New USAID Program Emphasizes Private Sector Investment

The ultimate goal, according to an architect of an innovative USAID initiative, is for the agency to “work itself out of a job” when it comes to helping fund enterprises in poor, developing markets. This, one could say, is the primary difference between the agency’s ground-breaking, six-year Securing Water for Food (SWFF) program and the follow-on Water and Energy for Food (WE4F). 

It is a distinction with several major differences, says Dr. Ku McMahan, a senior team leader for USAID currently working on the projects. 

“While SWFF hoped for private investment, non-government capital and regional decisions, WE4F moves from hope to an intentional plan, with these activities as linch-pins of the new program,” says McMahan. 

“USAID now is seriously trying to work itself out of a job. If we could get the private sector and these other actors to become more self-reliant, then we don’t have to be there anymore,” says McMahan. “And that money could go to address other challenges and problems around the world.”

However, he adds, “It’s going to take a lot of work, and we may have to be there for a while to achieve these objectives, but we’ve seen it work in a few places already.” 

SWFF, which was also supported by government funding from South Africa, the Netherland, and Sweden, was McMahan’s brainchild and occupied much of his life at USAID over the last decade. He was the ultimate decision-maker for SWFF from USAID’s Washington, DC’s headquarters, making numerous visits to innovator projects in far-flung places in Africa, India, Southeast Asia, and elsewhere.

In the final analysis, that’s what the program intended to do: Meet a looming water and food crisis for a planet that will be home for nearly 10 billion people by 2050. 

The program was a Grand Challenge for Development, in which hundreds of potential innovators competed for money and technical assistance to produce more food with less water. This called for ground-breaking irrigation and weather monitoring, novel seed development to resist salinity and co-composting without toxic chemicals, among other innovative strides. It also included aiding people at what McMahan calls “the base of the pyramid,” while stressing gender equality and paying close attention to environmental concerns. 

All of these elements are in WE4F, with the added emphasis on private investment and regional decision-making. 

“I, along with a few other people, set up SWFF, and the reality was a lot of the decision-making and information flowed through me, and no one else knew everything about every innovator and historical decision,” said McMahan. “We have built WE4F differently by using regional innovation hubs.”

“If I were to get hit by a bus tomorrow, WE4F can easily continue forward without me. With SWFF, particularly at the beginning, that was simply not the case,” he says. Under the new program, McMahan says the strength is in partnerships. “We made a broad agency announcement to bring innovators and entrepreneurs together,” says McMahan. “We want to go beyond where SWFF was able to go.”

“While I am extremely proud of the earlier work and the activities we were able to do and the new ways of doing things that we created, pivoted, and proved with SWFF, I’m excited for the possibilities of what WE4F offers,” he says. 

McMahan is a big proponent in experimentation in development. 

“It’s always possible this could fail, though I don’t think it will,” he says. “It could be that the SWFF program was the way to go. It was faster and cheaper, but I don’t believe it will be the future. The next few years will give us the answer. Together we can achieve more.” With the SWFF program—scheduled to end this year—McMahan had diminished expectations but was pleasantly surprised at the results of increased agriculture yield, savings in water, and how it enhanced farmers’ lives. 

He says the WE4F program, from the outset, should have a similar trajectory. The innovators will be carefully culled as to quality and investment potential and, essentially, handpicked. There was a feeling in SWFF that if a quality innovator was brought into the program, that, in itself, would make it investment ready, and the funding would happen. 

“In fact, this is the way some developed,” says McMahan. “We obtained about $20 million in investment, but that was only with three or four innovators. We had another nine or 10 that needed up to $10 million in investment. This hasn’t been realized yet.”

A component of the WE4F program is that technical advisors will focus on and facilitate investment. Already, experts have been in the field in West Africa and East Africa mapping potential investors. “Most innovators don’t have the working capital to grow and expand because their capital is locked up in waiting for farmers to pay them back,” explains McMahan. “We need to find a way to offload that credit to a third party. That is what WE4F is designed to do.”

McMahan says his team expects, at a minimum, to unlock $25 million in private investment across 5 WE4F Regional Innovation Hubs.

“I know from the investor landscape that investors are ready. They just want quality companies. I know as well there are many innovators that are looking for deal flow,” says McMahan. “I really believe we will be able to unlock the potential and that there are third parties without agendas wanting to make sure sustainable development is taking place.”

What’s McMahan’s prognosis for WE4F? 

He qualifies it by saying when working with much smaller goals, as with SWFF, you are able to grow more quickly. However, when an innovator aims to scale a business through growth and profits, the hurdles are higher. However, he ventures forth. 

“Probably 10 to 20 percent of them will be really successful,” he says. “Another 70 to 90 percent—depending on the region—will not be as successful.” 

“That’s the risk component, but the reward is if that 20 percent are wildly successful and reach hundreds of thousands or millions of customers, we can substantially modify, if not reduce in some cases, the amount of water needed for agriculture.”

In the final analysis, that’s what the program intended to do: Meet a looming water and food crisis for a planet that will be home for nearly 10 billion people by 2050. 



USAID, Sweden through the Swedish International Development Cooperation Agency (Sida), and the Governments of The Netherlands and South Africa invested $34 million in Securing Water for Food (SWFF) to promote science and technology solutions that enable the production of more food with less water and/or make more water available for food production, processing, and distribution.

This story was developed through the SWFF Social Impact Storytelling Initiative which was established to document innovator journeys and social impact as they work to improve the way water is being used for agriculture. #socialimpact #innovation #agriculture #water