Palladium International Pty Ltd

Tapping In: connecting rural communities to essential services at scale

Lead Organization

Palladium International Pty Ltd

Brisbane, State of Queensland, Australia

http://www.thepalladiumgroup.com

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Project Summary

Only 21% of Cambodians have access to piped, clean water. This essential service is limited to cities, while 80% of Cambodians live in rural areas. To increase access to 95% of the population by 2030 (and achieve SDG6), the World Bank estimates that there is a funding shortfall of at least US$60million per year.The Cambodian Government relies on the private sector to build and maintain rural water infrastructure, but low water tariffs combined with low household income means that most rural areas have little to no prospect of being connected.Our team has developed and proven an effective model that sustainably expands access to piped, clean water across Cambodia by partnering with local water operators. Working with 80 operators to date, we will connect 1million rural Cambodians to piped water for the first time. With MacArthur's funding we will reach at least 3.75million rural people with clean drinking water.

Problem Statement

Cambodia is the poorest country in Southeast Asia as measured by GDP per-capita. 80% of Cambodians live in rural areas, where decades of large-scale infrastructure programs both in Cambodia and across the region have failed to provide a sustainable solution for connecting rural communities to essential services including safe, reliable drinking water. Currently only 21% of the population has access to piped drinking water, with existing infrastructure limited to urban areas where there is a high population density.The negative impacts caused by lack of access to clean water are wide-ranging and well-known, with severe consequences on health, education, gender, economic opportunity and available time for productive work or education, disproportionately affecting rural communities and vulnerable groups including women, people with disability, the elderly and children under five.Cambodia primarily relies on private water operators for rural areas, however development of piped water supply and overall investment in infrastructure has been limited to areas that are commercially viable, determined by the pay-back period achieved on the investment. Attractive investments are those with a pay back period of less than 6 years. High up-front infrastructure costs and low tariffs contribute to low viability.By working with local entrepreneurs who have the skills, networks, resources and most importantly - motivation to improve the lives of their communities, our approach uses the minimum amount of charitable funds possible to incentivize family businesses to build, expand and maintain piped water services. This model will substantially contribute to Cambodia's goal of universal access to clean water.

Solution Overview

Over the past four years, we have developed and proven a unique model that works by using limited public funds to incentivise private water operators to expand access to piped drinking water across Cambodia. Working with 80 small operators, one million poor people in rural areas will benefit from access to piped water within 5 years (by 2020). With $100m, we are confident that this model will reach all remaining viable areas, connecting a minimum of 3.75million more Cambodians (or 22.7% of the population) with sustainable, reliable access to piped drinking water for the first time.Our approach puts sustainability at its core. By incentivizing local entrepreneurs who have the skills, resources and incentives to build and maintain piped water services in their own communities, we ensure that these services continue to be provided in the long-term. The approach identifies rural areas that are not currently commercially viable, and develops a business model to determine the appropriate level of support required to incentivize a water operator to build or expand its operations into that area. To date this approach has leveraged US$23.5 million in private co-investment, achieving a cost per beneficiary of US$18.80 per connection. This model offers nearly guaranteed results and impact. It has proven successful in every commune where we have worked to date, and is already achieving results at scale. Our team has identified a minimum of 250 more rural communes across Cambodia that meet the requisite criteria, benefiting poor women and men living in rural areas.

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Project Funders

  • Australian Department of Foreign Affairs and Trade

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