1. Promoting equitable Private Sector Participation for Development: The case of water and sanitation
Urban Frei ecos Basel, Switzerland
for the Swiss Agency for Development and Cooperation (SDC)

2. Overview
Private Sector Participation in water supply and sanitation - a concrete case of Financing for Development
Risk mitigation through framework clarification
dialogue process around principles
project implementation guidelines
Sustainable service delivery and financing requires
common understanding of business models
clarity on roles, responsibilities and spheres of action
3 potential work streams branching off
translate for the Financial Sector --> rating instrument
identify obstacles for access to financing --> analysis
generalize for other basic services --> UN level initiative

3. Why am I here
Public-Private initiative of SDC, seco and Swiss Re: Mobilize the potential of the private sector in water supply and sanitation projects
Water Supply and Sanitation as a concrete case
sector requires huge, long-term financing to meet MDGs
Inclusive developing process for „Policy Principles“
in an international Multi-Stakeholder Process
ready for local discussion and application
Main idea: Attract financing by risk mitigation through inclusion of all relevant stakeholders in the design, implementation and operation of a project

4. The idea behind the overall system
Policy Principles
Policy Level
WHAT should be done?
Implementation Strategies HOW can it be done?
Specific Guidelines
Tools What KNOWHOW is available?
toolkits, cases, best practice

5. Risk mitigation … on the framework level
Fair and stable frameworks (legal, regulatory, macro-economic)
Mutual trust and open communication
--> Conducted a first international Multi-Stakeholder-Dialogue including the financial sector (also non-MDB)
… on the implementation level
Projects need clarity on roles, rights, responsibilities, incentives and sphere of action of stakeholders
--> Local Multi-Stakeholder Dialogues to identify common goals and assign / confirm roles
Sound business model and carefully structured, transparent, and sustainable project financing
--> Exchange between experts, business and future users

6. “Policy Principles” with impact on financing
Basic Values
Good Governance
Safe, affordable and sustainable services
Key Factors
Accountability
Transparency
Socially responsible (but sound) financing
Sharing interests and incentives
Proactive Risk management
Framework Development
Local ownership and leadership
Adequate framework for investments
Effective Regulatory Mechanisms
Roles & Responsibilities

7. Next on our agenda
Translate the Policy Principles for the Financial Sector
--> Develop a rating instrument for projects
Is it doable? What are the requirements?
What would the right context be to place it?
Analyze past projects for business model and financing bottlenecks
--> Research hypothesis: W&S services create huge value, but projects fail to access available funds. Why this?
Does it add value? Is the outcome obvious to experts?
Broaden the scope to cover provision of other basic services
--> UN-initiative: identify common framework elements for successful provision of basic services
Can it strengthen local capacity and decentralization?

8. Conclusions Risks are lowest in stable frameworks
Frameworks are stable if all stakeholders agree
Facilitating agreement is a participatory process
Communicating the agreed framework around a “deal” needs target-group-specific translation:
Picture books for multilingual / analphabetic target groups
Implementation guidelines for project managers
Rating capability for financial sector ?
Analysis of bottlenecks for project financing ?
UN Declaration for national governments ?

9. Thank you for your kind attention - but don’t hold back with criticism…
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