Innovation prizes in financing for water distribution

Lavola supported the Dreampipe Challenge II by sending its water and environment expert, Aytor Naranjo, to carry out the endline performance verification at two water utilities participating in the competition, namely, Nkana Water & Sewerage Company in Kitwe (Zambia) and Lilongwe Water Board in Malawi.

The Dreampipe II Prize Challenge is one of the challenges included within Ideas to Impact Programme.

Ideas to Impact is a programme launched by UK Department for International Development (DFID) in April 2014 to stimulate innovative solutions for challenges in climate change adaptation, energy access, and water and sanitation for the world’s poorest people or low-income households. The programme is an action-research programme: it not only aims to launch innovation prizes but also to test their efficiency and applicability to development challenges. The programme, managed by a consortium led by IMC Worldwide, is overseeing the development of a series of “innovation inducement prizes”, i.e. prizes that induce change through competition and that reward good performance ex post.

The Dreampipe II Prize aims to stimulate innovations that will help water utilities in developing countries mobilise funds for non-revenue water reduction activities. Non-revenue water (NRW) is the difference between the quantity of water entering the utility’s system and the quantity billed to customers, it is the water lost through technical and commercial processes. NRW is a significant issue for many water utilities in the developing world, translating into lost revenue, intermittent water supply and the premature need to seek additional water sources.

The objective of Dreampipe II is to encourage the development of workable and replicable ideas for how to expand the financing available for non-revenue-water (NRW) reduction activities in developing countries – beyond the conventional sources (mainly the development banks and agencies and governments). The key will be to find ways to reduce perceived risk for the new sources, especially (but not only) for commercial lenders. One way to help convince financiers of the viability of larger efforts is by first carrying out successful smaller demonstration projects. The Challenge does not seek to incentivise the development of new technical (e.g. engineering) solutions for reducing NRW, as it is assumed that these technical solutions are already well developed. The Dreampipe Challenge is open to water utilities from around the world.

Photo credit: A’Melody Lee / World Bank