Key Commercial Risks

Irrigated agriculture projects, especially those involving smallholder farmers, are difficult to fund on a commercial basis from day one because they cannot deliver short-term predictable financial returns. Unlike other sectors, irrigation projects, are self-contained investments which are linked solely to the local off-take, i.e. the viability of the agricultural activities using the water. Infrastructure providers are thus exposed to market and commodity risks.

Public private partnerships in water require various agreements, or contracts, to outline the relationships and responsibilities between various stake holders. The agreements below are specific to the water and sanitation sectors.

• Introduction to Rural Water Supply Issues

• Toolkit: Structuring PSP Contracts for Small Scale Projects

• Affermage Contracts and Variations

  • Benin

  • Mali

  • Niger

Africa

Cameroon

• Laws setting out the basis for delegation of public service functions of water and sewerage services and establishment of CAM Water - Loi No 98-005 du 14 Avril 1998 portant regime de l’Eau (framework)

Kenya

Hybrid affermage/ Concession contracts

In the water sector in recent years in West Africa, a hybid affermage/ concession arrangement has been adopted - a description of such an arrangement in Cote d'Ivoire can be found at PPIAF Gridlines - Partnering for Water in the Cote d'Ivoire(lessons from 50 years of successful operation). Examples of the hybrid model that has been adopted are set out below.

Management Contracts

The World Bank has developed a Standard Form Management Contract together with Bidding Document and Technical Note recommended for use on water and energy projects the Bank is funding, together with a technical note discussing management contracts and their preparation. go to the General Conditions in the Bidding Documents for the contract itself.

For general information on Concessions, see Concessions, Build-Operate-Transfer (BOT) and Design-Build-Operate (DBO) Projects.

Sample Raw and Treated Bulk Water Supply Agreements

Australia

• Melbourne, Victoria - Bulk Water Supply Agreement between the Melbourne Water Corporation (MWC) and City West W

Cartagena, Colombia Case Study