Water & Sanitation PPPs

Almost fifty percent of the developing world’s population - 2.5 billion people – lack improved sanitation facilities, and almost 1 billion people still use unsafe drinking water sources, and even those with access often receive unsafe and inadequate service. Sustainable Development Goal 6 on Clean Water and Sanitation, by 2030, sets tough targets:

  • 6.1 achieve universal and equitable access to safe and affordable drinking water for all
  • 6.2 achieve access to adequate and equitable sanitation and hygiene for all
  • 6.4 substantially increase water-use efficiency across all sectors.

Water is also crucial to food security and irrigation, and is affected by climate change. In an infrastructure-intensive sector, improving access and service quality to meet the SDGs cannot be done without massive investment. Around the developing world, the water sector is chronically under-funded and inefficient. In this context, Public-private partnerships (PPPs) can be a mechanism (among others) to help governments fund much needed investment and bring technology and efficiency that can improve the performance and financial sustainability of the water sector.

Governments are using in the water and sanitation sector increasingly to finance and operate bulks water supply and wastewater treatment. Governments turn to PPPs to introduce new technology and innovation where traditional sources are being scarce, such as in desalination and water reuse. Utilities are drawing on specific expertise, such as non revenue water reduction and pressure management, to bring efficiencies and service improvements. Private investors and providers are increasingly local and regional, increasing competition and bringing down prices.

A key challenge in sustainability of the sector is customer tariffs. Water utilities have difficulty investing in infrastructure and maintaining it when they cannot rely on revenue streams that cover the costs of operation and investment. Whilst subsidies and grants from government continue to play an important role in financing water and wastewater infrastructure, a stable revenue stream is more dependable and allows utilities to carry out business and asset planning.

Navigate the following subsections for more information and sample laws, regulations and agreements.

The World Bank Group Climate Toolkits for PPPs including Climate Toolkits: Water Production and Treatment contains a set of tools covering the major climate entry points (identification of risks, incorporation of climate considerations in the project selection, and appraisal of climate effects in the project’s economics).

The Municipal Public-Private Partnership Framework is a tool developed specifically for local governments to help them understand and implement PPPs, keeping in mind their characteristics, needs and challenges. The tool kit offers a comprehensive and concise approach to PPPs, with sample terms of reference, bidding documents, and PPP agreements.

Subsections

Water Sector Regulation When seeking to involve the private-sector in water and sanitation infrastructure projects, a host country's legal… more
Utility Restructuring, Corporatization,… A government considering ways of improving performance in its utilities may seek to achieve this by involving the… more
Corporatization of Public Water Utilities
Corporatization - Key Features Corporatization has the following key features: Separate legal entity - the… more
Empresas Mixtas
Examples Legal Frameworks for / Examples of Empresas Mixtas Below is a list of laws that present the legal framework… more
Joint Ventures / Government Shareholding in… This section does not focus on the relationship between consortium members bidding on a project where they may decide… more
Water and Sanitation Agreements
Public private partnerships in water require various agreements, or contracts, to outline the relationships and… more
Water Management/Operation and Maintenance…
Management Contracts The World Bank has developed a Standard Form Management Contract together with Bidding Document… more
Water and Sanitation Concession / BOT / DBFO Typically water concessions are granted to a private concessionaire to supply water and/ or wastewater services to… more
Water and Sanitation Lease and Affermage Contracts
Hybrid affermage/ Concession contracts In the water sector in recent years in West Africa, a hybid affermage/… more
Raw and Treated Bulk Water Supply Agreements
Sample Raw and Treated Bulk Water Supply Agreements Australia Melbourne, Victoria - Bulk Water Supply Agreement… more
Small Scale Water Projects - Rural and Peri-Urban
Introduction to Rural Water Supply Issues Toolkit: Structuring PSP Contracts for Small Scale Projects… more
PPPs in Irrigation This section looks at different PPP models that are being used in Irrigation and legal issues that arise in relation to… more
Theft / Non-Technical Losses (Water and… Perhaps one of the greatest challenges in successfully operating a PPP related to utility services is to effectively… more
Water & Sanitation PPP Toolkits Listed below is a number of toolkits that comprises contracts, leases, affermages, concessions, divestitures relevant… more
Case Studies and Lessons Learned - Water
General Public-Private Partnerships for Urban Water Utilities: A Review of Experiences in Developing Countries (2010… more
Gender & Water and Sanitation Projects Water and sanitation projects that take gender differences into account can play a significant role in improving the… more

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