Transforming Rural Water Supply Services for the Poor through Public-Private Partnership in Vietnam
East Meets West builds the capacity of the private sector and government to effectively deliver clean water to rural villages in Vietnam.
I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.
East Meets West (EMW), a program of Thrive Networks
Growth (the pilot has already launched and is starting to expand)
Annual budget in 2017 (USD)
Number of beneficiaries impacted so far
Nonprofit, NGO, or citizen sector
Headquarters location: Country
Headquarters location: City
Location(s) of impact
Son La, Ha Nam, Nghe An, Hai Duong, and An Giang provinces
Australia and Vietnam are applying technology, new ways of working, and innovative business practices to solve the challenges facing the water and agricultural sectors.
EMW meets with government representatives in Son La province.
We use an output-based approach (OBA) to incentivize poor households, communities, private enterprises, and the government to implement our WASH programs.
Problem: What problem is this initiative trying to address?
Only 45% of rural villages in Vietnam have access to clean water. Where piped water systems exist, connection rates are low and quality of operation and maintenance is poor. Weak community ownership, a focus on asset building over system management, and low tariff levels to cover costs mean the government struggles to connect more families. Private enterprises can fill the gap, but their lack of capacity and the complicated government bidding and procurement systems discourage them from investing in rural water supply.
Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?
EMW provides smart subsidies to encourage the private sector to build, own, and operate rural water supply systems. Our study showed that privately-ran systems are 69% more sustainable than those ran by cooperatives or local authorities. We work with the government to implement transparent and efficient procurement processes and invite private operators to bid for construction projects. Women’s Union, our long-time partner that promotes women’s rights and gender equality, provides health education to motivate villagers to connect to water systems.
In our pilot in Son La province, winning enterprises spent $100 for each new connection. For every household connected, Thrive disburses $50 to the enterprises upon independent verification, while households pay $50 connection fee, allowing 100% full cost recovery. Digital monitoring tracks customer satisfaction and accurate payment to enterprises.
We aim to solidify the pilot to ensure sustainability in the ecosystem of water services.
Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work
EMW facilitates the creation of shared value by increasing rural communities’ access to clean water while enhancing the sustainability of water systems and private enterprises. Since 2016, we have awarded smart subsidies to five private operators, which in turn have built new piped water connections that serve 7,000 rural households (~35,000 people) in Son La and Ha Nam provinces. Clean piped water ensures the health of families and communities. It also leads to improved sanitation and hygiene practices, which positively impact health and the environment. Moreover, as systems are developed, women’s decision-making in their families’ health and hygiene also increases.
With EMW's support, private enterprises improve their efficiency through reduced construction time (from 12 to 5 months) and increased access to digital monitoring, advanced technology, and better accounting and budgeting procedures, which help them effectively manage business operations and serve more households.
Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?
The Australian government funded the pilot project, and we aim to diversify funding to expand our work in three rural provinces in Vietnam. Our annual budget is composed of 60% grants, 38% individual donations, and 2% earned income.
To ensure long-term sustainability, we are determining full cost recovery tariffs and smart subsidy levels. Customers pay for individual connections and a monthly fee for water use with wealthier households cross-subsidizing the costs for poor households. Depending on the size of the system (number of connections), the payback period for the enterprise will vary from 10-20 years. We will also advocate for government adoption of the smart subsidy approach and for regulatory reform to support private enterprise ownership and management of rural water systems.
Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?
East Meets West goes beyond traditional aid to incentivize poor rural households, communities, the government, and the private sector to deliver clean water and ensure long-term sustainability of rural water systems. By attracting private sector investment in the water sector, EMW is helping solve challenges and creating shared value for the poorest rural communities and local private enterprises.
Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.
As part of a World Bank grant to provide clean water services to poor rural communities in Vietnam, we learned that private operators were more efficient service providers than cooperatives or local authorities but were not being tapped effectively. Grant results revealed that private operators have higher labor productivity, lower water losses, better collection performance, fewer system breakdowns, and quicker response to repair requests, leading to higher customer satisfaction. But the private sector only manages 2.9% of total water schemes, with a sustainability rate 19% higher than other providers. These findings led us to pilot a partnership with the private sector to build water systems in provinces lacking access to clean water.
Where did you hear about the Nestlé Creating Shared Value Prize?
Upon recommendation from others