IBM & Waterfund To Develop a Water Cost Index For Uganda

Waterfund, with IBM acting as calculation agent, will work with the Ministry of Water and Environment to calculate the cost of producing water in Uganda. This work will reflect estimated water production costs measured in US dollars per cubic metre and be published as part of the Rickards Real Cost Water Index™, to be updated monthly.

As governments are increasingly forced to turn to the private sector to fund the construction and maintenance of complex water networks, the index will provide Uganda with a benchmark for helping measure critical projects on a like-for-like basis. This makes it a vital tool for attracting funding for the water infrastructure projects critical to national development.

“Becoming part of Waterfund’s benchmark index for water costs will help place Uganda at the forefront of innovation in finding significant funding solutions to realise our water infrastructure goals,” said Hon. Professor Ephraim Kamuntu, Uganda’s Minister of Water and Environment. “The unprecedented level of transparency that the index will bring to pricing water sector investments in Uganda will be a great asset in attracting private sector funding that can help us provide clean and safe freshwater to all our citizens. It gives us great pleasure to work with Waterfund and IBM and harness their expertise to make this happen.”

The Rickards Real Cost Water Index™ will highlight the energy costs, interest rate risk, and capital expenditures required to build and maintain large-scale water treatment and delivery networks in Uganda. The FY 2012/2013 budget for the Ministry of Water and Environment to invest in the water sector is UGX 301.9bn (US$153mn), with plans to supply 77% of rural dwellers and 100% of urban dwellers with clean water by 2015. To achieve this aim, however, it will require Uganda to commit at least US$300mn per year of new investment to the water sector until 2020.

“Uganda is proving itself to be very forward thinking and proactive in the solutions it is seeking to meet the water infrastructure investment challenges it faces,” said President & CEO of Waterfund Scott Rickards. “This innovative spirit, combined with Waterfund’s first of its kind water cost index and IBM’s unrivalled expertise in Big Data analytics, will bring real financial transparency to Uganda’s water sector and significantly broaden the funding options available to ensure sufficient investment in freshwater infrastructure.”

By 2030, 50 percent of Africans are expected to live in cities, while Africa’s collective GDP is expected to rise to $ 2.6 trillion by 2020 (McKinsey Global Institute), increasing the demand for water and stressing existing sources of potable across the continent.  In South Africa, IBM is already working a project called WaterWatchers, which is driven by a new mobile phone application and SMS capability that will enable South African citizens to report water leaks, faulty water pipes and general conditions of water canals.  The recently launched IBM Africa Research Lab is also developing solutions for Africa’s challenges access to potable water.

“Ensuring that sufficient water infrastructure is available to citizens and businesses is one of the greatest fundamental challenges faced by Africa today,” said IBM Public Sector for East Africa Leader Magero Gumo.  “Solutions that could enable the funding needed to provide such a vital resource are a crucial part of meeting that challenge.  Our work with Waterfund and the Republic of Uganda shows the difference that IBM’s expertise in Big Data analytics can make to the lives of people in Africa through creating the tools necessary for enhancing the provision of vital services such as the supply of freshwater. We very much look forward to working with Waterfund and the Ministry of Water and Environment in developing such solutions in Uganda and throughout other parts of the continent.”

With analysts predicting significant growth for the IT market in Africa, IBM is working with its clients and partners to put in place the systems, infrastructures and processes to underpin the continent’s economic and social transformation. Today IBM has a direct presence in more than 20 African countries, including Tanzania, Senegal, South Africa, Morocco, Egypt, Tunisia, Algeria, Ghana, Nigeria, Kenya, and Mauritius.