DWAAS (Drinking Water as a Service)

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DWAAS (Drinking Water as a Service)

Utrecht, NetherlandsBuea and surroundings, Cameroon
Organization type: 
nonprofit/ngo/citizen sector
Budget: 
$10,000 - $50,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Drinking Water as a Service (DWAAS) is a social enterprise that invests in safe drinking water projects in rural area's in Cameroon.

About Project

Problem: What problem is this project trying to address?

Despite the word telling that the Millenium Development sub-Goal concerning safe drinking water will be easily met in 2015, statistics for rural Cameroon suggest a serious shortfall in complying with this MDG water goal. More specifically, rural Cameroon faces an annual funding deficit of US$ 10mio required to provide 66% of rural inhabitants with access to safe drinking water in 2015. In absolute figures more than 4 million people are currently denied access to safe drinking water in rural Cameroon. Simultaneously these regions are consistently neglected by for-profit capital markets and underserved by both NGO's and governments. Apparently, traditional practices are inadequate in supplying safe drinking water to inhabitants of rural Cameroon while there is a huge demand for safe water.

Solution: What is the proposed solution? Please be specific!

Our solution is to make a transformation from development aid towards a social enterprise approach. We don't give away water for free, but we make social and ethical investments in local water projects. We see people in developing countries not as poor victims, but as resilient entrepreneurs and value conscious consumers. Too many water projects fail because of ownership and sustainability issues. By realizing a revenue stream we can finance maintenance and support and build long-term relationships with our partners. The income furthermore enables us to reach a larger scale and access (international) financial markets. DWAAS will focus on two main activities: financial and operational services. We act as an investor towards local organizations, entrepreneurs and communities to enable them to finance and realize their projects. Next we will also set up our own projects where no local counterparts are available and charge local communities a fair prices for access to safe water.
Sustainability

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

We target a neglected market. For-profit companies assume start-up risks too high, and financial returns too low. NGO’s and local governments cannot realize sufficient scale, nor ensure sustainability. Foreign development cooperation furthermore abandons Cameroon due various reasons. Our main focus will be on Cameroon's Southwest and Northwest regions. In the rural parts of these regions, 800.000 people have no access to safe drinking water. For the whole of Cameroon this is 4 million. The large potential market has both advantages and disadvantages. The advantage is that there are plenty of investment opportunities. On the other hand will we be working in an undeveloped market and do we need to realize a mentality change with respect to paying for safe drinking water.
About You
Organization:
Drinking Water as a Service (DWAAS)
Background Information
First Name

Douwe

Last Name

van Loenen

The competition is only open to people between 18-34 years-old and resident in UK, Ireland, Sweden, Denmark or the Netherlands. Does this apply to you

Yes.

Country of residence of entrepreneur

The Netherlands

Tell us about your personal background. Why are you passionate about this issue? Making an idea a reality takes innovation, dedication and strong leadership. Do you have the necessary entrepreneurial skills to realize your vision?

Since three years I am working for the LiveBuild Foundation, a small Dutch foundation that supports local water and education projects in Cameroon. During my work in both the Netherlands and Cameroon I came to realize that the work that we do is great, but that we are unable to realize real and large scale change. The current institutions and frameworks we have in place to address the huge global water crisis are not effective and fail to deliver water to millions of people around the world.

Contemporary development aid is just not cutting it to supply all people in developing countries with access to affordable, sustainable and safe drinking water, especially not with the current budget cuts and public criticism that we find all around us. Funds are too dispersed over sectors, countries and regions. To really make a change, massive investments and a strong focus on a single area and a single sector are needed. The investment needed to supply al rural area's in Cameroon with access to an improved-water source amounts between 22.5 and 52 million dollars. The only way to raise these kind of investments is through the capital markets.

Traditional firms on the other hand are also unable to address this issue. For them, the risk is too big and the rewards are too small. Next to this, traditional firms are not equipped to take on the massive challenges of doing business in a country like Cameroon. In Cameroon, there are almost no companies active in the rural water supply sector.

We think that we have a solution. We want to address a social problem (access to safe water) via a business approach. We are setting up a social enterprise that invests in water systems and solutions for rural communities in Cameroon. Because we ask local communities to chip in (in other words, they have to pay a fair price for the water) we can recuperate our investments. This means two things. First we have access to more funds because (opposed to traditional development aid) we pay back our funds. Secondly, because the money comes back, we can re-invest it and serve even more people.

I think that I have the necessary skills to make this project a success, altough doing business in Cameroon will be tough. As one of the founders of LiveBuild I know how to set up and develop a business (or foundation). I have experience with coordinating development projects in Cameroon and already have a strong network of motivated partners in place in Cameroon.

Next to my job I'm also finishing my Masters' degree in International Financial Economics at the University of Amsterdam. I'm currently writing my thesis on social entrepreneurship and impact investing and how these can be a solution for delivering social services in sub-Saharan Africa when markets, NGO's and governments fail.

About Your Organization
Organization Name

Drinking Water as a Service (DWAAS)

Organization Country

, UT, Utrecht

Country where this project is creating social impact

, SOU, Buea and surroundings

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Innovation
The Model: Walk us through a specific example of how your solution makes a difference; include your primary activities

DWAAS will operate as a social enterprise that invests its capital in drinking water projects and/or local entrepreneurs setting up safe drinking-water businesses. Through the direct or indirect sale of affordable and safe drinking water in an inclusive and sustainable manner, we will slowly generate revenues that we will reinvest in maintenance, local capacity building and new remunerative water projects to ensure a sustainable social impact and DWAAS' survival and growth (goal alignment). DWAAS will start by investing in water-by-gravity systems that are widely used in our selected rural areas in Cameroon.

