Case Project: Safe Water Network Mastering the Model at Dzemeni

Question 1

Dzemeni pronunciation

Answer 1

JEM-uh-nee

Question 2

2 questions he and Hew Crooks considered

Answer 2

1) How can we optimally expand the system to increase profitability at the Dzemeni site?

2) And, should we move ahead with plans to expand the Dzemeni site into a regional “micro-utility” to
provide safe water to the people living in nearby Tongor?

Question 3

Who founded Safe Water Network

Answer 3

Founded by American actor and philanthropist Paul Newman and a group of business and
civic leaders

Question 4

What does Safe Water sought to do?

Answer 4

Safe Water Network sought to “develop innovative solutions that provide safe,
affordable water to those in need

Question 5

Safe waters core values

Answer 5

Located in Figure 1

Access: Making water available and affordable for all
Empowerment: Providing communities the confidence and competency for self-sufficiency
Impact: Realizing lasting health, social, and economic benefits
Measurement: Documenting success and failure
Lessons Learned: Adopting best practice
Environment: Safeguarding water resources
Risk Taking: Investing in new approaches
Open Source: Sharing our findings with the water sector at large

Question 6

Safe Water Network’s partner list

Answer 6

The organization counts the Conrad N. Hilton Foundation, Kosmos Energy, the Merck Company
Foundation, Newman’s Own Foundation, PepsiCo Foundation, Navajbai Ratan Tata Trust, and
Starr International Foundation among its funders, and it has partnered with the International
Finance Corporation (IFC), IBM, and the Johns Hopkins Bloomberg School of Public Health
(JHBSPH)

Question 7

Safe Water Network currently

operates in two countries: ____ and _____

Answer 7

India and Ghana

Question 8

When did Safe Water Network start?

Answer 8

The organization began in 2008 with the launch of

a rainwater harvesting program in Rajasthan, India

Question 9

WHG

Answer 9

WaterHealth Ghana

Question 10

Economic conditions for Ghana

Answer 10

Per capita income averages $1,230 annually for the country as a whole, 39 percent of rural Ghanaians earn less than $456 per year, or $1.25 per day,
the global standard for extreme poverty

Question 11

What percentage of Ghanaians do not have access to clean drinking water

Answer 11

Between 40 and 45 percent of rural

Ghanaians, roughly 4.6 million people, lack consistent access to clean water

Question 12

What happens when you drink back water?

Answer 12

Water-borne diseases such as diarrhea,
Buruli ulcer, and intestinal worms run rampant among the population, with 70 percent of diseases
in the country traceable to the lack of safe water.

Question 13

The Dzemeni safe water site made sense to Safe Water Network for several reasons

Answer 13

First, Dzemeni had no municipal water source and no other commercial water vendors existed; the
convenience of Lake Volta effectively eliminated competition
-Since it first appeared, residents
have drawn water out of the lake, in spite of its contaminated state

Second, Safe Water Network research indicated that more than 50 percent of residents, while poor, could reasonably afford to purchase clean water.

Third, Safe Water Network was able to identify community leaders who would create excitement about safe water stations and encourage educational efforts that stressed the importance of clean water.

Finally, nearby Tongor, which was also a combination
of a number of villages, provided another potential market if the safe water station could profitably
scale its operation

Question 14

Delays and problems to the Dzemeni project

Answer 14

1) Locating, screening, and
selecting sites took longer than expected

2) Negotiations with community leaders at selected
sites took time, and the sites required different water purification systems to address specific
challenges.

