Sustainable rural water supply
Through an innovative business model and persistence Grundfos has developed LIFELINK - a new business concept that supplies safe and affordable drinking water for rural communities in Africa, Asia and Latin-America. We asked Peter Todbjerg Hansen – Managing Director at Grundfos LIFELINK - to share some of their experiences with the BOP Learning Lab.
The business model
Together with Safaricom Limited (telecommunication industry), Grundfos LIFELINK has created new opportunities for the people at the bottom of the pyramid (BOP). Safaricom provides the infrastructure and Grundfos LIFELINK provides the water technology and after sales service.
Peter Todbjerg Hansen explains how the business model works: “People can now pay for their water via their mobile phones and mobile banking facility, which is already widely used. Through their daily consumption of water the loan is repaid to the bank or the community saves money for the service contract if the water system itself has been donated. All monetary transactions in the business model take place in a closed system.”´
Implementing the idea
Implementing the idea in the pilot market Kenya has not been a straight forward process as Peter Todbjerg Hansen says: “The BOP-market is extremely challenging, but it is possible to succeed. It’s important not to think that you can come and make a difference from the one day to the next. In Grundfos we are in a quite privileged position, because we have strong internal support. This support is crucial, because one thing is certain – things move slowly in these projects – much slower than we are used to in private companies. In Grundfos we have been willing to invest time and money – and learn a lot along the way. It is these hard-earned experiences that are crucial for the result we can deliver today.“
The importance of strategic alliances
Entering into business alliances has been an important part of the process for Grundfos LIFELINK. As Peter explains large scale impact requires partnerships: “It’s fine to help a village or two; however, making a genuine difference requires multiple partnerships, as it is impossible to solve the task alone.” The partners are quite diverse and each fulfills an important role: “Our partners are companies that deliver complimentary products, such as mobile banking. It can also be valuable to work with international organizations and NGO’s, but it is important to include commercial actors who are not focused on ‘projects’, but rather on long-term sustainable business models. “
Be on site
Asked to provide a piece of advice for companies considering the BOP-market segment Peter says: “My advice for other companies is to get out there. Get a taste of the local conditions and understand the culture. It is fine to draw on NGO’s that have relevant local knowledge, but it must never be a replacement for having your own people on site.”