DWAAS will start with a start-up phase lasting one year. In this year we will research and test how to distribute water in rural Cameroon. Will we run an operating company owning water projects and selling drinking water to local communities or will we run a financial company investing in local initiatives and entrepreneurs? Furthermore we will investigate whether to find local partners or set up and build our own local functions dealing with project execution, maintenance, and spare-parts distribution (greenfield). When the start-up delivers a strong proof of concept we will attract investors and expand our operations.

Our model starts with identifying local water projects in Cameroon. We have an extensive list of selection criteria that we use during this process. We identify both investment projects (those who only need capital) and operational projects (where DWAAS also manages the construction, management and maintenance of the water system).

After we have selected a project we will team-up with local organizations and communities. We will support these local partners to set up drinking water solutions based on business principles. Some projects will only require financial assistance (investment projects) that will be paid back within a certain timeframe. In this case we support local entrepreneurs to set up their own safe water business. Other cases may need for DWAAS to act as an operating company and fulfill a larger part of the value chain (operational projects). In these projects DWAAS focusses on construction, maintenance, support, sales and marketing. The revenues in this case come from water sales based on for example a pay-per-liter of subscription fee.

We take care of all our systems and investments by focussing strongly on maintenance and the collection of revenues. By doing so, we can support the sustainability of our projects that is often lacking in development projects. Our income stream enables us to pay for maintenance and organizational costs. Profits will be reinvested in new remunerative water project so the whole process can start over again. This approach to access to safe drinking water enables us to reach more people every year and get closer to universal access to safe drinking water.

Select the stage that best applies to your business

Operating for less than a year

Social Impact
What is the social impact you have had to date and how you measure it?

As a spin-off of the LiveBuild Foundation, DWAAS can build on LiveBuild's previous work in Cameroon. In the last three year we realized access to safe drinking water for over 10.000 people. Access to safe water is measured by community size and access to an improved water source. According to the WHO, each dollar invested in safe water leads to economic returns of between $3 and $34.

Through our community approach (based on supporting local initiatives), approximately 12 local communities were trained in setting up and managing water and education projects. We merely committed resources, the communities executed their own projects. As such our projects act as a catalyst for further autonomous community development.

What barriers might hinder the success of your business? How do you plan to overcome them?

Bussiness success will largely be dependent on the willingness to pay for safe drinking water and to secure healthy income streams to expand our social impact. The main problem is that we need to realize a mentality change in rural communities. We have to convince people that the long run benefits of safe drinking water are much higher than the short-term costs. We plan to overcome this issue by developing a savvy marketing strategy that explains consumers the added value of safe drinking water and by taking small steps. We will start investing in various (small) projects and expand our operations based on lessons learned.

Sustainability
How does your model address financial, social, and environmental sustainability?

DWAAS adresses financial sustainability by asking customers to pay a fair price for access to safe water. In general, people in Cameroon spend between 1% and 3% of their income on water. With this revenue, we can maintain our systems, run a (small) local organization, repay our investors and invest in new remunerative water projects. The main challenge here is to realize the mentality change mentioned earlier.

DWAAS is socially sustainable because we will ask a (minimum) price that enables us to supply people with save drinking water in the long run and because access to safe water has such profound effects on health and economic development. Because we sell our water, we need people to buy it. This leads to the logical conclusion that we have to offer what people really need and want. We are forced to cater to local demand, something that many NGO's fail to do. Many projects fail because the donor leaves the project after completion. We will not. We will support our partners for many years with maintenance and other support, thus realizing effective and sustainable projects.

With regard to the environment we use only natural water sources and protect these sources well. We support local communities in proper water management and sanitation. For this we will work closely together with the LiveBuild Foundation, which will support communities with sanitation, hygiene and environment training.

Awareness & learning
How do you see social entrepreneurship contributing to the improvement of developing countries?

Both traditional development aid and for-profit companies have (often) failed in addressing the needs of the people in developing countries with respect to access to safe drinking water. The main question is how we can we address these needs without giving products and services away for free. A social enterprise can combine the best of two worlds. Such an organization can take the social goals and values of NGO's and combine them with the efficiency and effectiveness of for-profit companies.

By making its success depend on how well the organization serves its customers, the organization is forced to really address local needs and local demand. If water is distributed ineffectively, the organization will cease to exist. A social enterprise is thus forced to make a profit, as opposed to development organizations. We believe that this approach leads to organizations that really cater to local demand, treat people with respect and get things done!

What aspects of your stay in Uganda as part of the competition do you think you will find most challenging and rewarding?

I would love to meet up with other social entrepreneurs, especially people who are also working on social ventures in Africa. I would really like to exchange experiences, ideas and best practices and to get inspired by other people's ambitions and motivation. Next to this, I am very interested in VSO's approach in Uganda. I hope to learn more on setting up a social venture in Africa's challenging business environment and how to tackle (a part of) the mentality problem. It would be amazing to learn from VSO and Ashoka in the field!

The most challenging aspect will be the confrontation with existing water projects that are broken down or not functioning anymore. There are so many well intended projects out there, that are not working because they were not addressing local demand and local skills or not based on a sustainable business model. I think that there's so much to learn in Uganda that ten days might not be enough!

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