Crowding-in Commercial Financing to Water Supply and Sanitation Utilities

This is a guest blog by RWSN Members Lance Morrell and Michael Ashford.

Achieving SDG6, clean water, and sanitation for all by 2030 requires estimated investments of US$114 billion per year. The present value of the total investment needed is US$1.7 trillion, and these estimates do not include costs of operation and maintenance. At three times current levels, this far exceeds the financing capacity of the entire public sector and donor community, combined.  

We in the development community need new tools and approaches to address this gap. Using donor and public funds to “crowd-in” private investment can help. USAID’s recently announced Private-Sector Engagement (PSE) Policy, for example, recognizes the urgency of using development funding to attract private sector capital into development of infrastructure and services around the world. Similarly, USAID’s Water, Sanitation and Hygiene Finance (WASH-FIN) program is developing and piloting specific interventions to increase private and public investment in WASH. The World Bank’s Public-Private Infrastructure Advisory Facility (PPIAF) is another important source of information and successes on how to leverage the public and donor sectors’ financial power to increase private investment in public infrastructure and services. In all cases, the policies and prescriptions call for the use of market-based approaches as the only sustainable path to sustainably support communities in achieving development and humanitarian outcomes.

While “billions and trillions” of capital for WASH feels overwhelming, outside of 20th century Soviet-style economies, public infrastructure was never meant to be financed, funded, and operated with public resources alone. Commensurate with the growing financing gaps, there is today a glut of private sector capital looking for reliable investments that meet their investment criteria. Globally, pension funds, insurance companies, sovereign wealth funds and commercial banks hold approximately US$100 trillion in assets. In this light, the global financial system is out of balance, and the challenge is to attract private capital and other types of private sector participation into the water and sanitation sector. Development professionals, working with their government counterparts, must now “put skin in the game” without sacrificing the broader objective of shared, public benefits and economic growth.

Changing Project Funding to Crowd-In Private Investments

If the private sector has the capital needed to expand and improve the performance of the WASH sector, why haven’t governments been able to access it? How do we crowd-in the private sector?

The first step is to stop crowding-out private investment with donor funds. Governments and donors crowd-out private investors by providing grants or ill-designed concessional financing against which the private sector cannot compete. Financing and funding are products that banks and donors, respectively, want recipients to “buy;” the price is the interest rate. Free or cheap money from donors is not something private capital can beat.

There are numerous real-world examples of crowding-out in development, which follow the same basic scenario: Donor X works with a government to develop a project that will use public and donor funds to attract commercial financing to the project. In order to attract – or crowd-in – the commercial financing, government will work with financiers to understand their concerns and design appropriate risk mitigating measures. To crowd-in the private sector, the project designers require time to develop both the demand and the supply side. As this project preparation is proceeding and nearing agreement, Donor Y approaches the government and offers grant financing for 100 percent of the cost of the project, and crowds-out the private sector.

In contrast, as USAID’s PSE policy emphasizes, governments must engage and collaborate with the private sector, and the private sector must be allowed to manage its level of risk and to earn a reasonable profit. Adhering to an enterprise-driven development model, USAID and other donors are aiming to play a catalytic role in achieving results, rather than fully funding and managing the majority of its projects. The PSE model recognizes that the private sector represents nearly 90 percent of the direct foreign investment to developing countries, and the model represents a strategic approach through which USAID would consult and collaborate with the private sector for greater scale, sustainability and effectiveness. Under this approach, USAID will attract, or crowd-in, the private investors.

Increasing Government Commitment

Government is the key stakeholder in attracting private sector financing to the WASH sector. To effectively express these commitments, government officials need to understand the benefits and costs of the WASH sectorfrom the perspective of commercial finance. Some of the potential policies and actions include the following, with the commitment type identified in parentheses:

  • Sharing capital costs or providing limited guarantee of recovery of capital costs (lump sum);
  • Guaranteeing continuous payments during project performance to recover capital costs overtime or sharing in expected revenue from tariffs to cover financing costs (revenue flows);
  • Indirect market development by requiring improved operational performance of the utility, whether publicly or privately owned, to reduce expenses and increase revenue, so the utility can enter into direct lending arrangements (regulatory enforcement);
  • Contractually transferring asset management of utilities, if owned by government, through performance-based contracting with private sector service providers (give up control of asset).

Developing a business relationship between governments, utilities and commercial lenders takes time and patience, and the path forward should be gradual to allow all parties to develop trust and confidence. For example, commercial lenders could start with financing smaller projects that enhance revenue for the utility, such as new or upgraded water meters or increasing customer connections. If the utility then dedicates the additional revenue attributable to the project to the private investor, the private investor’s and utility’s interests align around ensuring performance during operation. After the loan is paid off, the additional revenue accrues back to the utility. Once the utility passes this kind of test with private investors, it can expand follow-on borrowing to finance further extensions of the water supply system –again using new cash flow that is “ring-fenced” to repay next the loan.  Meanwhile, scarce public funds are protected and can be used for projects which have high economic value but low financial viability, such as a new sewage treatment system. Overall, the goal is to create more incentives for private capital to partner with donors and government toward shared development goals.

About the authors

  • Lance Morrell is a financial specialist with more than 35 years of professional experience, and is the Founder and Managing Director of FEI Consulting;
  • Michael Ashford is senior clean energy and infrastructure professional with more than 20 years of experience, and is the Global Practice Lead for the Water, Energy, and Sustainable Cities practice at Chemonics International.

This blog post represent the views of the authors and does not necessarily represent the views of Chemonics. Photo credit: Gerardo Pesantez / World Bank.

