Results-Based Financing for Municipal Solid Waste


October 2014

Solid waste management is a pressing challenge that an increasing number of cities in developing countries are facing today.  A joint report by the World Bank and the Global Partnership for Output-Based Aid (GPOBA), Results-Based Financing for Municipal Solid Waste, provides lessons from eight countries with municipal solid waste projects that applied a results-based financing (RBF)  approach in design and preparation.

Results-Based Financing for Municipal Solid Waste is a financial mechanism through which payment for solid waste services is conditioned to the achievement and verification of pre-agreed targets.  Results-Based Financing offers opportunities for innovation, finding locally appropriate solutions, and focusing on achieving results.

The report provides examples in three categories:

  1. Improving solid waste service delivery and fee collection

    This is an appropriate model for lower income countries where service delivery is poor or non-existent and where fee collection to support waste collection and disposal is a major challenge.  It is also a helpful model to jump start the solid waste services in fragile and post-conflict situations where the private sector may be reluctant to enter.

    Examples: Nepal and the West Bank

  2. Promoting source separation and recycling

    For middle income countries where municipal solid waste collection is already high, government focus tends to be on improving the financial and environmental sustainability of the sector.  Results-Based Financing can be used to design projects that incentivize household-level source separation and recycling.
    Examples: China, Malaysia, and Indonesia

  3. Strengthening waste collection and transport in under-served communities

    This model is for applicable to both low and middle income cities but is most relevant where the focus is to improve services in under-served and low income communities.  These project designs could be integrated into community and slum upgrading projects.

    Examples:  Tanzania, Jamaica, and Mali