Entrepreneurship for Ecuador: Building a Clean Water Business

by on January 4th, 2013

In the summer of 2006, Alex Harding (NA) was working at a local hospital in Muisne, Ecuador, when he recognized a familiar face in the emergency room. It was Surullo, a 5-year old boy from his neighborhood, and he looked awful, severely dehydrated due to an unrelenting bout of diarrhea. Infected with intestinal parasites, Surullo received the appropriate treatment and recovered, but it was not long before he was readmitted to the hospital with the identical symptoms.

Surullo’s series of successive illnesses was not uncommon in Muisne. In fact, being sick was routine. The more time Harding spent in the hospital, the more children—and adults—he saw return looking as if they had never left.

Harding suspected that contaminated water was to blame. Surullo’s family, like many in the coastal town, was poor and relied on unboiled rain or well water as its primary drinking source. Purified, bottled water was beyond financial means.

Harding could not stop thinking about the seemingly unending cycle he observed. “I was frustrated to see kids—the same kids—come into the hospital over and over, and I was frustrated by my inability to do anything about it,” he said. “It struck me that the only way to solve this problem was through preventive measures, not just treating the illness after it happened.”

Harding returned to Muisne the following summer and, with the help of a grant from Yale University, tested 23 sources of drinking water in the town. Bacteria levels were off the charts. Government-supplied water contained over 700 e. coli in 100mL and some rainwater kept in individual homes tested as high as 5,000 e. coli in 100mL.

Using the grant money that remained, Harding worked with a team of local Muisneños to build the city’s first clean water center. Constructed from a series of low-cost pumps and filters, the new system produced water free of bacteria. The center’s creators, inspired by what they had accomplished, called themselves Agua Muisne, and by the spring of 2008, as he was graduating from Yale, Harding had officially incorporated a 501(c)(3) non-profit known as Water Ecuador.

Today, Water Ecuador (still referred to as Agua Muisne in Spanish-speaking settings) provides clean drinking water at affordable prices to over 2,000 people in five cities in northwestern Ecuador—Muisne, Mompiche, Cabo San Francisco, Bahía de Caráquez, and Estero de Plátano. In each of these towns, water is sourced from a river or well and pumped through sediment and activated carbon filtration, exposed to UV light, and then chlorinated to achieve residual sterilization, a key final step since some families store water in dirty jugs after leaving the center.

Water Ecuador has set up each of its centers to be completely self-sustaining. Many of the system’s components, though reliable, are built by local craftsmen using inexpensive materials. Selling the water pays for the costs of operation.

“We had to create a mechanism that generated revenue in order to pay for regular maintenance,” Harding said. “Or else the system breaks down and it will never work again.”

A local manager runs each water center and earns a living selling the filtered water for $0.25 per 20-liter jug. By comparison, the same amount of bottled water purchased in a store would cost $1.00 or more. Elsa, who oversees the Water Ecuador center in Estero de Plátano, is able to pay for her children’s education with the money she earns selling clean water.

Funding the future

Harding, who is pursuing his MBA alongside a medical degree from Johns Hopkins, carries himself with the kind of soft-spoken confidence one might expect from a future doctor. Yet, while he is likely to pursue a career in healthcare, he came to HBS to learn how to build a successful business.

“I have seen charitable organizations fail because their leaders don’t think about efficiency or sustainability,” he said. “There’s a certain set of skills that are lacking in the non-profit sector.”

It’s not difficult to see how the type of on-the-ground, experiential learning promoted by FIELD could help in this environment. When Harding built the first water center in Muisne, he situated it around a well on the grounds of a Catholic church. The priest, who was the mayor’s cousin, took issue with Harding’s criticisms of the municipal water supply and was plotting to take over the center once Harding left the country. Only after building a relationship with the bishop did Harding ensure that Agua Muisne could maintain control.

Now almost five years old, Water Ecuador is raising money to build its sixth water center in San Jose de Chamanga. Situated by the ocean, many of Chamanga’s 500 homes are built on stilts above the water. While these perches—and the wobbly wooden planks that connect some homes—help to avoid daily disasters, the constant flooding can create serious sanitation problems.

When Hurricane Sandy rained from above, Harding hosted an on-campus event, “Drink for Ecuador,” which raised $1,185 to help fund the center’s construction. He has now secured $6,546 of the $12,000 needed to build a fully-functional system in Chamanga, which he planned to complete by December.

This summer, a Water Ecuador volunteer will visit Chamanga to record the rate of diarrheal disease and compare the results to the same data she collected last year. Though the organization has measured its success in other cities by observing the declining rate of hospital visits, this will be the first truly comparative study to quantify Water Ecuador’s impact.

Harding, who continues to run Water Ecuador while in school, is also currently applying for roughly $450,000 from the U.S. Agency for International Development that would support the construction of 30 water centers over four years.

“I see Water Ecuador expanding to have broad coverage across the country, moving to a microfinance model whereby entrepreneurs buy and manage individual water centers as a small business,” Harding said.

As the Muisneños like to say, cada gota cuenta. Every drop counts.

To learn more, or to make a donation, please visit waterecuador.org.

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