Memorandum submitted by the World Bank
1. INTRODUCTION
This submission is made in response to the inquiry
by the International Development Committee of the House of Commons
into Water and Sanitation, as described in the Terms of Reference
issued by the Committee on 20 July 2006. This submission focuses
on the partnerships between the World Bank's administered global
trust programs and the UK's Department for International Development
(DFID) in support of developing countries' progress towards achievement
of the Millennium Development Goal 7 and its targets on water
supply and sanitation.
This submission includes an overview of the
World Bank Group assistance in the water supply and sanitation
(WSS) sector and the way in which DFID and the World Bank work
in partnership in this sector. Section 2 of this submission focuses
on the World Bank Group investments in the WSS sector and the
influence DFID has through its partnership relation. Section 3
presents specific examples linked to direct DFID financial support
to one of the oldest global programs in the World Bank—the
Water and Sanitation Program (WSP). The examples presented are
directly related to the areas of interest of the International
Development Committee's inquiry into water supply and sanitation.
Finally, Section 4 presents examples of water and sanitation activities
directly supported by DFID through other global infrastructure
trust fund programs administered by the World Bank—the Public-Private
Infrastructure Advisory Facility (PPIAF) and the Global Program
on Output-Based Aid (GPOBA).
2. OVERVIEW OF
THE WORLD
BANK GROUP
ASSISTANCE IN
THE WATER
SUPPLY AND
SANITATION (WSS) SECTOR
The World Bank Group is among the largest international
financiers of water supply and sanitation services. The total
World Bank[232]
financial portfolio for the WSS sector is over $6 billion. World
Bank (IDA/IBRD) lending in fiscal year (FY) 2006 was $1.6 billion.
This represented 8% of total World Bank lending and was the highest
WSS lending in a decade—up from $0.6 billion in FY2001.
This makes the World Bank among the largest external financier
in the WSS sector. For FY07, financial support to the WSS sector
is expected to reach over $2 billion. Lending is accompanied by
analytical and advisory services to support client countries in
devising and implementing policies and programs to extend and
improve service, particularly to poor communities. Further information
on WSS activities supported by the World Bank Group can be found
at watsan.worldbank.org.
In terms of concessional aid, IDA's share of
total donor financing increased from 7% to 25% over the past five
years. This makes IDA the largest source of aid for the sector
and IDA commitments for WSS in Africa are to double this fiscal
year to $700 million. In FY2006, IDA grants to the WSS sector
amounted to about $154 million or 24% of all IDA total investments
in the sector.
In addition, where country and project creditworthiness
is sufficient, the International Finance Corporation (IFC) issues
loans and equity, and the Multilateral Investment Guarantee (MIGA)
provides guarantees to catalyze private investment in the sector.
IFC currently holds a portfolio of over $327 million ($103 million
in equity and $223 million in loans) in WSS investments.
World Bank assistance for WSS has contributed
to improving WSS services in both direct and indirect ways. A
large share of lending directly supports expanding access to improved
services. The World Bank also contributes to the WSS MDGs through
a number of indirect mechanisms, including supporting sound policies
and effective institutions; positioning WSS in national poverty
reduction strategies; building multi-donor investment programs
at the country level; and supporting technical assistance, capacity
building, policy advice, and knowledge generation and dissemination
in the WSS sector.
The World Bank Group's activities in infrastructure
development are guided by an Infrastructure Action Plan.[233]
This plan emphasizes the delivery of infrastructure services along
the entire spectrum of public and private involvement. It envisages
the financing of projects at regional, national, and subnational
levels. The World Bank operates across the entire spectrum of
public and private provision. The Operational Guidance for World
Bank Group Staff: Public and Private Sector Roles in Water Supply
and Sanitation Services note2 provides World Bank Group staff
with the guidance on assessing the suitability of available options
for public-private roles in the provision and financing of WSS,
and the main considerations in choosing among these options. It
cautions against one-size-fits-all prescriptions, recognising
the variations in circumstances among developing countries.
