Borrower Spotlight: Azure Source Capital
May 04, 2021
Our borrower, Azure Source Capital (ASC), mobilizes capital and technical expertise to upgrade and expand water services for under-served urban and peri-urban communities of El Salvador. ASC provides capital to local financial institutions (rural banks and credit cooperatives) to on-lend to water service providers. Its technical services partner, Azure Technical Services, provides engineering services and training to water service providers and facilitates loans between local financial institutions and water service providers.
In El Salvador, more than 25% of the population does not have access to piped water in their homes and 40% of the population has unreliable access to water. Two-thirds of rural and small urban water systems require major capital infusions to improve and expand water services.
In the Guayapa Abajo community of El Salvador, it has taken more than forty years to provide consistent and reliable access to household water to all residents. The process of bringing clean, piped water directly to households throughout the community has been slow moving and often left out the poorest families. It began in 1983, when the first water pipeline brought water to 233 homes. In 2000, the community’s water association, Asociación Administradora de Acueducto Agua Saludable de Guayapa, was formed to help meet community needs. Beginning in 2004, the association supported the installation of micro-meters in residences, which helps community members keep track of water usage and avoid major costs associated with overuse.
In 2018, a group of the poorest families in the community expressed interest in obtaining water service but were unable to afford the costs associated with the connection. For the first time, in coordination with the town mayor, the community’s water association organized to subsidize those who could not pay. That’s when they called for support from our borrower, Azure Source Capital.
“At this time, we met with Azure El Salvador during a municipal council hearing and, as a member of the association's board, I asked them to complete an assessment of our water system,” commented Alex Mejía, treasurer of the association. “Through this assessment, we determined the community’s water needs as well as associated costs. Azure helped complete a project profile for the improvement and expansion of the drinking water system, which was then submitted to potential funding organizations.”
ASC estimated that the project would cost more than $400,000 USD. After the initial assessment, ASC helped arrange financing to cover the cost through the Ministry of the Environment.
The Mayor's Office contributed to the purchase of materials, paid for skilled labor, and supported negotiations with other institutions. The water supply system was then expanded with funds from Catholic Relief Services (CRS) and technical support from ASC. The technical support services helped to promote soil conservation practices and reforestation of degraded land used for grains and livestock. The final stage of the project, which began in early 2020, is building another community well and updating two existing wells.
Over the past four decades, the community of Guayapa Abajo struggled to provide clean and safe water for all community members. This year, for the first time ever, all community members will have stable water access, thanks to the collaborative effort and joint investment of different national and international institutions, such as ASC.
Mr. Mario Sánchez Rodríguez is one of those residents. Now, "I bathe when I want to and wash my hands twelve times a day," exclaims Mr. Rodríguez.
As of 2020, 925 homes in the community were connected to the system, leaving more than 325 homes still without water access. However, once the project is completed, a total of 1,250 families will have improved access to clean and safe water.
“From the very first day I received water access, I have been much happier. I bathe often; I water my plants; I keep my house clean; I couldn’t do this before,” says Salvador Ayala, a community member.
“Girls and boys do not waste time fetching water now. They even have more time to study,” concludes one of the water board members, mentioning one of the many benefits of water access.
ASC asserts that “water is life,” which is the foundation of their mission to ensure that all communities, especially those living in poverty, have access to clean water. The community members of Guayapa Abajo have waited more than 40 years of their lives to see water fall directly within their home. Today, thanks to ASC and other partners, their cups will be full.
This is adopted from a piece originally published by Elizabeth H. Rivera for Catholic Relief Services and Azure. Learn more about Azure Source Capital and our other borrowers in our Portfolio List.