Grundfos Lifelink Case Study

Are people in the developing world willing and able to pay for their water? Can water consumption in rural water projects cover expenses for professional service and maintenance? Will communities start income generating activities when they get reliable access to water?

These were some of the questions the Grundfos Lifelink team posed when establishing the first demonstration projects in Kenya in 2009 to test the ground-breaking technology and concept of Grundfos Lifelink. Since then, 40 demonstration projects have been implemented, providing access to water for nearly 100,000 people. The answer to our questions is yes – if the the water project is carried out correctly.

 

The Situation

For most countries in Sub-Saharan Africa, it still remains a major challenge to provide sustainable access to safe water for the entire population. In Kenya alone, 16 million people do not have access to this basic human right. In contrast, more people have access to mobile communication than safe water.

For decades, a lot of work has been done to establish water supply projects, yet it still remains a major challenge to build long-term sustainability into many of these initiatives. Countless evaluations point to two main factors:

  • Lack of funds for operation and maintenance
  • Lack of expertise and spare parts for service and maintenance.

These are the missing links to long-term sustainability of water supply projects.

 

The Solution

The driving force of Grundfos Lifelink is a commitment to develop and provide sustainable water solutions for people in the developing world. Building on 60 years of experience in advanced pump solutions and linking to the strength of mobile connectivity, the engineers of Grundfos developed the automatic water dispenser with an integrated system for revenue collection and an online water management platform for full transparency and remote management. Combined with well proven solar pumps from Grundfos and a dedicated professional service team on the ground, the Grundfos Lifelink solution was ready to prove the case of long-term sustainability.

In close collaboration with a range of partners across sectors, including the government of Kenya, local communities, water service providers, Safaricom, Danida, Nordic Climate Facility (NCF), UNICEF, WFP, the Red Cross, and World Vision, 40 demonstration projects have been implemented in Kenya since 2009. Each project is providing reliable access to water every day with an average of 364 operational days per year for a time period of up to five years – and counting. The goal is to prove a minimum of 10 years operational sustainability for all 40 water projects.

 

The Outcome

The Grundfos Lifelink demonstration projects in Kenya have proven that water consumption can indeed finance professional service and maintenance of the water projects – if you build the right set-up. In this business model, the overall financial and technical sustainability is achieved by operating a larger portfolio of 40 water projects instead of looking at each project individually. The high-yielding water projects in urban areas contribute to the ongoing operation and service of smaller water projects in rural areas.

By thinking bigger and linking across the rural and urban divide, this ground-breaking approach creates a new business model. The communities are relieved of the continuous struggle of managing and maintaining their water supply, and the water service operator – in this case the local Grundfos organisation – is able to make a viable operational model where water consumption finances professional service and maintenance.

The communities have experienced a significant improvement in living conditions due to the reliable supply of water and the resulting boost in entrepreneurial activities created.

‘The Lifelink system makes it easy to get water and water-borne diseases have gone down significantly.
Also, people are starting to grow vegetables and distribute water to nearby communities because they know the water will be there tomorrow’,
explains Peter Munyasia, Assistant Chief in Musingini, Kenya, where the first Grundfos Lifelink water project was implemented in March 2009.

Topic:

Sustainable water supply for rural and peri-urban communities in the developing world. Grundfos Lifelink water solutions.

Location:

Kenya, various locations

Company:

Danida, NCF, UN, The government of Kenya, World Vision, Red Cross,

Download (pdf)

40 Grundfos Lifelink projects in Kenya are proving a new model for self-sustaining water supply operations and provide water for nearly 100,000 people in rural and peri-urban communities.

The world is filled with unfulfilled community needs as a result of weak public institutions or perceived lack of market opportunity by private actors. But there are examples of how multinationals have discovered business cases where no one else had bothered looking.

One of these very successful examples is Grundfos LIFELINK, an inclusive business model for sustainable supply of safe drinking water at affordable prices created by Grundfos, one of the world’s leading pump manufacturers.

The Grundfos LIFELINK business model addresses the breakdown causes of many water projects: limitations of inadequate physical infrastructure for water and maintenance as well as restricted access to financial services.

The model – a total solution water system with a solar-powered water pump, a water tank, a remote monitoring unit and an automatic tapping unit – also incorporates a payment facility, where the users pay for the water using smart cards and mobile banking.

The payments also cover Grundfos LIFELINK’s service and maintenance of the pump stations. Any surplus from the water revenue is paid back into the community’s own account so it can invest in new development projects.

Partnerships are critical success factors

Another important aspect of Grundfos’ project are the partnerships which they have made with various stakeholders to ensure that their solution is financed and delivered.

They have both a loan-based and a donation-based financing model and have gone into partnerships with local microfinance institutions, major INGOs like the WFP and the Red Cross, governmental institutions, private foundations, and CSR programmes.

Now, Grundfos LIFELINK is expanding operations across Africa and Asia, providing the LIFELINK technology to water utilities and development organizations working to establish long term sustainable water supply in rural and urban low income communities.

You can read a full case study of the Lifelink project here.

The Lifelink in action

This example proves that there are a myriad of business opportunities in unexplored markets. It is just a matter of leveraging your competencies as a company, and of developing original solutions to societal needs.

Think about what you do well, and think about how this can be utilized in a developing market, given the market conditions.

A last point to remember is to partner up with the right companies and organizations, as they often are the ones who hold or have access to invaluable local resources that could be a success factor of the project.

By combining the engagement of local knowledge, resources, skills and needs with the resources and technologies of commercial companies, the result may be co-creation of unique business models.

So for your next company retreat, consider going somewhere different. Why not go on a combined  trip to, say,  South Africa to try out a full-bodied shiraz wine while you look for business opportunities? Or go to see the lions in Kenya and then head to the Silicon Valley of Africa?

– No matter which part of the world you decide to explore, you’ll find that there’s a great world of corporate social opportunities out there.

 

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