Why finance WASH-entrepeneurs?

Limited sector knowledge and perceived risk

Firstly, local banks often have limited experience financing WASH providers and therefore lack the sector-specific knowledge needed to properly assess opportunities and risks.

Weak regulation, unclear responsibilities, limited transparency and political influence on water tariffs can further increase the perceived risk, making financial institutions reluctant to provide funding, even to promising enterprises.

Lack of collateral

Water infrastructure is often difficult to use as collateral for a loan. Assets may be publicly owned, legally ineligible as collateral or, in the case of underground pipes, difficult for a bank to seize and sell.

As a result, smaller private water providers may be required to offer other assets, such as property or vehicles, as collateral — assets they often do not have in sufficient value.

Creditworthiness

Banks need to be able to assess whether an enterprise is capable of repaying a loan. To do so, they consider factors such as financial management, stable revenues and past financial performance.

However, many WASH providers have a limited financial track record or have yet to generate stable cash flow, making it more difficult for them to demonstrate their creditworthiness.

Long-term financing

Water infrastructure often requires investments that take many years to pay off. Commercial loans, on the other hand, tend to have relatively short repayment periods and high interest rates.

Water infrastructure typically has a lifespan of 10 to 40 years, while financing in emerging markets often have terms of just 7 to 15 years. As a result, the financing available does not always align with the long-term nature of water infrastructure investments.

Funding after accelerator programmes

While accelerator programmes exist and can provide valuable support to promising start-ups, funding often dries up once these programmes come to an end.

The capital needed for further growth and scaling can be difficult to secure, leaving start-ups caught in a cycle of limited resources despite the potential of their innovations to create significant impact.

Our role: screening, coaching and financing

Made Blue Foundation provides much-needed funding and support to water enterprises that often struggle to access financing through traditional channels. While sector experts provide screening and coaching in the early stages, we help finance the growth and scaling of these businesses.

By providing venture capital and risk financing to promising water innovations, we help bridge a critical gap in the financing pipeline. This enables enterprises to move from promising ideas to implementation and, ultimately, contribute to broader change across the water sector.

How do WASH enterprises count towards our impact?

The litres we promise our ambassadors are fully delivered through our regular water projects. Any impact generated by water enterprises comes on top of this and is only counted once it has actually been achieved.