The Performance Based Contracts in Non-Revenue Water Reduction Programs, session 2 - Basics in Non-Revenue Water Reduction

Key findings of this report:

Public Private Partnerships for irrigation and other development is becoming a widely accepted model for financing future agricultural and overall economic development, and was part of the toolkit of the Third International Conference on Financing for Development's (July 2015, Addis Ababa) to approve a framework for financially supporting the Sustainable Development Goals (SDGs) and the post-2015 Agenda.

The project, designed as a pilot program, complemented WSP’s ongoing sector sup- port in the country. Ten pilot rural water supply systems were selected in three dif- ferent municipalities across the country and grouped into four clusters of two to three systems each. Each of the four clus- ters was tendered as a separate transac- tion by the respective municipalities. The tender process led to the award of four eight-year concession agreements for the design, partial financing, rehabilitation, extension, and operation of the 10 rural water systems to three winning bidders.

The objective of this Guidance Note is to offer practical, experience-based guidance to those considering or currently engaging in PPP in the water sector, and to provide a basic understanding of water PPPs and the PPP cycle to better inform dialogue with governments that are considering PPP arrangements. It builds on the experience of WSP in supporting PPP reforms in developing countries, especially through the domestic private sector. Key stakeholders in this dialogue include government at all levels, service providers, policy makers, customers, civil society, and professionals.

Many developing countries are about to prepare their new strategies on how to achieve the Sustainable Development Goals (SDGs) for universal and equitable access to water and sanitation by 2030.These new roadmaps need to put a focus on rural growth centers and small towns where the majority of those without access to water and sanitation reside. In 2015, a third of the global rural population was living within the service area of a small piped water scheme mainly operated by water users association. These schemes are generally ill-maintained and ill-managed.

The toolkit is divided into six sections focusing on:

Section 1: How to use the Toolkit - This section provides an overview of the tool kit and how it can be applied.

Section 2: Introduction to the WSS sector and the need for Commercial Financing - This section provides a high level overview of the current operations in the Water Supply and Sanitation Sector in Kenya. The section also discusses how the sector has been traditionally financed and its current financing needs.

Over the past decade, the Government of Benin has made great strides to professionalize the management of piped water systems (PWS) in rural areas and small towns. Since 2007, the sector actively supported the implementation of public-private partnership (PPP) contracts for operating PWS. The sector introduced an affermage-type PPP model to connect decentralized municipalities and small-scale private operators (POs). The number of PWS managed through an affermage contract went from 1 in 2007 to 269 (57% of the total number of PWS) in 2014.

No methodology has yet been generally accepted for assessing the significance of climate risks relative to all other risks to water resources projects. 

This sector note covers private participation in infrastructure (PPI) in low and middle income countries in 2015. The following trends stood out in 2015: