Contributing to the Millennium Development Goals for Water and - PowerPoint PPT Presentation

Malawi Water and Sanitation Project - Contributing to the Millennium Development Goals for Water and Sanitation Malawi Peri-Urban Water and Sanitation Project - Working with NGO’s to increase W&S coverage 1 Thomas van Gilst European Investment Bank

EIB: Priority Objectives  Within the Union : • Cohesion and convergence • Small and medium-sized enterprises (SMEs) • Environmental sustainability • Knowledge Economy • Trans-European Networks (TENs) • Sustainable, competitive and secure energy  Outside the Union : • Private sector development • Infrastructure development • Security of energy supply • Environmental sustainability • Support for EU presence in Asia & Latin America via Foreign Direct Investment 24/03/2011 2 European Union Regional Water Seminar, Amman 21-24 March

EIB Drivers in the Water Sector EIB water sector lending policy closely linked to EU priorities and policies including support for: Compliance with Urban Waste Water Treatment Directive; Water Treatment Directive, Water Framework Directive, Sewage Sludge Directive, Floods Directive to name a few, Implementation of EU Water Blueprint through Water quantity management, economic instruments for efficiency (including in agriculture) Improved river basin management plans Green infrastructure (eg wetlands) Resource Efficiency Initiative under Horizon 2020 Efficient water use and reduced system losses - reducing leakages and managing demand can save both water and energy, thus also improving the promoters’ financial position Growth and employment Investing in water services induces job creation in an industry where Europe is leader – through the impact on the upstream value chain (equipment suppliers & manufacturers) Declining water service quality and water resources mis-management may negatively affect growth potential Outside of Europe: Millennium Development Goals for water and sanitation, Depollution of the Mediterranean (MeSHIP), climate action – particularly adaptation to climate change (including improved water resources management and natural resource efficiency)

The Millennium Development Goals The Millennium Development Goals (MDGs) are eight international development goals that were established following the Millennium Summit of the United Nations in 2000, following the adoption of the UN Millennium Declaration. All 189 United Nations member states and at least 23 international organizations committed to help achieve these goals by the year 2015. Target 7.C: Halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation 4 Thomas van Gilst European Investment Bank

670k inhabitants 72% WS coverage 715k inhabitants 70% WS coverage 5 Thomas van Gilst European Investment Bank

A different project not in Malawi… 6 Thomas van Gilst European Investment Bank

Peri-urban WatSan, Malawi Main problems: Highly inefficient water supply system (Leakage >40%, Blantyre 1000 m above source, water 2x/week); Large poor population un-served; Low affordability (>5% of household income) 07/12/2013 7 European Investment Bank

Main Project Objectives Safe drinking water to 723,000 additional people (half by 735 kiosks) and Basic sanitation to 468,000 people in low income areas of the cities of Blantyre and Lilongwe (all by VIP latrines)  NGO/CBO’s 24-hour water supply for 408,000 people in Blantyre who currently receive it intermittently Building competent and sustainable Water Utilities  Private Sector Service Contractor with Performance Based Contract 8 Thomas van Gilst European Investment Bank

Project Approach Concept of the project based on 2 components: works for efficiency gains in the main/existing infrastructure/operation; extension of network in poor areas => transfer the drinking water saved to the un-served population Conditions to succeed: partnership with: private company under a PPP to support the public utility on efficiency (O&M + rehabilitat. works); incentive-based service contract to address the O&M inefficiencies and investment needs; NGOs to support peri-urban works+Op) small local concessions for the provision of services through kiosks and associated public sanitation facilities. 9 Thomas van Gilst European Investment Bank

Project Cost EU grant 14.9 m EIB loan 15.8 m Water Boards 1.1 m Total: 31.8 m Eligible EUWF: 30.8 m Of which for LIA’s: 7.3 m 10 Thomas van Gilst European Investment Bank

EU ACP WF Contribution agreement EIB Loan/ grant agreement Ministry of Finance On-lending agreements Implementation Partnership agreement agreement BWB LWB Performance Contracts Water For Private Service Contractor WaterAid People 11 Thomas van Gilst European Investment Bank

Peri-urban WatSan, Malawi Significant EIB involvement in preparation of project in close coordination with the two water utilities; Active involvement of NGOs in project structure/design (key partner: WaterAid); Creation of a revolving fund to make connections affordable;  Stakeholders project Lilongwe Water Board Blantyre Water Board WaterAid Privatisation Commission NWDP II World Bank Two PIU’s EIB NGOs, CBAs Water Users Low Income Area Users Ministry of Finance 07/12/2013 12 European Investment Bank

Most challenging task is the water and sanitation delivery in the LIA’s: Safe drinking water to additional people: 735 Kiosks Basic sanitation to additional people 70,000 VIP latrines Key LIA features Unplanned Limited land tenure Affordability Poor payment records Vandalism Sanitation practices Latrine investment hurdle 13 Thomas van Gilst European Investment Bank

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Replicating successful models: WaterAid WaterAid (in partnership with LWB) demonstrated a succesful local kiosk management model: “The Water User Association” built on a strong social/community fabric WUA’s: manage up to 100 kiosks Single customer interface for Water Board WUA’s: charge slightly increased fees to: Pay kiosk operators & WUA administrators Recover prior debts Kiosk design with “superstructure” against vandals/theft Success has sensitised WaterBoards who now have special LIA unit to deal with WUA’s. Sanitation marketing vs slab subsidy Training small entrepreneurs Slab construction Pit latrine emptying 17 Thomas van Gilst European Investment Bank

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Scaling up NGO’s service enabler role through project To identify kiosk sites in GIS system for PSP to construct 700 kiosks To set up associated WUA’s Roll out 70,000 latrines sanitation awareness building and marketing training slab builders Setting up private pit latrine emptying services: Gulper; Nibbler Did we have the NGO’s ? Lilongwe: WaterAid – Yes Blantyre: - No 22 Thomas van Gilst European Investment Bank

Procuring an NGO for Blantyre ? Only identified 3 potential NGO’s at outset; NGO’s need local grass -root presence They operate through CBO’s; Do they bid competitively (WaterAid not); Open to consultants? Level playing field ? 23 Thomas van Gilst European Investment Bank

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Restricted tender carried out Open tender for Expression of Interest (EOI) 9 expressions of interest from int’l & local: NGO’s Consultants JV’s 4 pre-qualified bidders 4 bids received 1 winner: W4P, on price. Signature in August 2009  Big help: Transaction Advisory Services (Fichtner Consulting) to prepare tender documents, raise market awareness, manage process; 26 Thomas van Gilst European Investment Bank

Some early conclusions NGO/CBO’s can play a very important role in reaching the MDG’s; Especially crucial on the sanitation side Including NGO’s in the project structure simply adds mode parties and thus complexity If sanitation is out of Water Supplier’s remit, even more parties (city council etc); We walked a thin line to procure competitively, but market is thin: Would other bidders have done as well? Winning bidder confirmed sanitation marketing approach; No complaints received from bidders other than tight timing 27 Thomas van Gilst European Investment Bank

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