FAQ – World Bank Group Support for Water and Sanitation Solutions
January 7, 2014
The World Bank Group is committed to eliminating extreme poverty by 2030 and boosting shared prosperity by focusing on the bottom 40 percent. Expanding access to clean water and basic sanitation services is fundamental to these goals.
Worldwide, more than 700 million people still lack ready access to improved sources of drinking water; nearly half are in sub-Saharan Africa. Furthermore, more than one third of the global population – some 2.5 billion people — do not use an improved sanitation facility, and of these 1 billion people still practice open defecation. This causes preventable deaths - mostly of children, contributes to the spread of disease and suppresses economic growth. At the same time, water supplies in many developing countries are under growing pressure from urbanization, desertification and climate change. Helping governments identify the best solutions to these challenges in a given local context is a World Bank Group priority.
Why do governments seek World Bank Group assistance in water and sanitation?
The performance of water and sanitation utility companies varies greatly, but many are underperforming. This is due mainly to systemic issues, which can include weak governance, lack of accountability, poor management, inadequate or ageing infrastructure, and insufficient funds for operations and maintenance. These all adversely affect service delivery. For many people, having 24x7 access to a safe water connection at home is still a dream.
To review potential options for improving water and sanitation services for people, governments often approach the World Bank Group as an objective, expert partner that can work with them to bring national, regional and international experiences to allow for customized solutions - solutions that will help move towards a goal of universal access, affordable to customers and which are sustainable. They also know that the World Bank Group will ensure the protection of people and the environment during development projects.
How does the World Bank Group support water and sanitation projects?
The World Bank Group offers financial support and technical assistance to governments working to upgrade, repair, maintain or expand water and sanitation services. We support countries looking to ensure efficient, transparent and sustainable delivery of water and sanitation services to citizens, including in underserved areas.
The World Bank Water Global Practice oversees approximately $22 billion in grants, low interest loans and technical assistance through 181 public sector projects focused on improving public sector services to citizens with the largest programs in water supply and sanitation followed by irrigation and water resources management. In FY14, the World Bank Group provided $4.3 billion in grants, low interest loans and technical assistance to support governments’ water, sanitation and flood protection projects.
We also work directly with government ministries overseeing the water and sanitation sector, as well as with other development partners including civil society organizations, on improving the policy environment within which service providers operate.
Finally, our support to clients is backed by a range of practical research from which new knowledge and good practices can be generated and introduced into project design to further improve the quality and sustainability of service delivery.
Why does the majority of World Bank Group water and sanitation financing and technical assistance go to the public sector?
Around 93 percent of water and sanitation services in cities worldwide are provided by public utility companies. Governments approach the World Bank Group to help improve water and sanitation services for citizens, thus our support is based on the demand from governments.
Does the World Bank Group prefer private or public sector water solutions?
There is no one solution to addressing often very complex water and sanitation challenges. Because of this, the World Bank Group doesn’t have a preference for public or private service. Countries face unique challenges, and any solution to these problems must be tailored to the local context.
In many cases, governments concentrate improvements on upgrading public utilities’ operations or extending their reach. In other cases, governments choose to bring in the private sector knowledge of how to get clean water and sanitation services to more people more efficiently, affordably or sustainably.
The World Bank Group aims to ensure governments have access to a range of financial and technical options from which to choose for improving water and sanitation services to citizens. We offer local and global knowledge from our network of country offices and broad expertise in the water and sanitation sectors. Developing country governments decide what type and model of water and sanitation service provision is most appropriate to their challenges.
Why would a country’s public sector government seek to involve the private sector in delivery of basic services like water and sanitation?
In many cases the public sector water and sanitation service providers seek support to overcome the challenges facing them. Struggling to operate old systems, while satisfying increasing demands for better or expanded service, requires access to expertise not available immediately. In such instances governments are investigating options that bring in the know-how of the private sector to improve management of the water utility company. This is similar to a homeowner hiring a private contractor to make improvements on a house because the contractor has special skills, experience or resources which the homeowner lacks. Importantly such an arrangement is defined by a contract which clarifies performance requirements and provides recourse to the owner if the job isn’t done properly – just like in the water sector.
