Bank Netherlands Water Partnership Water Supply & Sanitation Windows Progress Report Second Quarter, 2003 April 1 to June 30, 2003 Bank-Netherlands Water Partnership -Water Supply and Sanitation Windows www.worldbank.org/watsan/bnwp 1818 H street NW, Washington DC 20433 USA · Bnwp@worldbank.org · tel. 1-202-4587796 Bank Netherlands Water Partnership Water Supply and Sanitation Windows Comprehensive Quarterly Progress Report Second Quarter, 2003 1. The Bank-Netherlands Water Partnership ­ Water Supply and Sanitation Windows The mission of the Bank-Netherlands Water Partnership (BNWP) is to improve delivery of water supply and sanitation services to the poor. The partnership enhances performance of World Bank operations in the water supply and sanitation sector and supports a broad sector reform agenda with a strong poverty focus. BNWP activities center on providing support to solve immediate problems with actual cases, testing policy and service delivery innovations, and plugging gaps in existing knowledge in the water sector as a whole. The BNWP is managed as a cohesive program based on good quality projects and activities, and is complementary to other sources of funding. BNWP projects are targeted interventions that support implementation of structural changes. A typical project fosters South-South collaboration and includes pilots in the field. All project proposals are quality-assured through peer review by reviewers chosen from within and outside the World Bank. More details on the work done by BNWP are available at www.worldbank.org/watsan/bnwp or by writing to bnwp@worldbank.org. 2. The quarterly progress report 2.1 Purpose This Quarterly Progress Report outlines the progress in work of the Water Supply and Sanitation Windows of the Bank Netherlands Water Partnership during the second quarter of 2003 (April 1 to June 30, 2003). The purpose of the Quarterly Progress Report is to: · report outputs and activities of the various BNWP projects and activities · report expenditure that allows comparison with outputs · facilitate identification of links and common interests between various projects of BNWP · increase transparency of BNWP operations. 2.2 Structure of the Quarterly Progress Report The Quarterly Progress Report is organised with a main text with an annex giving the detailed progress reports for each project and activity. 3. Key developments in quarter BNWP is now at cruising speed. BNWP activities in the second quarter of 2003 focused on the consolidation of the eight existing flagship projects. A variety of smaller activities were initiated, ongoing, or finalized. In April/May, 2003, the BNWP-WSS program was evaluated by the Dutch government and received positive feedback. The overall comments were: 2 "Projects and activities financed by the BNPP project appear to be highly relevant for the WB policy in this area. They are innovative and additional in the sense that it is unlikely that they would be financed with WB resources. Furthermore the management of the program is very well structured and organized, which creates favorable conditions for a good score on efficacy and efficiency. Because the outcome of the implementation is not yet known, the scores for the implementation phase are tentative/conservative." 3.1 New projects and activities Two new activities were started up: Distributional Impact of Utilities Subsidies (#055) ­ Editing and publication of a book which reviews and presents empirical research done in recent years (1997-2002) on the distributional impact of utilities subsidies. Comparative Review of Risk Mitigation Instruments and Design of a Framework for Financing Pro-Poor Water Investments and Sub-Sovereign Governments (#080) ­ Enhancing water supply and sanitation service delivery by strengthening the use of risk mitigation instruments and facilitating lending to municipal governments. 3.2 Closed projects and activities The following projects and activities were finalized in this quarter: Consultation Workshop with African Water Operators in Dakar (#015) ­ Sixty-five high-level decision makers from 17 African countries as well as bilateral and multilateral development agencies participated in this three-day workshop on PSP in WSS. It enabled African water decision makers to share lessons learned and become familiar with recent innovative experiences. It gave the World Bank the opportunity to listen to the policy makers positions on ways of improving their capacity to negotiate reforms with the private sector. A workshop report is available in English and French on www.worldbank.org/watsan/bnwp. Toolkit for Rural Water and Sanitation Components in Multi-Sector Community-Driven Development Projects (#042) - This activity developed a toolkit to assist task teams working with multi-sectoral investments programs in designing, implementing, and monitoring and evaluating the RWS components of such projects. The "Rural Water Supply & Sanitation Toolkit for Multi-Sector Projects" is available in hardcopy, on CD-Rom, or online at www.worldbank.org/rwsstoolkit/index.htm 3.3 Events BNWP co-sponsored a session on "Can the Principles of Franchising Be Used to Improve Water Supply and Sanitation Services?" (BNWP #053) at an International Private Water Association event in May, 2003. BNWP sponsored the First Public-Private Handwashing Initiative: Country-Sharing and Orientation Workshop (BWNP #008) in Accra, Ghana, in May, 2003. 