Performance financing for reliable last mile rural water access 28 - - PowerPoint PPT Presentation

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Performance financing for reliable last mile rural water access 28 - - PowerPoint PPT Presentation

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Performance financing for reliable last mile rural water access 28 August 2019 | World Water Week About Uptime Uptime is a global consortium working to deliver drinking water services to millions of rural people through long-term,

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Performance financing for reliable last mile rural water access

28 August 2019 | World Water Week

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Uptime is a global consortium working to deliver drinking water services to millions of rural people through long-term, performance-based funding to achieve Sustainable Development Goal 6.1.

About ‘Uptime’

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Session Objectives

  • 1. Discuss recent developments in understanding the

performance of rural water maintenance providers.

  • 2. Explore how better data on service provider performance

might unlock new sources of long-term funding to sustain services in rural and remote contexts.

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Agenda

1. Welcome and outline 2. Presentation on performance-based funding for reliable rural water services in Africa 3. Panel: service providers 4. Panel: government and donors 5. Q&A and audience survey 6. Summary and closing remarks

Speakers

  • Dr Duncan McNicholl, Uptime
  • Dr Alex Money, University of Oxford

Service Provider Panelists

  • Cliff Nyaga, FundiFix
  • Adrienne Lane, Water for Good
  • Nicolaas van der Wilk, UDUMA
  • Lara Lambert, Water Mission
  • Elizabeth Buhungiro, Whave

Government and Donor Panelists

  • Eng Joseph Oriono Eyatu, Government of

Uganda

  • Abbie Jones, USAID
  • Regina Rossmann, GIZ
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Which type of org do you represent

  • Government
  • NGO
  • Private Sector
  • Donor
  • Academic
  • Other
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Statements to agree/disagree with

  • 100% of maintenance operational costs can presently be met by user

payments in all contexts

  • Concessionary funding is required at scale to maintain rural water

services to achieve SDG 6.1

  • New sources of funding can be unlocked if service provider

performance can be objectively measured and verified

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https://www.smithschool.ox.ac.uk/r esearch/water/report- performance-based-funding.html

Working Paper

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Study Scope

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Multiple factors influence levels of cost- recovery and most service areas do not break even on operating costs

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Finding 1:

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Waterpoints maintained by service providers were functional over 90% of the time, significantly outperforming the regional average

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Service providers outperformed the regional functionality average by ~20 percentage points

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> 90% of breakdowns in preventive + rapid response service models repaired within 3 days

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Order of magnitude improvement from a month to less than 3 days to repair infrastructure

(range: 13 – 214 days)

Ghana (Whittington, et al., 2009) Kenya (Hope, 2015) (Foster and Hope, 2017) Malawi (Kleemeier, 2000) (Chowns, 2015) Zimbabwe (Hoko, 2009) Rwanda (Nagel, et al., 2015)

Regional Modal Breakdown Duration:

~30 Days

Modal Breakdown Duration: Service Providers v. Regional Performance ≤ 3 Days 30 Days

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Finding 2:

a

Water users paid some but not all of the costs

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Water users paid ~USD 310,000

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The total shortfall was ~USD 890,000

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Finding 3:

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Most service areas do not fully recover

  • perational costs from user revenues
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Cost recovery is calculated using ‘Working Ratios’

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Most service areas do not break even on

  • perational costs
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More analysis is needed on the multiple factors that influence working ratios

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Implication 1:

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Institutional design is a key determinant of

  • perational and financial performance
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Implication 2:

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The investment case must consider financial, economic and social impacts

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Multiple factors influence levels of cost- recovery and most service areas do not break even on operating costs

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The focus on

  • perating ratios

recognises the

  • ngoing

requirement for capital investment

Projected need for increase in operations and maintenance funding as capital investment needs decline towards 2030 (Hutton and Varughese, 2016)

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We define ‘Investment’ as the funding to deliver social, economic & environmental returns to achieve SDG 6.1

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Estimated 1m people served

Water services maintained for around USD 1.20 per person, per year

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DATA More Better Faster Often Easier

Data can improve both quantum and return on investment, by reducing asymmetry

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Our hypothesis:

a

Reducing information asymmetries… …by quantifying the opportunity to fund service providers… …can unlock new sources of concessionary funding to provide long-term resources for reliable rural services.

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Service Provider Panel

Cliff Nyaga

Director, FundiFix

Adrienne Lane

Chief Strategy Officer, Water for Good

Nicolaas van der Wilk

Operations Manager, UDUMA

Lara Lambert

Director of Community Development, Water Mission

Elizabeth Buhungiro

Communications and Learning Coordinator, Whave

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Service Provider Panel

Why do services maintaining handpumps have lower working ratios? Is piped infrastructure necessary to achieve higher working ratios?

