaled product thereforecommunity agreement to purchase the product will be madein advance before manufacturing takes place.

- A local motor bike sales team of four people will be deployedto educate and inform the communities of this product untilthe first installation is made.

- A community marketing strategy to invite communityrepresentatives to observe the successfully installedcommunity pump will also be implemented with follow upvisits from the local sales team.

- All sales staff will require training in the use, installation andmaintenance of the systems from the manufacturing partner.

Retail Pricing- Each Hydram pump unit will be sold at Rp. 8.5 million.- This price includes installation and 3 month maintenance

- Each Hydram pump unit will be sold at Rp. 8.5 million.- This price includes installation and 3 month maintenance

End-UserFinance

- End-user financing will be made available to assist communitiespurchase the unit. Communities will need to collect an initial downpayment of 30% to pay upfront with instalments made over 12months to an external finance institution.

- This collection mechanism will be managed by the head of eachindividual hamlet

- End-user financing will be made available to assistcommunities purchase the unit. Communities will need tocollect an initial down payment of 30% to pay upfront withinstalments made over 12 months to an external financeinstitution.

- This collection mechanism will be managed by the head ofeach individual hamlet


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The Competitive Environment

The Next Generation Hydram Powered Water Pump faces competition from several available water pumpingsolutions that are currently being used in the target location. These water pumping technologies range from

manual methods to fully automated electricity powered water pumps. The existing technologies and alternativesbeing used for transporting water include:

Existing Hydram Water Pumps: These systems offer many of the same benefits as the NextGeneration Hydram Powered Water Pump, but the design and installation methods of the technologycan be up to 100 years old and outdated.

Electricity Powered Water Pumps: Water pumping systems of varying size can be obtained directly bythe end-user or community scale solutions can be implemented in central locations. These pumps canbe powered by grid electricity, fossil fuel generators, solar powered, or other renewable energy sources.

Manual Water Transport: In locations where a well is available, manual use of buckets can be acommon water transportation method in combination with hand pumps and other manual pumps. Inlocations where there is no well, carrying water from the river in buckets or barrels is also common.

These water pumping technologies are being offered to the target market or parts of the market from a range ofdifferent organisations with different business models and different motives for distributing their particulartechnology:

Private companies: Companies who are commercially offering their own technology or distributing anexisting product in the target location.

Socially motivated organisations: Initiatives, programs and donations sourced from corporations oruniversity, CSR, Non-Government-Organisations, and Multi Intergovernmental organisation initiatives.

Local Government: National, provincial, regional or rural government initiatives that offer partial or fullsupport for well-digging, technology implementation, and other water transportation alternatives.

Local Hydram Pump Producers: Local Hydram pump production has been identified in the target

location of Yogyakarta.

Barriers to Entry

The following points create potential barriers to enter for first movers into this market:

Communication barriers with the community due to language and cultural barriers; Difficulties to change the community mindset due to assumed expense and change concerns (e.g.

switching cost from currently used pumping systems and technologies); Difficulties to penetrate market controlled by the existing water pump players; Competitive responses from established alternative solutions providers; Patents and proprietary knowledge of existing Hydram pump providers may challenge entry;

Communities unable to collaborate and work together to obtain capital; Government import and customs policies; and Government operation licensing requirements.

Barriers to entry for subsequent market players include:

Identifying a new innovation which is able to make a more attractive offering to the target community; Acquiring target community acceptance for the new water transportation solution provider; Access to ideal target locations for Hydram pump operation in the market; Competitive response from established first mover and alternative solutions providers; Access to optimal distribution channels as potential distributors gain increased bargaining power; and National, provincial, regional or rural government regulations limiting competition and endorsing first-

mover organisations.


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Indonesia is the national target market for Next GenerationHydram Powered Community Water Pump commercialization.Indonesia is the largest country in South-East Asia both in areaand in population. It has an estimated population of 237 millionof which 28 million live in the metropolitan area of the capital,Jakarta. Indonesia consists of 33 provinces located across 5major islands and thousands of small islands. The country is anarchipelago contains 17,508 islands. The Indonesian economy is the world's sixteenth largest by nominal GDP.Indonesias 2011 GDP isestimated to be USD 845.680 billion with GDP per capita estimated to be USD 3,508.Despite the countrys 6.4% economic growth in 2011, Indonesia still faces unemployment and povertychallenges. In 2011, the poverty rate was estimated to be 13.3% and the unemployment rate 7.9%.

