Sustainable Pro-poor Financing Modalities for WASH Innovative Water Financing Workshop Mombasa, 9 th November 2011

WSUP Members

Urban poor to low income consumer

Public Private Vendor/NGO Provision Filling The Void Through Empowering NGOs?

Public Private Community Partnership Provision Reformed Public Private Sector With Pro-poor Mandate, Using NGOs ?

Why Invest in LICs? Perception that supplying water to the urban poor is not financially sustainable Convince utilities of their obligation to serve the urban poor Convince water utilities that serving the urban poor makes business sense €NRW Reduction €Expanded customer base €Tap into existing private assets €Multiplier effect through DMMS

Urban poor to low income consumer Urban poor Low income consumers

Project Cycle Feasibility study Project Identification Scoping study Full Implementation Piloting Scale-Up WSUP Project Cycle

Project Cycle WSUP Project Cycle

PLF – rewarding success IFIs enter into pre-agreements with LSPs to provide loan finance to scale up financially sustainable pro-poor models Innovative Water Finance goes hand in hand with innovative Water Management Options/Partnerships WSUP - accessing technical expertise from private and NGO sectors, specifically focused on assisting LSPs to reach LIC on a financially viable basis.

PLF – rewarding success Designs financially viable service improvements at representative scale Implements financially viable representative scale project Further enhance capacity to expand pro-poor services city wide Service Provider Service provider scales up pro-poor services city wide; loan finance repaid over time by service provider with expanded customer base and improved financial status

Management tools Management Contracts Concession Contracts Affermage Privatisation Municipal Funding Recognise poor as market segment Tenders include professional partners for LIC Budgets & finance mechanisms for LIC Delegated management models Recognise poor as market segment Tenders include professional partners for LIC Budgets & finance mechanisms for LIC Delegated management models INCLUSIVITY

PLF characteristics vs other financing modalities

Unique advantages of PLF Increasing access and quality of service to low-income urban settlements in a financially sustainable manner Linking finance to demonstrated results and capacity improvements to incentivise reform Directly engaging with and supporting the entities mandated to provide services in urban areas, i.e. utilities and municipalities (and, through them, smaller-scale or informal service providers) Providing an accessible finance option for such service providers regardless of their initial capacity and financial sustainability

Urban poor Low income consumers Pro-poor finance mechanisms MDGs need management plus finance

Advising on Pro-poor Financing Modalities for WASH