07/16/14 – This guest blog is written by Eric Byington. He is part of the Global Social and Sustainable Enterprise MBA, is a co-founder of H2.0, and is spending his summer doing research in Kenya.
H2.0 founders in front of some H2.0
We always knew this was going to be difficult. In fact, many well-intentioned and well-informed individuals often told us that investing in WASH (water, sanitation & hygiene) sector projects in Kenya would be nearly impossible. The profit margins are too small; the infrastructure costs too high. Even if we could find a business model that was spot on or a technology that was the best thing since sliced bread, issues of access, corruption, local know-how, and general supply chain hurdles would only serve to derail us.
The truth is, all of these challenges are very real. The profit margins in water are tiny at best. The cost of installing pipes, filters, kiosks, and treatment facilities are huge. In rural hardship areas, water is nearly inaccessible due to a lack of surface water and deep lying aquifers. In high density slums, competition from informal taps, water “mafia” groups, theft, and lack of provision from the local municipality leaves the running of water businesses to only the strong, brave, and bull-headed. In sanitation, pit latrines spoil the rural water tables and “flying-toilets” dominate the high density areas with bags filled with human feces falling wherever human effort and gravity may take them.
It does not take a savvy investor to have one look at the WASH space and quickly turn away, realizing an investment in this space would be akin to buying equity in a bathing suit manufacturer headquartered in Antarctica.
Now, I realize that this depiction paints a bleak horizon. I, however, do not think the horizon of the WASH sector could be more beautiful. Here’s why:
WE KNOW HOW TO DO IT:
The technology, know-how, expertise and ability to provide access to clean water and appropriate sanitation exists, and there is so much happening here in Kenya at the moment. We met Isaac who is installing rain water catchment systems in rural schools that is providing tens of thousands of liters of water to these hardship areas. Sanergy is a company that is quickly nailing down a model that provides clean toilets to high density slum dwellers, turning human waste into valuable fertilizer while employing hundreds of local entrepreneurs. Mika and his organization has a product that creates enough chlorine, from just 500 milliliters of water and a few table spoons of salt, to treat hundreds of liters of contaminated water. An international non-profit is working with large, multi-national corporations to fund the building of water kiosk networks that strategically supply water access points to slum areas throughout Kenya. A business man in Nairobi is supplementing his other revenue streams through clean and efficient pay-to-use, city toilets that are turning a nice profit. We have the technology, we know how to do it, and people are already doing it.
THE ENTREPRENEURIAL SPIRIT IN THE SECTOR IS ALIVE AND WELL:
In every site visit we’ve made, every coffee house meeting we’ve had and every office we’ve had the privilege to experience, there’s a real buzz that is reverberating throughout all of the WASH sector. A group of women of the Gatina slum in Nairobi are passionately pursuing their kiosk business. Isaac, a self-proclaimed “hustler”, pounds the pavement (or dirt, depending upon where he is) every day, installing his effective systems and training local leaders who are deeply interested in his work. Head teachers and community leaders are clamoring to introduce appropriate technologies in their small communities, and they are willing to get creative and entrepreneurial in their approach. There is a palpable energy in the WASH sector, it only needs to be harnessed properly.
THE KNOCKING OF DEMAND IS GROWING LOUDER:
This phrase, or some iteration of it, is often used – water is the provider of life and sanitation is the provider of dignity. Clean water and proper sanitation are not only essential to human existence, they are the building blocks of human rights, and this ideology is seeping into our collective consciousness. Throughout Kenya we have heard this belief reiterated in many ways. We have spoken with women filling their 20 liter jerry cans at the kiosks who know that the bacteria free water they’re collecting will lead to improved health for them and their families. We have met with an assortment of community leaders who have a deep seeded desire to eradicate the spread of deadly viruses through the spread of fecal matter. People are paying for access to clean water and sanitation; often, they’re demanding it. This is not to say the demand is perfect, but it is there and it is growing.
I can’t help but look at this space and think that it is just screaming out for market based solutions. It’s there, it’s time, and we can do it. But, we must still overcome the challenges that have plagued us from the very beginning.