Financing Access to Basic Utilities for All

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

• Service Provision

Central Govt
L/Authorities
PSP
Sector Reforms - NWP 1994
Commercial Utilities
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
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DTF Fund Components
DTF 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
Eligible Applicants all CUs (unless excluded) 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.
Eligible Projects Project Area peri-urban or low cost, legal situation clarified Projects improving financial viability of CU i.e. reducing operational costs and/or increasing revenues.
Eligible Projects Project Volume within specified thresholds Projects improving financial viability of CU i.e. reducing operational costs and/or increasing revenues.
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DTF Funding Arrangements
Agreed
DTF
CPs
Monthly requirements
1
Account for Project Funds (EUR)
DTF Admin. Account (EUR)
3
2
GRZ
Account for Project Funds (ZMK)
DTF Admin. Account (ZMK)
4
CUs
Investments
8
Project Selection
Submission of Project Proposals
Call for Proposals
Initial Screening

• Adressed to all CUs (exceptions possible)
• Scope/content of eligible projects
• Thresholds for project value
• Application forms

• Eligibility
• Completeness

Detailed Assessment

• Review of proposed measures
• Review of implementation concepts
• Review of BoQs and Cost Estimates

Prioritisation
Financing Agreement
Funding Decision

• Cost per Beneficiary
• Current WSS Situation
• Potential to reduce Health Risks
• Sustainability Risks

• Recommendation by DTF Management
• Decision taken by DTF-Committee

9
Overview of Committed Funds (2006 2010)
Source of Funds Amount (in EUR)
GRZ Commitment 416,667 5
CP Commitment 8,700,000 95
TOTAL Funds 9,116,667 100
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Impact on Target Population
70 in low income area
2005 3.7 Million 2015 4.4 Million
65
DTF Programme 2006 2010 1.0 Million
No access to safe water
Urban
2015 2.85 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!
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Achievements

• Six pilot projects completed between 2003-2005
• Cost US450,000 beneficiaries 120,000
• Large scale financing under way 2006/7 US1.2M
  projects, 135,000 beneficiaries
• Another US1.4M projects for 2007

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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
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Targets for Water Supply Projects (2006 2010)
  Funding secured Total Planned Unit
Total Funds required 4,330,000 7,000,000 EUR
Average Project Size 70,000 70,000 EUR
Total No of Projects 62 100 No.
Cost per Kiosk 10,000 10,000 EUR
Cost per Beneficiary 7 7 EUR
Total No of Kiosks 433 700 No.
Total No of Beneficiaries 649,500 1,050,000 No.
Funding Gap 2,670,000 EUR
Assumption 1 EUR K 5,800
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Allocation of Funds (2006-2010)