The COVID-19 outbreak exposed the water and sanitation service challenge worldwide. Around the globe, 2.1 billion people do not have access to safe water and 4.5 billion people do not have access to proper sanitation services. At the same time, one in four healthcare facilities lacks adequate water, sanitation and hygiene (WASH) services.
During this crisis, water is handed out for free in several countries, either by government decree, or at the providers’ own initiative. Besides, demand for safe water has increased, but many customers cannot pay for services. Water and sanitation small and medium enterprises (SMEs) face revenue loss, increased costs for occupational health and safety, and restrictions on transportation. They are struggling to survive.
In April, Aqua for All reached out to its partners and stakeholders to understand their needs. We found an urgent need to provide emergency assistance to water and sanitation service providers to continue their services. Besides that, they need to expand their reach to underserved populations to combat the spread of COVID-19. Without additional funding, countless people will be left without essential water and sanitation services to help prevent the spread of COVID-19.
Just-in-time support for water and sanitation providers
To immediately respond to this crisis, Aqua for All mobilised over €1,2 million: Own funds: €700,000; The Waterloo Foundation’s funds: £300,000; Sidian Bank €200,000 – to ensure that at least 132 water and sanitation SMEs will continue providing essential services. However, these funds are not enough to support every provider identified in our initial inventory of needs.
Our funding efforts are supported by organisations active in the field of water and sanitation, and the impact investment sector, such as: Amref, Bopinc, cewas, danone communities, Davis and Shirtliff, FINISH Mondial, FMO, Global Distributors Collective, NWP, Sidian Bank, Take-a-Stake Fund, the Toilet Board Coalition, WASTE, Water.org, and WaterWorX. Since June, these endorsers are referring struggling water and sanitation providers with a solid track-record to us. This referral allows us to identify potential grantees and move quickly ensuring that essential water and sanitation services remain available, affordable and accessibility is increased for 600,000 people served by 32 water and sanitation providers from six to ten low-income countries, as estimated after our initial inventory.
Promoting financial inclusion in water and sanitation
Apart from this, we surveyed 17 water and sanitation providers in Kenya and learned that they urgently need working capital to invest in water tanks, water ATMs, borehole development, and the rehabilitation of pipelines. Notwithstanding, financial institutions are reluctant to offer them credit because of the high risks associated with the sector.
In Kenya, water utilities can only serve less than 30% of the 48-million population because of limited budget and poor public infrastructure. This means more than 70% has access to water from private SMEs, mainly in rural and low-income areas.
To increase access to credit, we have started a collaboration with Sidian Bank to provide working capital loans to local water and sanitation SMEs. This innovative financing facility will be launched on 4 August 2020.
While the situation is critical, the crisis has not yet reached its peak in many countries. The impact of the aftermath will be felt for a long time. Therefore, our response to the crisis aims at ensuring immediate challenges do not undermine the ability to provide essential services in the long-term.