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Social Water Entrepreneurship - Catalyzing Impact with Innovative Finance


Innovative collaboration with the private sector is needed to achieve SDG 6. This program – implemented by Aqua for All and co-financed by the Dutch government - enhances access to private capital for high impact small and medium sized enterprises (SME) in the field of water, sanitation and hygiene, facilitating sustainable water and sanitation services in Least Developed and Lower-Middle Income Countries through two key innovative finance instruments: Impact-Linked Financing to SMEs and Impact Finance first loss investments in structured funds investing in water SMEs.

Country/region Topic Period Budget
Global
Water
Employment & economic development
Water supply
SME development
Water sanitation
01.01.2024 - 31.08.2030
 CHF  8’920’000
The project in brief
Background Around 2 billion people still lack access to safely managed drinking water and 3.6 billion people have no access to safely managed sanitation. These gaps are primarily a consequence of short-comings in terms of governance, funding, distribution and sustainable management of water and sanitation infrastructure. Market-based and sustainable water and sanitation enterprises, as well as innovative finance solutions, are inevitable to significantly accelerate access to clean water and sanitation for all. The project will scale the successful work of the partner organization Aqua for All with an emphasis on innovative finance solutions.
Objectives Increased access to private capital for small and medium sized entreprises (SMEs) in the field of water, sanitation and hygiene (WASH) to provide equitable and sustainable WASH services at scale for end users in Least Developed Countries (LDCs) and Lower-Middle-Income countries (LMICs) towards achieving SDG 6.
Target groups
  • Final beneficiaries: Low-income households, in particular female headed, in LDCs and LMICs (Total 600’000 people, >50% women)
  • Intermediary beneficiaries: Social and Impact Enterprises serving the final beneficiaries
  • Secondary beneficiaries: impact investors in the water space
Medium-term outcomes
  1. WASH SMEs in LDCs and LMICs are enabled to create additional social impact and mobilise private capital through impact linked financing and technical assistance. (75’000 people, of which >50% are women, with newly provided or improved access to basic/safely managed drinking water and newly provided or improved access to basic/safely managed sanitation)
  2. Increased private financing is available to invest in WASH SMEs in LDCs and LMICs, fostering growth (525’000 people, of which >50% are women, with newly provided or improved access to basic/safely managed drinking water)
Results

Expected results:  

  • Enabling 7 WASH SMEs to achieve social and environmental impacts through time-limited payments (Social Impact Incentives)
  • Providing technical assistance to 4 WASH SMEs alongside ILF transactions
  • Conducting ILF trainings and research studies and fostering public engagement on ILF outcomes
  • Making catalytic investments in 2 funds and structuring a Results-Based Financing facility
  • Supporting funds and potential investees with technical assistance
  • Participating in international knowledge-sharing events and fostering public engagement on IF outcomes


Results from previous phases:   Over the last decade, SDC Water Section (formerly Global Programme Water) has implemented six projects limited in size and independent from each other with either the promotion of the private sector as the main focus or elements of it incorporated in the overall strategy of the project. An external review of the portfolio documented valuable lessons and developed strategic recommendations on how to further engage in water and sanitation entrepreneurship. With support from the Section E+E, the Water Section has evaluated multiple avenues to move forward towards a more comprehensive, systemic project in support of water entrepreneurship in LDCs and LMICs. Upon a thorough review of available options, a contribution to Aqua for All’s “Making Water Count 2” program, financed by the Dutch Government, was selected as the best way to push the needle in moving more (impact) capital towards water enterprises that provide much needed water and sanitation services to low-in-come households.


Directorate/federal office responsible SDC
Project partners Contract partner
International or foreign NGO
Private sector
  • Other international or foreign NGO North
  • Swiss Private Sector
  • Aqua for All, Dutch Private Foundation


Coordination with other projects and actors
  • Investment Credit Proposal in the pipeline: SDC (Section E+E) direct investment in Water Access Acceleration Fund (WA2F)
  • Portfolio of Impact-Linked Finance projects
  • Other Social Entrepreneurship Programs
  • Inclusive Green Growth (IGG), Directorate of the Netherlands Ministry of Foreign Affairs
Budget Current phase Swiss budget CHF    8’920’000 Swiss disbursement to date CHF    91’168 Total project since first phase Swiss budget CHF   120’000 Budget inclusive project partner CHF   18’570’000
Project phases Phase 1 01.01.2024 - 31.08.2030   (Current phase)
  • Sector according to the OECD Developement Assistance Commitiee categorisation WATER SUPPLY & SANITATION
    WATER SUPPLY & SANITATION
    INDUSTRY
    WATER SUPPLY & SANITATION
    INDUSTRY
    Sub-Sector according to the OECD Developement Assistance Commitiee categorisation
    Basic drinking water supply
    Basic sanitation
    Small and medium-sized enterprises (SME) development
    Basic sanitation
    Small and medium-sized enterprises (SME) development
    Aid Type Mandate without fiduciary fund
    Project and programme contribution
    Project number

    7F11294

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Last update 03.05.2023