Turning charity into a business opportunity: piped water for all

By: Ania Sharwood

Interview with Waliul Islam, Advisor Max Water Social Business, Max Foundation Bangladesh

Waliul Islam certainly knows WASH and how it benefits child health in Bangladesh. He has worked in the sector for seventeen years. Waliul joined Max Foundation in 2016 and became part of something innovative for an NGO: setting up a social business to help revolutionise the provision of drinking water. “We are on a mission to popularise the idea that water should not be free”.

Most of the country has access to water. So why change things?

Bangladesh has a 97% coverage for drinking water, mostly through tube wells. “The problem with this is twofold”, Waliul explains, “it’s mostly surface water, which is often polluted with arsenic, iron or has high salinity. Placing deep tube wells, like Max Foundation does, extracts groundwater and solves part of the problem. But, in some cases, women still spend much time each day fetching it. So, for practical reasons, it can still be tempting to use river water for cleaning and cooking for example, and children are still exposed to harmful bacteria.

Secondly, there is no good financial model and people depend on funding to manage and repair the wells.”

Safe water from wells tends to be used for drinking mostly, whereas for cooking and washing, people often turn to water from unsafe sources closer to home. Various reports have shown that safe -piped- water inside the house has a positive impact on health, children’s development and position of women and girls who no longer have to labour for the collection of water (Worldbank and WHO).

Max Water Social Business Bangladesh

Max Foundation looked for a more sustainable solution that would also stimulate the local economy. The idea for Max Water Social Business was born: a locally managed, corporation to provide rural, hard-to-reach areas with piped water. Last year, we started on the infrastructure. We built 17 water towers attached to pipe grids so far, connecting up to 620 households.

Currently, only 1% of households in rural Bangladesh have a piped water connection, and the other 99% is over 100 million people. We realise that the need is great, and so is the local market opportunity.

How the business currently works

“All stakeholders have their role in making Max Water Social Business successful. We design and build the infrastructure, supervise the projects and facilitate the payment system. Our implementing partner, a local NGO called DASCOH, is constructing the schemes in our current projects. Entrepreneurs from the area are trained to become Water Operators. They operate and maintain the schemes and collect fees from the community. ARDEA, a governmental agency, provides them with legal and technical support in this. 

For the current schemes, Max Foundation provides a majority of the budget upfront to set up the schemes. The remaining part comes from the private sector who sign an agreement that they will operate the schemes for a set amount of years. After this, the pipe-scheme entrepreneur recovers its own investment with a marginal profit and pays back the initial advance payment to Max Foundation.” 

For the future scale-up phase we are investigating alternative models where schemes are run but not owned by water operators to make it easier for small local entrepreneurs to step in and support the local community through income generating models.

Changing attitudes is key

“Obviously the communities have to be on board too. Families are asked for a one-off payment of 1,000 BDT (€10), for the connection and 150 BDT (€1,50) per month for the service. This cost is low, but understandably the hardcore poor are not easily convinced. Why would they pay for something that is ‘god gifted’ and has always been free? Through our motivational campaigns, as part of our WASH and Nutrition programmes, we explain that you are not paying for water, but for the service. And that your children’s health will improve substantially. This hits the mark for them. It’s great to see more and more households signing up." 

Riad Mahmud, founder of Max Water Social Business shares an example of a rickshaw puller living in extreme poverty. He had realised that, in some ways, he can be equal to rich people in the city. Just by investing a little in getting piped water into his home.

Ending the funding dependency

We now have 17 small-scale piped water schemes in operation specifically for domestic purposes, in the areas of Talora, Jabaripur, Enayatpur and Shadullapur in Bangladesh. Now we are looking for a €1 million investment to support scale-up. This investment will help us to build an additional 40 schemes, providing access to safe water for over 12,600 people in rural villages and urban slums. Max Foundation will offer a social return, and the investment will help move Max Water Social Business towards a financially sustainable product. After four years we plan to attract investment capital and phase out grant funding. We project a positive cash flow by year nine and a fully self-sustaining and profitable model within 15 years. This is why Max Water Social Business is a truly sustainable approach in giving children a healthy start in life.

We are striving to be pioneers in creating system-wide change to the water supply network in rural Bangladesh

Currently, only 1% of households in rural Bangladesh have a piped water connection, and the other 99% is over 100 million people. We realise that the need is great, and so is the local market opportunityWe will invest in small-scale water supply networks to clusters of households in rural areas using existing local technologies and suppliers. We will create an enabling environment for Water Operators to maintain and manage the systems. And, we will bring reliably safe drinking water to the consumer at an affordable price, while still generating sufficient revenue to sustain the operations, facilitating supply at all level, including to the hard to reach and poor.

Max Water Social Business Bangladesh

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