The Pilot MarketThe target community is the community in which the Program isfocusing its activities for pilot commercialization. The local communitysparticipation from this location has been the key to the success of the

process so far. After assessing different possible locations, the SpecialRegion of Yogyakarta was selected as the best suited location for pilotcommercialization of the concept. The province is located near thesouthern coast of Java. In 2010 registered population in Special Regionof Yogyakarta is 3,452,390 inhabitants.

The Special Region of Yogyakarta consists of four districts:

1. BantulBantul district consists of 17 sub districts, 75 villages, and 933 hamlets. The total population in 2011was 1,035,635 inhabitants with total 311,934 people as head of households. Several subdistricts are stillin off-grid areas and most rural areas do not have access to Drinking Water Local Company

(Perusahaan Air Minum Daerah). Bantul district has six rivers that flow all year long. Industries locatedin Bantul are typically small industries. In 2010, there were total of 18,146 industries in the area.

2. GunungkidulGunungkidul district consists of 18 sub districts, 144 villages, and 1416 hamlets. The total population in2010 was 674,408 inhabitants. The economy of Gunungkidul Regency is dominated by the agriculturalsector. Traditional home craft industry, food processing, and agricultural products are all the sectorswith significant potential for further development.

3. Kulon ProgoKulon Progo district consists of 12 sub districts, 87 villages, and 917 hamlets. The population of KulonProgo is 388,869 people. Majority of inhabitants occupations in Kulon Progo are farmers. Water supplyfor irrigation in Kulon Progo is taken from Progo and Serang River.

4. Sleman Sleman district consists of 17 sub districts, 86 villages, and 1212 hamlets. The total population in 2011was 1,125,369 inhabitants with total 305,376 people as head of households. The biggest Slemaninhabitants occupations are in the field of agriculture and services. In 2009, the number of registeredsmall industries is 15,012. In 2009 there were 181 Solar Power Generators, 3 Micro Hydro PowerPlants, and 105 livestock waste biogas installations registered in Sleman area.

Sleman

Bantul Gunung

Kidul

Kulon

Progo


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The Hydram pump is a technology that has been in use for over 100 years, the proposed improvementsrepresent a new generation of Hydram pumps. The improvements are in several areas including improvedusability, ergonomics, maintainability, affordability, and modularity. Communities need a high rate of buy-in to justify the cost of the improved Hydram pump system. There is a widespread reliance on fossil fuels, unstablegrid electricity, and in some cases lack of access to grid electricity. Seasonal weather conditions may constraintthe viability of the concept. The successful commercialisation of the concept depends on the successfuldissemination of the technology improvements and engagement of a reliable source of end-user finance. A briefanalysis of the concepts existing Strengths, Weaknesses, Opportunities, and Threats as well as Constraints andDependencies follows below:

Strengths Weaknesses The water pump does not require electricity or fuel to

operate; Automatic and continuous operation requires little

supervision and maintenance; Reduced sound pollution, and improved usability,

ergonomics, maintainability, affordability and modularity; Lighter weight system allows simpler installation; The pump can be multiplied in series or parallel to

satisfy the needs of the community; Community based payment exponentially reduces end-

user cost and ensures community ownership; and The model can be expanded to include several regional

and national markets.

The system can only be operated in area that haveaccess to flowing water;

The cost of the system is too high if full buy-in from thecommunity is not attained;

The benefits of the improved technology are currentlyunknown to the community;

The system is a subsequent player in the target market; The motorbike team will act as ambassadors for the

product and the commercialisation relies heavily uponthese individuals; and

End-user finance model or partnership is necessary.

Opportunities Threats

The target location has households who do not haveaccess to grid electricity;

Many households in the target location rely on fossilfuels;

The technology improvements and cost-sharing model,once accepted and established, can generate new ideasin other areas and a change in att itudes that mutuallybenefit all members of the community; and

Community preference to choose lower price optionswould make the system highly compelling as acommunity solution when compared to a diesel generatorpump.

Source of water may become contaminated which couldthreaten community health;

A lack of or decrease in purchasing power in the targetmarket would have severe implications for the success of

this system; Lack of rain or seasonal draught could significantly affectthe system effectiveness;

Grid-expansion into the target areas may render theoffering significantly less attractive for the targetcommunity; and

Technology improvements can meet resistance in thetarget communities and be rejected before they areintroduced and the benefits have been fully presented.

