Water Metering
IoT networks of sensors and meters, purchased by municipal water companies, to monitor the flow and/or quality of water through the network to identify leakages and aggregate water revenues, ultimately improving accessing to clean, fairly-priced water.
Potential Market Size (by 2022):
20-35 Billion USD; ~1.5 Billion Users
THE CHALLENGES
It is expensive to connect people to piped water leading to rent-seeking behavior.
In developing countries, very few water utilities cover their costs from customers. Governments rarely have (or allocate) sufficient financing to cover that gap, let alone build out more infrastructure. As a consequence, informal settlements are forced to rely on communal and alternative water providers (including water cartels) that often charge significantly more for water than the municipal utility.
Operating a water network requires good planning and management.
Poor management of water sources by municipal water utilities makes it even harder to deliver water. Many water utilities in developing countries do not know where their water pipes are, let alone where they are losing water or it is being stolen. In Nairobi, non-water revenue losses are 40%; some counties lose more than 80% of water.
Supply is stressed.
There is enough freshwater for everyone, but in reality many cities are not situated close to sufficient water sources, or it has been polluted. Half of the global population lives in countries where water tables are rapidly falling.
The market for smart infrastructure and utilities is rapidly evolving and ever expanding. Significant benefits across water, energy and sanitation for low resource communities in large cities exist. The market opportunity for smart water meters has been presented given its B2C appeal, but the opportunity is much more broad at both a household and municipal level.
Source: “The Water Crisis” water.org accessed 2018, “A Performance Review of Kenya’s Water Services Sector” Kenya Water Services Regulatory Board 2016
THE NEEDS
Providing less than that is currently good business for a few. In Nairobi, people constantly point out that ‘water is life’. That’s why big profits can be made by ‘water cartels’ who either control shared water points selling it at a markup, or illegally tap and stockpile water and wait for shortages to resell it. The result is that people have to travel far or pay more to get small amounts of water.
"Water is life but the poor can’t access it. To solve it you need to stop corruption."
Janet, 18, Nairobi
"If everyone had water there would be no motivation to tap and people could not increase the price for it when there are shortages."
Tabitha, 16, Nairobi
When water shortages occur and prices soar it is usually women and girls who must travel far to get water at the best price possible. This often means searching during dangerous hours to avoid long queues, entering neighborhoods they’re not familiar with, and being away from home for long amounts of time. Mothers with very young children often bear the biggest burden because they use more water on a daily basis to, for example, clean diapers. Together women and girls waste 226 million hours every day finding water
"Women go during the night to avoid water lines when there are shortages. They are raped and killed in the search for water. Fixing it would fix lots of issues."
Mercy, 43, Nairobi
"With issues of water, girls suffer a lot. They fetch water and get raped."
Frida, 33, Nairobi
It’s extremely hard for people to verify the quality and safety of water: it all looks the same. This is why low income people often choose the most affordable option, particularly if it is close by (fetching water on a daily basis is already a major effort). Diarrhoea is the third largest cause of child death; every 90 seconds a child dies from a water-related disease
"To fix the water issue I would have a personal robot go around find clean water, test it, and bring it back."
Charles, 16, Nairobi
"People get sick from the water but what can you do about it if you have no choice?"
Irene, 18, Nairobi
GLOBAL MARKET POTENTIAL
Potential Revenue
in Billions (USD)
addressable market
Potential Users
in Millions
people
Assumptions
Based on Nairobi market:
1 smart meter per active piped water connection
8-10 year average life of meter
30-50% overhead for placement, maintenance and management of system
60-80 USD per meter
Extrapolated to global, taking country populations and adjusting for:
Urban population
GDP per capita (PPP)
Urban access to improved water sources
Extrapolated to 5 years time using projected figures for the year 2022
5 yrs time with even more access for BoP
Increased uptake to 75-85% of required connections
Reduction of 10% in prices
Source: Dalberg analysis of World Bank data (urban population, urban access to improved water sources, GDP per capita - PPP), Kenyan Water Services Regulatory Board (active connections), IEEE (overhead costs), Innovator websites and interviews (price data)
WHEN IT WORKS
Create savings and efficiencies for water providers to expand their reach, consistency and/or affordability.
Are well- integrated with payment system (e.g. through mobile payments)
Are installed with the involvement of the community (reducing risk of sabotage and increasing user adoption)
Are suitable for different types of connection points (including in-home, and shared connections)
Incorporate sensors which measure quality as well as flow (and make this data accessible and understandable for customers to track their consumption)
INNOVATOR STORY
Upande
Upande is a social enterprise founded in 2009 by Jody Eijsenga and Mark De Blois.
Upande develops customized systems for businesses, government, and NGOs that capture, store, analyze, manage, and present location-tagged data.
They recently partnered with BRCK and Kericho Water and Sanitation Company (KEWASCO) to map existing water infrastructure and implement real-time monitoring systems, using smart meters with alert modules and low-cost
solar- powered data loggers.
As a result, Upande was able to identify non-revenue water losses for KEWASCO, who estimate they were previously losing up to 70% of their water to leakage and theft.
