1. Financing Access to Basic Utilities for All Mobilizing Finance: Zambian Experience Sam Gonga DTF

2. Overview Background Overview of Financing Options Financing WSS services for urban poor in Zambia Conclusion

3. Background Central Govt L/Authorities Commercial Utilities PSP Service Provision Sector Reforms - NWP 1994

4. Challenges after 1994 NWP Low capital investments Dilapidated Infrastructure Low Govt spending on water & payment of bills Tariffs not able to meet capital costs Limited skilled personnel Difficulty accessing finance from donor & domestic sources

5. Financing WSS for urban poor – DTF Zambia Basket fund for WSS Financed through govt & donor grants Sustainable in the short to medium term Target: improved access of the poor to WSS Provided as grants to water utilities – no excuse for poor service delivery Priority to peri-urban areas

6. DTF: Fund Components DTF General Fund (GF)Performance Enhancement Fund (PEF) Objective to assist CUs in extending WSS services to the urban poor. to support initiatives by a CU that aim at enhancing its financial viability. Eligible Applicants all CUs (unless excluded) CUs with proven efforts to improve WSS situation for urban poor within past 12 months; previous DTF projects well implemented Eligible Projects Project Types : water supply, sanitation, capacity building (any combination) Projects improving financial viability of CU; i.e. reducing operational costs and/or increasing revenues. Project Area : peri-urban or low cost, legal situation clarified Project Volume : within specified thresholds

7. DTF Funding Arrangements CPs GRZ CUs Investments Account for Project Funds (EUR) DTF Admin. Account (EUR) DTF Admin. Account (ZMK) 1 2 3 Monthly requirement s DTF 4 Agree d % Account for Project Funds (ZMK)

8. Project Selection Call for Proposals Submission of Project Proposals Initial Screening Detailed Assessment Funding Decision Financing Agreement Cost per Beneficiary Current WSS Situation Potential to reduce Health Risks Sustainability Risks Adressed to all CUs (exceptions possible) Scope/content of eligible projects Thresholds for project value Application forms Eligibility Completeness Review of proposed measures Review of implementation concepts Review of BoQs and Cost Estimates Recommendation by DTF Management Decision taken by DTF-Committee Prioritisation

9. Overview of Committed Funds (2006 – 2010) Source of Funds Amount (in EUR) GRZ Commitment416,6675% CP Commitment8,700,00095% TOTAL Funds9,116,667100%

10. Impact on Target Population 11.5 Million 70% in low income area 2005: 3.7 Million 2015: 4.4 Million 46% Urban 65% No access to safe water 2015: 2.85 Million DTF Programme 2006 – 2010 1.0 Million DTF Programme 2011 – 2015 1.85 Million With adequate funds, almost all the urban population can have basic access to safe and sustainable water supply by 2015!

11. Achievements Six pilot projects completed between 2003-2005 Cost US$450,000; beneficiaries 120,000 Large scale financing under way: 2006/7 US$1.2M projects, 135,000 beneficiaries Another US$1.4M projects for 2007

12. Conclusion Increase govt spending & donor aid in the short to medium term DTF effective approach to serving the peri- urban areas Possible to reach many peri-urban areas by CUs using DTF approach

13. Thank you

14. Targets for Water Supply Projects (2006 – 2010) Funding secured Total PlannedUnit Total Funds required4,330,0007,000,000EUR* Average Project Size70,000 EUR* Total No of Projects62100No. Cost per Kiosk10,000 EUR* Cost per Beneficiary77EUR* Total No of Kiosks433700No. Total No of Beneficiaries649,5001,050,000No. Funding Gap:2,670,000EUR* *Assumption: 1 EUR = K 5,800

15. Allocation of Funds (2006-2010)