The World Bank has a long-standing partnership
with DFID in the WSS sector focused on collaboration at the global
and country level through direct and indirect means. The most
important direct means of collaboration is the participation and
financial contribution of DFID to one of the oldest global trust
fund programs administered by the World Bank—the Water and
Sanitation Program (WSP). DFID also contributes directly to WSS
activities through other global programs administered by the World
Bank such as the Public-Private Infrastructure Advisory Facility
(PPIAF) and the Global Program on Output-Based Aid (GPOBA). The
knowledge generation, policy analysis, analytical work, and upstream
investment support provided by DFID through these programs has
a multiplier effect that influences the entire World Bank Group
portfolio. Furthermore, the partnerships at the global and country
level between the DFID teams in the Policy Division and the country
programs and the World Bank teams reinforce the influence and
cross-learning through shared policy dialogue, knowledge sharing,
and harmonization efforts.
3. THE WATER
AND SANITATION
PROGRAM (WSP)
The Water and Sanitation Program (WSP) is an
international partnership of the leading donors in the Water Supply
and Sanitation sector. Its mission is to alleviate poverty by
helping poor people gain sustained access to improved water and
sanitation services. It does this by working with partners in
the field to seek innovative solutions to the obstacles faced
by poor communities and by striving to be a valued source of advice
to achieve widespread adoption of these solutions. WSP is supported
by 14 financial partners—including multilateral and bilateral
agencies and a private foundation.
DFID is one of WSP's leading donors, with total
pledges and contributions of about $33 million over the last five
years. This support is provided through a combination of core
global, regional, country and programmatic trust funds. A valued
aspect of the partnership with DFID is the coordinated and effective
approach between the Policy Division and country programs that
interact with and support WSP.
The DFID funding has been used to support the
overall work program of WSP to enable it achieve its goal of helping
the poor gain sustained access to WSS services. A key element
of this goal is the support to partner countries in their efforts
to achieve the MDGs, particularly the WSS targets and other goals
linked to improved and sustainable WSS. Through its core untied
funding, DFID supports a broad range of WSP program activities
and products including policy and strategy development, knowledge
generation and dissemination, support to implementation of policy
and institutional reforms in all WSP focus countries as well as
at the global level. DFID support has also enabled WSP to play
a catalytic role in developing innovations and testing new approaches
and working with clients to apply lessons and experiences in scaling
up WSS programs at the country level.
In this submission, we will focus on specific
examples of WSP activities supported through DFID core untied
as well as targeted funding. The examples have been selected to
illustrate evidence addressing the areas of inquiry by the International
Development Committee in the WSS sector, as identified in the
Terms of Reference issued on 20 July 2006. The specific areas
that will be covered in this submission are:
(a) The Domestic Private Sector Participation
Initiative—unlocking the power of domestic private sector
for the provision of WSS services to the poor.
(b) Sanitation in South Asia—a movement
for scaling-up access to basic sanitation to the poor.
(c) Water Supply and Sanitation MDGs in Africa.
(d) Accountability and overall WSS sector
governance.
(e) Rural Water Supply and Sanitation institutional
reforms in India.
(f) The Global Public-Private Handwashing
Partnership and the School Sanitation Toolkit.
(g) Dissemination of WSS knowledge—a
tool to replicate and scale-up best practices.
3.1 The Domestic Private Sector Participation
Initiative
Launched in June 2005, the objective of this
project is to support client countries and multilateral initiatives
to leverage greater financial and technical inputs from the domestic
private sector to make progress toward the MDGs by focusing on:
(a) promoting an enabling environment for domestic private operators;
(b) developing the capacity of the supply and demand sides of
the market; (c) developing programs designed to achieve the right
balance between public and domestic private sector involvement;
and (d) promoting cooperation between public WSS utilities and
agencies and small entrepreneurs serving the poor in rural and
peri-urban areas. The project follows, and builds on, a number
of smaller projects supported by bilateral donors and NGOs as
well as multilateral institutions. It is currently supporting
23 multi-year projects in 15 countries across Africa, East Asia,
Latin America, and South Asia to:
(a) create an enabling environment for small
providers (Philippines, Lao PDR, Cambodia);
(b) pilot private operation in small towns
(Vietnam, Peru, India and Bangladesh);
(c) improve efficiency of borehole drilling
through the Drilling Entrepreneur Support Initiative (Africa);
(d) introduce innovative management models
through partnerships between utilities & informal/small providers
(Kenya, Tanzania);
(e) design output-based schemes (Kenya) and
design-operate and lease contracts (Bangladesh) for domestic private
operators;
(f) support the transition from government
ownership and operation to private sector and joint stock companies
(Red River Delta, Vietnam);
(g) develop large scale public-private partnerships
(PPP) with pro-poor focus (New Delhi, Bangalore, Goa and Dar-es-Salaam)
and in small towns (Burkina);
(h) strengthen action planning to improve
services to the poor (Seven Cities project in Latin America);
and
(i) facilitate utility access to market finance
(Africa and South Asia) by addressing the key constraints such
as reforming utility and linking performance improvement to financing,
and creating room for market transactions.
