Synergies – EIB –EC Macro – micro approaches - EIB and EC have different tools Very powerful to get project and sector approach working together What can EIB- EC can do better – what are we not doing? Money is not the problem – funds are not being used in EU due to sector level issues e.g. funds distorted mandates by channelling funds to the Environment ministries where there was not capacity….Entry point critical EC is increasingly pushed to work at the macro level – there is a danger of losing contact with the micro level and with reality!! EC need feedback from the ground - Banks need more time at the sector table Difficulty of creating bridges between the macro and micro even if obviously needed – macro and micro l

Blending of loans and grants can be a means of complementing the two approaches Malawi –is a case study but too early to tell – EIB did not have a person in Country which was a constraint initially but actually absence increased ownership….! Years of dialogue it took too long how to shorten Project preparation funding can help in marrying the micro and macro approaches – but lack of capacity has slowed the discussion we had to start with capacity and « wasting time in meetings » Link between policy and reality – risk of dealing with the wrong ministry – how to link water to growth, is this a real demand on the ground, productive sector is attractive to bank financing Adjustment of procurement rules – Ukraine example of project failure – time limit for funds needs to be more flexible and adaptable – time horizon needs to be harmonised, this also happens for Water Facility projects But is it always helpful to just extend deadlines? We have 18 year projects with discontinuity. When the funding is time limited, progress is faster, it is an incentive for action.

EIB should take more advantage of EU offices, this happens in Lebanon, Benin but not in many other places Eriteria – example in the Education sector – the trust fund is managed remotely by the WB with very little accountability to EU Summary notes session 1 There is a focus on blending as loans and grants – but there is also a blending on skills and roles (EIB has few water specialists so can make use of EU presence on the ground) – need clearer delegation when we work together Time horizon is important needs to be flexible but not too flexible or it encourages delay Sharing project pipelines and using loan officers to take part in coordination meetings Lowest common denominator problem is less with EIB-EC because their share a framework What to do: SWAP – Indicators (how to make them work- Bolivia) – get close to actors – corruption (rational?) and the irrational (politically rational)

Summary notes session 1 – synergy EIB/EC and others 1.There is a focus on blending as loans and grants – but there is also a blending on skills and roles (EIB has few water specialists so can make use of EU presence on the ground) – need clearer delegation when we work together 2.Time horizon is important needs to be flexible but not too flexible or it encourages delay 3.Sharing project pipelines and using loan officers to take part in coordination meetings 4.Lowest common denominator problem of following the worst of all procedures is less with EIB-EC because their share a framework 5.What to do: SWAP – Indicators (how to make them work- Bolivia) – get close to actors – corruption (rational?) and the irrational (politically rational) – avoid risk …stay away unless not needed? – lower ambition

Day 1 - Session 2 and 3 – comments - PPP 1.Why does the public side of a contract often breach the contract – because they can!....a regulator function helps to distance tariff from politics - But will an external regulator stand up to a President? 2.Resistance to PPP – donors have contributed to this resistance 3.Capacity is not even between the public and private sectors – such asymmetry is problematic but is capacity building the role of the regulator? 4.Don’t rely entirely on NGOs – the service providers need to be involved, or the price will escalate (no cross subsidy with the rich) 5.PSCC perceived as a consultant because they behave that way – it is a service not a partnership…focus on reports not operational performance 6.Water user association do not question paying for meeting allowances 7.Energy and water very linked – also in terms of governance and tariff 8.Concessions can be combined with subsidy 9.The situation is very vulnerable – a single irrational decision can change it all 10.When funds are given ignoring the non compliance the bank is part of the problem