3.4 Program management BNWP program management was ongoing. The BNWP program manager attended the coordination meeting of the program managers of the various BNWP water programs, convened by the Dutch Ministry of Foreign Affairs in The Hague on May 1 and 2, 2003. The main topics of the meeting were collaboration among programs. water week, and monitoring & evaluation. 3 4. Overview of present portfolio The total value of the present portfolio of projects and activities is USD 6.8 million. This budget includes projects and activities that are approved by (the chair of) the Sector Board. In addition prequalified projects under development amount to a budget of USD 2.1 million. The planned disbursement per quarter is presented in figure 1. 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 02-I 02-II 02-III 02-IV 03-I 03-II 03-III 03-IV 04-I 04-II 04-III 04-IV 05-I 05-II 05-III 05-IV planned disbursement actual disbursement Figure 1: Planned and actual disbursement per quarter. This approved budget of USD 6.8 million leverages co-financing of USD 1.8 million from other funding sources. 4 per region per deliverable per window Global Rural WSS advice on approaches Africa Urban WSS East Asia & Pacific policy awareness and Financing systems dialogue Europe & Central Asia synthesised knowledge & Sanitation & hygiene Latin America & Carribean info research & development Capacity building Mediterranean & N. Africa South Asia cap. building & training Figure 2: Break up of portfolio in windows, regions, and deliverables The focus of the present portfolio is summarized in figure 2 (above). The majority of the portfolio is global or located in Africa or South Asia. This is in line with the needs for the Millennium Development Goals. There is a reasonable spread across deliverables. BNWP-WSS sponsored initiatives are predominantly located within the rural WSS, urban WSS, and sanitation and hygiene windows. 5. Financial and progress report Table 1 gives a specification of accumulated progress as well as expenditure per window. The total expenditure between April 1 to June 30, 2003 was USD 591,016. This is 102% of the planned budget for the second quarter of 2003. Having exited the build-up phase, BNWP disbursements increased sharply in the second quarter of 2003, bringing the program to cruising speed. The outputs achieved in the fourth quarter amount to 78% of the targets set for the quarter. This number represents a weighted average of the individual project achievements, as specified in the annex. 5 Table 1: Outputs and expenditure fourth quarter 2002 (USD) Window Performance Quarterly Expenditure (% of target) budget USD % of budget WSS in rural areas and small towns 64% 151,750 135,457 89% Reform of urban WSS 62% 116,500 95,181 82% Dev. of sustainable financing systems 93% 30,000 45,926 153% Sanitation and hygiene promotion 99% 167,000 236,561 142% Capacity building 79% 34,750 30,643 88% Program coordination N/A 80,000 47,248 59% Grand total 78% 580,000 591,016 102% Indicates that % of spent budget > % of reached target 6. Plans for next quarter BNWP has assumed cruising speed and will continue at this level during the third quarter of 2003. Now firmly in the implementation phase, BNWP will gear up for extra efforts in the areas of quality assurance, capacity building, monitoring and evaluation, and dissemination of outputs. The review of the pipeline will be finalized. In the third quarter of 2003, it is expected that the BNWP-WSS portfolio will be cleaned up by removing projects for which (i) a quality full proposal has not been delivered within a reasonable timeframe, or (ii) the initial proposal has been withdrawn. 