In the past years Project Maji and Practica Foundation have been exploring ways to close the gap between operational expenditure and income in water projects focused on rural Africa, in the interest of financial sustainability of each water point. One of our key questions is whether a different approach to hardware design and hardware setup can bridge this financial gap. Therefore, both parties decided to partner and pilot a novel modular building approach in water hardware implementation. This sector report details the findings from our joint pilot rolled out in Ghana. The aim is to provide a blueprint of a smarter and more sustainable safe water distribution network for all providers, so it can be replicated and scaled in multiple countries, unlocking new finance to contribute towards SDG 6.1, universal access to safe drinking water.
While the report is now available for download on Project Maji's website: https://www.projectmaji.org/resources, the following blog summarizes key findings from the study.
Introduction
Waterpoint dysfunctionality is one of the biggest challenges plaguing the rural water sector in Africa. An estimated 25% become dysfunctional after 5 years, and this rate Increases to about 30% after 10 years of deployment. One major root cause of this high failure rate is the imbalance between revenue generated by water sales and expenditure needed to maintain and operate the water infrastructure, which requires reliable post-installation maintenance structures. The imbalance is especially evident in rural Africa due to low water consumption per capita and a very low willingness to pay.
To address this income-expenditure disparity Project Maji and Practica Foundation have piloted a novel approach in water hardware implementation. The newly developed setup as tested in the pilot–referred to as modular building in this report - is a small network of prepaid water kiosks fitted with a mechanical prepaid device. The system itself is adaptive: it can grow or decrease in size depending on the uptake or changing demographics. Thereby creating the ability to optimize the business case during the operational phase. Moreover, the system as a whole is sized based on field monitoring of existing water points in rural settings – ensuring an optimum balance between service levels versus costs.
The newly developed concept is based on the following hypotheses:
Paid water services transform beneficiaries into customers. Value creation – by higher service levels – will increase the uptake of the service and the willingness to pay.
The uptake of newly introduced paid water services in newly targeted communities is hard to predict. Novel technical concepts – focussed on agility and adaptability - can help to reduce the entrepreneurial risk and optimize the business case.
Data-driven and disruptive designs have the ability create more appropriate water infrastructure for rural setting - thereby supporting sustainable hardware implementation.
The rest of the report provides a detailed explanation of the concept of modular building, followed by the novelties that have been integrated in this pilot. In conclusion, the three hypotheses are compared to field findings.
Modular Building: Explained The core of the concept is a standardized, compact mini water kiosk that can be connected to a central grid. It is designed with rural, remote communities in mind. It serves as a public water point – able to reach about 500 people. Depending on the water needs, this grid can be expanded or reduced by adding or removing the small water kiosks. In the pilot site three kiosks were installed– each strategically located so it can serve its own user group.
The project includes fit-for-purpose technologies using solar pumping and custom designed mechanical payment systems with data monitoring capacity. In addition, the system design consists of a network that is fed by a pressure pump in a single well, leveraging existing water infrastructure such as a tube well. This system is known as the MajiPlus distribution system. The pressure in the network is generated by the central solar powered pump, rather than a more traditional gravity-generating water tower.
Novelties Integrated
Novelty 1: Risk reduction by Standardization and Adaptability
To achieve financial sustainability, the water consumption of a paid water service is vital and must be over operational costs. However, predicting the uptake of a paid water service is hard and involves entrepreneurial risk. To minimize this risk, our technical setup reduces the entrepreneurial risk by using a staged approach during the introduction. The setup of the systems allows the system to adapt – by adding or removing the compact standardized water kiosks - depending on the demand. The system can be introduced with a minimal layout and can expanded when the uptake is high. In addition, the adaptability of the solution at low cost allows it to be truly self-expanding, ultimately improving the business case for rural water services.
Novelty 2: Income Optimization via Value Creation
The small network of water kiosks - piloted during this study allows for improved service and value creation, enhancing revenue collection. Field observations suggest that an average single kiosk has a service reach of about 300-400 meter radius. On average, this service reach translates in a water sale in the range of 1,500-2,500 litres per day. Consumption peaks during the dry season and reduces in the wet season as the availability of alternative water sources has a significant effect on the sales of paid water services. The small network of kiosks each servicing their own catchment area (in the range of 500 customers each) results in higher demand and increased revenue.
Novelty 3: TokenTap
Developed by Practica Foundation with the aim of reducing operating costs, the TokenTap meets all the objectives of a cashless payment system (enhance revenue collection, financial security, and accountability, 24/7 access, remote monitoring, eliminate information asymmetries, improved uptime, freeing time for labour or schooling) while introducing a mechanical solution reducing the payment solution cost significantly.
Novelty 4: Optimal Sizing of Water Tanks
To optimize the infrastructure cost, the concept uniquely matches water production with actual demand, resulting in an overall much smaller, more efficient and cheaper system, while having the same water sales capacity of an equivalent centralised system. This was achieved by challenging pre-conceived notions about consumption patterns guided by a study conducted by Practica Foundation In 2019.
Results
First Hypothesis
Paid water services transform beneficiaries into customers. Value creation – by higher service levels – will increase the uptake of the service and the willingness to pay.
The study found that the satisfaction rate regarding the water provision increased significantly. This is likely to be a result of increased reliability compared to a hand pump. All customers state that more water is fetched as a result of a reduction of distance between their dwelling and the water point. Secondly, the water sales of the new system as a whole increases significantly compared to an average Mini Maji (single kiosk) in the same month. For the three months monitored the sales more than doubled, reaching an average increase factor of 2.5. Hence, the hypothesis that value creation results in higher uptake and willingness to pay appears to be true. The newly introduced concept has considerable higher uptake than an average single water kiosk.
Second Hypotheses
The uptake of newly introduced paid water services in newly targeted communities is hard to predict. Novel technical concepts – focused on agility and adaptability - can help to reduce the entrepreneurial risk and optimize the business case.
The study found that the total operational cost increase - of the modular piped system compared to the Mini Maji will therefore remain well below the 60% while the income increase is 145% considerable higher. Therefore, concluding that a substantial competitive financial advantage is created in the pilot.
Third Hypotheses
Data-driven and disruptive designs have the ability to create more appropriate water infrastructure for rural setting - thereby supporting sustainable hardware implementation.
This hypothesis is particularly applicable for two innovation aspects: the sizing of kiosks and the introduction of a novel prepaid system. The study proved that the storage capacity does currently not form a technical constrain. With regard to the pre-paid system the study confirmed that the initial skepticism of users at the pre-implementation phase has reduced considerably, with even 80% of the users being strongly in favour of the system.
Given the observations above, it can be concluded that novel concepts in the right setting:
· Can increase the uptake of the service and the willingness to pay;
· Can help to reduce the entrepreneurial risk and optimize the business case;
· And can create more appropriate water infrastructure for rural setting.