Dispensers for Safe Water is a proven, innovative and low-cost method to deliver safe water to millions of people. Think behavioral economics meets innovative business model meets cost-effective health intervention. Dispensers for Safe Water increases rates of household chlorination. This ‘water as a service’ includes reliable hardware, community education, and an ongoing supply chain. Dispensers generate revenue through carbon credits, using a cutting edge clean tech financing mechanism.
Dispensers for Safe Water grew out of a research study that tested several ideas to address the problem of diarrheal disease. Researchers at Harvard University and the University of California, Berkeley -- in collaboration with Innovations for Poverty Action (IPA) -- identified chlorine dispensers as the most effective, low-cost intervention. The researchers found that 50-61% of people adopted the chlorine dispenser system, which was a six-fold increase over the control group.
Inspired by the sustained adoption of this low-cost intervention, a program was developed to scale up chlorine dispensers as a service. Between 2009 and 2011, various operational models for service delivery were tested, and additional research was conducted on how best to engage local promoters to boost adoption. The program installed 2,500 dispensers in Kenya during this period, serving approximately half a million people. Having refined our model in Kenya, we successfully replicated and scaled the program in Uganda and Malawi, demonstrating successful implementation of the program at scale.
Today, we have over 26,000 dispensers currently installed across Kenya, Uganda and Malawi serving 4.5 million people with an average program wide adoption rate of 60%. Specifically, we have over 17,000 dispensers serving over 2.2 million people in Kenya, over 5,000 dispensers serving 1.6 million people in Uganda and over 3,000 dispensers serving around 600,000 people in Malawi. Such expansion has proved the cost effectiveness of our model at scale, which is currently at $1.24 per person per year.
We have already developed and proved our capacity to create financial returns from the program by successfully validating, monitoring, auditing, issuing, and selling carbon credits for dispensers with our carbon development partner, South Pole Group. Evidence Action recovers part of its operating costs as it earns carbon revenue, since people with access to a chlorine dispenser are able to treat their water instead of boiling it by burning firewood, resulting in lower greenhouse gas emissions. The program has also secured a futures contract worth $13 million for purchase of credits generated from 2017-2021. Our buyers have paid a higher price for these credits, recognizing twin benefits of reducing carbon emissions as well as the provision of safe rural water services.At this juncture, we seek funding partners to invest in our current projects as well as our growth plan. Investing in our current projects will allow us to continue serving 4.5 million people at less than $1.24 per person per year and will help us continue on a path to sustainability. On the other hand, in order to continue to grow the program, we need to invest in lowering costs across the chlorine supply chain, expand our capacity to advocate to governments for support of chlorine dispensers, and grow our strategic partnerships to support global expansion. Investing in this growth plan will help us further refine our business model and grow our program effectively.
How does your innovation work?
Chlorine dispensers take on the safe drinking water challenge. We treat water with chlorine, a proven, low-cost water treatment solution. We focus on sustainable service delivery, not a one-time hardware installation. We measure success by actual use of chlorine, and by leveraging evidence from behavioral economics to achieve high rates of adoption. Our unique approach on economies of scale keeps our unit costs down. Because households don’t need fires to boil their water, we are one of the biggest producers of carbon credits in East Africa.
Key features of our business model are:
Sturdy, Easy to Use Hardware: The dispenser is installed with community input directly at the water source. It is fitted with a valve that consistently delivers a precise 3 ml dose of chlorine. We fill the tank with sodium hypochlorite (chlorine) solution and install at the water source in a protective casing. Community members go to their water source, place their bucket or jerrican under the dispenser, turn the valve to dispense the correct amount of chlorine, and then fill the bucket with water. The chlorine disinfects the water as they are walking home, and by the time they arrive, much of the chlorine smell has dissipated and they are left with clean, safe water that stays safe for 2-3 days.
Community Education: Our chlorine dispenser system extends beyond the dispenser hardware to include community education and a regular supply of chlorine refills. We educate the community about the dangers of contaminated water and how to use the dispenser to treat their water. A community member is elected to be the dispenser ‘promoter’, who encourages use of the dispenser, reports any problems, and refills the dispenser with chlorine.
Operations & Maintenance: We operate a supply chain that fills the crucial “last mile” gap in service delivery, bringing chlorine refills to the local promoter at each dispenser every two to three months. We operate hotlines for promoters to contact us about any issues, and repair dispenser hardware as needed. Dedicated field officers regularly monitor our service delivery operations and adoption rates, which we use to adjust our operations as necessary, hold staff accountable for service delivery targets, and track our impact.
