Bill Gates sipping from a glass of water doesn’t sound like riveting television. But add the subtitle: “This water was human waste five minutes earlier” and people will sit up and take notice.

That’s precisely the reaction Gates was aiming for earlier this month when he unveiled a new technology on his blog which he claims could revolutionise the way sanitation is provided all over the developing world and improve the lives of millions of people.

The Omniprocessor, which has been developed by Janicki Bioenery, a small family-run company north of Seattle, is a compact waste treatment plant that can process sewage for a community of about 100,000 people. Unlike modern sewage plants, which squander huge amounts of electricity treating waste, the technology combines incineration, steam power and filtration technologies to ensure no energy is wasted in the process.

Its star turn is to generate 11,000 litres of high-grade drinking water a day – and that is just the start. The processor derives enough energy from the faecal matter it incinerates to run the unit, with 150kw a day spare to export to the grid. It also produces ash, which can be commercially valuable as a soil amendment.

Gates said he was impressed by the engineering, and excited by the business model. “The processor wouldn’t just keep human waste out of the drinking water; it would turn waste into a commodity with real value in the marketplace. It’s the ultimate example of that old expression: one man’s trash is another man’s treasure.”

Brian Arbogast, director of the Bill and Melinda Gates Foundation’s water, sanitation and hygiene programme, says the Omniprocessor could potentially be its most powerful weapon in tackling the problem of the 2.5bn people who still lack access to a toilet. Poor sanitation is a global public health crisis, and is one of the primary reasons why 1.5 million children die every year from diarrhoea, according to Unicef.

In 2011, the foundation issued a challenge to researchers around the world to design a toilet that works without running water, electricity or septic system, and can be operated for as little as 5 US cents (3p) per person per day to run, including purchase and maintenance costs.

It set another challenge for scientists to develop technologies to make the servicing of pit latrines and septic tanks cheaper and easier, and a third to design a new type of waste treatment plant, which led to Peter Janicki’s family company winning a contract.

“We are working on a number of other projects that we are excited about,” Arbogast says, “but this is the closest to being commercially available. It treats the sludge of 100,000 people so it’s a much larger social intervention [than simple toilets]. Every unit will transform its community.”

That is, of course, providing it can be proved to work in the real-world environment of Dakar, Senegal, where the first unit will be shipped next month accompanied by Janicki’s 22-year-old son, Aaron. Depending on the outcome, Janicki and his team are planning a second model that they say will be almost eight times more efficient: producing 86,000 litres of clean drinking water a day.

Arbogast says what makes the Omniprocessor so potentially revolutionary is its income-generating potential, which the foundation hopes will attract private sector entrepreneurs to a sector that until now only governments have been able to bankroll. The expected price tag of $1.5m (£0.99m)may sound a lot, but Arbogast says conventional sewer-based sanitation systems cost tens of millions of dollars to buy, and then millions of dollars every year to maintain due to their high electricity consumption. “Where they exist, sewage treatment plants tend to only serve downtowns, central business districts and the wealthiest neighbourhoods. It is very rare for the poorest to be served by them,” he says.

And even if a city can afford the initial outlay for a sewerage system, many abandon them a few years later because they can’t afford the upkeep. In Accra, Ghana, fecal sludge is dumped untreated into the sea because the city no longer has a functioning sewage treatment plant.

The fact that the Omniprocessor will generate income from the water, electricity and ash it produces means it will become a money-spinner within two to five years, says Arbogast. “In many communities the poor pay 15 cents (9p) per litre for drinking water. This unit would be very profitable at a fraction of that price.”

Dakar was chosen as the test site for the first Omniprocessor because the municipal sanitation agency, Onas, had already partnered with a private company to operate three of its sewage treatment plants. Delvic, which is run by Lena Tall Faye, improved profitability from the plants so dramatically that Onas is making more than when it was running them itself, says Arbogast. “Madame Faye is a remarkable woman, and a great example of the type of entrepreneur we think could dramatically help a city like Dakar improve its sanitation.”

And Faye, too, is excited about the arrival of the new processor. “Our objective is to make these plants profitable, but at the moment our only revenue is from a charge paid by the trucks that deliver the sludge,” she says. The trucks in turn charge Dakar’s residents for removing it. “That’s why we have great hopes for the Omniprocessor. If it performs as expected, it will increase Delvic’s profits substantially and ultimately allow us to cut the cost of collecting sludge from needy homes.”

She says Delvic will look at acquiring the Omniprocessor for other cities in Senegal and in the rest of the subcontinent.

Gates was reportedly impressed that the Omniprocessor is equipped with sensors and webcams to enable Janicki’s engineers in Seattle to monitor and control its operations in Dakar, should local engineers need help. But this questions whether the technology involved is too sophisticated to provide a sustainable solution to sanitation in developing cities such as Dakar.

Arbogast accepts the point, but says local operators will be trained to be as self-sufficient as possible. The ability to remotely monitor how the Omniprocessor performs will allow Janicki’s engineers to improve designs for future models so users won’t need as much help from Seattle.

There is, however, one big question that Janicki’s engineers can’t answer: how will people feel about drinking water sourced from human waste? This is exactly why Gates was so keen to have himself filmed drinking it: if the product is good enough for the richest man in the world, surely it is good enough for the citizens of Dakar.

This article was amended on 21 January 2015 to correct Brian Arbogast’s name. He was previously referred to as Bill Arbogast

Read more stories like this:

• How new technologies are helping mining companies to come clean

• New technology using bacteria from dung helps coffee farmers to purify water

• Brought to you by Grundfos: New water treatment technology reduces risks from hospital wastewater

The water hub is funded by Grundfos. All content is editorially independent except for pieces labelled ‘brought to you by’. Find out more here.

This content is brought to you by Guardian Professional. Become a GSB member to get more stories like this direct to your inbox.