Thinking Outside the Pipeline : Venturing into Distributed Off-Grid Water Markets

Abstract

Traditionally, International Finance Corporation (IFC) engagement in the water sector has focused on large municipal infrastructure projects, where individual transactions are of sufficient scale to attract commercial project finance. Such projects, involving capital-intensive network infrastructure, can often be commercially attractive but have generally failed to provide access to poorer consumers living outside of formal urban centers. So what about the 'base of the pyramid' populations that those large utility systems fail to reach, rural communities, and sometimes poorer urban customers living within informal settlements and rapidly growing peri-urban areas? New business models are needed, adapted to the reality of water-supply necessities in the developing world, but with the economies of scale required to achieve financial sustainability. This smart lesson describes some early ventures by IFC to invest in and develop market opportunities in the challenging but potentially far-reaching area of distributed off-grid water supplies.