Updated Apr 04, 2018

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Expanding Sustainable Access to Safe, Reliable, Affordable Water through Small Water Enterprises

Designed for global scale up, Safe Water Network's small water enterprises (SWEs) leverage market-based principles, community resources, and innovation to provide sustainable and convenient access to safe water to people living on $1-2 per day in small town and peri-urban communities in Ghana and India.

http://safewaternetwork.org/
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Gillian Winkler

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Stage 5: Scaling

Working in collaboration with implementers and NGOs, alongside commercial and government stakeholders, Safe Water Network is committed to demonstrate success of the market-based approach to community water supply at credible scale: implementation of small water enterprises (SWEs) in 500+ small town and peri-urban communities in India and Ghana, enabling us to develop and a robust proposition that can achieve scale globally. To date, we have over 300 SWEs in operation, providing access to safe, affordable water to over a million people.

We aim to reach millions more indirectly by facilitating replication and advancing a conducive funding and enabling environment, unlocking opportunities to scale up the approach with private and public implementers across the globe. To this end, in addition to our field implementation work in Ghana and India, we are working on developing a Water Enterprise Operating Platform to provide the standardized digital tools and systems to efficiently launch, manage, and monitor SWEs, and a technical assistance capability to build the capacity of other organizations to independently implement the model around the world.

Safe Water Network is establishing a compelling case for state and national governments and funding agencies to adopt small water enterprises as a priority solution for the hundreds of millions of people unserved by large infrastructure or small-scale hand pumps.

Registered as aNon-Profit in United States.

Focus Areas:

Water Sanitation and Hygiene (WASH), Digital Finance, Public-Private Partnerships and 6 MoreSEE ALL

Water Sanitation and Hygiene (WASH), Digital Finance, Public-Private Partnerships, Entrepreneurship, Economic Empowerment, Digital Development, Gender, Technology and SolarSEE LESS

Implemented In:

India and Ghana

India and GhanaSEE LESS

1
Key Partner
2
Countries Implemented In
1,000,000
Customers
100
Employee

Problem

Despite billions of dollars invested and decades of work, safe water still remains inaccessible for over 2.1 billion people globally. Communities’ inability to obtain safe drinking water represents one of the most significant economic and public health challenges. Communities’ inability to reliably obtain safe drinking water represents one of the most significant economic and public health challenges. Without safe water, communities suffer from high incidence of diarrheal diseases leading to persistent illness and death, particularly among children and infants. Adverse effects of unsafe water disproportionately affect women and girls, who are typically responsible for collecting water and caring for ill family members. These demands consequently prevent them from attending school or conducting income-generating activities and lock their families into a cycle of poverty.

While the number of water points has increased in the last decade, critical factors of financial viability, functionality, quality, and affordability have been overlooked, resulting in poor sustainability, unacceptable water quality, unreliable service, and water tariffs either too low for financial viability—the ability to cover operations, management, and ongoing maintenance expenses through revenues from sales to support long-term sustainability—or too high to be affordable to the poor.


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Solution

Safe Water Network’s locally-owned and-operated SWEs are community-level water treatment facilities that produce high quality water sold at affordable rates. SWEs are less costly to implement, operate, and maintain than both utility level water treatment and hand pumps, yet sufficiently advanced and flexible enough to endure in challenging operating environments with varied water quality.

Financial viability underpins operational sustainability. The initial SWE investment covers technology, civil works, community engagement, and operational losses in early years. As sales increase and per unit operating costs reduce through economies of scale, SWEs earn enough revenue to cover operating costs and contribute to sustainability reserves. The initial investment is leveraged as SWEs expand through neighborhood distribution points and, if applicable, household connections. Water is then available when needed, meets relevant World Health Organization and national water quality standards, and is affordable. The increased convenience results in higher consumption of safe water, which in turn produces better health outcomes and improved financial viability for the SWE.