RWSN/ REACH consultancy opportunities: your questions answered

On 30.11.2020 RWSN advertised two consultancies in partnership with the University of Oxford under the REACH programme (deadline for applications: 8th January 2020). The Terms of Reference for the consultancies are below:

We have received a number of questions in relation to these consultancies which we would like to respond here, to so that all applicants can refer to them.

  1. Q: In the Terms of Reference, the essential qualification and age limit is not mentioned. Please inform us so that we know the eligibility criteria.

A: There are no essential (university) qualifications or age limit for these positions. All essential requirements are detailed in the ToRs.

2. Q: Kindly send to me necessary forms or information to enable me apply

A: You can download details via  https://rural-water-supply.net/en/news/details/86  or here: https://reachwater.org.uk/about-reach/jobs/

3. Q: Is the offered position as “Researcher – Global Diagnostic on Rural Water Services” intended for one person? Or otherwise, could an organisation like the one I am part of apply?

A: Our thinking is that this is better suited to an individual, who can focus on the task rather than it being fragmented across a team. However, we are open to more creative solutions.

4. Q: I am interested in submitting an application to one of the consultancy opportunities for the global diagnostic of rural water service providers under the REACH programme. Now before I go any further I would like to get a better understanding of the programme and this assignment. By rural water service providers, do you mean (a) community members that have been trained to repair hand pumps (b) water utility companies, public and/ or private and/ or (c) rural water supply and sanitation units under the district or local authority?

A. The first point we need to clarify is that the proposed consultancy for the diagnostic of rural water supply providers is global in nature, and that arrangements will likely differ depending on the countries that are chosen for the study. For RWS providers to be considered, there would need to be some data related to basic operational and financial performance available to enable comparison between rural water service providers within and between countries. This would therefore  probably mean that community members could not be considered, but rather (public and/or private) service providers with adequate data and scope of operations. This could mean for instance in the rural water supply and sanitation units under the district or local authority, or water utilities if they operate in rural areas. One of the first tasks under the consultancy will be to propose a typology of service providers (see activity 2 in the ToRs) that would enable us to determine exactly who/ which type of organisations we should target with the diagnostic.

5. Q: I have a question on one requirement in the desired experience section. In the sentence, “Experience in advanced data analytics, mapping and modelling, including GIS”: 1. Is there a specific model that RWSN would like the prospective consultant to use or can the  prospective consultant select a model of their choice? 2. Are there parameters that RWSN would like the prospective consultant to use or can the prospective consultant select parameters they think would be informative to the study? 

A. 1.       There is no specific software that we would recommend to use for data analytics, mapping and modelling, and GIS but we would prefer that the consultant uses open-source software (e.g. QGIS) as we will not support the costs related to licenses for private software.

2.       We would recommend that the prospective consultant thinks about potential parameters for data analytics, mapping and modelling as part of his/her proposal.

6. Q. Could you please clarify the following:

  1. Geographic scope  – the TOR and clarifications point to a global study, but the TOR highlights REACH’s work in Africa and Asia. Is the study likely to focus on Sub-Saharan Africa and South Asia, or is the intention to gather examples of RWS providers from a much wider group of countries (including those in Eastern Europe given the reference to that consultancy).
  2. Survey scope – can you clarify what the scope of the surveys is likely to be? Our assumption is that this would be online surveys of rural water service providers only (e.g. no household surveys, or attempting to survey service users). Is this correct?
  3. Definition of advanced analytics – Do you have any examples of what you mean by ‘advanced analytics’? It may be challenging to get a high number of responses and in-depth answers to an online survey (particularly as the number of eligible RWS is unknown) which would limit the complexity of any analysis and/or modelling that would be possible.
  4. Intensity of inputs – an earlier clarification was that the thinking of RWSN/REACH was this consultancy was best suited to an individual. Given that, the timeline, the scope of the project, and the budget available to you envisage that this will be (more or less) a full time role?

A.

  1. The intention is to gather examples of RWS from a wide group of countries/ geographies, not restricted to SSA and South Asia.  
  2. The survey is intended to be conducted remotely / online (no household or service user survey). The Marketing consultant will support this exercise to ensure that there is a wide variety of RWS providers who respond to the survey; responsibility for data collection and analysis remains with the diagnostic Consultant.
  3. Advanced analytics: as you said this will depend on the quality of data collection, which is a risk we are hoping to mitigate through the Marketing consultant. For your proposal you could perhaps suggest what you might be able to do given ideal/ less than ideal data.
  4. Intensity of inputs: the intensity of outputs for this consultancy will depend on the level of experience of the consultant/ team.

We will continue answering your questions here as they come along. Any questions can be addressed to ruralwater[at]skat[dot]ch.

(Photo credit: REACH)

Les populations rurales peuvent-elles payer pour l’eau en temps de crise ?

Les co-auteurs de ce blog invité sont le Professeur Rob Hope (REACH Programme) et le Dr Guy Hutton (UNICEF). Une version de ce blog an anglais est disponible sur le site web du programme REACH.

Rendre l’eau potable abordable pour les populations rurales a toujours été un défi. La COVID-19 exerce des pressions urgentes sur les gouvernements, les prestataires de services et les utilisateurs d’eau en milieu rural qui ont des besoins prioritaires en eau pour se laver les mains à la maison, dans les écoles et dans les établissements de santé.

Le 23 juin, le programme REACH et l’UNICEF ont organisé un webinaire en partenariat avec le RWSN afin de présenter de nouvelles données sur l’évolution de la demande et des revenus de l’eau, et d’étudier comment mesurer l’accessibilité économique de l’eau dans le but d’améliorer les réponses politiques et programmatiques. Le webinaire complet est accessible ici.

