What normally comes to mind when thinking about the nexus between energy, water and climate change? Probably things like energy-efficient water pumps, solar panels for water purification, or methane recovery in wastewater treatment plants - all routinely discussed in conferences and seminars around the world, and featured in the scientific literature grappling with climate change mitigation and water scarcity issues.
A less talked-about approach, however, is focusing on reducing the need for water by making water use more efficient at the residential level. But how would reducing water use in households impact energy needs, one might ask? Well, if we consider that a large portion of the energy needed at the household level goes into heating water for showering or washing the dishes, well, the energy and water link starts to become more evident.
Something very innovative is happening in the low-income and low-opportunity neighborhood of Los Heroes de Tecamac, on the outskirts of Mexico City. Old, inefficient, and often unsanitary water fixtures are being replaced, household by household, by an army of local women who have been trained as plumbers. The project, which we affectionately call the “Lady Plumbers” project here at the MIF, is being implemented by Cambio Azul S.A., a startup owned by a US-born and Mexico-based social entrepreneur, Mr. George Maher, who with a team of committed colleagues including Dan White from consulting firm Berkeley Research Group, first came up with the idea and invested the good part of the last 5 years and significant personal finance to make it a reality.
Since we first met Mr. Maher, who had approached the MIF looking for financing, it was clear his idea could be a win-win-win-win solution:
- It saves water in the severely water-stressed Valley of Mexico;
- It saves fuel, which translates in an annual savings of approximately US$300 (!) for each low-income household where it is implemented;
- It reduces emissions of CO2 in the atmosphere, about 1.5 tons/year/household, thus contributing to mitigating climate change; and
- It generates employment for about 50 women in the pilot stage, in an area where jobs are hard to find.
It took almost two years, and two separate MIF operations (an investment grant and a social entrepreneurship loan), to see this project move from the concept note to the planning board and eventually to the implementation stage, but it is now a reality. And one we can all be proud of.
One of the most innovative features of the operation is that replacing the showerheads and water faucets in bathrooms and kitchens is done completely free of charge for the home owners. How is this possible? Well, it’s carbon finance at its best! Cambio Azul worked with a Mexican-based carbon consultancy, Carbonding, to design a methodology for calculating emission reductions connected with the energy savings from the program, and had that methodology approved under the UN Clean Development Mechanism. The carbon credits generated under the pilot phase of the scheme, which involves installing about 45,000 efficient water fixtures in some 18,000 households, will be sold to a carbon buyer, Swiss Foundation MyClimate. Proceeds from the carbon sales over the next 10 years will be used to cover the implementation cost of the program, including equipment manufacturing, training, labor costs for the installation teams, and logistics. The loan from the MIF will then be repaid in-kind with a share of the carbon credit issued, which the MIF will use to cover its own carbon footprint from conferences and events for the next 10 years.
The installation phase is now completed. When we visited the project headquarters last November, we were impressed with the amount of planning and commitment that the management team, as well as the Lady Plumbers team, put into every single household visited. As the project moves into the periodic verification stage (independent auditors will verify the CO2 emission reductions yearly before carbon credits can be issued), we are now focused on finding partners and potential donors/financiers interested in participating in the next stage of the project: a massive scale-up from 18,000 households to 325,000. The time is right and cities across Latin America and the Caribbean are certainly ready for this innovative model!
For more info and for expressions of interest in partnering with the MIF on water and energy efficiency programs, please contact Filippo Berardi: filippob@iadb.org