To provide long-term access to safe water supply, SWEs must be able to cover operating expenses (OpEx) and sustainability requirements from revenue, while maintaining a low price point that is accessible to their target consumer base. As SWEs currently operate with very little margin, continual optimization to reduce OpEx and boost revenue is central to Safe Water Network’s sustainability approach, with the objective of strengthening the financial viability of SWEs. Optimizations are identified through hands-on field implementation paired with a robust monitoring and evaluation (M&E) system. They are strategically prioritized to maximize the potential impact on sustainability and benefits to consumers. Such optimizations include solar power (which reduces OpEx and increases reliability), consumer activation (which increases penetration), remote kiosks (which increases convenience), and mobile monitoring (which reduces OpEx).

Digital finance, encompassing mobile money for water payments, as well as prepaid water supply through smart metered household connections and water ATMs (“anytime machines"), is currently being integrated into the SWE model implemented by Safe Water Network in Ghana and India. Digital finance boosts revenue: the convenience of 24/7 water collection and payment increases consumption, and is an attractive selling point for consumers, as is the use of mobile money, which facilitates improved management of household resources and water expenditures. Similarly, digital finance reduces OpEx related to revenue collection, vendor costs, and data collection. Taken together, it strengthens the financial viability of SWEs, supporting long-term operational sustainability.

Target Beneficiaries

SWEs serve small towns and peri-urban communities, largely underserved by formal development efforts of donor agencies, NGOs, and governments; their median size (3,000-10,000 people) overwhelms the use of small-scale technologies such as hand pumps, but does not make economic sense for an urban utility. As such, members of these fast-growing communities do not have access to high quality, reliable, affordable water supply.

SWE consumers are typically day laborers, farmers, or fisherman, and live on $1-2/day. SWEs provide water at affordable prices to all members of the community, regardless of tribe, religion, age, gender, disability, or health status.

SWEs provide important benefits to women and girls. They provide a service that reduces disease, increases convenient access to water, and creates opportunities for women to achieve equal access to and decision-making control over assets, building their ability to fully benefit from new enterprise-oriented services. Women play a central role in the implementation of SWEs, serving as entrepreneurs, operators, vendors, mobile money agents, and technical support providers. This strengthens their economic status and empowers them as decision makers, both within the family and the community. The training provided on operating and managing SWEs also improves the skills of the women thereby readying them for bringing about change within their own families and the community at large, and increasing opportunities for income generation.


Mission and Vision

Safe Water Network is dedicated to improving how water is supplied to small towns and peri-urban communities by demonstrating at scale a market-based approach to water supply that addresses the key barriers to sustainability and scale; advancing the market for SWEs globally by building the evidence base for the SWE proposition; engaging with governments, development agencies, and global policymakers to strengthen the enabling environment; and developing innovative financing mechanisms to aggregate the financial resources necessary to meet global demand for safely managed water. Through country programs in Ghana and India, and global headquarters in the U.S., it addresses three persistent problems in the water sector: i) unsafe water; ii) unsustainable water systems; and iii) community water approaches that fail to reach scale.

Safe Water Network applies core competencies to solve these problems and provide sustainable access to safe and affordable water to base-of-the-pyramid consumers, including:

  • Community needs assessment and engagement
  • Understanding of consumer knowledge, attitudes, practices and behavior (KAPB) about water
  • Cost-effective implementation of locally owned and operated community water supply at scale
  • Application of market principles for sustainable operation of water facilities
  • Comprehensive M&E
  • Continuous optimization of methodology
  • High-level engagement with multi-sector stakeholders to advance the market for SWEs

Innovation Description

To ensure against high system failure rates and promote sustainability, the SWE model implemented by Safe Water Network relies on durable hardware, proactive community engagement, financial rigor, cost-effective technologies, training, and strong monitoring.

