To celebrate yesterday’s World Water Day, watch Yasmina Zaidman, Director of Communications at Acumen Fund, present on what we have learned from our Water Portfolio, and how it has informed expansion and growth.
Posts Tagged ‘water’
Lessons from Investing In Water
Friday, March 23rd, 2012Capturing the best for World Water Day 2012
Thursday, March 22nd, 2012For World Water Day this year, we’ve compiled some of the best photos from across the water sector and our portfolio. For an in-depth look at Acumen’s perspective of the water sector, read Nijhad Jamal’s recent blog.
Photo Credit: G.M.B. Akash. Akash is the winner of the WIN Photo competition in 2011. His winning photo (above) was exhibited in Stockholm during the World Water Week 2011, which Akash was invited to attend. He writes about this photo:
“In this particular photograph, I tried to portray the true picture of the scarcity of potable water in slums. In slums, people have to stand in queues from early morning hours to get the daily supply of free drinking water from the government water tankers. As they have no idea exactly when the government tanker will come, they line up their water jars & sit beside them for hours waiting for the water tankers. Even after passing the long queue, the water that they receive is not of purest quality. Rather this impure water causes sickness. Still the poor people feel that they are fortunate not to have to leave with empty pots. This is the plight of the slum dwellers in the Bangladesh capital city of Dhaka.In my winning photo of WIN competition, I wanted to convey the ultimate state of heart wrenching vulnerability and helplessness of the poor little child, who is fighting along with a pigeon for few drops of water.”
A camp in Delhi home to about 4,000 migrant workers with no clean water supply. Workers are dependent on water tankers, and every day, they have to wait for the tanker and scramble for water. They are only part of the 1.1 billion people in the world without access to improved water supply.
Photo Credit: Sia Kambou/AFP/Getty Images. A woman draws water from a well in Gonate, in Ivory Coast. “Since 1990 over 2 billion more people in the world have received access to drinking water. And this progress has not been driven by just big middle-income countries – smaller, less well-endowed countries have also shown the way. The majority of people without access to drinking water – 479 million – live in countries that are not among the poorest. The country with the largest number of people without access to improved water – 119 million – is China, the world’s second largest economy.” Source: http://www.guardian.co.uk/global-development/poverty-matters/2012/mar/06/mdg-drinking-water-target-met
A river in the Qayyumabad District near Karachi suffers from extreme pollution.
On the banks of the Yamuna River in Delhi, men and children are bathing and washing their clothes. A recent government audit found that the level of fecal coliform in the Yamuna was 100,000 times the safe limit for bathing.
Progress on sanitation delivery currently lags well behind other Millennium Development Goals. As such, private sanitation providers, from retailers to masons, from public toilet operators to latrine emptying business, are of vital importance to BoP communities. In developed countries sanitation is the role of the water utility.In developing countries however, the sanitation market is dominated by small private providers, usually very local in nature and often benefiting from little outside support.
Mapping the Water and Sanitation Sector
Monday, March 12th, 2012
At Acumen Fund, we look to invest in for-profit, social enterprises that are using market-based approaches to increase the affordability, access, and quality of water and sanitation to the poor in the developing world. Our previous investments in the sector cover everything from an enterprise creating rural community water centers, to organizations using microfinance to increase access to sanitation. When considering the entrepreneurial landscape in the water and sanitation sector overall, there is an enormous opportunity for social investment to make an impact; however, in order to be successful, social enterprises will require innovative approaches to tackle the serious challenges that remain.
As we continue to look for new deals that focus on low-income customers, unfortunately the economics of the sector often make it challenging for social enterprises to serve the poor as customers, and so many either leave the responsibility to government and civil society, or end up having to focus on middle- or high-income customers. Part of the reason for this is that in many regions markets are distorted by a flood of NGO money into the sector. They often provide goods and services at free or subsidized prices, but they can sometimes be at low quality. This ultimately reduces consumers’ willingness to pay or desire to use products and services in water and sanitation.
Furthermore, there is often a real lack of education or consumer awareness in the market for why these critical goods or services are needed. Many customers think, “Why should I pay for drinking water when the water from the river is free and sweeter tasting? Why should I pay to use a toilet when there are other places I can go for free?”
