The partnership provides smart water solutions with pay-as-you-go (PAYGO) options to increase affordable access to clean water from utilities.
P4G provided $100,000 in grant funding to partnership.
iW+ installed 1,000 PAYGO systems to provide sustainable water access to Kenyan households. By giving household residents access to a more affordable option of water piped from a utility instead of expensive and unreliable substitutions, this model also reduced costs and improved supply for subscribers.
In 10 months, the partnership had supplied 49,000 cubic meters of water (the equivalent of about 20 Olympic sized swimming pools) through the new technology and collected almost USD 56,000 in payments. This helped BOMWASCO (Bomet Water and Sewerage Company) collect 35% of its global subscribers’ debt with a total of 416 out of 967 (43%) customers fully reimbursing the company.
The model had advantages for customers and the utility company. For low-income subscribers, this allowed them to purchase small amounts of water and effectively manage their finances because of the prepaid transactions. It also gave them better service and clear communication about their service.
For utility companies, the model reduced the resources deployed for billing and collection and was a more effective method of payment collection. It made it easier to track down water theft and track water consumption patterns.
Some challenges included higher electricity bills because of the need to install routers at the sites, and a lack of trained staff familiar with the digital platform who could explain it to subscribers.
The partnership learned some valuable lessons that it and others in the field can use in the future:
1. For the model to continue to be effective and engage subscribers, there is a need for more customer education on the technology and payment system.
2. Subscribers want clear and descriptive bills that include price of water per unit and any associated charges (such as debt collection). They would also like a smartphone application to be linked to their water account.
3. The leasing model required BOMWASCO to pay a 20% down-payment of the total loan amount. This requirement is a potential challenge for utility companies and investors should consider removing the down-payment requirement.
This innovative business model benefits subscribers and utilities. It presents a financially sustainable solution that will generate cash flow for utilities to pay back investors and make infrastructure investments. This can attract utilities and investors in Kenya and East Africa to scale the model.
Smart Water Solutions
Digital Solutions for Water