Though fairly new, the Domestic Private Sector
Participation Initiative is already showing the following outcomes:
(a) In Peru, an increase in domestic
private sector activity in eight small towns (2,000-30,000 inhabitants)
through new management contracts between local private operators
and municipalities. All the contracts are expected to be fully
operational by the end of 2006. WSP has also launched a sanitation
marketing program in Peru which has been able to leverage additional
funding of US$1 million for scaling up activities.
(b) In Kenya, support for implementation
of sub-delegated network arrangements between the Kisumu Water
and Sewerage Company and private entrepreneurs and local community-based
organisations through bulk water supply and pricing is already
providing improved services to about 2,000 people, a number that
is set to increase during the scaling up process. The utility
is replicating this model in all the low income settlements through
partnerships with local NGOs. Using a combination of output-based
aid and microfinance to fund community-based water projects, this
project will help expand water and sanitation services to a total
of 18 low income communities.
(c) In Pakistan, WSP has made significant
progress in helping to legitimize the relationship between small
scale providers and the Karachi WSS utility in two locations where
community associations are paying the utility to obtain utility
connections. So far, two community associations are managing and
operating their water networks, which are contributing to improved
governance.
(d) In Cambodia, the focus has been
on providing advice and technical assistance to the leading 10-15
small water providers. In addition, technical training through
workshops to 62 hitherto unlicensed private providers has resulted
in an increase in applications for licenses.
(e) The project has also been supporting
regional activities in Africa in building relationships
among municipalities, utilities and small-scale providers. Examples
include Zambia, Benin and Mozambique, to develop and design work
programs that include small private provider participation in
water and sanitation service delivery in informal settlements.
3.2 Sanitation: from South Asia to Global
Innovation
DFID has played a substantive role in one of
the most interesting new approaches to scale up sanitation services.
In this innovative local approach to sanitation—Community-Led
Total Sanitation—where national policies and fiscal
rewards are incentivizing rapid scale up, significant impacts
are resulting in progress toward meeting the MDG. The Community-Led
Total Sanitation (CLTS) approach is a shift from the paradigm
of promoting toilets at the household level to one of awakening
a desire for local communities to become "open defecation
free." The CLTS focuses on:
(a) behavioral change as the foundation for
improving sanitation outcomes;
(b) shifting the focus from infrastructure
to services and outcomes;
(c) identifying the triggers for behavioral
change, including targeting the local collective as the means
to facilitate behavioral change, thus making use of the influence
that community perception has on individual practice; and
(d) demonstrating how targeting negative
externalities at the collective level creates incentives for the
local community to prioritize inclusion, as the collective outcomes
require everyone to be included.
Through CLTS, Bangladesh has already met its
MDG target for sanitation. Coverage is reported to have increased
from 33% (2003) to 70% (2006) and is set to reach 100% by 2010.
With DFID support, WSP has been actively working with the government
of India to replicate the lessons from Bangladesh by facilitating
knowledge dissemination and learning between the two countries,
in particular for policy makers and local governments, developing
sanitation policy and streamlining policy principles for all the
development partners. CLTS is rapidly being scaled up in the state
of Maharashtra where support has increased from 38 communities
(2004) to over 4,000 (2006). The lessons and success of Maharashtra
are helping to scale up CLTS in an additional five states in India.
With WSP support, governments of Punjab and the Northwest Frontier
Province have also started to roll out fiscal incentive programs
in sanitation.
