One of the major issues affecting water utilities in the developing world is the considerable
difference between the amount of water put into the distribution system and the amount of
water billed to consumers (also called “non-revenue water” [NRW]). High levels of NRW
reflect huge volumes of water being lost through leaks, not being invoiced to customers,
or both. It seriously affects the financial viability of water utilities through lost revenues and
increased operational costs. A high NRW level is normally a surrogate for a poorly run
water utility that lacks the governance, the autonomy, the accountability, and the technical
and managerial skills necessary to provide reliable service to their population.
The waste of resources resulting from high NRW levels in developing countries is considerable.
To illustrate this point, the study begins with a global overview of the situation and
what it means in terms of foregone services to new consumers and the financial costs to
utilities. The total cost to water utilities caused by NRW worldwide can be conservatively
estimated at $141 billion per year, with a third of it occurring in the developing world. In
developing countries, about 45 million cubic meters are lost daily through water leakage
in the distribution networks—enough to serve nearly 200 million people. Similarly, close
to 30 million cubic meters are delivered every day to customers, but are not invoiced
because of pilferage, employees’ corruption, and poor metering. All this directly affects
the capacity of utilities in developing countries to become financially viable and fund
necessary expansions of service, especially for the poor.