Early 2016 RAIN developed and started implementing the Rain for Sale concept in two emerging towns in Uganda in the Lwengo district in the country’s dry lands. When that project started, we aimed to select 5 entrepreneurs from whom to select 2 to work with. After the promotion of the concept 28 entrepreneurs expressed interest. This prompted us to find more budget to include 2 additional entrepreneurs (thus a total of 4 entrepreneurs). At present 4 tanks of 50 cubic meter have been constructed (and handed over) based on a loan. The first results of these pilots are very positive, both entrepreneurs and communities jumped on the idea communities that want to engage in a loan for a tank. The first instalments for the loan repayment have been received on March 31, 2017; the other instalments are expected towards the end of April 2017. The R4$ approach can be tested in Rwanda. Rwanda offers different conditions under which the concept can be tested and improved for upscaling.
The problem we address revolves around the decreasing water availability in African towns and the increasing costs and efforts incurred by poor sections of society to access water, particularly women. To contribute to new methods and solutions to this problem we introduce storing and selling rainwater in urban environments.
The inception phase is crucial to find out more information about planning, co-funding, site selection, partnership and demands a relatively small part of the investment (approx. 10%).
Knowing whether this concept is scalable under different conditions, needs Via Water seed money and is crucial for two reasons: it is important for the starting capital element (financing parts of the RWH system and installation) and for the possible guarantee fund element (to favor the conditions for the MFI, and eventually the entrepreneurs/cooperatives and users). Whether we will set up a guarantee fund, a revolving fund or another option of financing of businesses, needs careful consideration during the inception phase. Otherwise the microfinance market can easily be disrupted by the provision of funds which are not needed. The same accounts for the form of the available funds, for which we need to negotiate and discuss with MFIs on the prevailing ways of making funds accessible to businesses. These two elements combined form approximately 30% of the investment and are part of the pilot phase. The pilot phase totals approximately 55% of the investment and includes activities like community meetings and business trainings making this pilot phase crucial.
The scaling phase includes exchange visits, marketing the concept and a research component (for which we hope to find external co-funding (NWO)), totaling approx. 19% of the investment. Complementary in-kind co-funding is expected from MFI’s as to their product development, from RWFA in terms of time input and possibly office space, and the upfront contribution from the entrepreneurs. Finally, from EMF/ YEP in terms of human resources for research.
The urban poor in African cities should be able to rely on a sustainable source of drinking water that is not threatened by urban expansion, waste and sanitation pollution and climate change. Particularly for women alone with low incomes, the physical and financial burden should not be underestimated.
We see the urban (water deprived) poor as the ultimate beneficiaries. Indirect beneficiaries are the entrepreneurs or community cooperatives that are working with us as there are (financial) incentives in place. On a similar level, local service providers (business management trainers, instruction companies, MFI’s) will also have an incentive to join as their services are being used. The ultimate aim of the project is to have proof of concept for a business case for selling harvested rainwater and scale up this initiative. Thus, a variety of local actors (MFI, government, local service providers, community groups and entrepreneurs) will be involved / impacted to ensure institutional embedding and demonstrate the potential of harvesting and selling rainwater as a business.
We will focus on the following sustainability aspects:
Financial: Verifying whether the business model is feasible and monitor whether it is workable for all parties after the pilot phase. This needs careful planning of conditions during the inception phase and evaluation of the preliminary results of the pilot phase to adjust the business/financial model where necessary so that it can be scaled up. We will collect data on the financing part (MFI / SACCO) and their financing models, the supply side (entrepreneurs / service providers) and their price policies, and the demand side (clients) and their willingness and ability to pay.
Institutional: As institutional embedding is crucial for upscaling, we need to monitor whether local authorities and other local stakeholders are adequately involved in the program. This requires their involvement in the baseline study as well as in the client satisfaction studies that are foreseen.
Environmental: The concept works as long as there is sufficient supply of (rain) water. Ensuring safe and sufficient water supply is crucial for the model to work and ANA in collaboration with the entrepreneur will continuously monitor and train on water quality aspects, ensuring that potential water quality risks are mitigated. As to supplying sufficient water, our primary source will be rainwater. Other sources (groundwater, trucks) can be found though this is eventually the decision of the entrepreneur.
Technical: In Rwanda, the hemispherical 100m3 underground tanks are known and widely accepted. They normally have a life-expectancy of 20-25 years and installed by RWFA, ANA and other private companies already. This is therefore a proven concept and we do not foresee any major M&E activities in this regard other than first-flush installation/training and small repairs. The fact-finding mission showed that many small towns close to the main road have piped water from gravity flow schemes already and therefore we need to carefully and strategically choose our intervention areas. Further off the road water sources become more distant, but here the houses are roofed with locally made clay tiles from where the quality of water might be questionable.
Social: The program aims to alleviate the problem of access to water for the urban poor, especially women who have a dominant role in water fetching. Achieving this we will need to create impact in access to water, and we will use the WASH alliance M&E framework indicators to work on this.
Overview of Goals
We foresee three outcomes ultimately leading to our desired impact:
1. Proven demand for the service and willingness to pay – this outcome focuses on the demand (beneficiaries) of the concept
2. Ensured supply of rainwater for sale – this outcome focuses on the supply (and business model) of the concept
3. Best conditions for RWH business known – this outcome focuses on the research side of the concept, testing demand and supply under different conditions
As for the first outcome, it is foreseen to undertake client satisfaction studies and surveys throughout and at the end of the program period by a YEPper. On an output level, we expect customers to pay for the service and this will be measured by the number of jerrycans sold (whereby the fluctuation of the price of water plays an important role).
The second outcome focuses on the supply side – ensuring profits on the long-term for the entrepreneurs involved. A core activity here is business development support/business management training. The output related to this outcome is that entrepreneurs take the opportunities related to harvesting and selling rainwater. This will be measured by the number of entrepreneurs or community cooperatives involved, the number of RWH tanks constructed and number of credit loans applied for at (and granted by) MFIs / SACCOs. This relies on the assumption that we will have enough financing for scaling up.
The third outcome is oriented towards research; studying what works best under which conditions. This would entail designing and carrying out a comparative study using different variables such as different entrepreneurs, different kind of support, different socio-economic factors, different prices, etc. in different zones in Rwanda as well as a comparison and exchange visits with the RAIN 4 Sale project in Uganda. This research component is expected to be carried out by a YEPper with support from ANA. On an output level, local authorities and MFIs should enable this type of entrepreneurship, which can be measured by the number of appropriate regulations, number of appropriate loan products, number of complaints by entrepreneurs.