Constraints The existing water pressure limits the effectiveness of the system and excludes some potential markets; The availability of technological expertise in the target location may be limited and there may be a need for extensive

training; Only villages or hamlets of a certain size can afford the system; The possible production and shipping from abroad presents limitations in the production and delivery capacity of business

partners; Community acceptance of the new technological features and benefits; and Government efforts to increase electrification rates may limit the potential demand growth.

Dependencies Availability of appropriate end-user finance providers; Availability of technical expertise; Some infrastructure standards need to be met; The target community needs to be of a certain minimum size; and The trust and acceptance of the technology and the product from the local communities.


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The following is a selection of high-level risks, risk events, and suggested mitigation measures to be consideredwhen a comprehensive risk management plan is developed in relation to the potential commercialization of thisconcept.

# Risk Categories Risk Events Risk Mitigation Strategy

1 Technology: risk of technology failure or technological obsolescence

Proposed technology enhancements fail Design failure due to installation

approach

Testing, prototyping for extendable solutions,evaluate multiple options to enablecommercialization, implement and operate an activemanagement of obsolescence

2Business/strategic: risk affecting theviability of the business model andcommercial strategy

Marketing strategy fails Pricing points exceed purchasing power Community rejects joint payment model

Identify lessons learned from previous success andresearch, pilot selected commercial strategies in acontained environment prior to scale-up, Developcontingency plans for key areas of the commercialstrategy

3

Environmental and Health: risk ofdamage to the environment or healthcaused during manufacture orinstallation and the liability arising fromsuch damage

Serious contamination of local watersource

Installation failure damages river system

A Health, Safety and Environment Plan will bedeveloped and implemented (including staff, supplierand contractor training)

4Financial: risk of insufficient access tocapital, employee fraud end-userfinancing failure

Loss of revenue due to theft Insufficient start-up capital Operational capital delays End-user finance model fails

Required capital will be secured prior to thelaunching of the pilot, a fraud prevention plan will bedeveloped, multiple finance alternatives will belocked into long-term service contracts;

5

Manufacture and Supply Chain: riskrelating to plant closure, inputresources, plant damage, componentfailure, cost base

Unplanned plant closure Significant increase in

product/component cost

Development of a supply chain risk managementplan including the preparation of simulation modelswith mitigation and impact reduction strategies

6Distribution: risk of non-delivery,increased logistics costs, transportationrelated breakage

Logistic supplier is unreliable Trucking accidents Damaged product during transportation Stolen goods during distribution

Qualify local distributors and logistics providers,maximise payloads, use alternative modes ofdelivery distribution network design, insurancecoverage

7

Operational: risk relating to the

operational management strategy andimplementation

Maintenance teams do not deliver Installation teams do not deliver

Prepare a business continuity and resiliency plan

that documents scenario analysis and impactreduction strategies

8

People: risk of not attracting sufficientlyskilled and experience people with theright attitude who can consistentlydeliver

Inability to hire staff as required High staff turnover Staff damage community relations

Emphasizing social mission of the organisation, strictemployment screening and Implementing aperformance measurement and reporting framework

9Demand: risk of not creating sufficientmarket demand during the pilot phaseand beyond

Marketing strategies fail Sufficient demand cannot be created Scale is unachievable

Extensive relationship building with pilot systemusers, regular evaluation of product value to thecommunity, assessment of the effectiveness ofmarketing and adjustment as necessary

10

Community Acceptance: risk of thecommunity not embracing the offering,business model or local salesrepresentatives

Community rejects product offering Community rejects organisation

Respectfully engaging with the community, definingmutual expectations and monitoring their fulfillment

11Business Partnerships: risk in failureof partnerships between businesspartners

Partners refuse to remain workingtogether

Suppliers fail or discontinue supply A partner enters bankruptcy

Seeking multiple alternative suppliers, locking inmajor suppliers through long-term service contracts;ensuring all business partners commit to a sharedvision and set of values

12 Competition: risk relating to earlymover competition in the market Competition occurs too quickly Non-Profits undercut pricing model

Maximizing first mover advantages throughaccelerating speed-to-market, utilizing competitiveintelligence strategies

13

Political/regulatory: risk of a changein public energy policy, export/importregulations and business enablingenvironment

Import restrictions relating to finalproduct or components

Frequent and detailed communications with policymakers, regulators, industry bodies, media,consumers, and environmental groups

