Water for All
Country: France
Organization: SUEZ Environment
2) Sector of activity: Water and Sanitation
3) Description of your products or services: SUEZ Environment (SE) operates water and sanitation systems on behalf of cities throughout the world, under contract with municipal or city authorities. Contracts awarded recently in the developing world require SUEZ Environment to provide services to people already connected and to extend the services to the un-served population. Many of these people live below the poverty line (1USD per day and per person). SUEZ Environment currently serves 8.8 million people who fall into this category.
The quality of life of low-income individuals is significantly improved, given that access to water and sanitation (1)ensures environmental sustainability, (2) leads to a better, healthier, more educated life, (3) promotes gender equality and empower woman.
The role of the SUEZ’s programme Water for All is to develop new methods and technical proposals to fit this context in a sustainable way. The economic and urban context of these areas calls for a tailored approach. The challenge is fourfold: to embrace customers’ interest and contribution in the management and maintenance of the system; to match this with the community’s “affordability” level and willingness to pay, to involve the community in project schedules and finally to communicate on developments from day one.
SUEZ Environment, who knows from experience just how great the financial risk is in the developing countries, wants to keep funding to the minimum, hence its proposal for a new financial package.
4) Description of the operational model: The Water for All principles are applied in each of the countries where SUEZ works and are constantly updated.
ˇPartnerships involving communities in the decision process The communities are involved at each step of the process.They are fully associated in decision making about both the level of service to be provided and payment options.The inhabitants can participate collectively in the construction and the maintenance of the services.
ˇUsing innovative technology Conventional techniques (too expensive and beyond people’s economic means) are not well adapted to the particular urban patterns of blighted areas. Water and sanitation infrastructures have to be adapted to the context.Low- income areas have low affordability levels even if their willingness to pay is often superior to those of the average population.This needs to be taken into account with appropriate economical schemes.
ˇProvide services, not just connections Developing water and sanitation networks in low-income areas is neither a guarantee of access to services nor the system’s sustainability.Our programme encourages technical support and where appropriate sets up financial mechanisms (micro-credit).In partnerships with NGOs, we puts a strong emphasis on hygiene education, technical training and plumbing skills to help people maintain their installations.A commercial approach and tariffs are tailored to support communities, avoiding disconnection due to non-payment.
5) Description of the financial model: There are 2 levels of payment in low-income areas:Households pay a connection fee to be connected to the water distribution network. They pay for the service they receive, according to their water consumption. The connections fees and the tariff are not decided by us but by the public authorities' regulator or representative. Various payment facilities and finance mechanisms are implemented to ensure that low-income individuals can pay the water consumption, such as: -Low-income individuals can participate to the network’s construction and, therefore they do not pay the connection charge. -Installation of prepayment meters and free repair of internal plumbing fixtures -Collective or bulk invoicing is used -Social tariff, with a direct subsidy on water bills for poor households. Our budgets include operational expenditure and capital investment. All operational costs are recovered from users through user fees. Capital investment may be recovered from user fees also, or by direct or indirect subsidies from State or International Finance Institutions. In general, our operational budgets represent between 70 to 100% of client fees, the remaining is dedicated to investment budgets
Client fees represent this approximate percentage of operational budget: 0%
6) Key operational partnership: Water for All projects have been implemented worldwide. Each experience has been shared between all subsidiaries allowing ideas to be transferred between Latin America, Africa and Asia. Depending on the resources of the subsidiary, partnerships with NGOs are set up to assure the social interaction and community organization aspects of the project.
SUEZ Environment is very active in disseminating its experience and working on it with various partners such as local authorities, municipalities, unions, universities (Buenos Aires, Manaus, Delft UNESCO-IHE…), international institutions (World Bank, UNDP, WBCSD), NGOs (BPD, ESSOR), aid agencies (AFD, SECO, US Aid) at the international level as well as the local one.
An example is Manaus (fig iii) where the NGO ESSOR has been the partner of SUEZ Environment subsidiary, Aguas do Amazonas, for more than 2 years. ESSOR initiates projects within the communities by leveraging their demand, developing their skills and explaining the service offer. The population buy-in for these projects is very high (more than 90%). The payment rate in this zone (75%) is superior to the average for Manaus (50%),which shows the satisfaction of the consum
7) Current outreach:
We are at the Mature stage. The approach developed and implemented by Suez to provide sustainable access to water services has proven to work and is replicable. It is now a mature strategy that is mainstreamed in all our local companies in developing countries.