With this as a general context, I do believe there are opportunities for investment and entrepreneurial solutions in the space. There are entrepreneurs out there that are innovating on technologies, but unfortunately it feels like many are still early stage and haven’t yet figured out how to actually build a business around the technology or product. The most interesting deals we see involve companies and entrepreneurs that are truly innovating on business models, and three of the most compelling innovations out there involve vertical integration, small-scale distributed infrastructure, or creative financing.
- We are seeing a lot of organizations that are trying to vertically integrate across the water/sanitation value chain. They’ve recognized that in many regions it is difficult to rely on other parties to provide these functions and so are having to bring the entire chain in-house (this could include capture/storage, transport, treatment, reuse, etc.) These businesses have realized that some parts of the value chain are fundamentally going to be cost centers and other profit centers – but that you need to tackle all parts to make the whole process work and become financially sustainable.
- Other opportunities can be seen with companies trying to do small-scale, distributed infrastructure where they are really trying to bring down initial capital costs and ongoing operating costs, often by using hub-and-spoke models which are modular and highly scalable. Potential issues with this approach include water and sanitation service quality and physical-infrastructure maintenance across the organization, to ensure consumer confidence and brand integrity.
- And finally, we are also seeing deal-flow with businesses that are trying creative financing –whether it is microfinance at the household level for small water and sanitation improvements, or lending at the community level for community toilets or piped water mini-grids. Our recent investment in GUARDIAN is an example of using a creative approach to microfinance to increase access to improved sanitation in rural India.
We are also innovative businesses that manage to play at the intersection of water/sanitation and other sectors, such as agriculture or energy, for example by exploring new sources of revenue through waste-to-energy conversion or conversion of waste to fertilizer. Ultimately the most compelling opportunities are the ones that are able to foster partnerships with communities, civil society and government to fully function, while leveraging an innovative business model that drives financial sustainability and quality service.
Nijhad Jamal is a Portfolio Manager at Acumen Fund based in New York where he focuses primarily on the cleantech and water sectors.
Do you have what it takes to serve Pakistan’s health and water needs?
Monday, January 30th, 2012
Affordable healthcare and drinking water are two of the most important challenges facing low-income citizens in Pakistan today. The need is great – but so is the opportunity for businesses, driven by talented teams, to step up and fill this need. Do you have the skill and the will to address one of Pakistan’s most pressing problems? Are you inspired by the chance to lead one of Pakistan’s most innovative social enterprises? An opportunity is waiting for you.
Pharmagen Healthcare Limited, a social enterprise focused on delivering clean water and healthcare in urban Pakistan, is looking for a Chief Operating Officer. This person will be responsible for driving the business’s core operations as it seeks to become the leading provider of clean drinking water and healthcare services to low-income communities in Pakistan.
This is a rare opportunity for you to use your business experience and organizational drive in an environment that is committed to social change. Finding success in low-income healthcare and water delivery in South Asia has been notoriously difficult. However, Pharmagen is offering a singular opportunity to transform a successful social start-up into a national enterprise poised for growth.
The COO will be responsible for general management, strategic planning and reporting, organizational development, as well as its relationship with investors and professional networks. Under the guidance of the CEO, the COO will be responsible for overall company performance and will direct various aspects of its planning and operations, including marketing, sales/distribution, finance, human resources, business development, product development and supply-chain management.
Pharmagen currently operates 17 water shops in Lahore, Pakistan and plans to launch 32 water shops with Acumen Fund’s investment, which will supply half a million people with clean water daily. Water is affordably priced for low-income customers, who pay only 1.5 rupees per liter at Pharmagen’s shops.
Ideal candidates for this role will have excellent general management skills combined with a strong entrepreneurial spirit. Some of the additional qualifications include:
- A minimum of 10 years of professional experience with 5+ years of executive/senior management experience.
- Demonstrated experience of executing innovative sales and marketing strategies for a social purpose and to achieve ambitious sales targets.
- An MBA and FMCG experience would be highly preferred.
- Previous exposure and a strong commitment to serving low income communities with a comfort of dealing with them directly.
- Strong professional networks which can be translated into business development opportunities.
If you think you have what it takes to serve Pakistan’s health and water needs, please send a cover letter and resume to Taylor Ray at tray@acumenfund.org. See the attached PDF for the full job description.