6 Annex: Overview per project or activity # Title Short description Approved Windows Current status Project period Quarterly budget (USD) performance 005 Pro-poor transaction design; Upstream Ensuring that urban water sector reforms involving 780,000 Urban WSS Operational Nov 02 ­ Feb 04 11% work for private sector participation the private sector are more effective at increasing and reform access and service quality for poor consumers 006 PPP in urban WSS: building capacity Addressing the role of civil society in public private 150,000 Urban WSS Operational Nov 02 ­ May 04 118% for civil society engagement partnership transactions and build capacity of key Capacity building civil society groups, and policy makers to engage positively in the reform process 007 Follow up support to communities after Identifying the types of follow-up support to 180,000 Rural WSS Operational Nov 02 ­ May 04 39% construction of rural WSS facilities communities after the construction of rural water and sanitation Facilities that are needed to enable sustainability 008 Public private partnership to promote Promoting partnership between the soap industry, 850,000 Hygiene & Operational Jun 02 ­ Dec 03 116% handwashing with soap public agencies and NGOs to provide soap and sanitation promote handwashing with soap to decrease diarrhoeal diseases 012 Trends in the Desalination Market in Improving the understanding among Bank staff and 350,000 Urban WSS Operational Jun 02 ­ Sep 03 64% the Middle East and Central Asia clients in the Middle East and Central Asia of recent developments in the desalination industry 015 Consultation workshop with African Organizing a three day high-level seminar of 50,000 Urban WSS Closed Feb 02- Jun 02 N/A water operators in Dakar African water policy decision makers to develop a roadmap on how to improve capacity of water ministries in implementing sector reform 017 Enhancing the empowerment of poor Assessing the extent of empowerment being 147,000 Rural WSS Under 18 months N/A women and men within communities effected, specifically for poor women and men development within user communities, as a result of water and sanitation interventions 020 State of the art hygiene and sanitation Supporting the implementation of effective 530,000 Rural WSS Operational Jun 02 ­ Dec 03 51% promotion component design of large instruments for improving hygiene and sanitation Hygiene & scale RWSS programs behaviours in rural communities in the context of Sanitation large-scale rural water supply and sanitation projects 021 Addis Ababa International Conference Organizing a conference to take stock of the 50,000 Rural WSS Closed Apr 02 ­ Jan 03 N/A "Water Supply and Sanitation Services lessons learned on water supply and sanitation in Urban WSS in Small Towns and Multi-Village small towns and to launch the new BWNPP small Schemes" town initiative 026 Scaling up sustainable rural water Characterizing the necessary supporting 50,000 Rural WSS Operational Feb 02 ­Jan 03 99% supply services environment for successful scaling up of sustainable rural water supply services, such as demand response approaches 028 Understanding the Infrastructure Improving our understanding of infrastructure 375,000 Financing systems Under 18 months N/A Environment of Small and Medium shortages faced by small and medium enterprises development Firms in transitional and developing economies, the impact of such shortages on firm productivity and competitiveness, and the firms' coping mechanisms 7 # Title Short description Approved Windows Current status Project period budget (USD) 033 Modes of engagement with public Developing better performing public sector water 628,000 Urban WSS Operational Jun 02 ­ Dec 04 74% sector WSS in developing countries utilities in developing countries.- identifying, Capacity building categorizing and analyzing various international models for public sector water service provision 042 Toolkit for Rural Water and Sanitation Providing task teams with guidelines and tools for 50,000 Rural WSS Closed Mar 02 ­Sep02 N/A Components in Multi-Sector Projects designing, implementing, and monitoring & evaluating RWS components in multi-sectoral projects 043 Town Water Supply and Sanitation Building appropriate models for service provision 1,030,000 Rural WSS Operational 18 Jun 02 ­ Dec 65% Initiative for town water supplies, by identifying, assessing Urban WSS 03 and market testing professional support options for town water supply, and by investigating ways to aggregate towns 047 Beyond capital subsidies: financial Documenting the sustainability and scalability of 400,000 Rural WSS Under 14 months N/A alternatives for achieving rural government capital subsidies in the rural water Financing systems development universal coverage targets sector; and financial alternatives such as use of non-public funds, private participation, inflow of donor funds 050 Evaluation of Pro-Poor Subsidies for Assessing the effectiveness of the subsidy 50,000 Financing systems Operational May 02 ­ Aug 02 90% Urban Water Services in West-Africa schemes used in Senegal and Ivory Coast in providing piped water supply to the poor 051 Developing a Flowchart for Providing support to