At the regional level, WSP has been facilitating
knowledge sharing and learning through regional conferences organised
to highlight the importance of sanitation. The first South Asian
Conference on Sanitation (SACOSAN I) took place September 2003
in which the Dhaka Declaration was signed by the respective
Governments endorsing the focus on the eradication of open defection,
the service delivery role of local governments and the importance
of behavioral change at the collective level. The success of SACOSAN
I resulted in demands for a deepening of the agenda from one of
bi-annual regional conferences into a substantive regional knowledge
agenda in sanitation. SACOSAN I was also a great impetus and contribution
to the successful sanitation story in Bangladesh. SACOSAN II took
place in October 2006 in Pakistan during which the Government
of Pakistan developed a national sanitation policy embedding best
practice principles from the region.
The success of the CLTS in increasing rural
sanitation coverage is having impact beyond South Asia through
WSP's global/cross-regional networks, supported in part through
DFID core funding. It has enabled other countries such as Indonesia
and Cambodia to embed this best practice approach within their
own policies and programs. Plans are also underway to test the
CLTS approach at scale in Tanzania, new states in India, and Indonesia
starting from this fiscal year, with funding from other WSP donors,
further leveraging DFID's financial support.
3.3 Supporting the Water Supply and Sanitation
MDGs in Africa
The objective of this set of activities is to
support country policy dialogue and to develop policies and financing
strategies to stimulate sector investments to achieve national
targets and the MDGs. With WSP support, MDG roadmaps have been
completed for all focus countries in Africa, as well as Country
Status Overviews (CSOs) for 20 African countries as a flagship
product. The CSO report on WSS MDGs brings together current data
that sector leaders and support agencies can use to assess progress
and have a comparative basis for sharing country experiences and
identifying corrective action. DFID support is also being used
to support development of country Monitoring and Evaluation (M&E)
systems to increase accountability and improve provision of WSS
services by helping clients develop systems for sector implementation
and results monitoring. Demand for support to develop M&E
system has been growing steadily as pressure to meet the MDGs
increases.
DFID has taken a leading role in addressing
the needs for facilitation or "soft support" for the
WSS MDGs in the areas of policy development, sector wide approach,
aid coordination and learning and networking. It provides this
support to a number of African countries and on key themes, in
some cases, through its partnership with WSP and UK centers of
excellence dedicated to WSS (WEDC, London School of Hygiene and
Tropical Medicine). This support has contributed to important
advances in sector policies and programs particularly concerning:
— the strengthening of the WSS components
of PRSPs as well as their monitoring (Kenya, Mozambique, Senegal,
Benin);
— the effective use of public finance;
— development of the role of domestic
private operators (eight countries in Africa)
— hygiene and sanitation and HIV Aids
(Uganda, Ethiopia);
— increased country-based capacity
for communication, learning and networking (Kenya, Uganda);
— revival of WSS development in post-crisis
situations (Rwanda and Democratic Republic of Congo); and
— improvement in sector planning mechanisms
through improved financial planning tools (Sector Wide Investment
and Planning Tool—SWIFT) to facilitate more effective allocation
of resources (being pioneered in Kenya, Mozambique, in concert
with the EUWI).
3.4 Accountability and overall WSS Sector
Governance
Recent studies show just how significant corruption
can be in diverting resources. To give an example from a survey
conducted by WSP in South Asia, involving more than 1,400 water
utility staff and customers:
— 41% of customers said they had paid
a bribe to utility staff during the last six months to get a falsified
consumption reading.
— 20% of households with illegal connections
admitted that they were paying a bribe on a regular basis to utility
staff.
— The excess cost for civil works,
due to collusion between contractors, was estimated at 15%.
— Kickbacks to management for contracts
award was in the range of 6-11%.
To date, many governments and international
development agencies (including the World Bank) have sought to
counteract the symptoms of poor governance (kickbacks, bribes,
"state capture") by tightening procurement and financial
management processes and establishing government wide anti-corruption
agencies. This is useful and necessary but it does not address
the underlying social and political dynamics which give rise to
corruption and perpetuate poor governance. WSP has been supporting
a variety of anti-corruption and accountability programs in the
WSS sector, including:
— Jointly with WaterAid, WSP-Africa
is preparing a series of cross-country activities to strengthen
client and consumer voice in the WSS sector.
