While startups like Virridy work with international donors and national governments to pay for the installation of pumps on boreholes in arid environments like Kenya and Ethiopia, local communities lack the funds to maintain them.
As a result, the three organisations are combining innovative water monitoring technologies with expertise in carbon finance and water supply services to overcome this funding challenge and begin delivering consistent water supplies in Ethiopia and Kenya’s rural communities.
Introducing a funding model based on climate finance.
The three organisations collaborated to develop the Drought Resilience Impact Platform (DRIP). This is a system that uses satellite-connected sensors to monitor water security, generate actionable drought forecasts, and identify broken water pumps and areas of high water demand.
DRIP is funded by USAID, NASA, and the Swiss Agency for Development and Cooperation, and it makes these systems available to local water service providers in arid areas.
The partnership will add water treatment and a climate finance-based model to the areas where their DRIP systems are located.
Organizations can earn carbon credits under the Gold Standard voluntary carbon credit registry by reducing their need to boil drinking water with firewood or fossil fuels. The introduction of water treatment eliminates the need for communities to boil water. Local water service providers can thus earn carbon credits based on both actual and demanded energy savings (which would have been used to boil water) and the replacement of dirty water with clean water.
“The DRIP system, combined with revenue from carbon credits, will enable the MWA and its members to collaborate with local communities to identify and repair water systems.” Styvers Kathuni, MWA Kenya programme director and country representative for Kenya, says, “Local repair organisations will be paid to ensure water is always available.”
According to Keith Wright, executive director of MWA, this approach will dramatically increase available finance for community water access.
“Rather than relying solely on grants, we’ve been thinking about how we could use our networks and expertise to harness the global market to serve communities and channel revenue from the carbon market into local water service providers and communities,” he says.
“For a long time, donors have contributed funds to provide these water services, which is not a bad thing. This [carbon credits] actually connects these services to the global market in such a way that revenue flows based on how they operate. This is where water providers can take charge of their own fate.”
The partnership wants to show that revenue can flow to water service providers, potentially altering the entire financial model for how water is delivered to last-mile communities.
“We want to demonstrate that we can provide better services to communities using an entirely different financial model that will truly benefit them in the long run,” Wright says.
Kathuni also tells AFN that earning revenue from carbon credits will allow governments to free up funds for other infrastructure projects.
The Virridy leadership team was the first to develop and scale carbon credit-financed water supply programmes, demonstrating the first programmes in Rwanda and Kenya in 2007 and 2010.
According to Virridy, these programmes provided clean water to millions of people while also generating millions of carbon credits to pay for ongoing water supply costs and repay investors.
“This type of public-private partnership isn’t going to solve our water insecurity problems quickly or easily.” However, the effects of climate change are only going to get worse. “Carbon markets should be part of the solution,” says Evan Thomas, founder and CEO of Virridy.