Águas de Malanje underpins its financial sustainability with a cost-to-income ratio of 115% - Case study
The Angolan water utility Águas de Malanje streamlined supply efficiency and strengthened its financial viability thanks to a new organizational model. The project combined technical assistance with improvements in billing and collection services to implement the necessary operating procedures.
Águas de Malanje’s objective was to improve the service provided to its customers, optimize the billing cycle and tailor the size of its workforce to cater for the company’s needs.
The company was only partially detecting fraud and had difficulties in managing debt collection. The customer database was not computerized, and prices were not linked to consumption levels.
Águas de Malanje received frequent complaints from customers about poor service and outages. Although the hydraulic efficiency of the network was below 30%, only short-term measures were being taken.
Commercial viability and financial sustainability had to be underpinned by changing the prevailing business model.
Águas de Malanje is a water utility with over 24,000 customers in Angola. The project was part of the PDISA II program, financed by the Angolan government, the World Bank and the French Development Agency.
- Services:technical assistance, operational support and capacity building.
- Joint venture:Idrica (Aguas de Valencia) and Quantum Solutions.
- Implementation:Project Coordination Unit, Angolan Ministry of Energy and Water (MINEA).
Reading, billing and collection
- Setup of processes to update the databases and introduce a standardized billing, collection and debt management system, thanks to a specific department.
- Optimization of operating costs to improve overall business management.
- Increase in invoicing and adjustments in the size of the workforce.
- Implementation of a new pricing structure based on consumption to streamline and monitor the hydraulic efficiency of the distribution network.
- Awareness and social education campaignsto promote payment of the water service and encourage customers to save water.
Engineering services: technical assistance
- Implementation of operating procedures and training programs to facilitate knowledge transfer and ensure a smooth transition.
- Implementation of a three-phase strategic plan (design, training and implementation), and an asset monitoring plan.
- Development of specific training plans customized to the needs of each department. Delivered by Idrica experts with ongoing supervision to ensure proficiency in all management areas.
- Increase in the volume of water produced. Automation of water supply, treatment and storage infrastructures.
- Continuous expansion of the drinking water network’s coverage.
- Statistical data collection and mathematical processing.
Through this project, Águas de Malanje improved the water service it offers and transformed the company’s operations, optimizing billing cycle management.
Under the new organizational structure, grounded in the fundamental importance of financial sustainability, the cost-to-income ratio rose to 115%.
One of the key factors in achieving this was adjusting the workforce to cater for the company’s needs, providing training programs, improving debt management, introducing advanced fraud detection and regulating pricing.
The initiatives that explain the success of the project also included sectorization and monitoring of the network, and the creation of a hydraulic performance improvement team to locate leaks.
The streamlining of O&M processes, together with the new comprehensive investment plan for the water network and flow meters, optimized water quality and supply.