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Nous avons identifié cinq leçons clés que nous présentons ci-dessous, en réponse à la question: Les populations rurales peuvent-elles payer pour l’eau en temps de crise ?

Leçon 1 – Cela est possible. L’expérience de la République centrafricaine (RCA) a mis en évidence un modèle de prestation de services professionnels qui a permis de fournir des services d’eau fiables pendant de nombreuses années à échelle, malgré la guerre civile et la stagnation économique. Des pays comme l’Inde sont en train d’étendre une plateforme de suivi pour améliorer les réponses, soutenue par des prestataires de services gouvernementaux établis sur place.

Leçon 2C’est plus difficile en temps de crise. Les pays sans données et sans réseau de prestataires de services responsabilisés sont confrontés à des choix plus difficiles. L’approvisionnement en eau, imposé par la loi, les politiques et la réglementation, est limité en l’absence de prestataires de services déjà établis au niveau local. Les prestataires informels, tels que les vendeurs, peuvent desservir des populations éloignées en temps normal, mais leur capacité à fournir de l’eau pendant la pandémie de la COVID-19 est limitée en raison des restrictions de voyage. Les règles doivent rester souples.

 

Leçon 3 – Les populations pauvres sont les plus vulnérables. Les données mondiales ont illustré les coûts plus élevés que payent les groupes aux revenus les plus faibles au Ghana, au Cambodge, au Pakistan et en Zambie, ainsi que les coûts importants liés au temps passé à transporter de l’eau, qui sont plus élevés pour les déciles aux revenus les plus faibles. La conception de tarifs mensuels plutôt que volumétriques peut éviter une contrainte de revenu liée à l’augmentation de l’eau pour les besoins d’hygiène. Les inondations et les sécheresses présentent un risque supplémentaire important. Le suivi des données est ainsi un outil clé permettant de fournir une alerte précoce pour cibler les ressources afin de limiter les dommages.

Leçon 4 – Assurer un financement durable. Une eau fiable peut coûter moins d’un dollar par personne et par an. Mais cela nécessite une subvention pour les prestataires de services locaux et les utilisateurs d’eau ont besoin d’un soutien pour maintenir les services en fonctionnement. Une large proportion des populations rurales ne paie pas l’eau aujourd’hui par choix ou en raison d’inégalités. Il a été noté que les gouvernements ne peuvent pas se permettre de ne pas assurer l’accès à l’eau pour les populations. Mais une “eau gratuite” causerait plus de tort, mettant en péril la capacité des prestataires à fournir et à maintenir des services pour tous. Il s’agit là de choix difficiles et les décisions dépendront du contexte.

Leçon 5 – Mieux reconstruire. La COVID-19 a mis en évidence les faiblesses connues de l’ approvisionnement en eau en milieu rural. Investir dans des prestataires de services locaux et responsabilisés est un élément clé de toute stratégie de durabilité. Les écoles et les établissements de santé sont au cœur de ce vaste réseau de services et constituent une priorité essentielle. Ces institutions partagent souvent des infrastructures hydrauliques avec les communautés rurales, et  pourraient constituer un élément central et stratégique de l’approvisionnement en eau pour tous.

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Le webinaire s’est déroulé en deux parties sur une durée d’une heure et demie. Tout d’abord, un aperçu du débat et des caractéristiques de l’accessibilité financière par le professeur Rob Hope (Université d’Oxford), présenté par Alice Chautard avant les présentations du Dr Guy Hutton (UNICEF), Andrew Armstrong (Université d’Oxford)et le Dr Sonia Hoque (Université d’Oxford). Cette présentation a été suivie par une session de questions-réponses facilitée par Alice Chautard. Le webinaire complet est accessible ici.

Si vous avez des questions ou des commentaires, n’hésitez pas à nous écrire : reach@water.ox.ac.uk et vous pouvez nous trouver sur Twitter @REACHWater @UNICEFWater @RuralWaterNet. Crédits photo: Mary Musenya Sammy et Cliff Nyaga.

External support programs to improve rural drinking water service sustainability: a systematic review

This is a guest blog by Meghan Miller. Meghan is completing her PhD in the Department of Environmental Sciences and Engineering at the University of North Carolina at Chapel Hill and has conducted both her masters and doctorate research through The Water Institute.

The Water Institute recently published a systematic review on external support programs (ESPs) that target rural, often community-managed water systems. ESPs are of vital importance to long-term functionality and sustainability of rural drinking water service, as all water systems fail eventually and rural water committees can lack the resources and/or capacity to rehabilitate the systems independently.

The purpose of the systematic review was to determine how ESPs in low-, medium- and high-income countries are described and measured. The aims of the analysis were to: create a typology of ESP activities based on ESPs for rural drinking water systems; identify barriers to ESP access and implementation; and determine how ESPs effect the sustainability of rural water systems.

So what do external support programs do?

The types of ESP activities described in the literature were: technical assistance, financial assistance, monitoring and regulation, communication and coordination, administrative assistance, capacity-building, and creation of policies and enforcement of regulations. Technical assistance, financial assistance, and capacity-building were described in the majority of publications included (66%, 57%, and 53% respectively).

Need for a typology of activities and precise language

The language used to describe ESPs was not consistent between publications about low-, middle-, and high-income countries. When ESP activities go underreported, knowledge transfer is limited and support for ESPs is reduced. Communication and coordination between ESP providers is further limited by inconsistent and imprecise language. We identified twenty-one terms that were used to describe ESPs. Some terms imply that support occurs at specific phases or with specific actors. Post-construction support, for example, assumes that projects have a single construction event. The terminology should reflect how and when support is provided. The better ESP terminology is defined, the better we can compare ESPs in different settings.

