Water supply and social entrepreneurship in crisis zones
Fontes started to work in Goma, in the Democratic Republic of the Congo, after the 2002 volcanic eruption and has stayed on during the many years of political instability and conflict that have shaken the DRC. It’s hard to imagine a more difficult setting to start a social business that provides safe water. And yet, despite all the challenges, Fontes, together with the local company Yme Jibu and the support of the Swiss Bluetec Bridge, has managed to continuously expand their water scheme in Goma.
First, Andreas, could you please briefly explain what Fontes is all about?
At the beginning, Fontes was a consulting company specialised in reservoir geology and we were working for offshore companies with enhanced oil recovery in Norway. In 1989, we decided to create an NGO to use the profits generated by our commercial arm to develop water supply schemes in disaster areas and for development cooperation. We realised that some of the technical solutions and management principles used in the oil sector could also be applied to the water sector. Since 2000, we are doing a lot of consulting work for the water sector and have project experience in many countries, in Africa mainly. We strongly believe that the private sector has an important role to play in the provision of water and have since 2014 started to pursue a more business-oriented approach with our water supply schemes. We are currently very active in Goma in the Democratic Republic of the Congo (DRC) where we are supporting the implementation of water businesses. Yme Jibu, our first company, has been operational since 2016 and now has an annual revenue of USD 240’000 and profits of approximately USD 20’000. The profits have been immediately reinvested to extend the water scheme and reach more people.
The DRC is an extremely challenging context to work in, could you tell us a little bit more about this context and how it affects water supply?
Yes, the DRC is a very difficult setting. Trying to operate a business of any kind is extremely challenging. The Democratic Republic of the Congo is currently ranked 184 of 190 on the “Ease of doing business” index. The country has suffered from severe political instability for years and the Eastern regions where we are operating have been ravaged by ongoing conflicts. We started to work in the region after the volcanic eruption in 2002 when more than 100’000 people from Goma had to flee the centre of town. We were involved in the building of the emergency water supply schemes and have stayed on during the years of conflict. Many of the NGO’s and donors that helped build the initial emergency infrastructures left after years without putting sustainable management structures in place. As is so often the case, water is piped to large cities, but there is no proper management in place to distribute the water to the people who need it most. The transformation of donated services into fair and sustainable businesses that operate the built infrastructures in the long-term is thus essential.
What are your strategies to operate a business in a conflict zone?
To work in a crisis zone means to build close relations with good, honest and highly motivated people in the country, people who know the local conditions and the local culture. We spent years buildings these relationships, not only business relationships, but also personal and family ones. When families start to get involved and connected with each other, you become part of “safety and security network”, which no national or international insurance or rescue team can provide. This has allowed us to continue our work through years of political instability. There have been up and downs, also on the personal level, but thanks to the efforts made by both sides, we managed to get through difficult times and rebuild trust. The difficult times have made us stronger!
With what business model are you operating and where do you find support for your initiative?
With Fontes GmbH Switzerland and Fontes Invest (Norway), our aim is to develop local social entrepreneurship, currently by mobilising private investments into our company Yme Jibu. Fontes Invest is owning 50% of the shares of Yme Jibu and the rest is owned by local people. We are working with two different approaches in our business model. The first one focuses on “Leadership by Example”, the second one on driving social entrepreneurship forward. We sometimes struggle to get our African partners to warm to these approaches, since these types of approaches require a lot of trust building and building trust is obviously difficult in rapidly changing contexts. We work hard to convince everyone that continuity is the key to get significant results, both at the individual level (developing skillsets) and at the business level (growing profits).
In terms of trust in our business approaches, we are happy to have received financial support from the Swiss Bluetec Bridge and from private investors in Norway and Switzerland who do not only see potential profit, but also future social impact.
The idea of including the private sector into development cooperation is relatively new, how have you seen this evolution and how has it affected your work?
At Fontes, we have started reflecting about the role of the private sector since the early 90s. Back then, it was hard to convince governmental donors to fund projects that would include the private sector or to initiate projects that would then be operated by a private sector company. The prevailing idea was that the public, not the private sector should benefit from development cooperation. We were, however, convinced we could make a meaningful contribution to the development sector by building fair business relationships with local people. Projects need to generate “profits” to make them sustainable. This concept and the idea that entrepreneurship is a significant driver towards the SDGs has only been fully accepted in recent years.
Could you share with us some of the biggest challenges you encountered as a water entrepreneur and while building your water business?
We still struggle to find staff members with strong management skills. We need to invest in training to develop a more entrepreneurial mindset among all the people involved in our projects. So, the biggest challenge we see is not so much the lack of cash investments, but rather a lack of well-trained, experienced entrepreneurs who are aware of the weaknesses and strengths of these types of projects and who have a strong leadership to thoroughly manage them. I have been starting to work on this issue with some of my students at the University of St. Gallen and we are currently doing some research on the topic.
What do you wish for as a water entrepreneur, what would you need or where are the gaps?
As already said before, we need more funding (grants) to conduct training with local staff (from the CEO to the pump operator) and grow business skills locally. We have developed a concept for a WASH-business school (Water, Sanitation and Hygiene Business School) and we hope to be able to expand the skillsets of our staff members around the globe beyond the technical aspects (construction, maintenance, etc.). We have a difficult time mobilising funds for this project, although it is very badly needed, not only in the DRC, but continent-wide in Africa.
What would be the next steps for Fontes?
Fontes is now working on improving its business approach in the DRC since we are already well implemented there. Scaling-up is now our main focus. We want to reach a maximum of people in the shortest time possible. Of course, we want this to happen through proper business models and financially sustainable long-term approaches, not donations. We are for instance exploring the possibility of using carbon credits for safe water to kick-start infrastructure projects which would then benefit poor communities by reducing the cost of water. Fontes’ aim is not to grow as a company, but to do whatever is possible to encourage local initiatives to develop and ultimately improve the lives of local communities.