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Social Business Spotlight: Impact Water

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Over 9 million Ugandans lack access to safe drinking water, that equates to the entire population of London. Without access to clean water, it is estimated that 440 children still die every week due to waterborne diseases. Impact Water are trying to change that…

The UN Conference on Sustainable Development in 2012 recognised, “that water is at the core of sustainable development as it is closely linked to a number of key global challenges”, and reiterated “the importance of integrating water in sustainable development”. We know that health has a knock on impact on education, and every year children lose 272 million school days due to diarrhea, a leading cause of mortality that is commonly water-related. It is estimated that 40% of these diarrhea cases are attributable to transmission in schools rather than homes.

“Every year children lose 272 million school days due to diarrhea”

In Uganda, most schools rely on piped or borehole water which is not safe, threatening student health and education. The many schools that do treat their water use firewood stoves to bring water to the boil. The time and fuel cost of boiling water for the entire school population is significant, inevitably leading schools to not treat sufficient amounts of water. Boiling water has an additional negative effect on the environment. Ugandan schools can consume as much as 38 tonnes of firewood per year just to boil water for their students. With over 20,000 schools in the country and one of the world’s fastest growing populations, alternative water treatment solutions are urgently needed, not only to address demand but to help protect Uganda’s already threatened forests.

Ugandan schools can consume as much as 38 tonnes of firewood per year.

Enter Impact Water. Their mission is to increase access to safe water, focusing on school and health facilities.They sell, install and maintain environmentally-friendly water purification systems to schools on low cost, multi-year credit terms. This helps schools to avoid burning firewood for boiling water, offsetting CO2 emissions while reducing medical costs for the families by avoiding waterborne diseases. Improved student health enables students, and their teachers, to better focus on their education and their futures. One of the recipients of Impact Water’s tanks, Haji Kyabangi Yahaya, the Director of the Gangu Muslim Primary, noticed that before the installation of the tank they had around 6 cases per week of waterborne diseases. After installation, they did not have a single case.

“They sell, install and maintain environmentally-friendly water purification systems to schools on low cost, multi-year credit terms.”

Haji Kyabangi Yahaya, the Director of the Gangu Muslim Primary

Impact Water

The purification systems are huge pieces of equipment which aren’t cheap, typically costing around $1,200 – $2,000. As an upfront cost, this is considered by schools as simply too high. To counter this large expense, Impact Water offers credit services to allow customers to pay for their systems over time, typically between one and two years. Installment payments are timed to work with the needs of the institution. For instance, a school will pay three times per year when they receive school fees at the beginning of each school term. This is game-changing for schools, not only because their credit services do not require collateral but also because the payment cycle is so much more manageable. Most schools have extremely limited financial resources so the unique service that Impact Water offer is the difference between access to clean water or not. To Impact Water’s knowledge, the business is the first of its kind to customize payment terms for institutional safe water to the unique cash flow environments of developing country schools.

Since Impact Water’s launch in Uganda in October 2014, they have successfully sold and installed over 1600 school water purification systems. They control the quality of their service by procuring all system components themselves, sourcing from top global suppliers at volume discounts, and delivering all services via their own employees.

“They have successfully sold and installed over 1600 school water purification systems”

However, their success has not come without challenges, which they are quick to recognize. Safe water initiatives are notorious for failing after one to two years. This is often due to technology failure; lack of maintenance, repair services and capacity; community buy-in and challenges with behavioral change. The socio-economic, environmental and health benefits associated with safe water depend solely on its ongoing provision, and therefore sustained social impact is only achieved when systems remain operational. Impact Water’s ability to keep systems functional beyond this two-year period and combined with its scale of operations, is the factor they have recognized will significantly distinguish them from other safe water initiatives. Therefore, they have built-in preventive maintenance to each sale and deliver every four to six months (depending on water quality) for the first two years of operations. Consequently, greater system lifetime and utility equates to greater value for customers and increased demand.

“Safe water initiatives are notorious for failing after one to two years”

 

Results to Date

  • The 1600 water purification systems sold to developing country schools since the business launched in Uganda October 2014, has benefited over 600,000 students.
  • Inception to date payback rates have been strong, with 92% payback rate overall and less than one third paying late by greater than one school term. Systems are inspected by Impact Water staff twice a year, and component parts replaced when needed.

By the end of 2018, the business expects to have sold to over 10,000 developing country schools, benefiting 5 million students. By 2020, Impact Water expects to be in 12 countries with a projected 15-20,000 annual system sales and to create over 7.5 million new beneficiaries per annum.  It’s an ambitious plan but one Impact Water believes is achievable given its unique value proposition and the size of the developing country school market alone (not to mention other viable segments including health facilities, religious and community institutions, workplaces, government buildings, restaurants and hotels). In looking at the size of the school market in Africa alone, there are over 600,000 public schools and about 150,000 private schools.

The social impact potential of the business is far-reaching. Some examples include:

  • Improved dignity and health for millions of school children and health facility patients;
  • Socio-economic advancements which result from reduced absenteeism at school;
  • Improved gender ratios when safe water is combined with improved sanitation services as menstruation management becomes easier for girls;
  • Financial savings (as boiling and buying bottled water is expensive);
  • Reduced biomass consumption and a corresponding decrease in indoor air pollution as these safe water systems will replace the need to boil water resulting in large carbon dioxide, methane, carbon monoxide, and particulate matter emission reductions; and
  • Job creation, particularly for the youth, as they become employed in selling and installing systems.

Grameen Danone Foods Ltd – Nutrition

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The mission of Grameen Danone Foods speaks for itself: to reduce poverty by bringing health through food to children using a unique community-based business model.

