Hystra, Aqua for All, BoP Innovation Center

September 2011

Scaling-up access to safe water and reaching out to the 2.1 billion people without this common good is possible, and can even be profitable. For the fast growing urban population in developing countries (expected growth: almost 70% by 2030) piped distribution networks seems to be the most appropriate. Good opportunities lay ahead for utility operators (public and private), especially if they join forces and create hybrid water utilities which focuses exclusively on serving fast growing communities in towns and slums of large cities. These urban areas could be served with relatively low capital investments. For different reasons, such hybrid utilities could not be purely public or private, but rather require a blend of both, in terms of governance and financing.

There are key sectors in the base of the pyramid (BoP) that represent crucial development issues and have interesting market potential. These key sectors are food, energy, housing, transportation, ICT, water and health. These sectors affect billions of low-income people and represent a market valued of over US$5 trillion (The Next 4 Billion, IFC/WRI, 2007).

The BoP Innovation Center is developing a better understanding of these sectors through all its activities. Given the needs of the people at the BoP and the knowledge of Dutch companies, we are currently focusing on sustainable local food systems, energy services, water and sanitation. Other sectors will be added based on market demand, market potential and available expertise within our network. 

The situation: More than 1 billion people do not have access to safe drinking water and almost 3 billion people lack adequate sanitation. Almost 4000 thousand children die due to unsafe drinking water each day. Recent reports from the WHO and UNICEF show the significant impact safe water has on health and the economy. An investment of US$1 in water solutions has shown to have a multiplied benefit of $8 to $60 for the general economy in decreased healthcare costs and increased productivity.

 

Market value: The water market in the BoP is valued at US$20 billion.

 

The solution: Innovations are needed to increase access to water and sanitation in the BoP. Innovations are already reaching large numbers of people. Examples include small-scale production, vending points, household water treatment solutions and water storage options. These innovations call for new business models, including inclusive financing and leasing concepts. The challenge is to make these new solutions available on a larger scale.

 

We have forged strategic alliances with Aqua for All, Micro Water Facility, and several actors in the Dutch water sector, including innovators from businesses, knowledge institutions and investors. For more information on our projects, please click here.