Small-scale independent providers (SSIPs)

The last few years have seen increasing interest in and recognition of the invaluable role that small-scale providers play in providing water and sanitation to many officially “unserved” communities.  For water, these providers range from pushcart vendors to standpipe operators, from tanker services to those operating small water supply networks. 


Such providers typically operate in the informal private sector and, as such, little is known about how they actually function or what their relationships to customers and authorities look like.  Discussion of the merits and drawbacks of their services is clouded by a general lack of information.


Since cross-sector partnerships that bring water and sanitation to the unserved and poorly served are central to BPD's work, we are very interested in findings on this topic and improving ways to work through these individuals and small enterprises, to enhance the services poor communities receive.  


AFD-Hydroconseil action research programme - summary

To address part of this gap, BPD worked with AFD and international consultants Hydroconseil on a year-long programme of action research in West Africa. The work focused on water network providers, whose services are closest to those of formal utilities, and who have typically taken most risks in establishing their business niche. A preliminary survey of ten West African countries pointed to interesting developments taking place in Ghana, Mali and Mauritania. These three countries became action-research case studies, where specific providers were studied in more detail and dialogue between different stakeholders was supported. Maputo was later added as a fourth case study as steps to engage independent network providers were underway there (in which AFD, Hydroconseil and BPD had all been involved). 


Some highlights of the research are set out below. The full findings can also be found in the following  three published case studies and overarching synthesis report. These contain findings and practical recommendations for both practitioners and policymakers on how to better integrate small-scale independent operators into water provision in developing country contexts. 

Access through innovation - full report | summary report - expanding water service delivery through independent network providers.

Published case studies: Annex 9.4 - Ghana | Annex 9.5 - Mali | Annex 9.6 - Mozambique



AFD-Hydroconseil action research programme - highlights

Diverse actors in the water sector


This research focused on small-scale operators that have invested in the construction and/or extension of water distribution networks.  Numerous providers were surveyed, ranging from individuals driven to serve their community, to local entrepreneurs new to the water sector, to formal water operators appointed after competitive bidding.  Although diverse, all have shown a remarkable ability to adapt to local conditions in order to build up their customer base.  They often outperform larger formal providers in meeting demand for household connections, usually without any external subsidies.  This relies significantly on their ability to innovate, using appropriate standards to lower the costs of service delivery. 


We came across entrepreneurs providing water in this way to tens of thousands of people, in small to medium urban centres, or in the unserved areas of major cities. In the small towns surveyed in Mauritania and Ghana the providers we encountered had to a great extent been actively sought out by the public sector to run and expand existing schemes.  By contrast, in Bamako and Maputo (the capitals of Mali and Mozambique), providers were operating in the gaps left by the urban water utility.  Their networks had evolved more organically and often from other business operations (such as hotels or small factories).   


Key challenges for small towns and peri-urban settings


In small towns a key challenge was found to be getting investment into the system, especially to expand the network.  In Ghana local authorities were struggling to source the grant funding needed for this, and tariffs were insufficient to pay for network extension, especially given the high technical standards required.  In Mauritania however, providers were afforded some flexibility over standards and able to ask households to pay the cost of extension.


As for peri-urban operators, the prevailing architecture of the urban water sector meant that most were relegated to the informal sector.  They were finding some stability through accommodation with local authorities, but informality was constraining their investment horizons, limiting network expansion and ultimately driving up prices. 


Considerations for productive dialogue


The synthesis report above outlines how dialogue, focusing on tangible short- to medium-term actions, can offer providers a more stable operating environment and slowly bring them into the formal regulatory frameworks that govern water provision.  Recommendations are made about possible changes to market structures that could open existing small networks to competition and/or adapt technical standards to make things easier. 


The process of engagement is crucial, and suggestions are made in the report about likely champions and brokers who can bridge existing gaps.  Local authorities are one candidate.  The report also outlines some key considerations for this process and some early confidence-building measures.


In summary, the work shed more light on independent network providers, the scope of their operations and the constraints they face.  Their operations compare favourably with many larger, formal utilities, even without much support and subsidy, and users are broadly satisfied and appreciate their services.


This capacity and innovation can, however, be better leveraged to substantially contribute to increasing access to water and sanitation. 


Related BPD research on small-scale independent providers

Engaging sanitation entrepreneurs - supporting private entrepreneurs to deliver public goods

Case studies: DakarLesotho 


Contracting small-scale providers - 3rd of 4 learning documents by BPD on WSUP's African Cities for the Future programme: How can we deal with challenges that arise when developing contracts between large and small service providers in the urban setting? This paper gives practical guidance for programme managers on how to make contracts of this type more effective and more enforceable.