Innovative Solution

Innovation, Private Sector, Water purification, sustainable, for-profit, bottom of the pyramid, Africa, Asia, access

technical

Business

WaterHealth International aims to provide safe drinking water to 100 Million people in 10 years. The company has developed an innovative, scalable and sustainable business model to increase access to safe drinking water to thousands of underserved communities around the world. WaterHealth is working to bring its innovative approach and solution to help more people to have access to safe, great-tasting and affordable drinking water. Through decentralized and locally constructed and operated water purification centers, and using existing water and human resources, WaterHealth Centers provide a sustainable source of clean water, jobs and hygiene education to the communities in which it operates. The company ensures the safety of the drinking water by continuously monitoring quality to World Health Organization (WHO) standards and Waterhealth Centers contribute to improving the overall health, education and economic and social empowerment of the communities they serve.

WaterHealth operates in India, Bangladesh, Philippines, Ghana, Nigeria and Liberia, both in rural and peri-urban areas populated by low-income communities.

WaterHealth (WHI) has been able to take off thanks to a combination of entrepreneurship, vision, technological innovation and significant support from industry leaders including the International Finance Corporation, Acumen Fund, Dow Chemical and SAIL Venture Partners. WHI has also actively developed innovative partnerships at the local level such as A.K. Khan in Bangladesh, and Coca-Cola and Diageo in a joint initiative called Safe Water for Africa focused on Ghana, Nigeria and Liberia in its initial years. This particular initiative aims to provide clean water to over 2 million people by 2012 and follows WHI’s business model that works closely with local communities by involving them in the construction ad operation of the WaterHealth Centres. WHI has offices in India, Bangladesh, Philippines, Ghana and Liberia who are responsible for managing the sites from an operational and financial sustainability perspective.

WaterHealth is currently providing access to clean water to over 4 million people and is launching  its 500^th WaterHealth Center in January 2012. Over 40 Million litres of water are dispensed each month – with the commissioning of approximately 15-20 additional sites every month, the volumes are expected to increase significantly.

It is becoming clearer that the water crisis is not an issue of ‘scarcity’ but an issue of ‘access’ and this has shaped how different organizations have tackled the challenge. Numerous efforts to help improve ‘access to water’ have focused on solutions such as bore wells, decentralized Point-of-Use Systems and tankers to reach underserved communities that are ‘off-the-grid’. Although there has been progress, many of these solutions are simply not sufficient, efficient or, more importantly, sustainable.

 WaterHealth believes that to effectively and permanently solve this problem requires new thinking. The company has implemented a de-centralized model which involves the community at each step – however, a key difference is that WaterHealth assumes responsibility for the overall functioning of the facility and hires/trains local people to manage day-to-day operations. Coupled with the continuous quality monitoring process, this approach ensures that the facility is operating every day, maintenance is carried out on a regular basis and the overall quality is maintained.

One of WaterHealth’s most important features is the sustainability of its business model. An investment of US$25,000.00 can provide a typical community in India with their own WaterHealth Center and service for 10 – 15 years and WHC costs are fully covered over the first 3-6 months of operation. Other solutions to the water crisis require ongoing investment, but WHI’s business model creates a sustainable community solution that provides clean water, job opportunities, and enriches local economies. 

 Furthermore, WHI sites are contractually expected to operate for a minimum of 10-15 years. WHI ensures this by employing and training local people to maintain and operate the systems with central oversight. Bore wells (which is the standard solution provided by governments/NGO’s) typically break down within 12 – 18 months due to lack of maintenance/spare parts etc. Evidence of long term sustainability is the fact that many centers have been operating using this approach for six (6) years and continue to function to the same level of quality and reliability as when they were first launched.

WaterHealth is constantly striving to effectively monitor its success and impact. Key quantitative metrics which are monitored regularly include the number of operational WaterHealth centers (WHCs) and the increase in the volume of water that is treated and sold. Other metrics used include:   Number of beneficiaries with access to the WHC, total water dispensed per WHC and the quality of water dispensed which is tested to ensure it meets/exceeds WHO drinking-water parameters. On the qualitative dimension, over time, WaterHealth believes that there will be an overall improvement in key health and social indicators within the communities it operates such as reduced cases of child diarrhea, reduced waterborne disease, improved maternal health and less work and school days lost due to preventable waterborne disease. Evidence from the field (e.g., in Ghana) is already showing this to be the case as incidents of child diarrhea have dropped dramatically in communities where our centers are operating.

