Founded in 1995, WHI (WaterHealth International) is a company with the primary purpose of developing, marketing, operating and maintaining, decentralized water purification and disinfection systems and services that provide affordable potable water to underserved communities. Through its products, operations and services, WHI aims to play a major role in the reduction of the high morbidity and mortality resulting from waterborne diseases. To date, approximately 300 of WHI’s waterhealth centers, which are mostly rural community systems and urban/peri-urban water stores, have been installed in a number of countries including India, the Philippines, Sri Lanka, Ghana, and in addition a number of UV Waterworks have been used in Mexico. WHI’s key share holders as of December 4, 2009 (on a fully diluted basis) include Dow Venture Capital (40.9%), Sail Safe Water Partners and SAIL Venture Partners (21%), Plebys (10.4%), and Acumen Fund (2.5%).

WHI expects to establish over 2500 new installations in India over the next three years and about 400 each in West Africa and Bangladesh over the next five years. WHI’s systems are typically installed in rural/ semi-urban areas and are financed in a combination of upfront equity contributions from the communities and third parties, donor funding, and balance with debt finance from commercial lenders. WHI also selectively contributes as part of the upfront equity contribution where a) Equity contribution from communities is below minimum threshold/ inadequate or b) New orders are based on business models such as BOOT wherein no upfront equity contribution is envisaged. WHI presently is in the midst of raising its Series D funding to fund its expansion plans in these geographies. Total Series D funding is expected to be in the range of $20 – 25 million.

5.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	5.0

* These investment figures are indicative

The Water Centers will be spread across various rural/ semi urban locations across India, Bangladesh and West Africa.

The Project will have strong development impact by way of (a) Direct beneficial impact on quality of life and health; (b) Employment Generation by engaging people from the villages for operating community water systems, distribution of water and revenue collection; (c) Environmental Benefits - The adoption of WHIs systems will help minimize the use of chemicals with toxic by-products used in alternative water purification methods like chlorination. The distributed water model also assists in minimizing water losses by supplying water at the retail level thereby avoiding supply leakage losses. A separate impact assessment study is underway to determine the positive impact of WHC installations on healthcare expenditure patterns of the targeted villages.

IFC’s investment is expected to lead to the following additional outcomes: a. Establish viability of the distributed water service business model and help expand the business to new geographies - This model of providing distributed water services is new. Private investors and lenders are not familiar with the viability of the WHI business model and are cautious about providing financial support. IFC through its participation is playing an important role in ensuring that the underlying financing structure is robust and that the various risks in the business model are appropriately allocated. IFC’s participation will provide comfort to lenders/investors by demonstrating that this business model is appropriate to take advantage of the opportunity available in the large rural distributed water services market in emerging economies. b. Benefit the company from IFCs expertise and network as it expands into new countries.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards and guidelines. IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

- PS1: Social and Environmental Assessment and Management System;
- PS2: Labor and Working Conditions; and
- PS3: Pollution Prevention and Abatement.

WHI Water Health Center equipment, plants and infrastructure meet good industry practices. No Center is expected to exacerbate community health, safety and security risks or community exposure to disease either due to changes in land/hydrology or other terrestrial/air quality/hydrologic regimes or due to influx of large pool of migrant laborers. Armed security guards are not deployed at the Centers or by the WHI at other locations. (PS4). Typically, land for each WHC is provided by a donor or by the concerned local government, so no physical or economic displacement is expected as a result (PS5). Similarly, WHCs are located in population centers and do not have significant emissions and discharges, hence impacts on biodiversity are not expected. For the purposes of PS7, the Centers are not expected to affect indigenous peoples or associated lands or resources on which indigenous peoples may be dependent. Similarly, the water centers are not expected to affect any cultural heritage (PS8) including sites, structures, natural relief or resources of cultural importance for the communities.

WHI has committed to ensure that policies and procedures that have been put in place for the operations of WaterHealth India to meet IFC requirements will be adopted by all current and future subsidiaries.