Similarly the public sector may have access to the needed financial resources, but may choose to bring in the experience and skills of the private sector, and sometimes their finance too, to manage their capital program and ensure maximum value for money.
Whether viewed from an operations perspective, or an investment perspective, the goal for the public sector is the same – to leverage knowledge and skills of the private sector to help them improve the performance and efficiency of service delivery to customers. The scope of such arrangements can range from a part of the utility’s activities (such as leakage reduction) through to delegated management and investment for service delivery to a whole city.
Whether publicly or privately managed, it is critical that water and sanitation services maintain transparency and accountability.
How does the World Bank Group promote best practices in water contracts with the private sector?
The World Bank Group works to help governments set explicit targets, including performance indicators that can be enforced through contracts. When countries decide to involve a private company, the World Bank Group works to ensure an open and transparent selection process, and that appropriate oversight arrangements are in place to manage the private entity. The World Bank Group also helps governments assess and strengthen regulatory frameworks to ensure accountability and manage risks.
Does the World Bank Group recognize the Human Rights to Water and Sanitation?
Yes, the 2010 United Nation General Assembly resolution A/RES/64/292 clearly recognizes the right to water and sanitation and acknowledges that clean drinking water and sanitation are essential to the realization of all human rights. The 2010 UN Human Rights Council resolution A/HRC/RES/15/9 affirms that the rights to water and sanitation are part of existing international law and confirms that these rights are legally binding upon States. The World Bank helps to support countries striving to meet their obligations under all such environmental and social conventions and agreements - including rights based ones - that they have signed up to through the full range of World Bank Group instruments.
Does the human right to water and sanitation mean that water and sanitation services should be free for everyone?
No, rather it implies that water and sanitation must be affordable for all and nobody to be deprived of access because of an inability to pay. As such, the human rights framework does not provide for a right to free water. Accordingly the costs of service provision should not prevent anyone from accessing these services and should not compromise their ability to enjoy access to water and sanitation services alongside other human rights, such as the rights to food, education, adequate housing or health.
We believe a utility company should deliver services across all consumers in their area and whilst doing so they must be accountable, efficient, and environmentally, socially and financially sustainable. The World Bank Group helps countries achieve this. We support the provision of appropriate social safety nets and targeted subsidies for the poorest people to access affordable safe water and sanitation.
How does IFC support water and sanitation service delivery?
In some cases, when a government selects a private company to provide water and sanitation services in a city or region, equity financing or loans from IFC, the World Bank Group’s private sector arm, can help attract other investors to a project and ensure it develops sustainably and protects people and the environment.
What specific assistance programs does the World Bank Group provide?
The World Bank offers governments loans, grants and technical assistance, such as support for expanding or improving water infrastructure, improving management practices and ensuring community engagement.
The International Finance Corporation (IFC) works to increase access to water sanitation services by providing financing to private companies and advisory services to governments, including brokering public-private partnerships to solve specific challenges.
The Multilateral Investment Guarantee Agency (MIGA) offers political risk insurance, or guarantees, for investments in developing countries as well as dispute resolution services for guaranteed investments.
The Water and Sanitation Program (WSP) and the Water Partnership Program (WPP) are multi-donor trust funds administered by the World Bank that offer technical assistance through grant funding, helping capture best practices and lessons learned from water supply and sanitation projects.
The Global Partnership on Output-Based Aid (GPOBA) is a multi-donor trust fund program administered by the World Bank that expands access to low-income households in developing countries, typically through subsidized financing for pipes and other infrastructure.
The Public Private Infrastructure Advisory Facility (PPIAF) is a multi-donor trust fund program administered by the World Bank that offers technical assistance grants to help governments understand how best to leverage the private sector in providing better, affordable services for more people in a participatory manner.
Where can I learn more about the World Bank Group’s work in water?
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