These tasks are being developed with the collaboration of various organizations and governments. It would take too long to mention all of them here. A selected list of actions and priorities that are underway and will continue in the next few years is described in the following paragraph.
Together with the UN, the ICC, the World Business Council for Sustainable Development, the International Water Association, Suez Environment is developing partnership strategies and disseminating good practice on the challenge of the access to water and sanitation services by the poor.
How many clients have benefited from your product/service in total? Over the last year? SUEZ Environment is currently providing water services to 80 million people and sanitation services to 44 million all over the world. These people have direct access to drinking water and sanitation services and are connected to urban networks that are operated and maintained by Suez Environment.
What percentage of your clients is below the poverty line ($2 per day)? 31% SUEZ is currently working in several developing cities and
towns where a significant part of the population lives
below the poverty line (cf. fig ii). Through the Water For
All programme, it has provided services to 8.8 million poor
people. This represents 31% of the population of the cities
in the developing world that have recently contracted with
SUEZ Environment.
SUEZ Environment continues to contribute new connections to
the targets on a daily basis To date more than 3 million
inhabitants have gained access to water as a result of its
work. This success demonstrates how public-private
partnership of this type can help the significant number of
cities that are still confronted with serious water access
difficulties.
What is the order of magnitude of the potential demand for your products or services? Which
other low-income groups, countries or regions could benefit from it? Try to quantify (number
of clients, market size in currency):
There are currently 1.2 billion people who lack access to drinking water and 2.4 billion who lack access to sanitation services. Two-third of them are in urban areas and can become potential customers. However, the opportunity for private companies like Suez to develop profitable business with significant added-value for the customers depend largely upon the local political and economic context.
 Manaus, Brazil
8) Scale-up strategy:
How many low-income individuals do you plan to benefit in three years from now? How are you planning to scale up or replicate your solution? What are the major constraints to scale up?
We have significant projects underway or in preparation in Brazil, Morocco and Indonesia. In the next three years, the number of people that would receive services will be over one million individuals. Again, these projects will be implemented in partnership with local authorities, therefore the success of these projects will depend largely on local authorities’ political commitment.
Which specific areas - and why - in your field would benefit most from investment by corporations, foundations, and other investors:
As indicated above, water service expansion to low-income areas requires significant financial resources for which no significant financial return can be expected. Therefore innovative financing models need to be implemented, combining soft loans and private financing. It has been demonstrated that even if direct financial return is low or negative, the economic impact for the community (improving of health and productivity) is much bigger that the amount of money invested in such projects. Often, the implementation of water and sanitation services in low- income areas is the starting point of a local development process (urbanization, small-scale industry and job creation). Therefore the main beneficiaries of these projects are the local communities and, indirectly, local and national governments.
9) The organization: How does the initiative fit with your overall organization's strategic goals and priorities? How did the initiative start?
The Water for All programme was formally initiated in 1999 with the objective to strengthen SE’s ability to meet the challenge of providing water and sanitation services to un- served poor populations in the contracts it operates.
The programme's strength lies in the way it integrates corporate vision and divisional policy with highly focussed, local activity in the poor quarters of the cities involved (fig i). SUEZ was one of the first French companies to commit to reconciling the long-term requirements of sustainable development with short-term imperatives. Gerard Mestrallet CEO of SUEZ, launched an appeal “Bridging the Water Divide”, in November 2001, to mobilize on the lack of access to water and sanitation for billions of people. This is the symbol of a group wide strategy applied at all levels from the vision of SUEZ Management to its application within the local subsidiaries.
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10) On the mosaic diagram, which of these factors is the primary focus of your work?
- Factor: Poor understanding of the human and social capitals of low income communities
- Principle: Change radically the logic behind your business model
Contact Information:
Name: Alain Mathys - Programme Manager / Pascale Guiffant, Project officer
Organization: SUEZ Environment
Mailing address: 1 rue d''Astorg / 75383 Paris Cedex 08
Country: France
Email: alain.mathys@suez-env.com
Tel: +33 (0) 1 58 18 50 16
Fax: +33 (0) 1 58 18 46 42
Website: www.suez-env.com
Organization's legal status: Limited company
Number of Employees: 72 780
 Johannesburg, South Africa
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