Acumen Fund Announces Investment in GUARDIAN to Finance Water and Sanitation Needs in India
Wednesday, November 30th, 2011Loan to Support Leading Micro Finance Institution Focusing on Clean Water and Sanitation Loans in India
Mumbai, India, November 30, 2011 – Acumen Fund, a recognized pioneer of impact investing celebrating its tenth year of working to create a world beyond poverty, today announced an investment in GUARDIAN (Gramalaya Urban And Rural Development Initiatives And Network). The four-year-old organisation is the world’s first microfinance institution (MFI) engaged in microlending to communities that lack access to individual water and sanitation facilities. GUARDIAN operates in the communities in and around urban and peri-urban Tiruchirapalli (Trichy), Tamil Nadu.
“Ten years after our first investment, Acumen Fund remains committed to India’s future,” said Jacqueline Novogratz, CEO, Acumen Fund. “Although access to clean water and adequate sanitation is not yet a reality for many impoverished communities, organizations like GUARDIAN with their innovative financial solutions give us hope that we can create sustainable models to provide access to safe water and sanitation for all.”
Over 2.5 billion people suffer from a lack of access to improved sanitation globally. According to a report released by the World Health Organization in 2008, seventy-five percent of India’s surface water is contaminated by human and agricultural waste and industrial effluent. This contaminated water supply results in life-threatening illness. Additionally, lost productivity and other consequences of unsanitary water and inadequate sewage treatment can have a significant negative effect on GDP.
“Our investment in GUARDIAN is exciting for Acumen Fund because it is our first venture into the ‘water credit’ space, and our first investment in sanitation in India,” said Meghna Rao, Country Director of Acumen Fund India. “Our support of GUARDIAN gives us a unique opportunity to examine the consumer behaviour and attitudes towards sanitation, and from a broader perspective, develop a deeper knowledge base for utilizing microfinance as a tool to help poor households begin to build assets.”
The $1 million USD loan that Acumen Fund is providing would play a critical role in helping GUARDIAN build its portfolio and transition from a partially grant-funded NGO to a fully self-sustaining MFI. At the same time, it would support a scale-up of a potentially path-breaking model for increasing the coverage of water and sanitation solutions in poor communities. GUARDIAN currently offers micro-loans for the purchase of water and sanitation assets at the household level: connections to municipal water supply, toilet construction, rainwater harvesting equipment, and household water purifiers. It lends to members of existing women’s self-help groups, each with up to fifteen members, and to five-member joint-liability groups that they help form. The loans range between Rs. 3,000 and Rs. 10,000 ($65–215) per individual with repayment made in equal monthly instalments over eighteen months.
About GUARDIAN
GUARDIAN was founded by social entrepreneur, Dr. Paul Sathianathan, who also serves as the organisation’s Chief Executive Officer. Dr. Sathianathan worked in the Indian government for over two decades before he joined the NGO Gramalaya. With the support of a $240,000 grant from Water.org, Gramalaya spun out the water credit program into GUARDIAN. While GUARDIAN currently only lends for water and sanitation purposes, the organisation is actively exploring a diversification of its loan product portfolio as a way to retain customers that have already successfully repaid water or sanitation loans.
Welcoming the Acumen Fund investment, Dr. Sathianathan said, ”Ensuring safe water alone will not be adequate if people do not have appropriate sanitation facilities or develop good hygienic practices, as diseases can not only be spread through the contamination of water, but through other means. Hence, let us work for the promotion of safe water and sanitation.”
About Acumen Fund:
Acumen Fund is a pioneering not-for-profit venture fund that is changing how the world addresses poverty. Acumen Fund invests patient capital in business models that deliver critical, affordable goods and services to the world’s poor, improving the lives of millions. Since its founding in 2001, Acumen Fund has invested more than $70 million in 63 companies that provide access to water, health, energy, housing and agriculture inputs to low-income consumers in South Asia and Africa. For more information on Acumen Fund’s activities and investments, visit http://www.acumenfund.org and http://www.acumenfundblog.org.
Acumen Fund in India:
Acumen Fund has been investing in India since 2001, focusing on a wide range of sustainable, scalable businesses that use market-based approaches to deliver products and services to millions of rural and urban poor. Investments made by Acumen Fund India in local enterprises include high-quality maternal and pediatric healthcare services; safe water for consumption and livelihood; and clean energy. Leveraging strong relationships with local academic institutions and businesses as well as the global Acumen Fund network, Acumen Fund India is actively exploring further investments in healthcare services, as well as potential investments in housing, agriculture and energy services.