the Argentina's Renegotiations 50,000 Financing systems Operational May 02 ­ Aug 02 88% Renegotiations: Assistance to Commission in defining the renegotiation process, Urban WSS Argentina's Concession Contract and renegotiation policies and strategy, and Renegotiations Commission developing a flowchart on renegotiation that can be applied in other countries 052 Franchising in Water Supply and Investigating the potential of franchising as a 50,000 Rural WSS Operational Jun 02 ­ Jun 03 96% Sanitation means of providing water and sanitation services in Urban WSS 02 small and medium sized towns and in marginal urban areas 053 Good Governance to Improve Water Developing a methodology to assess governance 45,000 Urban WSS Operational Mar 03 ­ Dec 03 100% Supply and Sanitation Services for the regimes in urban water supply and sanitation sector Poor 8 # Title Short description Approved Windows Current status Project period Quarerly budget (USD) performance 054 Development of an African Sanitation Assessing the state of sanitation and hygiene in 50,000 Hygiene & Operational Jun 02 ­ Sep 02 68% and Hygiene Strategy (phase I) Africa, sharing experiences and lessons learned by Sanitation people and organizations working in this field, and raising the profile of sanitation and hygiene in Africa 055 Distributional Impact of Utilities Editing and publication of a book synthesizing 50,000 Financing systems Operational April03 ­ Dec04 N/A Subsidies recent empirical research on the distributional impact of utilities subsidies. 057 Market Development for Private Water Assessing the possibilities of how to increase the 50,000 Urban WSS Operational Mar 30 ­ Dec 03 112% Utility Management in the ECA Region number of players in the market, risks for the private sector and consumers 059 Updating the toolkit for Public Private Updating the toolkit for PPP in the water sector to 50,000 Urban WSS Operational Mar 03 ­ Oct 04 50% Partnership in the water supply and include new development and increase focus on sanitation sector "pro-poor" design issues, small scale providers, and the use of output-based aid. 060 Improving efficiency and competition Disseminating and tailoring the PSP Toolkit to the 50,000 Urban WSS Operational May 02 ­ Aug 02 65% of WSS provision in medium and small legal, regulatory and social situation of W&S at municipalities in Brazil municipal level in Brazil 061 Assessing Resource Flows for Water Developing a framework to assess the flow of 50,000 Financing systems Operational Sep 02 ­ Feb 03 86% Supply and Sanitation within a PRSP resources for WSS and their link to sector reforms. Framework The framework will be developed in Ethiopia and generalized for use elsewhere. 062 Methodology of Baseline Analysis of Producing a flexible framework to help project 50,000 Financing systems Operational Sep02 ­Sep03 161% Water Distribution Performance officers and regulatory agencies to develop appropriate and cost-effective baselines for water utility performance 064 Does Community Involvement Improve Looking into the household decisions to connect to 50,000 Capacity building Operational Sep02 ­Sep03 40% Performance of Water Supply the piped water system and an evaluating of the Projects? Evidence from the effectiveness of community/ user involvement in Philippines the design of water supply initiatives in the Philippines 066 Sanitation Sector Study for Indonesia Developing an action plan for sanitation in 50,000 Hygiene & Operational Nov 02 ­ Jun 03 85% Indonesia, including assessment of existing Sanitation situation and evaluation of existing incentives 071 Development of a Tool for Regulatory Developing a more generic dynamic financial 32,000 Financing systems Operational Sep02 ­Sep03 100% Oversight of Water Utilities: A Cash model that can be utilized more generically and can Flow Equilibrium Model (CFEM) serve as an important analytical tool for policy makers as well as professionals. 9 # Title Short description Approved Windows Current status Project period Quarterly budget (USD) performance 074 Improving Policy and Business Enhancing the global understanding of SSPs, their 35,000 Urban WSS Operational Dec02 ­Jun03 100% Environments for Small Scale importance in the water supply and sanitation Financing systems Providers of Water Supply and sector, and the impact of the policy and business Sanitation Services environments in which they operate 080 Comparative Review of Risk Mitigation Enhancing water supply and sanitation service 50,000 Financing systems Operational Jun03-Dec03 100% Instruments and Design of a delivery by strengthening the use of risk mitigation Framework for Financing Pro-Poor instruments and facilitating lending to municipal Water Investments and Sub-Sovereign governments. Governments 10