Clean Water Fund
The world faces a well-known crisis concerning the
availability of clean water. With the
exception of North American and portions of
The growing need to address worldwide shortages of clean water has been widely recognized, though ineffectively addressed. International conferences are held to state the alarming dimension of the challenge and the need for hundreds of billions of dollars of capital investment. The World Bank, for example, funds projects to clean up water. Despite problem recognition and action, however, the number of people worldwide lacking clean water continues to grow at a brisk pace.
Why? There is
a standard expl
The Clean Water Fund (“CWF”) believes that the key
to solving the world’s need for clean water involves the building of
transparent local water institutions funded by private capital. CWF believes that the capability of local
water institutions is the critical factor for the use of responsible water
The CWF focus on institutional capability is consistent with the new understanding of the true engine of economic growth. Historically, the standard paradigm held that capital investment held the key to economic growth, a paradigm that governed decades of capital investment in the developed world. More recently, the World Bank for example has discovered that economic growth requires the right institutional setting, including the rule of law and the market institutions. As such, the CWF vision is consistent with this fundamental reformulation of the understanding of the key ingredients to economic growth.
The CWF combines the power of the internet with the economic, strategic, technological, and organizational expertise necessary to fund the provision of clean water by local institutions (see chart). CWF will create its website, the Clean Water Fund Community (“CWF Community”) to facilitate information sharing and discussion among local groups throughout the world interested in meeting their communities’ clean water challenges. The CWF Community will also provide public information on all CWF funded projects so that CWF’s activities are conducted with transparency.
The CWF Community will serve as a tool to identify local groups that will become candidates for CWF funding. Funding candidates will be screened in accordance with CWF criteria related to the potential integrity of local institution, legal feasibility of entering into and enforcing funding agreements, ability of an identified technology to meet needs for clean water, and the economic viability of the local institution’s program for developing and distributing clean water. Unlike standard financing institutions, the CWF will provide technical assistance, as necessary, to help attractive funding candidates develop their own capabilities to use CWF funding successfully.
CWF will be operated to provide investors a reasonable return for the risks of capital investments in local institutions providing clean water worldwide. Financial security will be achieved by matching the proper type of capital investments in clean water technology with economic ability to pay. While it may seem paradoxical to some, CWF believes that communities with severe water quality problems offer promising investment opportunities even in the developing world for the following reasons:
Water quality problems are often susceptible to lower
cost solutions, such as the use of basic treatment technologies and m
2. While residents are low-income, they currently met their hydration needs with bottled water or even soft drinks. In comparison to a properly designed water supply system, the current means to meet hydration needs are relatively expensive.
3. Provision of clean water is often a key element of economic development. Therefore, development of an effective source of clean water can strengthen the economic base of water institutions.
CWF will secure its investment return by structuring financial arrangements to address the needs of local institutions. Worldwide, institutions providing water services are organized as private firms, mutuals, or local government. CWF will devise the financial structures to conform to the institutions best suited for local conditions. Therefore, some CWF may receive its return in the form of secured debt and possibly warrants in private water companies, or secured debt in mutual water companies or local government providers.
· Rodney T. Smith: economic strategy and development of local institutions
· Gary Gevisser: risk assessment and use of internet for worldwide marketing of CWF including the identification of local groups for investment opportunities
· DB: private banking relations
CWF can be at the forefront of the creation of decentralized institutions using private capital to solve the pressing social problem of meeting the world’s need for clean water. CWF can employ the tool of entrepreneurial institution building to overcome the problems with the current approach to addressing clean water needs. In addition to economic rewards, CWF would be a positive source to improving the public health, especially in the developing world. Not only will the world’s population enjoy the direct public health benefits of a clean water supply, it will also avoid the long term public health consequences of today’s broad practice of turning to soft drinks to meet hydration needs.
From Concept to Reality
Turning the CWF concept into reality requires the following steps:
Creation of Fund by M
2. Raising of initial capital from Angel Investors
3. Creation of CWF Community
4. Development of decision making criteria and assessment of investment opportunities
5. Identification of candidates for initial investment
CLEAN WATER FUND