Need:

30% of all Bangladeshis and 56% of Bangladeshi children under the age of 5 suffer from moderate to severe malnutrition. The country has some of the highest child and maternal malnutrition rates according to UNICEF State of the World’s Children Report 2008. This in itself is a human tragedy. Malnutrition, however, is also a major impediment to development: malnourished people become sick more easily, can work less and find it more difficult to study. While Bangladesh produces sufficient rice to nourish its people, diets often lack vital nutrients such as vitamins and minerals.

Social business solution:

Grameen Danone Foods was founded in 2006 in order to fight malnutrition. The joint venture produces a yoghurt enriched with crucial nutrients at a price of 6 BDT (= 0.06 EUR) which even the poorest can afford. However, Grameen Danone Foods affects people’s lives not only by improving their health. Benefits exist along the whole value chain. The milk for the yoghurt is purchased from micro-farmers. The production is designed in such a way as to give as many people as possible a job. Sales ladies distribute the yoghurt door-to-door and receive a 10% commission. Unsold yoghurts are taken back. In total, Grameen Danone Foods is responsible for the creation of about 1,600 jobs within a 30km radius around the plant.

There is also an environmental aspect: Solar energy is used for heating up the water, which is used for cleaning the installation and preheating water for the main boilers. In addition the packaging of the yoghurt is fully biodegradable.
Therefore Grameen Danone Foods contributes to the achievement of the Millennium Development Goals by the United Nations to end poverty.

Outlook:

Grameen Danone plans to expand. Within the next 10 years, more plants will be established and several hundred distribution jobs will be created. The Danone Communities Fund has been created to support this endeavor. The independent NGO The Global Alliance for Improved Nutrition (GAIN) tested the benefits from a regular consumption of the yoghurt. Results show improvements in IQ and growth indicators among children consuming one yogurt a day for a year.

Visit Grameen Danone Foods.

Grameen Veolia Water Ltd – fresh drinking water

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Grameen-Veolia Water Ltd inaugurates it’s first water treatment plant for the villagers of Bangladesh, in Goalmari.

Need:

Fresh water is abundant in Bangladesh, in the form of numerous groundwater resources that are shallow and easy to exploit. However, for essentially geological reasons, almost all of the groundwater is contaminated with arsenic, very often at levels that make it a health hazard. At the beginning of the 1990s, hospitals in Bangladesh started reporting an alarming increase in the number of cases of arsenicosis. Today, 30 million Bangladeshis have fallen victim to chronic arsenic poisoning and some have even died.

Social business solution:

Against this background, Grameen and Veolia Water have decided to join forces and combine their complementary skills to make clean and safe water accessible to villagers in the poorest parts of Bangladesh.

According to the precepts of social business, whereby there are “neither losses nor dividends,” this investment will be paid for by water charges levied on consumers, which will in turn enable similar projects to be started elsewhere. The equipment will be manufactured locally on the basis of know-how transferred by Veolia Water. Grameen Bank’s extensive network will enable charges to be collected by appropriate means. About ten jobs will be created in each of the villages involved.

The first plant was inaugurated in late 2009, bringing safe water suitable for drinking and cooking to the 40,000 inhabitants of Goalmari, a village 100km east of Dhaka and its surrounding areas. A specific distribution network was installed on the basis of a detailed survey of user requirements and will include standpipes, small storage tanks and collective connections. Therefore Grameen Veolia Water Ltd. contributes to the achievement of the United Nations Millennium Development Goals to end poverty.

Outlook:

Grameen Veolia Water Ltd’s task is to build and operate several water production and treatment plants in some of the poorest villages in the center and south of Bangladesh. All in all, 100,000 people in around 5 villages will be served by this initiative for a total investment of EUR 500,000.

Visit Grameen Veolia Water Ltd.

BASF Grameen Ltd – Mosquito nets

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The purpose of the company is to improve the health and business opportunities of the poor of Bangladesh.

Need:

Malaria is one of the major health problems in Bangladesh. According to the WHO World Malaria Report 2009, 11 million people in Bangladesh are at risk of malaria.

Social business solution:

In March 2009, BASF and Grameen Healthcare trust decided to found the Social Business BASF Grameen Ltd. to provide protection against insect-borne diseases. This social business will also give business opportunities to poor people who otherwise would not be able to build up a business without support.

BASF Grameen Ltd. is not a charity. It sells long lasting insecticidal nets (LLIN) at a price which is affordable to the poor people in Bangladesh.

The insecticidal-treated nets are distributed in urban areas via grocery stores and supermarkets, and in rural areas via the established Grameen networks. The use of insecticidal nets will provide effective protection to the poor people in Bangladesh against malaria and other insect-borne diseases.

Thereby, BASF Grameen Ltd. contributes to the achievement of the United Nations Millennium Development Goals to end poverty.

Visit

The purpose of the company is to improve the health and business opportunities of the poor of Bangladesh.

 

Need:

Malaria is one of the major health problems in Bangladesh. According to the WHO World Malaria Report 2009, 11 million people in Bangladesh are at risk of malaria.

 

Social business solution:

In March 2009, BASF and Grameen Healthcare trust decided to found the Social Business BASF Grameen Ltd. to provide protection against insect-borne diseases. This social business will also give business opportunities to poor people who otherwise would not be able to build up a business without support.

 

BASF Grameen Ltd. is not a charity. It sells long lasting insecticidal nets (LLIN) at a price which is affordable to the poor people in Bangladesh.

The insecticidal-treated nets are distributed in urban areas via grocery stores and supermarkets, and in rural areas via the established Grameen networks. The use of insecticidal nets will provide effective protection to the poor people in Bangladesh against malaria and other insect-borne diseases.

Thereby, BASF Grameen Ltd. contributes to the achievement of the United Nations Millennium Development Goals to end poverty.

 

Visit BASF Grameen Ltd.