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Posts Tagged ‘water’
GIM delivers a keynote speech at the Sixth World Water Forum: Testing solutions for water products at the BOP must take a multi-product approach, instead of a single product-driven approach

GIM delivers a keynote speech at the Sixth World Water Forum: Testing solutions for water products at the BOP must take a multi-product approach, instead of a single product-driven approach

In a keynote presentation at the Japan Water Forum Side Event at the Sixth World Water Forum, Marseille, 14 March 2012, Sahba Sobhani (Growing Inclusive Markets Initiative, UNDP), reflected on the challenge of growing inclusive markets for water products in low income communities, where the challenge is to find strategies that are replicable and scaleable. The session focused on business-based pro-poor approaches on water and sanitation for better sustainability.

Mr. Sobhani said, “research and pilot testing is essential to take into consideration the cultural characteristics and ease of use in water sector products. Awareness building and community mobilization are also necessary cost factors.  He noted that a sector approach testing multiple products can be more beneficial compared to the standard ‘product’ based approach pursued by most companies when entering the BoP market. Sectoral approaches enable comparative benchmark analysis of pro poor impact, demand for the products and business cases. The presentation included findings from a recent UNDP multi product testing undertaken with two Japanese water purification products as part of a Japanese Ministry of Foreign Affairs funded initiative -perhaps one of the first multi-product feasibility studies of its kind.

The BoP business model can apply not only to point of use systems, but also to support the construction of water supply systems for the unserved, in order to sustainably improve public hygiene with safe water supply. The JICA experience with the BoP business experience has so far demonstrated that these businesses are more difficult than other ordinary private water projects because they are small, target low income groups, and are high risk. Therefore, private finance is very limited. Osamu Murata (JICA), explained that this is why JICA is supporting the costs of feasibility studies by private companies that are willing to invest in the BoP business model. JICA will continue to welcome collaborations with other donors, NGOs and private companies.

The session concluded that the BoP business model can be successful in meeting the needs of poor people for improved water service provision at an affordable cost. It can also open up significant new markets for businesses and enable them to make a profit. And finally, the BoP model provides a long term contribution to sustainable poverty reduction by using more energy and resource-efficient technologies, increasing economic activity and creating opportunities. Unserved communities, private companies, and the international development community can all achieve their objectives by working together using the BoP business approach. Work by the Japan Water Forum, JICA and colleagues on the BoP solutions will build on the suggestions made during the Side Event in preparation for further presentation and discussion on this topic during the 7th World Water Forum in Korea.

Q&A with Charlie Dou, author of Micro-Hydro Power case study in China

Charlie Dou is an adjunct Professor and Research Associate, Alternative Energy Institute, West Texas A&M University, USA; CEO, Beijing Bergey Windpower Co. Ltd., served as International advisor for UNDP/GEF on renewable energy project in China, key Expert for EU, Consultant for the World Bank/GEF, etc. He is directly involved in many research and international projects sponsored by UNDP/GEF, the World Bank, China central government, and has published and/or edited 14 books and more than 40 papers/presentations, including “China Village Power Project development Guidebook” and the series books of “Capacity Building Strategy for the Rapid Commercialization of Renewable Energy in China” for UNDP. He received his Master’s Degree in Engineering Technology in the US, and Master’s Degree in Electric Engineering in China, and once worked on his doctoral degree on Industrial Engineering at Texas Tech University.

To download the Micro-Hydro Power case study from the GIM database, please click here.

What is the project’s basic value proposition and what makes its financial model sustainable?

The economic development is slow for these remote villages located in China’s western mountain regions and the life of these villagers is poor because of their inability to access electricity.  Extension of traditional utility power line is not viable, and not affordable for low-income residents.  Finding a technical and economically feasible solution is key for rural electrification in such areas.  Micro-hydro power is the least costly technology for power generation compared with other renewable energy technologies and traditional power plants. This case provides a successful example of local people relying on their own efforts to develop an electricity service without government and outside financial assistance and improve their life.

In developing countries, what are the main challenges for access to energy for the poor?

The main challenges for access to energy for the poor in developing countries is to develop a solution for a financially and technically sustainable power supply and affordable power service.

What main factors make this model successful that will allow it to be replicated elsewhere?