— Leading studies on corruption in
the WSS sector, including a review of anti-corruption efforts
in the post-tsunami reconstruction and WSS infrastructure and
services
— Support to Indian states and service
providers to understand perceptions of service provision and to
improve accountability to citizens, including: (i) customer grievance
redressal systems in Goa; (ii) citizen report cards, baseline
assessments and monitoring tied to performance improvement strategies
in several cities in Andra Pradesh; and (iii) utility benchmarking
in India, Pakistan and Bangladesh.
— Under the Voice and Client Power
initiative, WSP supports a network of NGOs and organisations in
India to exchange experiences.
— Joint partnerships with SIWI and
Transparency International (TI) for knowledge exchange programs
in Sweden, Uganda, and other countries.
Utility performance assessment and benchmarking
is an important tool to increase WSS accountability by providing
information to a range of stakeholders about utility and sector
performance, at national, regional, and global level. It can assist
utility managers in understanding how their performance compares
over time, and with their peers. Policymakers and regulators can
compare sector performance with that achieved within their own
country and with other similar countries, while global institutions—such
as the international finance institutions can improve policy advice
based on using available sector performance data. In view of the
importance of the availability of comparable data on utility performance,
the World Bank started the IBNET initiative, funded by DFID that
would enable performance assessment and benchmarking through the
use of a standard set of indicators, and provision of key performance
indicators of utilities through its website www.ib-net.org.
Since the project was launched in July 2004,
IBNET has become a leading instrument in municipal water performance
assessment. The IBNET team successfully developed a toolkit for
utility monitoring that was tested and implemented in more than
70 countries. The total number of utilities represented in the
database increased from about 750 in 2004 to 2,000 in 2006. IBNET
has increasingly become a standard for water and sanitation sector
assessments around the world and is the only objective instrument
for cross-country comparisons of water and sanitation utilities.
IBNET studies in Latin America, Eastern Europe, and East Asia
have laid the foundation for objective water and sanitation sector
assessments and the development of the national municipal water
strategies. It is a major tool for the on-going Africa Infrastructure
Country Diagnostic (AICD) study financed by DFID and PPIAF.
The World Bank conducted An Empirical Assessment of Private
Sector Participation in the Delivery of Certain Infrastructure
Services: Electricity, Water and Sanitation (2006) that will
be followed up by regulatory environment studies for public and
private utilities in 2007.
3.5 Rural Water Supply and Sanitation (RWSS)
Institutional Reforms in India
The objective of this support has been to develop
strategies for planning and implementation of large scale RWSS
investments to leverage resources, improve sector coordination
and help bring donors together to focus their support on government-led
programs. The DFID support to WSP has allowed for a combination
of rapid support and long-term policy advice, completion of sector
assessment and sector transformation plans, and practical knowledge
exchange and capacity building activities that have influenced
the policy statements and are beginning to influence up to $1
billion from the Government of India, states, and donors.
Activities under this program have included:
(a) support to country dialogue on the importance of reforms,
(b) development of policies that demonstrate the importance of
establishing demand driven and community-led approaches to service
delivery, (c) the critical role of local governments and their
relationship with communities and service providers in scaling
up of sustainable services, and (d) development of financing strategies
to stimulate sector reforms and investments in India.
3.6 The Global Public-Private Handwashing
Partnership and the School Sanitation Toolkit
In the 1990s the Central American Handwashing
for Diarrheal Disease Prevention Program piloted an approach to
changing handwashing behaviors and demonstrated that mass media
programs with public and private sector involvement could be successful
in promoting handwashing among the poor. An innovative feature
of the program was to tap into the behavior change and marketing
knowledge of private soap manufacturers. Based on this experience,
many organisations recognised the potential for a Global Public-Private
Partnership for HW (PPPHW) to capture the abilities and interests
of all players to promote HW with soap in developing countries.
The partnership is coordinated by a secretariat based in the Water
and Sanitation Program (WSP). The PPPHW carries out various activities:
support for establishing national HW initiatives, global advocacy,
knowledge sharing, and technical assistance. The PPPHW brings
together complementary skills and resources of industry, government,
academia, and development organisations.
