Terms of Reference for Business Plan - Oxfam Desalination Systems

1.     Background:

The Oxfam Somali Programme has been actively addressing critical water, sanitation, and hygiene (WASH) concerns among affected populations in Somaliland. As part of Oxfam WASH initiatives, we piloted reverse osmosis (RO) desalination systems to find a solution to the brackish water which is a major water quality concern for communities living in Sool and Sanaag regions.

Under this initiative, Oxfam has implemented five desalination systems to provide sustainable and reliable water supply solutions in El Dab, El Midgan, Oog, Guumays and Garadag. Oxfam seeks to develop a business plan to ensure these systems' continued success and long-term viability. This business plan will serve as a guiding document for Oxfam, WSP (water service providers) and relevant stakeholders, outlining key strategies, financial considerations, and operational aspects.

These sophisticated technologies have faced challenges in terms of maintenance, ownership and management. However,  under the WASH Innovation Grant, we planned to improve the management of these water supply systems by engaging communities, international and local RO firms, NGOs, UN and MoWRD. A recent workshop which brought together relevant stakeholders agreed action points.

This comprehensive business plan is intended to serve as a strategic roadmap, budget forecasts, and financial planning tailored specifically for the optimization of water supply systems. It should outline the system’s goals and operational structure including market analysis.

The business plan should include ownership and management, marketing strategy, competitive advantage, product description and problem identification, SWOT analysis, demand forecasting, promotion strategy, pricing strategy, distribution strategy and demand and financial forecasting.

In essence, this business plan is not just a document; it's intended to provide a roadmap to steer the enterprise towards sustainable success amidst the fluidity of market dynamics, consumer demands and predictable and unpredictable challenges.  

2.     Objectives:

The primary objective of the business plan is to develop a comprehensive and actionable 5-year business plan that includes detailed projections for revenue forecasting, operational expenses, staff structure, maintenance and spare parts costs, and annual budget forecasting.

The separate plan tailored to each location, taking into account factors such as population, demand, required clean water treatment unit capacity, and the competitive market, and SWOT analysis, and other related issues.

3.     Scope of Work:

The business plan will cover the following key areas:

3.1.   Supply Analysis:

-          examine various aspects related to the production, distribution, and management of these systems, including the water source, quantity, quality (use of RO technologies), treatment, and infrastructure.

3.2.   A demand analysis –

-          This covers demand for potable water both tap, public kiosks, and trucking. It should estimate how many people are in the towns (customers), including truck owners if any, how many households might be connected with service providers, what amount of water will be required to provide efficient service for people, what is the existing capacity and in five years what will the capacity and demand would look like including population growth – use UNFPA 2014 population data.

3.3.   Operational Analysis

-          Analysis of all issues required for effective operational and maintenance requirements and technical challenges. This should include staffing costs, proposed salary structure, spare parts (annual), and other costs related to operation and maintenance.

3.4.   Financial analysis:

-          This includes income and expenditure based on the demand for capacity and willingness to pay survey. Provide detailed financial forecasting with a clear analysis of profits per year.

-          Consider the possibility of adding possible government tax in the analysis.

-          Revenue component – should include estimate per year and total in five years plus compared with expenditure –

-          Provide the breakeven point and required support until the managing body reaches a better financial and technical capacity to fully manage and operate the town water supply system.

3.5.   Management Structure:

-          Provide proposed management structure of the utility or PPP including growth in five years.

3.6.   Initial Investment required:

-          Provide estimate funding required for planned water service provision: what will be the funding requirement, and how can it be raised - community, NGO, Government, and water service providers?  

3.7.   SWOT Analysis:

-          conduct a SWOT analysis for each town including Who are competitors - track owners, barked owners, etc and what impact will it have on the utility or pp, and how can it be mitigated  

3.8.   Risk assessment and mitigation strategies for potential disruptions or failures.

3.9.   Recommendations for community involvement, capacity building, and stakeholder engagement.

3.10.                     Monitoring and evaluation framework to assess the impact and effectiveness of the water supply systems. MoWRD and Oxfam will play roles in this monitoring.

Note: The intervention areas for developing the business plan are Ainaba (including El Dab), Garadag, El Afweyn (including El Midgan), Oog, and Wadaamagoo.

4.     Methodology

A.      Desk Review: reviewing existing literature, Oxfam field reports, willingness to pay reports, procurement reports/costing of spare parts, maintenance and upgrading reports from Boreal Light technician, workshop reports, and review study of desalination units in Somaliland by Brian.

B.      Key informant interviews: Oxfam staff (WASH Coordinator & PHP TL), MoWRD dedicated desalination technician (Eng Abdirashid), MoWRD Department of Water Supply and agencies, and other relevant stakeholders.

C.      Field visit to the project sites.

D.      Inception report: detailing methods of data collection, tools, and reporting.

5.     Stakeholder Involvement:

The business plan development process will involve collaboration with key stakeholders, including local communities, the Ministry of Water Resources Development (MoWRD), technical experts, and Oxfam staff. Consultative meetings and feedback sessions will be organized to gather input and insights from all relevant parties.

6.       Reporting and Deliverables:

Regular progress reports will be submitted to Oxfam's WASH Coordinator and PHP Team Leader.

The final business plan document will include but not limited to:

A.      Executive Summary

B.      Introduction and Background

C.      System Overview

D.      Operational Analysis

E.       Market size

F.       Target customer

G.      Market demand for clean water

H.      Description of key competitors

I.         Financial Analysis

J.        Growth and scalability

K.       Management

L.       Risk Assessment and Mitigation

M.    Community Engagement and Capacity Building

N.      Monitoring and Evaluation Framework

O.      Recommendations and Action Plan

7.     Budget:

Prepare and submit a separate financial proposal for two individual experts. The budget is intended for developing the business plan and covering expenses related to research, stakeholder consultations, and reporting.

1.     Qualifications

The ideal consultant should have an advanced degree in a relevant field, proven experience in developing business plans for water service providers, strong financial analysis and market research skills, familiarity with the Somali context, strong analytical skills, and excellent communication and report-writing abilities.

2.     Timeline

The consultancy is expected to be completed within 20 days, with the final report due by March 5th, 2024.

Interested consultants (firms) should submit a detailed technical proposal, budget, relevant experience, and CVs of consultants to [email protected] by 19th February 2024.