3) The Dzemeni center opened 18 months behind schedule, and capital costs for construction of the site exceeded its budget by 80 percent
4) Operating performance fell short of expectations; sales volumes indicated penetration rates (the percent of the population using the safe water station) around 20 percent instead of the 75 percent target, and the facilities failed to even cover operating costs

Question 15

The Water Users—Customers

Answer 15

Although the need for water is universal to humans, the demand for safe water is dependent on
a variety of factors, including:
1) price sensitivity,
2) convenience,
3) seasonal variation in demand,
4) consumer knowledge about the benefits of clean water

Question 16

1) Price Sensitivity

Answer 16

Before the management transition to Safe Water Network began, in order to stem operating
losses, WHG had doubled the price of water from 0.05 Ghana cedis (GHS) or 5 pesewas (p)—
about $0.035—to 0.10 GHS or $0.07 for 20 liters (20 L).

Overall demand dropped 30 percent immediately after the price increase, and the reduction in demand from the poorest Ghanaians, those Safe Water Network most wanted to reach, likely exceeded that figure

Incomes for the 40 percent living below the $1.25 per day poverty line averaged $1.08 per day, or $5.40 for a family of five.12 These families would have to spend about 2 percent of their income on commercial water, and studies from the Johns Hopkins group indicated that “cost did not seem to be a barrier to use.”

Question 17

2) The Convenience Factor

Answer 17

20 L container weighs nearly 45 pounds, and not only did the spending of hard-earned cash for the water dampen demand but so did the physical energy required to transport water from the station to the home

Safe Water Network mapped water purchasers
and found usage to be highly dependent on distance.

Dzemeni exhibited a similar pattern, with use dropping substantially for customers who lived further than 300m from the site

Safe Water Network decided to pipe water to remote kiosks (sales stations) some 400m away from the main station to increase demand and consumption. The remote kiosks almost doubled sales at Dzemeni

The increased water sales, combined with the low incremental operating costs of the remote kiosks, significantly improved the economics of the safe water
stations in these sites.

Total system cost per liter declined by 33 percent in Dzemeni after the remote kiosks were installed.

Question 18

3) Seasonality

Answer 18

As with rural populations around the world, Ghanaians have relied on rainwater harvesting to provide fresh, potable water during the rainy seasons, which in southern Ghana extend from April to July and from September to November.

The annual rainfall average in Ghana is more than 80 inches per year, a foot more rain than in Mobile, Alabama, the rainiest location in the continental United States.

The demand for commercial water could potentially vary 50 to 65 percent between the dry and rainy seasons, depending on the intensity of the rainy season.

Question 19

3) Seasonality

Answer 19

As with rural populations around the world, Ghanaians have relied on rainwater harvesting to provide fresh, potable water during the rainy seasons, which in southern Ghana extend from April to July and from September to November.

The annual rainfall average in Ghana is more than 80 inches per year, a foot more rain than in Mobile, Alabama, the rainiest location in the continental United States.

The demand for commercial water could potentially vary 50 to 65 percent between the dry and rainy seasons, depending on the intensity of the rainy season.

Safe Water Network chose to install enough capacity to cover the dry seasons, and believed it could
stimulate enough demand for commercial water during the rainy season

Question 20

4) Education and Recontamination

Answer 20

Many people in developing countries do not understand the need for consistent clean water to
combat water-borne diseases, and this lack of understanding leads to mishandling and recontamination of clean water by consumers.

Safe Water Network did not rely solely on the chiefs, and the organization recruited other influential volunteers, including local women, teachers, and even primary school children (peer educators) to teach residents about the need for, and benefits of, clean water.

The open or multiple-use water containers that people used, and lack of hygienic practices, often resulted in recontamination of the treated water.

Consumers dipped their hands into their clean water and introduced contaminants to the water in the container, and those contaminants remained in the container to pollute the next batch of clean water purchased.

To solve this problem, Safe Water Network introduced narrow-mouthed containers because the
smaller opening kept hands out

Two thousand narrow-mouthed containers were sold to Dzemeni residents along with a coupon that provided users with vouchers good for 30 containers of free water if they purchased a container for GHS 3 ($2.10)

The result of their efforts was a 151 percent increase in
overall demand from late 2010 to late 2011.