External support was the most commonly used term (27% of publications) and we propose using the term “external support programs” to describe the continued support for water systems. Based on our analysis we propose the following definition for ESPs: “the set of activities provided by NGOs, government, private and community-based entities to community-member managers to ensure continued safe operation of a drinking water system.”

What are the barriers to external support programs?

Barriers to ESPs were grouped into six categories: inadequate resources, inadequate ESP support, restrictive policies, lack of communication and coordination, little access to ESPs, and insufficient training of water system managers. The barriers to ESP varied by country income classification. Lack of communication within ESPs and between ESPs and stakeholders was most frequently mentioned in publications about high-income countries (36% of the publications); lack of communicate was often characterized by unclear roles and responsibilities, lack of trust between ESPs and stakeholders, inability to resolve disputes and misunderstanding of local context. Insufficient training of staff and insufficient resources for ESP wa identified as the most common barriers to ESP in publications about low and lower-income countries (57% and 45% of publications respectively).

Little comprehensive monitoring and assessment of ESPs

Twenty studies evaluated the effects of ESPs on water service levels. Most publications described ESP activities but did not undertake data collection to assess the programs. Without a rigorous assessment of ESPs, it is difficult to identify the most effective components of ESPs. Proper monitoring requires that stakeholders understand the activities and models implemented by ESP providers. Presence of ESPs and access to spare parts were used as the indicators of ESP activity by studies assessing the effect of ESPs on households and water systems. Better monitoring would include indicators that measure the six types of ESP activities, such as the frequency and attendance rate of water committee training events. Indicators should also measure the effectiveness of different providers – these outcome indicators should be developed according to the type and purpose of the ESP. Additional assessments of ESPs will help stakeholders identify which ESP activities and models promote sustainability. Support programs can then incorporate those that promote sustainability.

Majority of publications report on ESPs for point sources

The majority of publications addressed ESPs for point sources. The focus on point sources ignores water sources in community institutions and the implementation of more complex water systems. Community institutions, such as schools and health care facilities, have different water use characteristics and management structures than community drinking water systems and support to these community institutions will require adaptations to existing ESPs. Piped water systems, compared to point sources, are more complex, have larger one-time repair costs, typically require repairs more frequently, may require specialist technicians, and may require more expensive parts. Descriptions of ESPs in community settings and for more complex systems will improve knowledge about how ESPs for can be adapted to better serve community needs.

Further reading

The full article is available as:

Miller, M., Cronk, R., Klug, T., Kelly, E.R., Behnke, N., Bartram, J., 2019. External support programs to improve rural drinking water service sustainability: A systematic review. Sci. Total Environ. 670, 717–731. https://doi.org/10.1016/j.scitotenv.2019.03.069

Figure: Model of the variables that affect and are affected by external support programs based on data from quantitative and qualitative evaluations of external support programs and review of the literature. Plus signs represent a positive relationship and negative signs represent a negative relationship. The dashed lines represent relationships that have been identified in the literature, but were not assessed in the ESP evaluations. Credit: Authors.

 

 

 

 

Rural water supply is changing. Be part of it.

The Rural Water Supply International Directory that is available to download from today aims to track the organizations and businesses fostering this change.

by Philip T. Deal, University of Oklahoma, USA

The Sustainable Development Goals are pushing the water and sanitation community to reach higher than ever before. After decades of fighting for the human right to water, universal coverage is the next, challenging summit to climb. “Access to an improved source” has been upgraded to “safely managed drinking water” – a standard that requires continuous service, good water quality, increasing coverage, and affordability. Considering that rural infrastructure often lags behind when compared with urban environments, accomplishing this standard can sometimes feel more like a cliff than a mountain. For these reasons, rural water supply requires new ideas – experimentation – innovation.

The 2019 RWSN directory of rural water supply services

The The 2019 RWSN directory of rural water supply services, tariffs, management models and lifecycle costs that is available to download (and in French) from today aims to track the organizations and businesses fostering this change. These entities are the catalysts to novel service delivery and management models. Some offer minor changes to technology or accountability mechanisms that increase functionality. Some create new financing opportunities that were not previously accessible. Some create a complex management system to maintain water systems over large geographical areas. Some could potentially fail. All are valuable.

The cases described in the Directory are meant to foster growth, learning, and inspiration. The successes, challenges, and failures depicted by one organization could spark a solution for another across the continent. Financing and life cycle cost discussions could become more transparent, uniform, and clear across borders. Networking opportunities and connections become easier – there may even be a neighboring WASH partner nearby that fits your needs!

This new Directory is intended to be an annual compilation. Current cases can be updated with new developments and research. Other innovations and businesses can be added. If a future reader thinks some other information should be included, there’s potential for expansion. We are open to your input.

Questions to Consider

When reviewing the cases within this directory, I would encourage any reader to think on the following questions:

  • What are some common management traits that you observe? What is similar or different when compared to traditional water and sanitation models?
  • What are the most striking innovations that can be observed?
  • What role does each case hold in their water and sanitation ecosystem? What are their responsibilities, and for what are they dependent upon others?
  • Which cases seem more conducive to scaling up?
  • What life cycle costs do various organizations consider their responsibility? What costs should realistically be expected to be covered by tariffs?
  • How would an organization react if international or support funding were reduced or lost? What would be the ramifications to the customers or beneficiaries?
  • What monitoring schemes seem to be effective in maintaining quality water services?
  • What information or data would you be interested in evaluating for these programs?

