Grundfos installed a water system for a community of 400 people in a developing country, providing the community with clean drinking water. The solution consisted of several components. In order to create a water system which was linked to a payment system, Grundfos had to partner up with a variety of different companies.

Grundfos teamed up with local construction companies to complete a lot of the practical work, while local NGOs were chosen to assist with the sales of the water system. To enable the community to buy a water system, Grundfos cooperated with one of Kenya’s largest banks for micro financing in order to create terms the local community could take advantage of. In order for each individual member of the community to be able to obtain water, a payment system had to be created. Grundfos worked together with Safaricom, Vodaphone’s African subsidiary, to develop a new method of payment using mobile phones.

Since Grundfos’ business model for providing local communities with water was a new and very different way from the donations made by various charities, it took a while for the NGOs and banks to see the potential in the proposition. However, all the partners working with Grundfos will profit from the cooperation in one way or another.

By working together, the companies were able to provide an integrated water system with a mobile payment method using water cards (smart cards). By sending a text message from a mobile phone, a user can transfer money onto a water card which in turn can be connected to the pump to pay for using it. When the user arrives at the water station, the water card is inserted into a slot where the credit amount on the card is updated. Thereafter the user can insert the updated water card into a slot next to the water faucet allowing the water to flow.

Grundfos is planning on expanding its business of water systems and has defined its market as 1.5 million people on 3 continents, and expects to achieve revenues of 50 million Euro by 2015.

Source: FORA, 2009

For more details on this case, contact FORA at FORA@newnatureofinnovation.org.