Question 21

The Safe Water Network Business Model

Answer 21

Safe Water Network envisioned solving the challenge of potable water by creating financially sustainable
and community-welcoming safe water facilities.

The organization believed that if it could accomplish these goals, a third goal could be reached: finding local owners to buy and run the safe water stations

Taken together, these three overarching goals constituted the Safe Water Network objective.

Question 22

Financial Sustainability

Answer 22

Rain water is pure; the evaporation process removes inorganic pollutants—chemicals, sediments,
residues—as well as bacteria or other organic contaminants

The cost of equipment identified as suitable for community-sized systems in Ghana ranges from $23,000 (32,600 GHS) to $100,000 (142,000 GHS), not including land, building, and permitting costs

Consumables such as sand, gravel, chemicals, membranes, operator and staff salaries, and maintenance expenses constitute operating costs.

Question 23

Carbon filter with ultraviolet light treatment (CUV).

Answer 23

These systems employ sand, carbon, and 10- and 1-micron polypropylene wound cartridge filters in addition to ultraviolet (UV) treatment systems

Water passes through a carbon filter and a series of other filters to remove chlorine, sediment, and other inorganic compounds. Exposure to UV light alters organic DNA and kills bacteria, viruses, yeast, mold
spores, fungi, algae, and fecal coliform

CUV systems cost $50,000–$90,000 to purchase and
install

Question 24

Limited mechanization systems (LMS)

Answer 24

LMS involves installing a submersible pump in a
newly drilled or existing borehole (well), pumping water to an elevated water storage tank, and
distributing the water via gravity to standpipes

This system does not provide water filtration;
it only provides more water from existing boreholes

Safe Water Network’s budgeted LMS costs
are $23,000 for 1,000 people, $32,500 for 2,000 people, or $48,000 for 5,000 people. The use
of solar power would reduce operating costs but increase capital outlay by $5,000–$6,000

Question 25

Modular slow sand filtration (MSSF)

Answer 25

Slow sand filtration (SSF) has been in use since the early nineteenth century; however, in the last few years, the design and construction of modular systems
has made MSSF an attractive method for smaller communities in the developing world.

The system consists of twin modular plastic tanks for use as the main filter, supported with plastic raw and treated water storage tanks. The treated water is distributed by gravity, pumping, or a combination of the two, depending on the size of the system and
the location and distribution of a remote kiosk.

MSSF systems run $43,000 for 1,000 people,
$47,000 for 2,000 people, and $69,500 for 5,000 people

Question 26

Ultra-filtration (UF)

Answer 26

UF utilizes a range of polymeric-based semipermeable membranes to filter particulates of different sizes. UF provides a filtering solution for communities with surface water sources but variable levels of turbidity or contamination

UF systems range between $50,000 and $100,000; capacity is not an issue (a UF station could filter 2,000 L per hour), but costs vary based on the filtration method used

Question 27

Access to electrical power

Answer 27

Access to the electrical grid represents one challenge of working in rural Ghana, because the
provision of safe water must depend on the reliability of another system

A major benefit of solar power is the possibility of creating remote charging stations for appliances, cellphones, and batteries. If the solar recharging sites generate 100 to 200 GHS ($70–$140) per month, it would contribute to the overall profitability of the safe water station

Question 28

Welcoming Communities

Answer 28

Safe Water Network hoped to locate in communities with greater than 4,000 people or 800 families within
reasonable proximity to the station to provide adequate demand for clean water

Question 29

Local Ownership

Answer 29

The exit strategy for a safe water intervention in a community calls for local, community-based groups or individuals to take control of the station after capital costs have been recouped by Safe Water Network

Pros to this: Local ownership could dramatically improve adoption rates, assist in consumer
education, and provide employment and income for a community

Question 30

Conclusion

Answer 30

The team had created demand for safe water, the site was now operationally viable, and the Ghana and New York staffs both saw in Dzemeni the seeds of a financially sustainable solution to the clean water problem