The UK Government has announced the launch of Dreampipe, a major £1. 2 million multi-year innovation prize which is aiming to stem the amount of water lost in developing countries through leakage, meter inaccuracies and unauthorized use.

Funded by the UK Department for International Development’s (DFID), Dreampipe is part of the UK DFID’s “Ideas to Impact” innovation inducement programme, which aims to resolve challenges in water and sanitation, climate change and energy access.

Dreampipe is managed by a consortium led by the British-based consultancy IMC Worldwide. The launch is supported by the IWA.

The Dreampipe Challenge aims to stimulate financial innovation in order to help water utilities in developing countries mobilise funds for non revenue water (NRW) reduction activities.

The Challenge includes a series of prizes that will reward financing mechanisms which enable water companies in developing countries to undertake what is needed for implementing non-revenue water reduction and control activities. The Dreampipe Challenge, which is open to applicants from around the world, is targeted at utility experts, financial experts and transaction advisors who may or may not have prior experience in the water sector. Proposed solutions will have to be applicable in one or more of the 28 DFID countries.

At Stage one - "ideation" - applicants will be invited to submit a brief concept note based on an application form that will set out their proposals for innovative financial arrangements to help water companies in developing countries undertake the investment needed for implementing non-revenue water reduction-and-control activities.

This stage will be open for application for 10 weeks from prize launch. Awards will be given for the best innovative concepts for financial and contractual arrangements for NRW reduction. Judges will assess the applications based on a set of criteria reflecting the objectives of the challenge.

The Stage two implementation stage will last at least 12 months and will reward the best fully developed scheme ready for implementation in a specified water company. The exact requirements and judging criteria for that round will be defined once the applications for Stage One have been received.

These are likely to include a requirement that all funders have been identified, that agreements have been outlined, drafted or are already in operation. The exact details on Stage Two are subject to change and modification from the feedback on Stage One.

The initiative is intended to spur improved ways of mobilising funding to reduce the vast amounts of 'non-revenue water' (NRW) – the difference between water entering the system and water billed to customers – in developing countries.

The total purse for prize winners is £1.25 million ($1.8 million) to be distributed in several tranches over two stages (up to five in stage I and three in stage II) over the next 22 months. The competition will appeal to financial specialists and water utility experts – most likely working together. It is expected that successful solutions will mobilise multiple times the prize purse in funding.

 “What has lagged behind are widely applicable solutions for financing related investments. The resources of international financial institutions are limited. This prize will stimulate thinking on how to increase the provision of needed financing,” said the prize’s manager, Chris Shugart. “In principle, these deals will be financeable: by cutting costs and raising revenue, well-planned investments to reduce NRW can pay for themselves over 7–10 years.”

One study estimates water losses at 27 billion cubic metres annually in the urban areas of developing countries. Halving NRW losses in developing countries could generate $2.9 billion in cash annually and service an additional 90 million people, without using new water resources.

Entries will be judged by a panel of experts seeking improved financing solutions that can be standardised, replicated and scaled up to serve the needs of many water utility companies.

“Financing for water infrastructure investment in developing economies has been hard to mobilise owing to lack of borrower creditworthiness and high risk,” said Tom Williams, Programmes Director at the International Water Association (IWA). "This prize should help incentivise and drive improvements and move utilities towards more efficient service delivery.”

Deadline for submission of entries to Stage 1 is 11^th April 2016.  Click here for more information on the Dreamppie Prize and details of how to enter.