An example of a country program supported by
the PPPHW is the Ghana HW campaign. With more than nine million
annual episodes, diarrhea is a public health priority for Ghana.
A HW behavior study in four districts found that only 2% of mothers
washed their hands after cleaning their children, and only 4%
did so after defecation. The first phase of the program was delivered
with the slogan "For truly clean hands, always wash with
soap" (Hororo Wonsa). The program was marketed through
three main communications channels: mass media, Direct Consumer
Contact (DCC) and district-level programs through schools, health
centers, and communities. Evaluation of the first phase of the
communication campaign confirmed that it had effectively created
awareness about the importance of and critical times for washing
hands with soap. Specifically:
— Of women, 71% had heard of the campaign
Hororo Wonsa, and 69% knew the song and messages;
— Women's self-reported HW with soap
before eating increased 41 percentage points (from 14% before
the campaign to 55% after); and
— Women's self-reported HW with soap
after defecation increased 13 points (from 76% before the campaign
to 89% after the campaign).
A more recent example has been the crucial support
of DFID to the development of a Public-Private Partnership (PPP)
to promote handwashing with soap in Vietnam. Previously, there
was limited interest in promoting handwashing and the concept
of public private partnerships for hygiene promotion was relatively
untested in the country. Even though the program only started
in 2006, a strong PPP has developed involving Unilever, the Ministry
of Health, Mindshare (one of Asia's largest media relations firms),
local soap companies, several NGOs, UNICEF, the World Bank, and
the Asian Development Bank.
Strong support has emerged from both public
and private partners, including the piloting of a new "In
Safe Hands" marketing training for key partners of the Handwashing
Initiative, including domestic soap companies. Mindshare decided
to join the initiative to assist with media strategy. The Ministry
of Health is facilitating the baseline research and will implement
a component of the initiative through district and commune health
channels. DFID support has been used to successfully leverage
other bilateral donor support, including a pledge of US$1 million
from DANIDA for the first year of program activities.
In most developing countries, the sanitary and
hygienic conditions at schools are appalling, characterized by
the absence of properly functioning water supply, sanitation,
and handwashing facilities. Such conditions have a negative impact
on the health and wellbeing of children, who spend a significant
amount of time in and around their schools. It is estimated that
the prevalence of intestinal helminth infection in school-age
children is 35% for roundworm, 25% for whipworm, and 26% for hookworm.
The negative effects of diarrheal and intestinal helminth infections
on school-age children's growth, nutritional status, cognitive
development, and concentration, in turn, affect these children's
school performance, health, and future. A lack of appropriate
facilities may also discourage children—adolescent girls,
in particular—from attending school altogether or dropping
out at an early age. Illustrating the potential positive benefits
of improved facilities in schools, findings from an evaluation
of a pilot hygiene, sanitation, and water (HSW) in schools project
in Nigeria showed a 28% increase in girls' enrollment and an 80%
decrease in drop-out rates. Although global data on hygiene, sanitation,
and water in schools do not exist yet, data from individual countries
suggest that coverage rates are very low. As an example, only
58% of schools in India have water supply facilities and a mere
38% have sanitation facilities. At a global scale, UNICEF estimates
that more than half of the world's schools lack clean toilets,
drinking water and hygiene lessons for all children.
WSP, in collaboration with several partners,
has developed a School Sanitation Toolkit (www.schoolsanitation.org).
This Toolkit draws on the lessons and insights of health, education,
and water and sanitation task managers who have learned important
lessons about what works and what does not work in their respective
sectors. It is designed to help task managers tap into sector-specific
knowledge of practices and approaches that are likely to yield
positive results as they coordinate multi-sector efforts to improve
sanitation and hygiene in schools. Rather than "ready-made
solutions" the Toolkit presents theory, concepts, and ideas
to help professionals develop solutions that are tailored to their
specific program settings. The toolkit is now being used in a
variety of countries to begin mainstreaming sanitation in school
programs.