Bio – Philip T. Deal

At the end of 2015, I began my doctoral research on service delivery models at the University of Oklahoma. My first significant reference was, “Supporting Rural Water Supply”, by Lockwood and Smits (2011), which has often guided my thought process. Understanding how various management models can improve, disrupt, or maintain the status quo for water service has become a focus of my efforts. I want to know if each case is really sustainable, if there is measurable impact, and if equity is truly equal when applying these models.

Since I began, I have had the opportunity to investigate these types of questions in partnership with Water4 and Access Development in Ghana. You may notice this case was not yet included in the directory. This is because I have wanted to give excellent, data supported answers before I do. The team involved has been working diligently to measure and evaluate the level of service provided, the associated life cycle costs, and the effectiveness or their company. Keep an eye out in the next year for these results in multiple studies.

I would encourage all who would like to be a part of the directory in the future to do similar investigations. Challenge your assumptions and dig into the details. Determine what is working and what should be changed. Put resources into evaluating your organization. Then, be honest about it. It is not an easy or glorious task, but it keeps us accountable.

If you do not know where to start – RWSN is a great place to begin. Connect with experts, practitioners, and researchers that can provide excellent guidance. Sean Furey reached out for help on the Directory project in the fall of 2018 through a Dgroup discussion. Since agreeing to participate, I have had the opportunity to grow my knowledge base and network.  We hope this directory will offer the same opportunity to innovative and budding organizations across the world.

Cost effective ways to leave no-one behind in rural water and sanitation – Summary on the RWSN E-discussion

The e-discussion on the topic of “Cost effective ways to leave no-one behind in rural water and sanitation” has come to an end and we are very grateful for the 40+ participants who actively took part. A summary of the e-discussion can be found here. Additionaly, we as moderators want to share our own summary of the discussion in this short blog.

Authors: Julia Boulenouar, Louisa Gosling, Guy Hutton, Sandra Fürst, Meleesa Naughton.

As duty bearers for the realisation of human rights to safe drinking water, States have the responsibility to ensure that no-one is left behind. And the SDG framework clearly sets out the need for all stakeholders to work together on the challenge. This e-discussion was an opportunity for diverse members of the Rural Water Supply Network to share lessons and views on how this can be done.

Reminding ourselves of the challenge at stake: since the SDG WASH targets 6.1 and 6.2 were adopted in 2015, the sector has been thinking hard about how to finance the ambitious goal of providing access to safely managed WASH services for everyone, everywhere and forever. This ambition is even more challenging in rural areas, where coverage levels are lower and the unserved include remote communities which are harder to reach and often poorer.

In order to develop a credible financial strategy to achieve this ambition and leverage resources, governments and sector stakeholders need to determine the real costs involved (not only to provide first time access for a few, but sustainable services for all) and the sources of funding that are available and can be mobilised. It needs credible data on those aspects as well as on the population served and unserved, including the most vulnerable groups.

What we already know about the cost of providing WASH services: the costs of providing services rely on many factors and the WASH Cost initiative led by IRC has helped to identify 6 categories beyond capital expenditure to include among others, operation and maintenance, capital maintenance expenditure and direct support. We know that some of these cost categories are largely unknown and as a result, not planned, not budgeted and not financed. This is the case for capital maintenance expenditure and for direct support costs (generally referring to costs for local government to support service providers).

In terms of actual costs, a World Bank study of 2016 showed that $114 billion per year would be needed globally to cover capital costs and roughly the same for operation and maintenance.

What we know less about is the real cost of providing services to all, especially for those left behind (including those marginalised and those discriminated against) and this is because limited data are available. We also recognise that beyond the 6 generic cost categories, many costs are unknown and neglected and these include:

  • the non-financial time costs of WASH access,
  • the cost of taking time to properly understand demand, recognising gender differences and diverse perspectives,
  • the cost of strengthening skills and stakeholder capacity to fulfil their mandate, particularly service authorities and service providers,
  • the cost of corruption,
  • the time and cost of including people with disabilities and others who are socially excluded in services.

These can be seen as cost drivers rather than additional categories, but should be thought through, every time services are planned for.

Who is currently financing this goal and who should do more? Leaving no one behind is the responsibility of national governments. They need to mobilise funding through a combination of sources, including government (taxes), development partners (transfers) and users (tariffs). This is usually known as the “3Ts”. In some contexts, the private sector may have a role to play in investing in water services. However, results from countries that conducted to identify and track WASH financing with the UN-Water tool TrackFin, show that the main contributors for the sector are by far the users who are paying for their own services through capital investment (Self-supply) and through water tariffs (operation and maintenance). In that context, should we consider revising the “3Ts” to “3Ts and S” to acknowledge the importance of Self-supply in the mix of services? And should we also add a 4th T for time to recognise the extent of unpaid labour, especially that of women, on which rural water supply depends? And should we recognise the time used to travel to a place of open defecation or also the waiting time for shared sanitation?

In any case, given the magnitude of the challenge, governments should mobilise additional funding for the WASH sector and coordinate efforts at all levels to ensure cost-effectiveness and efficiency, particularly in resource-constrained environments. Developing WASH plans at sub-national level could be a good way to strengthening governance and coordination, and maximise cost-effectiveness.

