WaterHealth Inc

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WaterHealth International Inc. (“WHI” or “the Company”) develops and markets proprietary, decentralized water purification and disinfection systems and services that provide affordable potable water to underserved communities. Through its products and services, WHI aims to play a role in the reduction of high morbidity and mortality resulting from waterborne diseases. To date, [approximately 300] of WHI’s facilities, which are predominantly 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 has its headquarters in Irvine, California, USA with affiliate offices in Hyderabad, India, Manila, Philippines and Accra, Ghana. In February 2009, IFC committed $15m equivalent debt financing to WaterHealth India Private Limited (WIPL, a wholly-owned subsidiary of WHI) to support the establishment of 1,000 new Water Health Centers in India. IFC proposes to convert a portion of the undisbursed debt from this investment into equity in WHI. WHI has been developing expansion opportunities outside of India, in West Africa, Philippines and Bangladesh. The Company is in discussions with Safe Water Network (a leading global NGO addressing the challenge of providing safe drinking water to world’s poor) in West Africa and AK Khan Group (one of the leading conglomerates) in Bangladesh to roll out its expansion plans. Over the next five years, WHI expects to install about 400 facilities, branded as “Water Health Centers” (WHC), each in West Africa and Bangladesh. In India, WHI, through WIPL is working in a number of new states apart from Andhra Pradesh to expand its operations and expects to install about 2,500 new systems, over the next three years. Each Water Health Center (WHC) consists of equipment supplied by WHI through its local subsidiary and procured from a set of its approved vendors installed within a simple structure of proprietary design. Depending on the projected demand for a WHC, the Company typically installs either 65 kiloliters per day capacity (treated water) or 21 kiloliters per day capacity equipment. These assets are for the most part, community-owned and operated, and provide potable water to the community members at an affordable cost. Typically, the land is provided by local government or by a donor, which also in many instances provides the equity contribution for the WHC. The operations of each WHC, including the salaries of employees, are expected to be entirely sustained through affordable user fees generated from sales of treated water. In addition to the physical assets, the Company also provides: - technical skills and training to operators; - maintenance support for equipment; - oversight on adherence to quality system; - assurance on product/water quality; and - public information on safe drinking water to surrounding communities. In rural settings, a typical WHC sources water from a village pond, which has been earmarked by the local government for drinking water purposes. Water is pumped from the pond to the WHC through buried high density polyethylene (HDPE) pipes. Water treatment and disinfection involves filtration through pressure sand filter, activated carbon filter, cartridge filters of 5 and 1 micron size, activated carbon cartridge filter and UV irradiation (for disinfection). Treated water is stored in stainless steel tanks and dispensed through a tap manifold to reusable “food grade” HDPE containers of various sizes. WHC operators disinfect and rinse containers turned in by customers prior to refilling. In urban and peri-urban settings, the raw water may be sourced from ground water and even municipal water supplies.