Water services delivery as a business: an approach to sustaining water services in rural areas

In Kenya, almost 2/3rd of rural water projects start malfunctioning within 3-5 years of construction. While most of these projects have capacity to generate sufficient revenue to sustain their commercial operation, reliance on voluntary community groups has undermined the potential role of local enterprises and professional firms to keep these projects functional. SNV Netherlands Development Organisation in partnership with Adam Smith International have designed and implemented an approach aimed at delivering rural water services at scale. This approach uses market systems approach, which includes market research, commercial viability analysis, and business modelling as a tool to formalise relationship among the regulator/local government, users group, and commercial operators. While challenging the traditional belief that poor people cannot pay for water fees, this approach has demonstrated business incentives for small private firms in rural areas. This paper highlights various steps involved in the innovation, initial findings of the research and emerging lessons.