3.7 Dissemination of WSS Knowledge—a
Tool to Replicate and Scale-Up Best Practices
As a global knowledge program, WSP aims to provide
the highest quality analytics with practical field-based experience
for policy support and institutional development, as well as upstream
investment support for innovation and implementation of scaled-up
WSS programs. A fundamental part of WSP's work, supported by DFID's
core funding, is its knowledge management function, focused on
learning for action. WSP aims to ensure that lessons are not lost
and knowledge is shared with our counterparts and partners. As
a global program administered by the World Bank, WSP is able to
transfer knowledge across regions to solve local problems, leverage
innovative practices into investment funding, and attract diverse,
globally experienced, multi-disciplinary staff. WSP's series of
publications and website (www.wsp.org) are reference sources of
information for the WSS sector at the global level. The continuous
interaction with DFID staff in the Policy Division and country
programs allows for frequent exchange of ideas and knowledge that
translate into publications and other knowledge dissemination
tools.
DFID funding has been instrumental in supporting
WSP's initiatives to strengthen its global knowledge management
function and the link between global learning and local level
activities to support local level actors in adapting lessons of
tested approaches. With partial support from DFID's core funding,
WSP has established Global Practice Teams (GPTs) to enhance global
knowledge management and learning and to strengthen influence
on the World Bank and other IFIs. The GPTs are implementing work
programs in:
(a) Communications: cross-regional learning
on how to support strategic communications in client countries.
(b) Finance: improving the efficiency and
effectiveness of public financial management practices and leveraging
additional resources for WSS financing.
(c) RWSS: Multiple use of domestic water,
to establish the links with poverty reduction and improved sustainability.
(d) Sanitation and Hygiene: sustainability
of changed behaviors under different sanitation and hygiene approaches
and programs.
(e) Urban WSS and the poor: reforms to support
service expansion for the poor, develop modalities for linking
local private operators to utilities and municipalities and strengthen
the role and voice of the poor.
4. THE PUBLIC-PRIVATE
INFRASTRUCTURE ADVISORY
FACILITY (PPIAF) AND
THE GLOBAL
PROGRAM ON
OUTPUT-BASED
AID (GPOBA)
4.1 PPIAF—Support to the Water and Sanitation
Sector
PPIAF is a multi-donor technical assistance
facility that helps developing countries improve the quality of
their infrastructure through public-private partnerships (PPPs).
Launched in 1999, PPIAF was developed as a joint initiative of
the governments of Japan and the United Kingdom, working closely
with the World Bank. The impact of PPIAF's portfolio ranges from
the design of innovative transactions, to the establishment and
strengthening of institutions related to private participation
in infrastructure, training of regulators and policymakers, and
consensus building around the agenda for private participation
in infrastructure. From its inception until 30 June 2005, PPIAF
has provided 412 grants worth more than $93 million. In FY2005,
PPIAF supported 14 activities in the WSS sector, totaling $3.2
million, or about 18% of total funding. DFID has been one of the
main partners of PPIAF, with total core contributions of about
$39 million and non-core contributions of close to $20 million.
Further information on PPIAF's program of support to the WSS sector
and the strong and effective partnership with DFID can be found
at www.ppiaf.org.
In the specific areas of the International Development
Committee's inquiry on the WSS sector, PPIAF support has included:
— Piloting of projects involving small
and medium-sized enterprises (SMEs) in the management of small-town
water systems in three Ghanaian towns. The SMEs were engaged in
contracts for five years, and communities participated in the
tendering process and in deciding the management arrangements.
By-laws were developed during the pilots to strengthen the capacity
of water boards to contract with the private sector. The lessons
from these pilots will serve as a stepping stone to models that
involve even greater investment and risk-taking on the part of
private operators.
— In Vietnam, PPIAF supported the preparation
of pilot Design-Build-Lease (DBL) water supply projects, including
support for the development of charter, legal framework and template
business plan for rural WSS enterprises. This activity leveraged
finance for implementation of these DBL pilot projects from Switzerland,
Finland, and a World Bank—financed urban water supply development
project for $56 million to be invested in district towns water
supply. The DBL technical and social design approach is also being
applied to the World Bank-financed Red River Delta Rural Water
Supply and Sanitation Project.
— At the global level, PPIAF has supported
a mapping exercise and global survey of small-scale private service
providers of water supply and/or electricity in 49 countries.
The survey identified more than 10,000 small-scale service providers
in the WSS sector.
