92840 March 15, 2007 Links: - What is IDA? - Our Work in Mozambique More on Mozambique: - Borrowing History - Data & Statistics - Research - Contact Us Nearly 20 years of war (1974-94) left Mozambique’s infrastructure either destroyed or neglected and the provision of services difficult – for example, only 30 percent of the population had access to safe water. The reforms of 1994 ushered in a new era with the introduction of private sector management, cost recovery tariffs and good regulation. IDA supported the government of Mozambique’s own strategy which was based on a delegated management framework – a public-private partnership whereby assets are owned by the government and operations are managed by the private sector. A first project supported building capacity, rural water supply , water resources management, and the preparation of a new urban water supply strategy. This strategy, implemented during the second water project, supported large-scale civil works for urban water supply systems in five cities – Maputo (the capital), Beira, Quelimane, Nampula and Pemba. About 70 percent of the urban population of Mozambique have benefited from improved production and a more reliable supply. Highlights: - The central ministry – the National Directorate of Water – was reformed, trained, and equipped to manage greater and more efficient delivery of water. - A Water Supply Investment and Asset Fund known as FIPAG was set up as the asset holding company in the urban water sector through which the operation of water services was delegated to private lessees. A regulatory body was created. - Mozambique’s delegated private sector management approach has attracted about US$ 350 million to urban water over the last six years. - Large rehabilitation works were undertaken in the cities. Pemba, Quelimane, Nampula can claim 24/7 water supply. - A key to the success has been the strong economic regulation of the sector–balancing consumer and commercial interests. FIPAG is achieving full cost recovery and can graduate from government subsidies. - Given large production and efficiency gains, a potential 2.4 million more people may be connected to clean water in the five cities over the next five years. - US$126 million (incl. US$15 mln supplementary) in financing from 1998 to 2007 for urban and rural water production and capacity building. - Support for the implementation of an innovative private-public partnership for adequate and efficient urban supply, including the establishment of asset- holding and regulatory bodies. - Implementation of a pilot, demand-led, rural water and sanitation project which resulted in the construction of 130 water source points serving 62,000 people and catalyzed other donor programs. The Canadian International Development Agency and the African Development Bank are scaling up the model in their own rural water supply and sanitation projects. The African Development Bank, Canada, the Netherlands, the Nordic Development Fund, Sweden and Switzerland. - The projects initially supported the formulation of an urban water strategy covering five cities. An additional four towns were added in 2004 under a new private operator; and another four towns are to be added in 2007. - As the urban water supply graduates from concessional financing and is able to access a wider range of funds, including loans on commercial terms, more funding will become available for smaller towns and rural areas where the financing gap is still critical or in areas where government subsidies are required. The Bank is now preparing a follow-on project that will include funding from IDA and from the Africa Catalytic Growth Fund to extend the network for the four cities as well as expand the possibility of the delegated management framework to smaller cities and towns. This is expected to leverage a large amount of new resources from partner donors. National Water Development Project I (1998-2005), II (1999-2007) Project documents, II