Cost Recovery Mechanisms: We use unique financing mechanisms to recover a part of our costs, which helps ensure that target communities have access to chlorine to make their water safe in the home for free. These mechanisms include:
Carbon Revenues: Like other water and energy projects, Dispensers are allowed to generate carbon credits by providing a “clean development pathway”. Under international rules, the project generates carbon credits by avoiding the greenhouse gas emissions anticipated as poorer countries develop. These emissions are averted as people leapfrog a carbon intensive activity like water boiling (which is expected to increase as countries become wealthier) and go to a cleaner technology like dispensers. We have worked with carbon experts and are now certified to generate credits in all three countries where we operate. We use the revenue earned from these carbon sales to reinvest in the program.
Government Cost Sharing: In Malawi, we have successfully codified cost-sharing arrangements with the government. The Ministry of Health’s community health workers conduct the community education and last mile chlorine delivery. The government has also committed to financially support the procurement of chlorine. Such partnerships lower operational costs and signal government buy-in and raise the likelihood of long-term sustainability.
Other Revenue Streams: We see great promise in promoters as marketers for a range of products. Compensation for this, or revenue from sales of products with social value, would lower operational costs.
Replication Potential: Our model has been replicated in Uganda and Malawi at scale. We have received interest from organizations operating in other countries, from Senegal to Ethiopia, to India and Pakistan. We are focusing resources this year in developing a more robust partnership model. Exploring alternative and complementary revenue streams is critical for replication. Over 325 million Africans are potential customers for dispensers programs.
What Evidence do you have that your Innovation works?
Water treatment by the household can significantly improve water quality and health, and several appropriate technologies exist such as filters, dilute chlorine solution and solar disinfection. However, for all of these technologies, adoption remains low.
Randomized controlled trials have suggested several behavioral barriers to sustained high adoption. Inconvenience of acquiring these technologies may be one such barrier. In one study, for example, mothers of young children were given coupons that could be exchanged for free chlorine at stores. Adoption was 60 percent initially, but dropped to only 20 percent by six months suggesting that even the small inconvenience of going to a store and redeeming a coupon could be a barrier. When chlorine was distributed directly to homes, take-up rates remained high even 6 months after distribution, however this was a costly solution.
A study of spring protection also suggests that convenience is an important determinant of demand for safer water; it shows that people will walk only 3.5 additional minutes, on average, to collect water from a protected versus an unprotected spring, despite substantial health gains from the cleaner source.
Charging for products typically dramatically reduces adoption, both for water treatment as well as for other preventative health technologies, as shown by several randomized controlled trials performed in the last 10 years. More qualitative and anecdotal results suggest that remembering to treat water regularly, learning how to use chlorine with appropriate dosage and dislike of the taste of chlorine (potentially due to overdosing) may also be barriers.
Randomized controlled trials suggest that education and marketing messages may be able to increase adoption incrementally, but have not yet been shown to have large or continued effects. Making health information salient and relying on local promoters to reinforce messages about health and water treatment may hold more promise.
The source-based chlorine dispenser solution makes drinking water treatment convenient, salient, and public. Using the dispenser is convenient because the dispenser valve delivers an accurate dose of chlorine to treat a standard transport container of water and the required agitation and wait time for chlorine treated water are at least partially accomplished automatically during the walk home from the source. Accurate dosing also reduces the likelihood that treated water will have a chemical after-taste. The dispenser hardware provides a frequent visual reminder to households to treat their water at the moment when it is most salient – at water collection. This visual reminder combined with chlorination encourages habit formation. Emerging evidence also suggests that social effects may be important in adoption and the public nature of the dispenser system maximizes the potential for learning, habit formation, and social norm effects.
Randomized controlled trials have shown that the dispenser system dramatically increased water treatment compared to the traditional retail model. In pilot programs during unannounced visits 30 months after dispenser installation (and two years after payments to the local promoter terminated), 55-60% of household drinking water samples in these communities tested positive for chlorine. These test results represent a conservative estimate for the adoption of dispensers, since self-reports of use were closer to 75 percent. In comparison, only 5-10% of samples with access to the traditional retail model of chlorine distribution tested positive. Bacteriological testing showed that those reporting chlorine use had less contaminated water than those who said they had not used chlorine. Evidence Action has maintained 60% adoption rate on average across Kenya, Uganda and Malawi (as measured by the presence of residual chlorine in stored household drinking water) at scale.
Do you have current users or testers?