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What about serving those that cannot afford to pay? Those currently left behind include communities located in rural and remote areas who are often the poorest and currently rely on Self-supply. For those who cannot afford to pay and to address the issue of leaving no-one behind, various areas can be investigated:

  • Defining and measuring users’ affordability
  • Considering low-cost technology options such as Self-supply but only if accompanied by long-term support from local and national government (including through regulation)
  • Making sure the solutions are acceptable and accessible for all – taking into account gender, disability, and cultural preferences

This e-discussion has been useful at clarifying knowns and unknowns related to costing and financing services. Even though the issue of affordability has been touched on, many questions remain unanswered.

We think this discussion should continue and here are a few questions, which we still have in mind, but you might have many more:

  • Who are populations left behind in different contexts (including the marginalised and discriminated against) and how can we define and identify them?
  • What are the ongoing costs of reaching everyone (including the aspects listed above)?
  • If users are those paying the majority of WASH supply costs, how do we deal with those who cannot afford to pay?
  • What mechanisms can be introduced to set tariffs appropriately, whilst also covering the costs of long-term service provision?
  • What are the examples of supported Self-supply that have been successful?
  • What are the specific roles of local government in ensuring no-one is left behind?

Continue the discussion with us and post your answers below or sent your contribution to the RWSN e-discussion group.

Photo credits (top to bottom): Dominic Chavez/World Bank; Alan Piazza / World Bank; Arne Hoel / World Bank; Gerardo Pesantez / World Bank

Make the last mile the first mile: is business the key to fulfilling human rights?

This guest blog was written by Selma Hilgersom (Simavi). The original blog post is available here and is re-published with permission and thanks from Simavi.

Last week, I attended the AGUASAN workshop. This yearly event is organised by the Swiss Agency for Development and Cooperation and joined by a broad variety of WASH practitioners. The key focus of this year’s workshop were ‘service providers that take an inclusive business approach and drive the advancement of the human right to water and sanitation’. Within the conference, six cases of young and inspiring entrepreneurs were put forward during the week and participants teamed up to dive into the business cases and assess the human rights angle of making a business out of WASH.

If anything, the week has given me a serious mind exercise on the role of the private sector in development. I have a background in the field of water technology and supporting the development of innovative business propositions. I do believe that the private sector is key in addressing global challenges. Business comes with internal drivers to guarantee the delivery of products and services that meet the demands of costumers, as entrepreneurs depend on the success of their business to generate an income. This drives efficiency, cost-efficiency and the continuous exploring smarter ways of working.

So, if business has the potential to provide everyone in the world with well-functioning WASH infrastructure, why are we not collectively entrepreneuring into the most rural areas of this world and ensuring that the human right to water and sanitation is fulfilled? And why are NGOs still funded to do a job that business can do while making money out of it?

Let’s first set the perspective straight. I work for an NGO. I am not afraid to re-consider my role in a fast-changing world. I do believe business has an key role to play in accelerating development and strengthening (business) ecosystems in-country. Especially local entrepreneurship and equal North-South partnerships can go a long way in providing people with the basic services that they need. Especially the businesses that pro-actively include women and girls and effectively respond to the needs of all members of a given community, regardless of who they are and their circumstances, seem to have the exact same goal as many NGOs. And stepping away from the ‘beneficiary perspective’ and including people as ‘costumers’ creates a different perspective. Two sidenotes: let’s try to avoid the discussion whether capitalism is the system that ensures everlasting happiness here and at the same time acknowledge that disadvantaged people benefit from a system in which they are participating as more than just ‘costumers’ that are defined by their purchasing power.

The nature of business is to ensure that there is a profit made. And from my experience in start-ups, this is a challenge when starting-up a business. The question that comes to my mind is then how feasible it is to design a self-sustaining business model targeting consumers with the least purchasing power, especially in the beginning. And whether it is possible to focus on the lower-bottom of the pyramid; even if this comes with challenges. A few examples: geography (what if a village is located at a remote mountain), reaching relatively few costumers per community, having to invest a lot in demand-creation before WASH services and products are bought. Are there smart models that make this ‘work’? Or stable financing mechanisms that can blend different revenue streams to cover the high need with the limited profitability? And how do you create a business ecosystem with local entrepreneurs to serve the people who currently lack access to WASH? What is the role and contribution of the government?
There is a broader development perspective to this too. Including ‘impact indicators’ in doing business, which reflect the aim of development work, does require extra efforts that may conflict with business interests. But results in lasting positive change in communities. Think of delivering water in a community where people are at high risk of a specific disease; is this just solved by delivering water? Or does this require the provision of additional health information and working towards improved service delivery? Or in the case that women are not allowed to decide over their own bodies, does the delivery of WASH provide an answer to the broader challenges that exist in the community?

Even if we would imagine an all-inclusive model of the private sector that perfectly responds to the needs of people, there is still one discussion that was put forward more than once during AGUASAN: (government) systems are the enablers of the success and upscaling of any business. The central question is therefore how business models fit in existing local, national and global systems? This links into the very basis of acknowledging that people have rights, and that they should be able to claim them, wherever in the world that may be.
And this is not ‘just a remark’ – it links into the issue of rightly anchoring the responsibility where it belongs: who is (or should) take the responsibility for fulfilling the human right to water and sanitation, and what is the place of the private sector therein? What to do if there is no profitable business case for providing WASH? Maybe the consideration is whether the ideal business model, if it would exist, would silence this discussion: does access to WASH equal that human rights are fulfilled? Even if this is done independently from the government, and in a profitable way? And if so, is it possible (capacity wise) to reach the 2.1 billion people (!) that still do not have safe and sustainable water delivery? Should the private sector be made responsible for fulfilling the human right to water and sanitation, if governments fail to do this?

