State of efficiency in the WASH sector Status quo is not an option

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Presentation transcript:

State of efficiency in the WASH sector Status quo is not an option Jyoti Shukla @jyotishukla Director, Water Global Practice, World Bank Washington DC, 19th April

ACHIEVING THE SDGS Status quo is not an option Current investment are a fraction of what is needed $$$$$$$$$$$$$$$$$$$$ Future investment needs: $114 billion per year

Sources of financing Funding sources Repayable financing Tariffs User fees for services provided and households’ investment for self-supply Concessional finance Commercial finance Taxes Domestic taxes levied by local and central governments and provided as grants or subsidies Transfers Transfers from external sources, such as international donors (ODA grants), foundations, NGOs, remittances

Multiple options for private finance Size of financing needs Commercial bank loans Large Bonds Medium Vendor / Supplier finance Microfinance Small Households SSIPs Communities Medium sized entrepreneurs Utilities / Municipalities Size of borrowers

Efficiency – A no-regrets investment

How can we improve efficiency? Operational efficiency Capital efficiency Financial efficiency Allocative and pricing efficiency

Improving operating efficiency Reducing non-revenue water Boosting energy efficiency Improving staff productivity Improving bill collection

Improving operational efficiency to move to financial viability Currently viable Step 1 Increase collection rate to 100% Step 2 Reduce non-labor cost by 15% Step 3 Reduce non-revenue water to 25% Step 4 Increase revenues by 10%

Improving capital investment efficiency Cost-effective investment approaches Timely and adequate maintenance Maximum efficiency of selected approach - Procurement, governance, results-based

Improving financial efficiency Use public funds for areas of most externalities - Sanitation has a high public good element Blend public funds to mobilize private finance - Liquidity, guarantees, first loss provisions Target public funds to provide services to the poorest - Subsidies, micro-finance, output based aid

Allocative efficiency – Pricing and valuing water Sustainable and equitable approaches High-level panel on water Global dialogue on valuing water

Innovative approaches to improve efficiency Well-managed FSM vs sewers Senegal Cost-efficient condominial sewers Brazil Use of ICT to improve services and collections Nairobi, Kenya Community participation helped reduce capital costs Uttarakhand, India Re-using waste water South Africa Contract based NRW Vietnam

TO CONCLUDE Efficiency is a no-regret investment Operational efficiency Capital efficiency Financial efficiency Allocative and pricing efficiency Critical to attracting more financing in the sector It is the right thing to do! IT IS WITHIN (Y)OUR CONTROL