Sanitation Innovation

Water For People is invested in solving the sanitation crisis in the world. While billions don't have access to adequate sanitation, the real problem is that latrines fill and can't be re-used, some don't work and a quick fix mentality has taken over instead of a plan for long-lasting sanitation solutions. This is the chronic problem in the developing world. Solutions, when supplied, often don't last.

Sanitation as a Business is a program Water For People has tested in Malawi. Sanitation means access to adequate, hygienic toilet facilities and services. The ideas behind this alternative to traditional sanitation programs stem from a simple truth: we and organizations like us do not have the money or human capacity available to build everyone who lacks improved sanitation a latrine. More importantly, programs that focus on building latrines consistently struggle to have impact or reach scale, and often distort the market in ways that undermine future sanitation development.

Sanitation as a Business tries to shift sanitation programming by changing the incentives and bringing the private sector into sanitation in new ways.

More Information

Video: Rwanda Environment Care

Video: CNBC Feature

Sanitation as a Business Overview

Press Release: Water For People Receives Funding for Sanitation as a Business

Grant Proposal Summary

Case Study: Business Opportunities

Case Study: The Value of Options

The key to Sanitation as a Business is to make ongoing sanitation services the goal, rather than the installation of the latrine. When sanitation services are profitable and businesses see everyone without a latrine as a potential customer, businesses—rather than development organizations—will expand latrine coverage to increase their profit margin. Thus many more people will have access to toilets than they would with typical programming.

In summer 2010, Water For People received a $5.6 million grant from the Bill & Melinda Gates Foundation representing a significant investment over four years in our Sanitation as a Business work, testing possible sustainable sanitation services in Africa, Asia, and Latin America. This groundbreaking program seeks to revolutionize the sanitation sector.

Proposal Summary

Project Dates: July 2010 to June 2014

Vision of success:

To develop methodologies for exploring whether local entrepreneurs can take advantage of existing sanitation opportunities in a way that leads to sanitation services being extended to poor people, dramatically increasing coverage without requiring more philanthropy.

1. Market research: market segmentation and research to scope the potential for on-site sanitation business models in a range of urban and peri-urban contexts.  This grant builds on existing efforts in Blantyre, Malawi; additional market research is planned in West Bengal, India; Rwanda; Uganda; Bolivia; and Peru.

• Outcomes:
• Better understanding of the potential market for non-piped sanitation business models in selected sanitation market segments in Water For People countries.
• Governments allow businesses to operate without unnecessary interference, create sanitation business-friendly policies, and develop city- or district-wide strategies for sanitation provision by businesses.
• Clear direction on the most promising business models to pursue in a variety of selected market segments.

2. Business model development: drawing on market research and through testing in different contexts in several countries, develop clear, replicable business models for sustainable sanitation service delivery that benefit the poor, which can be adopted by the private sector.

• Outcomes:
  • Identify business models that can overcome existing economic, technical and social constraints, and make a profit.
  • Scaled-up business operations have the potential to expand sanitation coverage to at least 500,000 people.
  • Clear examples of successful businesses developed, and services extended to the poor (new clients).
  • Political changes allow sanitation businesses to thrive in identified areas.
  • Organizations working on sanitation (governments, development organizations, donors) gain a better understanding of how to support and incorporate non-piped sanitation business models into practice.

3. Business support: strengthen managerial and technical capacity of sanitation businesses to improve their ability to service the market and be competitive.

• Outcomes:
• Replication of business approaches in the same sanitation market segment in different countries.
• Other organizations use the methodology we develop to stimulate Sanitation as a Business in poorly served areas.
• In-depth understanding of critical factors (demand, willingness to pay) which will inform the business model in a particular segment and the potential for scale-up.

4. Building an evidence base: documenting where businesses make a clear case to customers, and cataloging formal service providers (e.g. public utilities/local governments), regulators, local investors, development organizations and donors about the role for businesses to address sanitation needs in poor areas.

• Outcomes:
• Sharing of lessons learned to the foundation and our peer organizations.
• Through strengthened monitoring and evaluation and new information systems, obtain an in-depth understanding of critical factors for business success.

The project also includes funding to support organizational strengthening.