Why it matters
The aims of SDG 6 and SDG 7 are to ensure the availability and sustainable management of water and sanitation for all (SDG 6) and to ensure access to affordable, reliable, sustainable and modern energy for all (SDG 7). In 2017, 785 million people lacked basic drinking water and 3 billion people had no basic handwashing facilities at home. In 2018, 789 million people – 85% in rural areas – lacked access to electricity.
The industry contribution
Mobile technology improves many aspects of water delivery and sanitation provisioning by enabling communication and payment channels between utilities or municipalities and the people they serve. It also facilitates logistics for collection and treatment of non-sewered sanitation services and makes remote and more affordable billing possible.
Mobile money and connectivity have also enabled the growth of PAYG energy solutions that allow households to purchase solar products and appliances through affordable loans. Nearly 4.2 million PAYG solar units were sold in Africa by the end of 2019, an increase of 48% since 2018. This growth has also opened doors for other PAYG models in multiple sectors such as clean cooking, agriculture and water.
Enabling safe water access for the urban poor
Target 6.1: By 2030, achieve universal and equitable access to safe and affordable drinking water for all.
Water and sanitation providers in emerging markets often struggle to recoup their costs and become financially sustainable. Economic losses due to inadequate water supply and sanitation are estimated at $260 billion. When revenues do not support the maintenance and expansion needed for reliable supply, this negatively impacts consumers. Mobile-enabled solutions such as smart meters and digital payments can help reduce these losses by creating data trails. These enable providers to increase service coverage and improve customer service and willingness to pay.
For instance, in Ghana, Safe Water Network more than doubled its per-litre payment collection rate, equal to more than 90% of its stations, by digitising processes (Harnessing the power of mobile money to achieve the Sustainable Development goals, GSMA, 2019; Testing the Waters, CGAP and GSMA, 2019). Similarly, in Tanzania, mobile money increased water utility payments threefold while reducing water collection waiting times from three hours to 10 minutes. In Haiti, ecological sanitation provider SOIL reduced its collection costs from $1.10 to $0.05 by switching to mobile payments (Harnessing the power of mobile money to achieve the Sustainable Development goals, GSMA, 2019; Testing the Waters, CGAP and GSMA, 2019)
Mobile-enabled PAYG water solutions allow low-income customers to pay for what they consume in smaller amounts, rather than a lump sum at the end of a billing cycle (especially for a service that previously may not have provided a steady, timely and safe supply of water). Using mobile payments saves customers time and money by providing a secure means to pay for water at a fair and set price without the need to travel to a local utility office. In Kenya, the time to make a bill payment was reduced by 82% and overall collection efficiency increased up to 101%.
Niger: leveraging mobile money for affordable and safely managed water to urban households
Water-supply disconnections due to non-payment is a common issue for urban residents of Niamey, Niger. At the same time, Niger’s national water utility faces challenges in serving the poor with affordable and clean running water while also reducing losses to remain financially sustainable.
CityTaps has developed a water utility subscriber management solution that includes a smart prepaid water meter that uses Orange mobile money and M2M technologies. The solution allows households to make micro prepayments for their water at any time using mobile money. CityTaps also provides a software management system and a subscriber management dashboard to monitor usage and performance of the meters remotely.
As of November 2019, CityTaps had installed 1,325 smart meters, directly benefiting 13,250 people. Users are now receiving lower monthly water bills and an uninterrupted water supply while spending less time collecting and paying for water. Customers reported savings of up to 94% of their spending on water from $3.37 per m³ to $0.21 per m³, and a reduction of 86 minutes spent collecting water on a daily basis (from over 90 minutes to under five minutes). The utility’s revenue collection efficiency now exceeds 100% because the water service is paid eight days in advance on average, a huge improvement compared to previous operations collecting postpaid domestic invoices six months after issuance. This shows the potential of CityTaps’s solution to help water utilities become more financially sustainable.
Source: CityTaps: Delivering safe water to the urban poor through prepaid smart metering and mobile money, GSMA Mobile for Development
Enabling access to affordable and reliable energy
Target 7.1: By 2030, ensure universal access to affordable, reliable and modern energy services.
Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.
Mobile money has successfully unlocked a large segment of the solar off-grid market and is enabling access to energy services and appliances for low-income consumers. Mobile-enabled solutions can make access to solar home systems and mini-grid connections more affordable to low-income customers; at the same time, they can give off-grid providers vital information to understand consumer behaviours and therefore improve service delivery.
For instance, smart-meter driven mini-grid power generation and consumption enables effective decision making, including on whether to connect new customers to increase or decrease consumption depending on time of day, or to add new energy storage. Given these dynamics, the International Energy Agency estimates that mini-grids have the potential to supply electricity to more than 450 million people (equal to more than 80% of those still lacking electricity in Sub-Saharan Africa) and to generate $300 billion in investment by 2030.
Nepal: telecoms towers as anchors of grid power
Despite the considerable hydropower resources of Nepal, only 76% of its population has access to electricity. There is also a wide urban-rural gap: 94% of city dwellers benefit from energy access compared to just 61% of the rural population.
Founded in 2010, Gham Power develops solar microgrids and commercial off-grid systems in developing countries. It focuses on developing projects that are a good fit with PAYG models, including rural microgrids, commercial and industrial systems, and productive end-use systems. In 2015, Gham Power received a grant from the GSMA M4D Utilities Innovation Fund to expand the capacity of two microgrids in Nepal, improving energy access for two rural villages and providing energy to two NCell (Axiata) telecoms towers. Mobile money was used for bill payment and smart meters were deployed to monitor individual consumption.
Since 2015, Gham Power customers across the board reported an increase in appliance ownership 10 months after connecting to the microgrid. Among SMEs using Gham Power’s service, including small hotels or roadside eateries that added refrigerators or cold storage to improve business, 22.5% reported higher profits, with most attributing the change to the addition of new appliances. Increased access to any type of energy, coupled with better mobile service, also increased mobile use. For mobile operator NCell, airtime expenditure from Gham Power users increased by 17%, mobile internet usage increased by 32% and smartphone ownership rose by 44%. Since the grant, Gham Power has been able to deploy two more 15 kW microgrids, reaching 128 households in rural Nepal. As of November 2018, the company has delivered over 2.5 MW of installed energy capacity across 2,000 projects, impacting over 10,000 people.
Source: Mobile for Development Utilities Innovation Fund, GSMA, 2019
Maximising impact by 2030
Enablers that could help maximise the mobile industry’s impact on SDG 6 and SDG 7 include the following:
- Accelerating mobile penetration to the poorest population segments. This will enable access to relevant digital services, including mobile money for the use of utility services.
- Driving adoption of innovative digital solutions supported by mobile technology (e.g. sensor technology), as sanitation service providers still need to make better use of these tools.
- Creating and fostering partnerships with mobile money providers to enable wider customer adoption of digital payments.
- Enabling regulatory frameworks and funding that encourage the adoption of mobile-enabled digital services for utilities and energy providers.