Podcast title: Can digital technologies help businesses deliver basic services?

Yes. Private businesses are using digital and mobile technologies where it is most needed. They deserve time and support.

For millions of people in the poorest parts of the world, private businesses already fill in where public services of energy, water and sanitation do not exist. Batteries, candles, charcoal, and oil lamps are sold through very well-established distribution channels. Cartels control the supply of drinking water and access to latrines. And poor people pay through their ramshackle roofs for these services, which people in the developed world — and in the affluent parts of the emerging countries themselves — take for granted. The question is: can digital technologies help in bringing in talent and capital in making these services available at better levels of quality at acceptable prices?

The evidence emerging from the work done by the organizations supported by the GSMA Mobile for Digital Utilities Innovation Fund is that it clearly does. Private sector businesses started off providing solar home systems to rural homes in East Africa were households paid for the use of solar electricity — in the same way as people pay utility bills, in small amounts on a regular basis — but with mobile money. What started in East Africa has now spread to West Africa and companies have also started catering to urban customers, not just rural and remote ones. And as these “pay as you go solar home systems” companies they have raised been raising capital at the rate of USD 200 million per year. Companies are also powering up solar irrigation pumps using the same methods.

It takes time, however. Even as private businesses were able to grow rapidly setting up solar systems in people’s houses or fields, it has been a struggle to set up larger systems that mimic the electricity grids in rural areas (“mini-grids”). And while people were willing to pay for electricity, convincing them to pay for stoves that used or replace charcoal or wood is much harder. In both cases, after several years of experimentation, there are now reasons for hope.

Figuring out how businesses can help bringing water and sanitation services has been a bigger challenge. The muddiness is clearing in water where companies are partnering with utilities to help reduce water losses from leaking pipelines and bring drinking water to informal settlements.

This is where grant capital is useful. The GSMA Digital Utilities Innovation Fund is supported by donors and UK FCDO has been particularly a generous supporter. The fund has been run by a challenge fund to support companies using mobile technologies to innovatively deliver energy, water, and sanitation to emerging countries. The challenge fund is hosted by GSMA Foundation so the companies have the full support of the industry knowledge and networks. The catalytic capital and focused support has helped the companies grow and raise capital.

Listen to George Kibala Bauer, Director Digital Utilities, GSMA for a fascinating tour across Asia and Africa, as he talks how private sector businesses are learning and experimenting and how the deep industry experience of GSMA Foundation is critical to build.

“Through our history we have supported 50 organizations with 53 grants … about 9 million pounds catalytic capital that has led to 309 million pounds of follow on funding.”

Climate change is likely to increase the flow of people to urban areas. Rural incomes will have to be stabilized to mitigate this flow. At the same time, as people crowd into unplanned cities, they will need basic services. The way governments and businesses can work together in using digital technologies to manage the twin challenges will determine how successful they will be in responding to climate change.

Available on: Anchor, Apple, Google, Spotify and YouTube.