Safe Water Network develops its pipeline of communities through market assessments, direct requests, and outreach. Our market-driven approach responds to local demand: when entering a community, we work closely with formal and informal leaders to conduct site selection and needs assessment, identify priorities, develop local management capacity, and raise awareness of safe water benefits and how our SWEs can serve their safe water needs. Working with local government authorities, community members, water and sanitation management committees (WSMCs), and entrepreneurs, we construct and launch SWEs using standard treatment technology. WSMCs are trained to ensure the long-term quality, functionality, and affordability of water services. Community members are recruited and employed as operators to manage daily business operations. They receive training in bookkeeping and basic accounting skills, as well as basic maintenance, simple repairs, and water treatment.

Beyond creating value for communities through access to safe drinking water, SWEs anchor ongoing health and hygiene awareness and education activities to generate demand for safe water and reduce recontamination in the household. They also create value for a range of actors involved in water service provision by creating jobs and other income generating opportunities. SWEs are locally-managed and -operated and therefore provide employment and leadership opportunities to local community members from all backgrounds, include women: as WSMC members, vendors, operators, water quality monitors, field service support technicians, and consumer educators. We also have anecdotal evidence of microenterprise development and new income-generating activities (i.e. soap-making, food and beverage production and services, mobile money agents, etc.) as a result of the SWEs.

We leverage our mobile monitoring system to collect regular financial and operational performance data from the entire SWE portfolio. Availability of real-time data on the financial and operational performance of SWEs allows us to identify bottlenecks and make rapid course corrections where necessary. We track operational and financial performance against key performance targets, including:

  • Cover local operating costs from water revenue
  • Pay monthly maintenance and repair contributions from revenue
  • Operate at <5% downtime on average over an annual period
  • Produce water meeting relevant WHO or national water quality guidelines
  • Sell water at affordable prices

The SWE model provides sustainable access to safe water in small town and peri-urban communities where millions of people would otherwise be using water that is located far from home, unhealthy, and/or an economic burden. Integrating digital finance into SWE services through prepaid supply and mobile money payments reduces OpEx due to staff time and travel costs for payment collection, boosts revenues through 24/7 water supply, improves operator and customer satisfaction, improves customer-level data collection and monitoring, and reduces arrears. With reduced costs, improved margins, and a deeper understanding of consumer behavior, the financial viability of SWEs improve, supporting cost recovery, reducing breakeven time, and strengthening the overall SWE financial proposition. Tangible improvements in the financial performance of SWEs generates increased interest from donors, investors, and entrepreneurs from across the NGO, private, public, and development sectors—thus generating funding for more SWEs and positioning them as an important and actionable solution for meeting the demand for safe water around the world.

In addition, over a longer-term horizon, we expect consumers will experience spill-over of financial inclusion benefits; digital finance, including mobile money, increases access to financial services and products, which supports financial resilience and improved social, health, and economic outcomes. SWEs will benefit from the strengthened financial resilience of customers; a reliable customer base ensures demand and ability to pay—ensuring long-term sustainability.

Competitive Advantage

Our approach uniquely addresses critical barriers to scale and sustainability. SWEs are a vast improvement over existing alternatives (e.g., utilities and hand pumps), because they can cost-efficiently expand to meet the needs of the growing populations they serve and are flexibly designed to thrive under difficult operating conditions (e.g., impoverished customer-base, high electricity costs, etc.). We have field-tested and validated a set of off-the-shelf standard technologies that are robust and maintainable largely by SWE operators. Selected water purification systems use standard components readily available in the local market. During site design, we ensure that water mains are large enough to handle additional pumps, and modular design allows the SWEs to adapt as population, demand, and service level grows. SWEs can then be expanded to neighborhood distribution points through sub-Stations, remote standpipes, and households with some additional capital investment.

We use marketing and activation strategies to grow consumer demand for safe water to improve health and livelihoods. The SWE model views community members as consumers, rather than beneficiaries, functioning as key players in the success of the SWE model: they provide the consumer market for SWEs, generating cash flows to ensure sustainability.

