We are pleased to announce the winners for Dreampipe Challenge Stage One!
Stage One of the Dreampipe prize competition was designed to explore the potential range of solutions, involving financing, to the vexing problem of non-revenue water (NRW) in developing countries’ water utilities. (For background, see background document).
The three winning entries of Stage One – as determined by Dreampipe’s panel of judges – exemplify the wide range of possible solutions. They also lend support to the idea that the problems of water utilities in developing countries are systemic in nature, and no solution addressing just one piece of the puzzle will be adequate by itself. Certainly no “magic bullet” emerged capable of solving the problem of financing NRW-reduction programmes in all water utilities.
Each of the winning entries approaches the issues from a different angle. Yet they have similarities. All three winning concepts make use of service providers separate from the water utilities and who are incentivised by bearing performance risk. All three winning ideas bring in additional financing in part by finding ways to reduce credit risk. And all three solutions highlight the key role to be played by an entity of some kind that can serve as facilitator or catalyst; it is not enough for a water utility simply to be willing and ready.
The winning entries also suggest that the need for subsidies for the highest-priority (and quick payback) interventions to reduce NRW is limited. These interventions can easily pay for themselves in terms of increased revenue or reduced costs. But subsidies or grants can be useful and may be needed to fund preparatory work and, as first-loss capital, to enhance the creditworthiness of deals so as to encourage commercial source of finance to participate.
Without further ado, here are the winners of Dreampipe Challenge Stage One (in alphabetical order):
— Concessional debt fund: a specialised, institutionally separate debt-financing facility intended for a wide range of NRW-reduction investments.
— Financing from industrial company: financing and support from an industrial company that shares a scarce water resource with a municipality.
— Mobile technology for meter reading and billing: a mobile-based system – financed in large part by the service provider – that improves metering and billing in water utilities, thus reducing commercial losses.