I am not afraid of profit. I believe that businesses and NGOs both play a vital role in development. I believe in systems that are driven by (young) entrepreneurs and create a broad-range of value to consumers and are self-sustaining. There are many examples in the world where the private sectors makes a huge difference in the lives of disadvantaged people. I refer to the two amazing female entrepreneurs of Pad2Go who want to break the barriers women face in Nepal due to their menstruation (and with whom I had the honour to work with during the week). I am incredibly happy that many entrepreneurs are positive towards cooperation with NGOs. However, I also believe that this comes with a joint dream and a joint responsibility.

Often, the cooperation between NGOs and the private sector is defined by the roles ‘taking care of the business’ and ‘taking care of development’. I advocate for a more integrated business case, where investing in business and investing in development are one and the same thing. Could we agree that the success on the broader impact indicators is equally important as the development of a sustainable business model? And not from a ‘charity perspective’, but from the believe that this will increase the integrated value proposition of businesses. And thereby open up new markets and potential (impact) costumers. And a call to NGOs – can we move beyond the output, outcome and impact indicators, and join hands with those who will remain long after the funding of our NGO programmes has run out? And create built-in incentives to be as successful as we can? And not be guided by pre-set targets?

One of the things that stayed in my mind after AGUASAN is the presentation of human rights superstar Ms. Catarina de Albuquerque, who challenged us to “make the last mile the first mile”. Let’s do that. Together.

Edit from the author: I had some discussions about the extent of ‘pushing (Western) values upon local communities’, and whether businesses or even NGOs should be involved in this at all – or that we should limit ourselves to basic product or service delivery. I can write another blog on my thoughts on this. As this blog has a slightly different focus, I refer to Simavi’s aim to ensure that disadvantaged people in low and middle income countries are enabled to practice healthy behaviour based on their own free and informed decisions and free from coercion and violence. By doing this through supporting civil society to claim its rights with and through local organisations, development is no more than amplifying positive changes that start locally.

About the author

Selma holds a master degree in ‘Human Geography’ and ‘Policy and Organisation’ with a specialisation in transnational advocacy and business and innovation. She has worked in international organisations to promote and support the development of new business models, sustainable innovations and the uptake of new water technologies. Currently, she coordinates programs of Simavi in Tanzania and Nepal that aim to ensure that disadvantaged people, and especially women and girls, can live healthy lives

 

 

From Colombia to Kyrgyz Republic and Uganda: how we help countries adopt state-of-the art information systems for better management of rural water services

How many countries have you worked in where an up-to-date national information system for rural water services is used for decision-making?

SUSANNA SMETS (World Bank/RWSN Sustainable Services) & ANTONIO RODRÍGUEZ SERRANO (World Bank/RWSN Mapping & Monitoring (re-blogged from the World Bank)

How many countries have you worked in where an up-to-date national information system for rural water services is used for decision-making?

How many well-intended monitoring initiatives did you encounter which are no longer being used?

Your answers are likely to be “few” and “many”, as government-led information systems to support planning and decision making for fragmented rural water services are not easy to develop, institutionalize, and sustain.

It is widely recognized that information systems are a key building block to achieve sustainable rural services delivery – a top development priority given that 8 out 10 people without basic water services live in rural areas, leaving 628 million people unserved. The good news is that a customizable, tried and tested solution already exists, so that countries can leap-frog a cumbersome development process and – more importantly – go through a fast learning curve when adopting and institutionalizing the Rural Water and Sanitation information System or “SIASAR” as their national rural sector monitoring and evaluation (M&E) system.

Following the initiative of the governments of Honduras, Nicaragua, and Panama, 11 countries in Latin America and the Caribbean are using the innovative open-data platform “SIASAR”. Different actors are using this tool for decision making, strategic planning, rural water performance monitoring, and for taking appropriate actions to prevent services from deteriorating, ensuring that water keeps flowing from the taps and communities receive timely support. SIASAR has been supported by the World Bank since its inception in 2010. In particular, Global Water Security and Sanitation Partnership (GWSP), a multi-donor trust fund housed within the World Bank’s Water Global Practice, provides funding to SIASAR.

Following the initiative of the governments of Honduras, Nicaragua, and Panama, 11 countries in Latin America and the Caribbean are using the innovative open-data platform “SIASAR”.

With its adaptability and multi-language capability, SIASAR has now been introduced in the Kyrgyz Republic (in Russian and Kyrgyz languages), and a pilot has also been planned in Uganda. Within the context of the Kyrgyz Republic’s national rural water program, supported by the World Bank-supported Sustainable Rural Water Supply and Sanitation Project, SIASAR has now gradually been introduced as the sector’s M&E system, covering data on system status and service provider performance for almost a third of its 1800 remote and mountainous villages. This will help to target investments and achieve the Kyrgyz Government’s vision to reach universal access by 2026.

With support from GWSP and the World Bank’s office in Colombia, the South-South Knowledge Exchange Facility helped bring Kyrgyz and Ugandan delegations together in Colombia. This knowledge exchange allowed them to receive peer-to-peer advice on how to introduce, roll out, and use SIASAR, and to learn about effective policy instruments, regulations, and institutional arrangements for sustainable rural water supply and sanitation service provision.

With support from GWSP and the World Bank’s office in Columbia, the South-South Knowledge Exchange Facility helped bring Kyrgyz and Ugandan delegations together in Colombia.