We currently serve nearly 4.5 million beneficiaries in rural households across Kenya, Uganda and Malawi. Our beneficiaries are people who are not serviced by centrally-piped water systems and are thus vulnerable to diarrheal diseases caused by contaminated water. Globally, the potential user base could be more than 1 billion people. Our demographics include poor rural households in Kenya, Malawi and Uganda, with an average of 5.16 persons per household, including 2.82 females, 2.53 males and 0.81 children under five. Our beneficiaries also have an average of 1 mobile phone 0.75 radios,1 sheep and 1.31 cattle per household.
What is your strategy for expanding use of your innovation?
Our strategy for expansion involves fostering partnerships with corporates, users and governments, developing our technical assistance model and increasing our policy capacity. To this end, we plan to further scale dispensers by executing the following activities:
Diversifying Revenue Streams: Given the unpredictability of the carbon markets, we would like to grow dispensers sustainably by augmenting our revenue base to include corporations, partners, users and government. A diverse revenue base would ensure speedier cost recovery and further expansion of dispensers. Consequently, we will be making investments over the course of 2016 to ascertain the size and viability of three main additional revenue streams: revenue from users, revenue from governments, and revenue from corporates.
Users: A randomized controlled trial and research from JPAL concluded that asking very low income households to pay for preventative health measures was a barrier to uptake. We have scaled the program following this approach. We understand that there are studies indicating this may not work, but one option we will investigate will be for richer users to cross-subsidize poorer users over time.
Government: Through our contacts at the UN, we have learned that Kenya is struggling to curtail cholera, with more than 12,500 cases currently reported and over 28 counties affected. We suspect that governments invest more in cholera response than in cholera prevention. For example, the Kenyan government allocated 500 million shillings to fight cholera in 2015. One of our strategies in 2016 is to share the evidence of chlorine dispensers keeping cholera at bay in our areas of operation. One tactic we are currently employing is to combine our program data with government data on the prevalence of cholera in order to show the cost effectiveness of chlorine dispensers as a preventative measure compared to existing cholera fighting measures. However, our immediate task is to raise funds for a three-year program to invest in a policy team in order to better engage the government in an effective manner in all three countries of operation.
Corporations: We have built a very strong program with a number of assets that we could commercialize to generate revenue into the program. For instance, we visit over 3,000 households on a monthly basis who trust us and invite us into their homes as we take water quality samples and a few simple survey questions on our mobile phones. We have the ability to update the survey remotely on a daily basis, so adding a few extra market research questions for a corporation would be easy. This will be attractive to market research firms and their corporate clients who target the hard to reach, ‘deep rural’ consumers. Other such assets that could be commercialized include our extensive chlorine rural distribution network via our many motorbike circuit riders who visit our promoters approximately every 45 days, our regular community meetings, plus our thousands of dispensers, villager promoter t-shirts, motorbikes, and chlorine jerry cans which could be branded for advertising purposes. We are testing out this strategy throughout 2016 to investigate a stronger corporate engagement team in the future.
New Country Expansion: We aim to scale at least one technical assistance model in a new country in 2016. We are closing an agreement with the Millennium Water Alliance to pilot chlorine dispensers in Ethiopia through a technical assistance model. If successful, this grant will help us scale and test this model, which could result in substantial cost reductions.
Our next steps are to continue engaging with government, understand budget cycles, get in kind and financial contribution to program while reducing our costs and bringing in more revenues. Since there has been a downturn in the carbon market, we can no longer rely on carbon finance as our sole stream of revenue. We are therefore looking to test new sources of revenue such as charging fees and commercializing program assets. On the commercialization side, we can offer branding opportunities for corporations or NGOs through our 18,000 dispenser network in Kenya alone, as well as opportunities in market research, last-mile product distribution, and messaging platforms.
Additionally, we intend to engage more heavily with governments going forward. So far, we have managed to leverage the existing government health surveillance network in Malawi with a commitment to procure chlorine for our dispensers. We expect this partnership to continue in the future, and we will continue to engage the government of Malawi to increase this support. As for Kenya and Uganda, a stronger engagement with the government is on the agenda for 2016 and beyond as we seek to commit budgetary allocation to augment our carbon revenues. This intervention is perhaps the cheapest way to make water clean at the source and clean at home in rural areas.
Finally, as we look at scale in an international context, we plan to develop our partnership strategy. This would consider all options, from a franchise model to a consulting model, whereby we would transfer our knowledge and expertise to implementing partners such as large international NGOs working in water, while maintaining the rigor of the approach through licensing or some other means.