14Natural Disaster and force majeure: risk of a significant natural disaster inthe pilot market location

Extreme drop in natural water pressure Earthquake, Tsunami or volcanic

eruption

Develop an emergency management and businesscontingency plan


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This following section provides information on the financial viability of the first year of the pilot commercialization.The total variable cost to assemble a Hydram Powered Water Pump is estimate to be Rp. 6,000,000 whichincludes the cost of the pump system, labour, sales, and distribution. A targeted sales price Rp. 8,500,000 with agross profit for the first units sold of Rp. 2,500,000 has been modeled. This pump would operate at a similarlycompetitive capacity per cost unit as some currently available pumps priced at Rp 12 million (10/liter per minutemaximum capacity). The budget has been developed to include sales throughout Indonesia, not only in the pilotlocation.

At the end of year one, the company will retain 48% of its earnings while the remaining Rp. 295,802,000 will bereturned to investors; ensuring investors enjoy a 20.9% ROI. This also ensures supportsthe companyssustainability by providing additional operational funds in year two of approximately Rp. 272 million rupiah.

Required Investment: Rp 244,700,000 Revenue year 1: Rp 2,762,500,000 EBITDA year 1: Rp 567,800,500Profit Margin: 20.6 % Return on Investment: 20.9 %

Cost Item Amount

Pump System Rp. 5,537,500

Labour Cost (2 people) Rp. 200,000

Sales Commission Rp. 212,500

Distribution Rp. 50,000

TOTAL UNIT COST Rp. 6,000,000

7%6%

0.37%

87%

Expenses

Payroll

Operating

Utilities &Maintenance

Cost of Sales

42.5

127.5

212.5

297.5340 340

0

100

200

300

400

1 2 3 4 5 6 7 8 9 10 11 12

Monthly Revenue in Million Rupiah

05

1015

2025

3035

40 40 40 40

0

10

20

30

40

50

1 2 3 4 5 6 7 8 9 10 11 12

Monthly Unit Sales

Risk

Value

Estimated Return on Investment: 20.9 %Estimated Payback Period: One Year


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Projected P / L Year 1


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The World Bank has brought together a team of experts to provide business and design support services toMarket Partner(s) to assist them in developing and commercialising compelling product and service concepts.The goal is to offer insights, access to networks, tools, and processes to expedite the commercialisationprocess.

IDDGIS will offer Business Support Services to facilitate the development of connections, investment, planning,and strategy needed to bring successful concepts to market; as well as, Design Services to help developinspirational, and technically refined concepts tuned to market demands and ready for launch. In return, MarketPartner(s) will bring specific industry knowledge and business resources to the table allowing us to jointlycreate products and services that are not only financially viable but good for communities and the people thatlive in them.

StageIdentification and

engagement of MarketPartner(s)

Concept development,testing, andprototyping

Market research,business consulting,and feasibility study

Validation of theMarket Solution and

Activities

Potential MarketPartner(s)identification

Engaging mostsuitable partners Market Partner(s)

meet with theProgram Partners

Commercialisationprocess is mappedout

Further conceptdevelopment

Testing of conceptdesign Prototyping (if

necessary) Several iterations

to prepare conceptfor marketability.

Conduct of afeasibility study

Business Supportto MarketPartner(s)

Market researchassistance

Joint marketingeffort by theProgram Partnersand the MarketPartner(s).

Market Solutiondevelopment,testing, andadjusting to marketresearch

Market Partner(s)empowerment

Maximised impacton the challenges

Direct improvementof lives of thetarget communities

Inputs

DevelopedBusiness Cases

Innovation

capability Strategydevelopment andbusiness planning

Seed funding Focus on cost,

value and pricing Learning

orientation andflexibility Innovation

capability

Marketing strategyand execution

Supply chaindesign andimplementation

Funds for markettrials, marketing,and refinement

Risk management Formalisation of

impact standardsand expectations

StakeholderManagement

Funds to supportscaling

Outcomes

Compelling initialbusiness plan

Demonstrated coretechnologiesand/or productprototype

Market Partner(s)selected andengaged

Refined businessmodel,technologies,product

Validation ofviability andscalability

Indication ofcustomer demand

Feasibility Study Market Research Strong customer

awareness anddemand

Effective supplychain

Fully validated andcustomised MarketSolutions

Sustainablyreaching targetcommunitiesimpacted


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Business Case Next Generation Hydram Powered Community Water Pump

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