Upande is looking to expand beyond Kericho as well as developing additional IoT offerings in Kenya.
Founded: 2009
Based in: Nairobi
Employees: 20+
Revenue: Not disclosed
Investment Stage: Seed
Business Model: Combined B2B and B2G
NAIROBI'S MARKET POTENTIAL
The Customers
End User:
Municipal water utilities (public or private) and customers
Who pays?
Municipal water utility (public or private) is the direct payer, likely through a contract that includes installation and ongoing maintenance. The indirect payer would likely either be the customer or government (through some form of subsidy)
Investment to Date
undisclosed
The Players
(Excl. municipal water utilities)
The Nairobi Market
Urban Addressable Market
Calculated based on current number of active piped water connections in Nairobi
~0.5 Million Connections
Directional Revenue Potential
Based on total addressable market if sensors are placed on every connection in Nairobi at cost of 60-80 USD
USD 4-8 Million
USER STORY
Rose
Nairobi
Rose lives in Korogocho, a large slum in Nairobi, and is a single mother to six daughters. In her community almost all of the available water supplies come from illegally tapped sources and suffer from improper infrastructure, installment, and maintenance. However, about a year ago a water meter was installed near Rose’s home that delivers clean, affordable, and reliable water.
Rose uses the metered water pump for all of her family’s daily needs. An electronic key loaded with credit via Mpesa allows her to fill her cans. She loves that this solution exists in her community because “it is more affordable, reliable, and safe compared to the other options.”
Rose encourages people to use the pump but says many often resist because they can’t see the difference in quality. “It’s extremely hard to know if the water is clean and safe, if people could more easily understand the danger that would be better.”
Rose has seen many different water borne illnesses, like cholera, devastate members of her community and she prays more water sources like this tap will be installed so the risk of disease is greatly reduced. “Water is life, but it has to be clean water! We need that so badly here.”
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“I use this because it’s cheaper and cleaner than the other water sources here. It’s always the same price even when there are water shortages elsewhere.”
Rose says other barriers exist to people adopting the new water source, for example, people are generally weary of new offerings. “Here people are very hesitant to trust new things. They should have done more sensitizing to the community.” She says price and convenience must rival or outweigh their current options to get them to switch. “I understand the value [of the water meter] but many don’t get it. They need something to want to make them try it and stick with it.”
When water shortages happen in the community more people try the new pump because it’s consistently priced. Lastly, Rose talked about people’s social ties to their existing water suppliers and how this can often influence their apathy or distrust of the new resource. “Water is a livelihood for many people so they fight anything that compromises it. Anyone who wants to bring something new here must work with the people who are already in the industry. That’s the only way it will succeed.”
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UNLOCKING GROWTH
To catalyze the market, global tech players could use their strengths to...
Support innovations for emerging markets.
Most smart meters have been developed for developed country markets. Emerging market penetration would be spurred forward by innovations which are designed for local water systems, increase durability and lower per-unit cost.
Advocate for governments to help finance smart-metering.
Installing smart meters in a system is a large upfront cost for water utilities. Most public and private municipal water utilities in emerging markets do not have access to upfront capital as their revenues are driven by ongoing customer payments.
Support water utilities to turn savings into pro-poor investments.
Customers will only support metered sources (over alternatives) if they feel the benefits of smart-metering. This means reduced prices, increased reliability, or expansions in the network.
Provide patient capital for innovators.
Local innovators who work with municipal water companies often face capital shortages during the installation of the system, particularly if payments from the utility are delayed or are structured as an ongoing contract.
To unlock demand, local innovators need to develop products that...
Reduce the risk of sabotage. Innovators should consider how their meters can be exploited by water cartels and others who are interested in bypassing metering. Local innovators can also work with the water utility to work with communities and informal suppliers to reduce the risk of sabotage. Citizens in developing countries are often skeptical of change because they’ve seen and experienced so much corruption and exploitation. Time spent in local communities before, during, and after roll out can be a powerful way to address concerns.
Develop meters that can measure water quantity AND quality. Report it back to users whenever possible.
If metered water points are unable to be the most affordable option in communities, competing on quality may be necessary.
Provide accurate real-time data
back to water utilities to identify consistency and sort out problems , like water shortages, when they arise.
Identify where additional infrastructure is needed. Metered water points located in communities that face severe access and quality issues are likely to see rapid user adoption.
To realize the potential of every child, UNICEF could...
Help strengthen the evidence for smart meters in resource limited environments.
Most smart meter systems have been developed and installed in developed countries. UNICEF could work with innovators, utilities, and Government on smart metering pilots.
Advise on distribution models.
Different urban contexts require different types of water distribution models (household, community etc.) and UNICEF’s network of experts can help Governments determine the best models.
Champion smart-metering with decision-makers.
UNICEF works in over 100 countries worldwide to improve water and sanitation services and, has the opportunity to advise Governments on the most cost-effective ways to improve their water systems.
Convene the people and players on the ground.
For water metering to take off, community consultation and involvement will be vital.
For water supply, priority countries include:
India, China, Nigeria, Ehiopia, DRC, Indonesia, Tanzania, Uganda, Kenya, Pakistan.