Cliff Nyaga

Director, FundiFix

Adrienne Lane

Chief Strategy Officer, Water for Good

Nicolaas van der Wilk

Operations Manager, UDUMA

Lara Lambert

Director of Community Development, Water Mission

Elizabeth Buhungiro

Communications and Learning Coordinator, Whave

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Service Provider Panel

What effect does the institutional environment have on your ability to recover operating costs?

Cliff Nyaga

Director, FundiFix

Adrienne Lane

Chief Strategy Officer, Water for Good

Nicolaas van der Wilk

Operations Manager, UDUMA

Lara Lambert

Director of Community Development, Water Mission

Elizabeth Buhungiro

Communications and Learning Coordinator, Whave

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  • Eng. Joseph Oriono Eyatu

Commissioner, Rural Water Supply & Sanitation Department, Ministry of Water and Environment, Government of Uganda

Abbie Jones

Water & Sanitation Advisor, USAID

Regina Rossmann

Sustainable Water Policy Advisor, GIZ

Government and Donor Panel

–

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What can governments do to help service providers improve operational and financial performance?

Government and Donor Panel

–

  • Eng. Joseph Oriono Eyatu

Commissioner, Rural Water Supply & Sanitation Department, Ministry of Water and Environment, Government of Uganda

Abbie Jones

Water & Sanitation Advisor, USAID

Regina Rossmann

Sustainable Water Policy Advisor, GIZ

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What potential does better service provider performance data have to improve investment decisions and unlock new funding sources?

Government and Donor Panel

–

  • Eng. Joseph Oriono Eyatu

Commissioner, Rural Water Supply & Sanitation Department, Ministry of Water and Environment, Government of Uganda

Abbie Jones

Water & Sanitation Advisor, USAID

Regina Rossmann

Sustainable Water Policy Advisor, GIZ

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Q&A

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Our hypothesis:

a

Reducing information asymmetries… …by quantifying the opportunity to fund service providers… …can unlock new sources of concessionary funding to provide long-term resources for reliable rural services.

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1: Long-term funding can be secured if the cost and reliability of rural services is clearly quantified and verified

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2: Funders are willing to provide resources to achieve economic and social impact at scale rather than financial returns

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3: USD 10+ million in concessionary funding could be committed annually to fund rural services for millions of people

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Intended Workplan

Research Assess current performance of rural service providers. Jan– Jul 2019 Sep 2019 – Sep 2021 Design Design the architecture and investment prospectus of the performance-based funding mechanism.

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Intended Workplan

Research Assess current performance of rural service providers. Jan– Jul 2019 Sep 2019 – Sep 2021 Design Design the architecture and investment prospectus of the performance-based funding mechanism. Oct 2021 and beyond Launch Secure long-term funding for services and and launch performance-based funding agreements with service providers.

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What Next

  • Building a database of service provider performance
  • 2015-2019
  • To include Asia by year end
  • Testing remote monitoring systems for verifying uptime

metrics

  • Deepening analysis of factors that affect service performance
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Active Inactive Unsubscribed

Maintenance Contract Status by Distance to Nearest Pump and Population within 1 Km

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Contacts

Cliff Nyaga cliff@fundifix.co.ke Mikael Dupuis M.DUPUIS@vergnet-hydro.fr Adrienne Lane alane@waterforgood.org Andrew Armstrong aarmstrong@watermission.org Adam Harvey adam.harvey@whave.org Rob Hope robert.hope@ouce.ox.ac.uk Duncan McNicholl dmcnicholl@uptimewater.org Alex Money alex.money@smithschool.ox.ac.uk

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Uptime Contributors

FundiFix

Cliff Nyaga Jacob Katuva

GIZ

Ulrike Pokorski da Cunha Katrin Gronemeier Regina Rossmann

UDUMA & Vergnet Hydro

Mikaël Dupuis Nicolaas van der Wilk Thierry Barbotte

University of Oxford

  • Prof. Rob Hope
  • Dr. Alex Money
  • Dr. Johanna Koehler

Patrick Thomson

Uptime

  • Dr. Duncan McNicholl

Water for Good

Adrienne Lane Donavon Favre Jon Allen

Water Mission

Seth Womble Andrew Armstrong

Whave

  • Dr. Adam Harvey

Elizabeth Buhungiro

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