— PPIAF has supported the development
of a major toolkit that helps governments think about using private
firms to improve water services. The program also supports the
PPI database, an important source of global information on PPP
activity and new trends in the WSS sector. Finally, PPIAF has
supported the development of Explanatory Notes on Key Topics in
the Regulation of Water and Sanitation Services to provide a consistent
set of principles and practices that respond to regulatory issues
in the provision of WSS services in urban areas.
4.2 The Global Partnership on Output-Based
Aide (GPOBA)
In January 2003, DFID and the World Bank established
the Global Partnership on Output-Based Aid (GPOBA), a multi-donor
trust fund administered by the World Bank. The goal of GPOBA is
to provide increased access to reliable basic infrastructure and
social services to the poor in developing countries through the
wider use of OBA approaches. OBA involves targeted subsidies for
the poor channeled through service providers that are paid for
the most part after targeted outputs have been delivered.
The objective is to improve the efficiency of public funding through
better targeting and increased accountability.
Since its inception, the GPOBA trust fund has
grown with total donor contributions and pledges in excess of
US$110 million, which may be used to fund Technical Assistance,
Dissemination and to provide Subsidy Funding. The total contribution
pledged by DFID between 2003 and 2010 is $47 million. Of this,
about $15 million has already been earmarked for investments in
8 water and sanitation projects, of which four are in sub-Saharan
Africa. A further US$11 million has been committed for TA and
Dissemination, a substantial amount of which is for the design
of OBA projects in the water and sanitation sector. The International
Finance Corporation (IFC) recently joined GPOBA with a US$35 million
contribution in June 2006, and several other governments have
pledged their support, namely, the Netherlands, Australia, and
Sweden. Further information on GPOBA can be found at www.gpoba.org.
GPOBA is active in about 22 water projects,
in some cases only in a technical assistance capacity, but in
others also with expected funding for investment subsidies disbursed
on an output-basis. Two projects that are in advanced design stage
and are directly related to the International Development Committee's
areas of inquiry are:
— OBA in Uganda's Water Sector: In
order to meet its poverty reduction targets of safe drinking water
and increased rural coverage, the Government of Uganda is challenged
to scale up service delivery in small towns and expand into un-served
rural areas. Since 2001, 67 Water Authorities have been appointed
and 16 different private water operators are managing water supply
services in 60 small towns. GPOBA funds of about $3.1 million
will be used to support private sector management of water supply
to expand access to over 40,000 poor people in rural areas.
— OBA in Kenya's Microfinance for Community-Managed
Water Projects: Community-based organisations (CBOs) in Kenya
have a comparatively strong track record as providers of last
resort for piped water supply services, but low income consumers
are largely excluded from effectively participating in CBOs as
they are not able to pay full connection costs. The overall ultimate
objective of the proposed OBA pilot is to develop and test an
output-based approach for water supply services by community-based
providers in the broader service area of Nairobi.
5. CONCLUSION
The partnership between DFID and the World Bank's
administered global trust programs in the WSS sector has been
effective in supporting developing countries make progress towards
achievement of the WSS Millennium Development Goal 7. The interaction
between the organisations at the central, regional and country
level strengthens the leverage of the investment resources going
into the WSS sector, the harmonization of efforts, and the cross-institutional
learning and replication of best practices. Through DFID's direct
support to the global programs administered by the World Bank,
it has been possible to bring innovation, solid analytical work,
and upstream support for investment programs to developing countries.
The World Bank strongly supports DFID's increased
commitment to its aid to Africa for WSS and other regions. We
are undertaking similar efforts and IDA's support to Africa continues
to increase. The level of coordination and harmonization at the
country and regional level offers an opportunity for greater impacts
on the ground.
Significant progress has been made in many countries
towards the achievement of the MDG targets for WSS. In the past
15 years, almost 150 million people per year obtained access to
safe water supply and sanitation services. Despite this, few regions
are on track. To achieve the MDG targets, the additional people
served annually have to increase to 250 million. This calls for
an even stronger and deeper collaboration and partnership between
DFID and the World Bank.
October 2006
232 Includes the International Development Association-IDA
and the International Bank for Reconstruction and Development-IBRD. Back
233
Available at www.worldbank.org Back
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