Can the sanitation sector learn from the water kiosk sector?

Last Monday, May 17, our partner WASTE organized an interesting conference on Sanitation, Finance & Revenue models.

Aqua for All was challenged to offer some ideas as to how the sanitation sector could learn from the water kiosk sector, drawing from our recently concluded study for the Untapped Potential of Safe Water Enterprises, undertaken by consortia including the Stone Family Foundation, Hilton Foundation, Danone Communities and Osprey Foundation.

The Safe Water Enterprise (SWE) study unveiled three key parallels that are highly applicable to the sanitation value chain:

  1. The market is there, but demand is still sleeping. In spite of all awareness efforts (mainly by NGO’s) to wake up demand with various solutions (latrines, public toilets, small sewer systems, etc.), there is still a need to enhance services perception and creating appealing options  for the consumer (as was done with safe water versus improved water with different tariffs, brought at doorstep level appeared successful)  Incentives must be clear and compelling to make people say ‘we must have this!’
  2. Like safe water, sanitation is a public good, in which government must play a central role.   Interventions in the sanitation supply chain should fit within policy frameworks, add value to policy tracks, and enhance services currently rendered by utilities.  Leverage existing utility efforts and build outward to include decentralized services as we moved toward full coverage (structural access to sanitation) by 2030.
  3. The sector has enough proven concepts, but scaling barriers are often the same.  We must continue to innovate to blend various finance streams in smart ways in order to accelerate progress.  This includes combining ODA and NGO-grants (to enhance the business ecosystem, to develop sector wide improvements for instance on ICT services or standardisation or quality measuring), with funding from philanthropists, impact investors, and so-called ‘outcome payers’ who are willing to pay for proven outcome of the intervention.

One thing has become quite clear. As blended finance becomes more common, intermediaries (also called aggregators) play an essential role in pulling these constructions together.  Entrepreneurs, service providers, suppliers, private financiers and ODA-grantors all acknowledge this to be the case.  Aqua for All works in this capacity.