Specifically, the delegations learned about Colombia’s differentiated policy and regulatory instruments for rural areas, including tariff policies, water quality and environmental regulations, technical standards for water supply and sanitation, financing modalities for investments, and of course the SIASAR information systems for evidence-based decision making. Through field visits, the responsibilities of local and regional governments in rural service delivery in Colombia were better understood. The three-way translation between Spanish, English, and Russian put in place and the excellent collaborative spirit by all parties helped to overcome the communication challenge. These delegates took away important lessons on the adaptation process for SIASAR, such as:

  • SIASAR implementation and scale-up requires dedicated human and financial resources at the national and regional levels, including both sectoral and IT experts.
  • A clear roadmap for SIASAR adoption is necessary, bringing in multiple partners to support implementation. Anchoring in national legislation and fostering linkages with other national statistical information systems is critical.
  • SIASAR can cater analysis to the need of different actors and increases transparency and accountability of service provision.
  • SIASAR has helped to inform and influence investment programs to close the urban-rural service gap, accompanied by a range of measures to support rural service providers.

Depending on where they were in the adoption of SIASAR, the Kyrgyz delegation was keen to grasp the process of institutionalization, while the Ugandans were exposed to the range of capabilities and practical first steps that have now led to a first pilot, supported by the Uganda Integrated Water Management and Development Project (IWMDP).  

Seeing solutions in action can be a great motivation. The knowledge exchange with Colombiastimulated learning and encouraged officials from Kyrgyz and Uganda to try and adopt solutions to their own circumstances. A guide is now available that can help any country go through the process and prepare for the steps of adopting SIASAR.

SIASAR has proven to be an effective tool for improving the monitoring, evaluation, planning, and coordination of water supply and sanitation services in participating countries in Latin America and beyond. Through knowledge exchange activities like this and future GWSP technical assistance, we hope to support more countries in adopting the system and joining the initiative, while we commit to continuous improvement of the capabilities of the system. 

How a radio talk show is promoting WaSH in Northern Uganda

This is a guest blog by Justine Olweny, a Ugandan WASH entrepreneur and resource centre founder. You can find out more about his activities here.

“YOT KOM LONYO” (meaning “Health is wealth”) is a WaSH campaign radio program talk show conducted every Thursday from 16:00–17:00 hours East African Time. It encourages the involvement of local entrepreneurs, school leaders, pupils, politician, district technocrats, and partner representatives on water, sanitation and hygiene (WaSH) promotion discussions. It has promoted the utilisation and ownership of WaSH products among the communities of Kitgum District.

The weekly talk show was started in September, 2018 and has so far covered 7 WaSH topics within 22 episodes.This involves the engagement of eight stakeholders within the region being represented in at least two sessions. This talk show was motivated by the need for community ownership in safe WaSH infrastructures created by difference agencies, including the government.

Mightyfire 91.5FM has a total coverage of about 1,500,000 listeners in Northern Uganda. It has made significant progress in reaching out to the majority of refugees from South Sudan in the local language Acholi, which is spoken by them. The intention was to prepare for the rainy season, which often leads to an increase in the prevalence of waterborne diseases, including cholera, through the production of short radio spots to promote hand-washing with soap before eating and boiling drinking water to avoid illness.

This 6-month partnership between Mightyfire 91.5FM and Water Access Consulting is a pilot project to explore the possibilities of promoting hygiene and sanitation products and services led by the communities of Kitgum District. It was inspired by the webinar From Beneficiaries to Business: Promising findings from customer-centered approaches to sustainable water services.

Achievements:

  • Improved pit toilets (DuraSan and the SaTo pan supported by the “Sanitation as a business” programme of Water for people Uganda) are being constructed by landlords, while demand for improved pit toilets has increased together with the services provided by the pit-emptying gulpers team of the Municipality.
  • The radio programme materials were developed in accordance with the context, with compelling radio programmes that engage listeners in good hygiene practices, and with references to Lifewater mWaSH and UNHCR WaSH manuals.

Learnings:

  • The materials and topics discussed are generated by the audience themselves, for example during a school Q&A session, and during interviews
  • The audience pay a lot of attention to jingles, and they memorise short spot messages instead of the entire radio talk show
  • It is very motivating for both parents, elders and pupils to listen to their recorded debate play over the radio.

What do you think? How can we create more WaSH service demand using media? Do you have any examples of good WaSH campaigns in the media, that have contributed to behavior change in WaSH? Please share your experiences below.

(Photo credit: Water Access Consulting Archive)

The Top 10 RWSN Blog Posts in 2018

The RWSN Blog provided us again with some exciting posts in 2018. From sustainable water resources and community management, to solar-powered water pumping, to (manual) borehole drilling, and to rural water services – the range of topics offers diverse and insightful perspectives on rural water supply issues.

Here are some of the most popular blogs in 2018:

  1. Sustainable water resources management in Sri Lanka: present situation and way forward
  2. Three common myths about solar-powered water pumping
  3. “The borehole is not a madman” 3 reasons why Community Based Management demands a rethink
  4. Manually Drilled Wells: Providing water in Nigeria’s Megacity of Lagos and beyond
  5. Borehole drilling supervision in Malawi: why it is essential, not optional
  6. For rural Tanzanians, water has a social value too
  7. Tracing a path to sustainable rural water services in the Democratic Republic of the Congo
  8. Still barking up the wrong tree? Community management: more problem than solution
  9. Sharing experiences of data flows in water and sanitation – some reflections from AGUASAN Workshop 2018
  10. Achieving Professional and Sustainable Drilling in Madagascar? Yes, we can!

Find more blog posts

Find the newest blog posts here: RWSN Blog

Write your own Blog posts on rural water supply

Feel free to send your text and one or more pictures (if possible) in an e-mail with the subject “RWSN Blog Post” to ruralwater@skat.ch