Sanergy: Turning waste into wealth in Kenya’s slums

More than 2.5 billion people worldwide lack access to adequate sanitation, and contaminated water is the second largest cause of disease in the world. Waterborne illness kills approximately 1.6 million children each year.

The problem is particularly acute in slums, where more than 1 billion people live.

In 2009, at a class in the Massachusetts Institute of Technology’s Sloan School of Management, MBA students David Auerbach, Lindsay Stradley and Ani Vallabhaneni, Civil Engineer Joel Veenstra, and D-Lab Instructor Nathan Cooke built a business around providing sanitation to Kenya’s slums, improving health and creating a sustainable energy source as well. They thought there was an opportunity to reach millions of people – working with residents of informal settlements as the drivers of change.

“The whole idea was around a franchise model: Sell toilets to people to run as small businesses,” Auerbach said. “They would charge a nominal fee for use, then we would collect the waste every day, take it out of the community and recycle it into useful byproducts.”

At a central processing facility, waste is processed into organic fertilizer for agriculture. These products are in great demand. Kenya imports 1.2 million tons of fertilizer annually, and tariffs and transportation make fertilizer so expensive that farmers are dramatically under-fertilizing their fields, leading to lost productivity.

“As my grandmother likes to say, this is an input that never runs out,” Auerbach told Fast Company in 2011. “[Sewage] is dumped everywhere, and causes disease if it’s not treated properly. We’re adamant about reducing sanitation-related disease, and in the end this is what this is about.”

The Sanergy team received an E-Team grant in 2010 and went to Kenya for further research. Two immediate observations forced them to re-think their initial strategy. First, the Nairobi slums they visited were densely packed so finding land would be a challenge. Their toilets would have to be built compactly. Secondly, they would also have to design a cartridge system so that they could easily and safely remove waste. There was no good system in place already – sewers are not present and unpaved roads prevent trucks from reaching the heart of the community.

Auerbach said E-Team financial support was crucial at that early juncture. “There are very few supporters out there willing to help university students make new things,” he said. E-Team coursework also helped guide them through key startup challenges: How do you attract entrepreneurs? How do you generate demand?

“Joseph Steig and James Barlow were really wonderful in helping us think through the legal structure of our organization and what challenges we would face,” Auerbach said.

Sanergy’s first toilets were open for business on November 19, 2011—“World Toilet Day,” an international occasion to call attention to the importance of hygienic sanitation worldwide.

Business has grown rapidly. As of September 2014, 471 toilet facilities are open, run by 250 entrepreneurs and serving 20,000 people every day in Nairobi’s slums. The company has removed 3,100 metric tons from the communities and safely treated it at the central plant. Sanergy has created 523 jobs, providing employees who live in the communities they service with contracts, pensions, and medical and life insurance.

In August, Sanergy co-founders Lindsay Stradley and Ani Vallabhaneni were awarded the $100,000 2014 Grinnell Prize, the largest prize for social justice accomplishments awarded by a U.S. college to leaders under 40 years old. They were selected from among 211 nominees from 34 countries.

Future plans include further expansion in Nairobi, then across Kenya and finally greater East Africa.