Seizing the Opportunity of Distributed Infrastructure Service Solutions
It is easy in a context of seemingly daily, dramatic changes to the global order to miss the longer-term trends that will determine developmental outcomes in the years to come. Concerns and public debates around the restructuring of the institutional and financing architecture of global development often dominate our attention. Meanwhile, quiet revolutions spurred by technological innovation and private initiative are creating greater actual and potential impact for those we seek to support with access to better services and opportunities. One of these major revolutions is the tendency towards “distributed infrastructure service solutions.” What Are Distributed Infrastructure Service Solutions? Distributed infrastructure service solutions (henceforth referred to as “distributed solutions”) are the move away from highly centralized facilities for the provision of services, complemented by extensive distribution networks to reach customers, towards a semi-autonomous approach in which both the infrastructure and the direct service capacities are more closely embedded with the customers themselves. Technological innovations, such as lightweight materials, improved sensors, energy-efficient power supplies, and, of course, digital communications and AI, are all major drivers of distributed solutions. Distributed solutions offer several advantages for providers and clients, as well as new challenges. These include lower start-up costs and more rapid deployment, the ability to better customize service provision to specific client needs, and greater flexibility to deploy new technologies. Distributed approaches also generally avoid the network externalities that require a “natural monopoly”, and hence they provide greater scope for private sector participation. At the same time, these new approaches introduce their own complexities related to equity of access and regulation. Distributed solutions have demonstrated the feasibility of the “leapfrog approach” in developing countries, whereby traditional approaches to service delivery can be largely bypassed, and services rolled out to clients much more rapidly and effectively. Obvious examples of the success of distributed systems in the development context are cell phones and solar energy, whose coverage in Africa grew by 40 percent per year and 30 percent per year, respectively, over the first decades of their deployment, with much lower up-front infrastructure investment costs and based primarily on private sector financing. Emerging Opportunities in the Water Sector New, leapfrog opportunities are emerging in other infrastructure-heavy service areas, such as the water sector, where two examples – irrigation and wastewater management – show how this dynamic is playing out in practice. Irrigation has traditionally been associated with large-scale surface water storage facilities connected to distribution systems covering large areas. Infrastructure development has usually been undertaken as a government project, or, occasionally, as a government-approved private project that required significant government guarantees and support. Given the large area of coverage, service quality is challenged by the need to serve a large number of customers, often cultivating different crops, as well as the inter-dependence between farmers regarding the water flows through the network. Cost recovery from farmer-clients is often difficult to enforce, particularly in the public schemes, and inadequate public budgets and operator incentives have consistently resulted in poor maintenance and upkeep of irrigation systems, leading to deteriorating quality of services over time. The resulting need for expensive, additional investments well ahead of the planned replacement period is often characterized as the “build, neglect, rehabilitate cycle”. However, a quiet revolution has been occurring in irrigation over the last twenty years or so, driven primarily by farmers and the private sector. Affordable, submersible pumps powered on-grid and/or by generators or solar panels have been expanding rapidly throughout Asia, Africa, and the rest of the World. These pumps tap the groundwater resources directly underlying the farms so that farmers have full control over the timing and volume of irrigation. The “infrastructure” required – borehole wells, pumps, possibly solar panels, and sprinklers or a drip irrigation system to distribute the water – can all be contracted or purchased from the local private sector, and technical innovation is constantly improving the efficiency, affordability, and durability of purchased equipment. Farmers have “voted with their pocketbooks” such that borehole irrigation is expanding rapidly (particularly in Asia and Africa) and currently accounts for about 40 percent of global irrigated acreage. A World Bank-publication, “Farmer-led Irrigation Development Guide” (https://documents1.worldbank.org/curated/en/721191624266146245/pdf/The-Farmer-led-Irrigation-Development-Guide-A-What-Why-and-How-to-for-Intervention-Design.pdf) , based on consultations with farmers, government, private suppliers, technical experts, and NGOs, highlighted that, while embedded in private initiative, several public policy concerns need to be addressed – particularly regarding equity of access and environmental sustainability. The upfront costs (including drilling of a borehole) can typically cost US$5000 to US$10,000, putting the approach out of reach of many small farmers. Accordingly, governments and NGOs have provided subsidies and guarantees to reduce costs and encourage lending and leasing arrangements by suppliers and banks. Another challenge is that the rapid expansion of pumps can lead to groundwater depletion. Examples of regulatory solutions from Karnataka State in India, California and Nebraska in the United States, Spain and Kenya involve effective government and community monitoring of water resources, and collective action amongst farmers to facilitate rainwater infiltration on fields, coordination of some cropping approaches, and even the use of leaky, traditional, large-scale irrigation infrastructure to support groundwater recharge through infiltration, rather than irrigation water delivery to farmers. The result has been to move the role of the public sector from an often inefficient and high public cost “provider” of irrigation services, to a “facilitator” and “regulator”, while allowing farmers to gain greater control over service provision and to benefit from private sector initiative and efficiency. Another example of distributed infrastructure service solutions in the water sector is that of wastewater management or, more accurately, “water recycling”. Traditionally, cleaning of industrial and household water outflows has been done in large-scale treatment plants with extensive collection networks. Treated water is then “disposed of” in the ocean or rivers or used for agriculture. More recently, as wastewater treatment standards have increased significantly, there is a trend towards reuse of this water – initially for “grey water” uses (landscape watering, toilets, and other non-potable applications), but increasingly for direct reuse for potable applications. However, this requires