First, availability of resource and technology. Second, affordability of the solution (again, micro-hydro power generation is one of the least costly power generation technologies). Third, self-motivation (local residents wished to change their status). Fourth, clear ownership (the micro-hydro power system was developed and managed by the villagers themselves).

What would you say was critical about the actor ecosystem that enabled this business to be successful?

The villagers there have lacked power supply for generations. They wished to change this situation.  But the local utility company is not interested in expanding the service to such areas due to high investment and poor return (or even no return, since the losses from the power transmission may be even more than the power to be applied).  Micro-hydro power generation provides an affordable and environmentally friendly solution, since usually, for such a micro-hydro power generation, no civic construction is needed.  The water flow will not change significantly, which means little negative impact on local ecosystems compared with large hydro dams.

Q&A with Mamadou Gaye, author of case study: Wind, Water for Life (VEV) (Senegal)

Mamadou Gaye is a PhD candidate of Regional Development at the University of Quebec at Chicoutimi Canada. He was awarded the Canadian International Development Agency Scholarship. Previously, Mamadou was the Director of the Graduate Programs at the African Institute of Management (AIM) in Dakar, Senegal, and Director of International Relations. In 2007, he became a member of the Academy of Management of the US. He is in charge of the international MBA at AIM. After participating in international meetings and initiatives funded by UNDP, GBSN, AABS, ICF, ICBE and Trust Africa, he is convinced of the importance and need of African private sector, business schools and universities to enhance case method approaches. He has written six case studies in Francophone West Africa for UNDP in 2006-2007. Mamadou undertook his graduate studies in resource economics in Moscow, Russia, with a specialization in project management (MSc). Awarded a scholarship from the Canadian International Development Agency (CIDA), he finished a master’s degree in organization management at the University of Quebec, Rimouski.  Mamadou speaks French, Wolof, English, Spanish and Russian.

Wind, Water for Life (Du Vent, de l’Eau pour la Vie- VEV) a small company in Senegal providing long-term repairs for the wind pumps installed by LVIA in the 130 villages where LVIA had also set up community water management committees to make sure that they would have the capacity to collect money for water sold and ultimately pay for repairs and maintenance.

Case study developed with financial support from the United Nations Environment Programme.

To download the VEV case study from the GIM database, please click here.

What is VEV’s basic value proposition and what makes its financial model sustainable?

Its value proposition is a low-cost local way to repair water pumps and provide clean water to an entire community. Its model is sustainable because they make the pieces locally with scrap metal and offer financing to their customers.

What have been the biggest challenges hindering VEV’s development and growth?

The biggest challenge has been expansion in the number of villages. The NGO did the initial work and payment of the pump installation. VEV must continue to grow the number of villages with wind pumps or it will be difficult for them to grow. This requires time, efforts and strategy on VEV’s part and also finances on the part of the villages, which they do not sustain at this time.

What are the main challenges in terms of access to water for the poor in Senegal and also more broadly in developing countries?

-Lack of financial resources in rural areas of Africa (Senegal)
-Lack of appropriate state policy to sustain local development and enhance governance in rural Africa
-Pace of urbanization and growing difficulties to take care of urban areas like capital cities
-Lack of information about renewable energy development and water supply

What are the promises in terms of human development of the VEV solution?

-Increased health through clean water and water to wash with as well as eating vegetables from the vegetable garden
-Increased income generation from garden vegetables and other crops
-Increased local capacity through water management and VEV staff trainings

What was your personal experience going through the GIM training and case research process?

Since my first interaction with GIM in 2006, I have understood that there is a big difference in talking about development and issues related to inclusive business around the world and the UNDP which is just going and digging deeper into that matter. I have gain maturity in how to approach locally sustainable development issues in poor African countries and that has made me aware of a big need in governance which will give space and room to the poor to create value for all. I am just happy and excited since I have been involved with the UNDP GIM Team since the beginning. The learning is huge because now I could anytime exchange with actors in the field and give business advice to companies, state agencies, NGOs, communities, decision makers and international partners in ways in which human sustainable development and social entrepreneurship activities should be rethought and implemented in poor African countries. I also got hold of what should really be an inclusive business. It is not being part of a research team but also understand on the ground how business should be done and what are the main roles of each actor in a country, region, space or territory to be in a win-win situation where humanity gets along with business sustainability.

Mamadou GAYE, PhD candidate in regional development, The University of Québec at Chicoutimi, Canada.