While there may be alternative water sources in the community (including free, often contaminated sources), all are either priced for upscale markets (those living on more than $1-2/day) and/or are unable to maintain sufficient service or quality levels. Safe Water Network is unique in its balance of a sustainable and replicable market-based approach with a commitment to affordability and inclusivity. Our SWEs are financial viable while keeping prices affordable to those most in need (i.e. no more than 3% of daily income for 20L of water, per UNDP’s affordability guidelines).

Our methodology includes establishing the local capabilities and resources to support the entire value chain to ensure long-term reliability and accountability, including water committees that ensure reliable quality and affordable pricing. SWEs are geographically clustered to receive routine technical service support from the Field Services Entity (FSE), which help keeps downtime to less than 2-5%. The FSE retains a pool of technicians (electricians, plumbers, etc.) to resolve repairs and breakdowns, maintains spare parts (e.g., pumps) and has rapid access to local market suppliers. The FSE is funded by service fees from the SWEs, generated through water revenue. SWEs also contribute to a Maintenance Reserve, a pooled fund shared among SWEs to cover costs for major repairs and equipment replacement.

Finally, as we seek out ways to further optimize our SWE operations, service delivery models, and consumer engagement programs across our expanding portfolio of SWEs, we conduct rigorous analyses on financial and operational analyses performance, and use the results to inform the optimization of our model. Safe Water Network’s attention to the financial performance of SWEs, and its continued efforts to test and share strategies to strengthen financial viability have generated significant interest from national and global policymakers, investors, entrepreneurs, and NGOs seeking to incorporate a market-based approach into their water programs.

Planned Goals and Milestones

Our success in encouraging others – funders, policymakers, governments, implementers, and private sector partners – to promote, adopt, and strengthen the policy environment for our approach lies in developing a strong evidence base that clearly articulates how and why our enterprise model is a proven sustainable investment for expanding access to safe water for low-income peri-urban and small town communities.

We continue to advocate for the mainstreaming of SWEs into national water sectors by working closely with governments and development agencies, in consultation with other key sector stakeholders, to engender a policy and financing environment favorable to the scaling of SWEs.

In addition, as Safe Water Network continues to expand and optimize our portfolios in Ghana and India, we are working to put the mechanisms in place to facilitate our longer term objectives of SWE scale up through replication by other organizations. Operating an SWE is a challenging business proposition requiring systems to support complex activities and mastery of a range of skills to deliver reliable, affordable, safe water to remote communities. With partners, including other SWE implementers and large NGOs, we are in the process of scoping and designing key components that will support our replication goals, including:

The Water Enterprise Operating Platform is envisioned as a fully integrated comprehensive digital resource with the necessary tools, systems, and procedures to rapidly launch and cost-effectively manage and monitor SWEs for off-grid delivery of safe water supply. It will support the scaling of the SWE model by other implementers to serve initially the market need in Ghana and India, and in time global markets. The Platform will enable new and existing SWEs to operate to key performance standards of financial viability, operational reliability, water quality, and consumer affordability. It will help organizations avoid mission drift and deliver affordable safely managed water. It will ensure transparency of SWE operations, minimize fraud, and equip implementers, field staff, and individual SWE with the data they need to better understand both their own operational and financial performance, as well as the people they serve. It will create much needed efficiencies in the sector, and incentivize new entrants to the sector as users will not need to invest in costly monitoring and management platforms.

Safe Water Network’s Technical Assistance (TA) program will be developed for deployment to new replicating organizations, offering capacity building, troubleshooting, and advisory services to increase local capacity in sustainable safe water supply, and support scale up of SWE programs to serve the growing need for safe water. It will encompass an improved understanding of implementer priorities so the replication program is both attractive and relevant to larger market of safe water suppliers. The TA program will provide clarity on the SWE proposition for new implementers, so they are clear on the guidelines and requirements for integrating an SWE program into existing organizational systems and plans.


Funding Goal3,000,000

Milestones

Jan 2009
New Country Implemented In
Ghana
Jan 2009
New Country Implemented In
India
Jan 2006
Created