The Peruvian water crisis: MMI x YAQUA

 

Latin America faces a water scarcity and safety crisis. 77 million people lack access to safe water (World Water Council, 2004) in Latin America; 51 million of these are rural residents, who are the most affected by the lack of safe water access. Peru, like most Latin American countries, faces this water crisis, with 3 million of the 31 million Peruvians lacking access to portable water. Moreover, these mounting concerns are exacerbated by the effects of climate change on limiting the Peruvian water supply. This is where team YAQUA, from the Melbourne Microfinance Initiative, steps in.

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YAQUA is a commercial bottled water company, whereby all the generated profits are used to directly fund water sanitation projects in Peruvian communities, to improve hygiene, awareness, and sanitation infrastructure. Since its inception, YAQUA has sold 3.4 million bottles, which have funded five completed and ongoing projects. However, recent trends in Peru indicate that bottled water is not as sustainable or profitable as it once was. Bottled water is a heavy, low-return product, which produces high amounts of plastic waste. Today YAQUA aspires to introduce a shared value proposition—wherein which profits and social impact (in this case, water sanitation) are concurrently prioritised—by introducing a new product into the market. As project consultants from MMI, our role is to facilitate this transformation of YAQUA’s into a more financially and environmentally sustainable model. This project was of particular importance to the club due to its relevance concerning climate change and social impact - two causes MMI is particularly passionate about. 

Lima specifically has an imminent water crisis, with the city expected to run out of water by 2025. Moreover, the poorest areas are not served by the public water network and bottled water is often too expensive. The communities Team YAQUA visited, during their trip in Peru, serve as a microcosm of the Peruvian water crisis. 

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One of these communities the team visited include San Juan de Miraflores: a peri-urban community, or community located on the hilly ‘peripheries’ of Lima city. Water for these communities are mainly collected from the Rimac River, which is highly polluted and requires decontamination efforts valued at $100m (Peruvian Times, 2009). This water then makes a long journey to people’s homes: it is pumped through decrepit State piping infrastructure, and then collected by unhygienic cistern trucks, each of which journeys through the narrow, meandering roads of this community in order to go door-to-door to dispel water into people’s ‘water bins’. Apart from the obvious concerns regarding sanitation, this process can be inefficient and unreliable. This situation is made worse by the fact that water sold by the informal cistern truck system is sold at extortionate, above-market prices, which exploit the people of this community. 

A similar case was examined through our trip to Chincha (15 (quince) de agosto), a rural town three hours away from Lima city. The lack of town planning and existing water infrastructure means that this community is solely reliant on cistern trucks to provide water. Due to the sheer size of this community, and thus a greater water dependence per cistern truck, people are often left with no water for a day or two when the trucks run out of it. Furthermore, the consumption of this unclean water can cause health issues, such as diarrhoea and skin infections, of which children are particularly vulnerable. Additionally, we encountered a sizeable number of single income houses consisting of single mothers, often abandoned by their husbands, and their children who are left to consume scarce, expensive, and unsanitary water.  

Ultimately, it can be concluded that the crux of the water crisis is three-pronged: the scarcity of water, the lack of proper water treatment, and the unnecessarily extortionate price of water. After much community engagement and research, one of multiple potential solutions is to introduce Atmospheric Water Generators to these communities. 

Atmospheric Water Generators, or AWGs, are a novel technology that extracts water from humid air, condensing it into water that becomes potable after being filtered. AWGs operate on electricity, with a capacity of producing 5000L per day. Currently Peru heavily relies on, and is exhausting, its river water, surface water and groundwater sources. However, the humidity of Peru is notably high; in Lima the average atmospheric humidity is 83.65. Atmospheric humidity is an idle and underused resource that can provide potable water. In this manner the AWGs alleviate the pressure placed on existing, and rapidly depleting, water resources. The extra supply of water is also the key to potentially lower prices over time, in order to remain competitive in the market. Lastly, due to an emphasis on quality control, a greater number of high-quality filters would be installed into these machines to ensure that safe, potable water is provided to the AWG users.

This could also be implemented using a Franchise Model, based on a model executed by Piramal Sarvajal, a supplier of potable water in India. Through this model, local entrepreneurs are encouraged to take up the responsibility of running and sustaining an AWG. The benefits of this are multifold: not only are local members financially empowered through a steady income, they are also socially given the opportunity to build their communities. 

This water crisis will continue to deepen in Peru, along with many other regions in the world. YAQUA will continue to find and create solutions that serve Peruvian communities that will be affected. Through community engagement and creative solutions, MMI Project Teams aim to assist clients like YAQUA in making a sustainable, real-world impact while tackling important issues. As world-renowned American academic Michael Porter best places it: “the purpose of the corporation must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth in the global economy”. 

Author: Diya John | Initiatives Consultant