WHI has set an example of how to successfully use the for-profit model to address a critical development challenge. WHI’s approach views underserved communities as “customers” and not “aid-recipients”. This change of perspective requires a fundamental re-thinking of what it means to provide products and services to these markets and has shaped WHI’s entire business model. WHI was referenced in a Harvard Business Review article co-authored by Michael Porter on creating shared value and highlighted as a “hybrid enterprise” that was “blurring the boundaries between for-profit and non-profit”. WHI’s business model in itself makes for a valuable example to learn from.  

 The approach pioneered by WaterHealth has proven to be flexible and has been successfully implemented in many diverse countries and geographies. WaterHealth believes the model can be replicated across many more countries and regions with the assistance of other corporations (like Coca-Cola and Diageo) and local/state/regional/central governments who are interested in making a significant impact on the lives of citizens who live in areas which are not currently served with, for example, piped water for their daily needs.

 WHI’s experience in servicing lower income socio-economic groups can also serve as best practices that can be transferred to other areas. There are numerous social challenges that offer fertile ground for collaboration and impact though a for-profit/socially-beneficial model. WHI’s grassroots approach to providing an affordable basic service accompanied with sustained social education and marketing could work for other organizations that share the goals of improving health, household economics and education at the community level.

WaterHealth has learned important lessons in its quest to provide an effective, sustainable and innovative solution to increase access to clean water which can be translated to similar initiatives to offer products/services to peri-urban and rural consumers.

 WHI’s key lessons focus on:

1. De-centralized interventions are necessary to access hard to reach consumers: Traditional centralized models which require significant financing, long implementation lead times and typically have political ramifications are not suitable for hard to reach communities which do not have existing infrastructure.  

2. Deploy abusiness model with flexible funding options: Instead of relying on aid/donations/subsidies to address the needs of underserved communities, WHI uses a financing model that is tailored to specific situations and needs and which is critical to success

3. Reduce implementation costs: WHI has created a modular structure and equipment skid which requires 4-6 weeks to implement a solution that can address the water needs of over 10,000 people. (Alternatives such as piped water require many months if not years to implement)  

4. Consumers in the peri-urban/rural markets have similar needs to more developed ones: By y providing a service (WHO quality drinking water) which is identical to what is available in urban markets and for which consumers in peri-urban/rural markets are willing to pay for, WaterHealth has shown that these consumers appreciate and value them. The consumers are extremely knowledgeable and are not willing to settle for lesser quality products/services.  

5. Ensure that revenue streams are adequate to cover operational/maintenance costs: Adequate up-front research needs to be conducted to gain a deep understanding of the market, environment, and consumer to increase chances of success

6. Multiple platforms (technology, processes, metrics) are necessary to ensure scalability and reduce costs: Structuring the company to cover remote locations covering large geographic areas is a challenge and can be extremely costly, so “clustering” the business (i.e., ensuring that there is a critical mass of activity in a given area) before moving to other areas is extremely important to managing costs.

The International Finance Corporation, Acumen Fund, Dow Chemical, SAIL Venture, Coca Cola and Diageo have all supported the implementation of WaterHealth Centres (WHC) across Asia and Africa. WaterHealth’s Safe Water for Africa (SWA) partnership with Coca Cola and Diageo aims to raise a total of over US$20 million to reach its goal of providing safe water to at least 2 million Africans by 2012. SWA will catalyse the expansion of WHI’s innovative self-sustaining water service delivery model across Africa and will begin with West Africa with WaterHealth Centres (WHCs) in Ghana (10 operational, 15 under construction), Nigeria (50 planned), and Liberia (1 operational, additional 50 planned). SWA is then likely to expand its operations to other African countries in 2012 and beyond. WaterHealth is continuously looking for partners to roll out in other locations.  

www.waterhealth.com

Sameer Mithal

smithal@waterhealth.com

WaterHealth International

9601 Irvine Center Drive

Irvine, CA 92618 USA

Please visit our site – www.waterhealth.com – which provides additional details as well as visual aids to enhance your understanding of our solution.