More than 2.2 billion people around the world still lack safe drinking water. In underserved, last mile rural communities, this need is particularly acute, as service delivery is more costly and operators face greater barriers. In addition, investment in rural safe water has historically prioritized building infrastructure instead of the long-term capacity required to sustain quality services.
These factors have led to a critical gap: a shortage of social entrepreneurs investing in professional, cost-effective rural water solutions. However, water service providers and funders can learn important lessons from the energy sector about proven, scalable financing models. A recent panel presented by the Conrad N. Hilton Foundation at the 2026 Concordia Annual Summit made the business case for viable, entrepreneurial water service models for rural communities, building on successes from the energy sector. The session brought together experts Kate Cincotta of Saha Global, Yariv Cohen of Ignite Access and Luiza Savage of the Washington Post in conversation with Hilton Foundation President and Chief Executive Officer Peter Laugharn to discuss what it will take to attract social entrepreneurs for last-mile drinking water services.
In rural environments, the ongoing costs to deliver safe water often far exceed what communities can pay in user fees. More than three-quarters of people globally experiencing extreme poverty live in rural areas, and costs for delivery, infrastructure construction and maintenance are higher than in urban areas. A Hilton Foundation-funded study in Uganda, for instance, revealed that providing reliable safe water to a district of 400,000 people would require $500,000 in annual subsidies to operators. Because these conditions deter social entrepreneurs, communities are forced to rely on untrained volunteers; over time, many water points do not remain operational due to a lack of maintenance.
To break this cycle, performance-based subsidies—financial incentives that tie operators directly to how reliable their water services are—from donors like the Hilton Foundation can attract qualified entrepreneurs, allowing them to deliver professional water services while keeping costs affordable. Philanthropic funders can absorb the financial deficits that operators face in rural environments and allow them to continue to grow their services. But philanthropy alone is not a permanent solution—foundations and other donors must work with governments to help them build the regulatory environments needed to attract entrepreneurs and scale up services.
Although the energy and water sectors serve similar rural populations, energy actors have attracted more investment to scale up operations. The instant, tangible benefits provided by energy access—such as lighting and connectivity—are easy to understand for funders and customers, who are willing to adopt and pay for these services even in remote areas. To emulate this success, the water sector must make the case that safe drinking water has immediate, visible value, and must communicate this message effectively to both consumers and investors.
The energy sector has also demonstrated the value of properly structuring innovative financing models to encourage sustainable, longer-term service delivery. Tools like results-based financing and concessional capital—both of which reward operators for good performance—can support energy access in rural environments through incentives. The key, however, is to incentivize durable execution over short-term activity. Funders in the water sector using innovative financing mechanisms must similarly ask if these tools are rewarding customer outcomes and long-term performance. If so, safe water projects and enterprises are more likely to build sustainably and scale up over time.
In both the energy and water sectors, local, regional and national government actors play a critical role in supporting rural service delivery. If we want professional operators to succeed in the water sector and provide reliable, sustainable services, governments must provide a combination of regulation, infrastructure and incentives. This approach includes clearly defined standards for service, transparent procurement, public funding for core infrastructure like pipes and pumps, and performance-based subsidies that reward operators for high-quality performance. When governments offer these practical solutions, they reduce risk for social entrepreneurs and other financing actors, and allow safe water operators to scale up their services while keeping costs low for vulnerable communities.