WATER AND SANITATION PROGRAM

FY08 Progress Report

Jae So, Program ManagerWSP Council Meeting London, EnglandJune 12, 2008

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FY08 Progress ReportOverviewPortfolio and ActivitiesFY08 HighlightsGlobal LearningFundingChallenges

Outline

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Overview

Highlights of FY08

Development of WSP 10 year Strategy Document and Medium-term Sanitation Strategy paper

International Year of Sanitation

Scale up handwashing behavior and total sanitation projects

FY08 flagships: Economics of sanitation, Financing policies for the poor

Establishment of Core-Global and Regional Multi-Donor Trust Funds (MDTF)

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Regional Water Supply and Sanitation Trends

East Asia Pacific

• Rapid urbanization• Huge investment needs

but few creditworthy borrowers

• Decentralization

South Asia

• Physical infrastructure has improved in recent years, but institutional reforms have been slow

• Urban population growth increases the access gap but policy response has not kept pace with growth

Africa• Lagging far behind in MDGs

despite increased water supply access

• Demand for collective donor support for national programs in countries committed to scaling up reform agendas

Latin America, Caribbean

• Increased access to water in rural and urban areas

• Continuing need for strong policy, institutional, and regulatory agencies

• Need to enhance decentralization of WSS service delivery

Regional Trends

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ContextStimulate demand: By promoting household investmentsStrengthen supply: By introducing financial facilities for entrepreneursIncrease micro credit access: By working alliances with financial institutions Support local development: By strengthening capacities of local actors

WSP SupportFacilitating the multi-donor project with Government leadership; TA to NGOs and CBOs; documenting lessons learnt

ResultsActive Sanitation Committees, information accessibleStores and manufacturers trainedParticipation of larger private firmsNew technology options available and being validated (from latrines to bathrooms)Financial products developed with 6 financial institutions, for different sanitation optionsLocal government participating in promotion of sanitation market; national government following the experience closely

FY08 Highlights: Latin America

Sanitation as a Business in Peru:A Market Approach to Sanitation

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FY08 Highlights: Africa

ResultsCoverage: Water 40%; Sanitation 52% Sector Finance: Rose from <$20m/yr in 2000 to >$120m in 2006. Now $629m committed from ESAsBanja Woreda in Amhara celebrated 100% H&S coverage with support of Amhara Region, UNICEF and WSP/HIPCLTS behavior change program for H&S started & spreading fast program estimated to have reached out to 1m people

ContextWSS sector transformed from low access and top-down, supply-driven approach to decentralized, multi-stakeholder, demand-focused approach, distinct programs for water & san/hygiene

WSP SupportDevelop Sector Strategy and program approachNational Hygiene & Sanitation Strategy/ProtocolCapacity building through “learning by doing” and sector coordination Document Results

Trends in Sanitation Coverage

1995 2000 2005 2010 2015 2020

0

20

40

60

80

100

% o

f pop

cov

ered

Universal

Access by

2012

Previous trend

Scaling up sanitation in Ethiopia

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Context:Funds to be channeled to local governments for the first time through the Local Government Support Project (LGSP)Good implementation of service delivery practices have been piloted

WSP Support:Design and facilitate establishment of horizontal learning network of local governmentsIntroduce “appreciative inquiry” approach

Results:93 local governments participating (serving 2.2 million pop); improving WSS, accountability, financial managementSet to scale up through LGSP

Building Capacity of Local Governments in South Asia

FY08 Highlights: South Asia

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FY08 Highlights: East Asia

Small Water Utilities Improvement and Financing Project, Philippines

Context:Service providers are small and unable to expand and improve services because of limited access to finance

WSP Support:Capacity building of 11 small utilities in project financing, customer survey and water pricing study, and support to development of market-financing for small utilities

Innovations:Introduction of market demand assessment in all aspects of planning Assessment of the financing market for small water enterprises

Results:Performance improvement and investment plans for all 11 utilitiesSurvey confirm satisfaction of existing consumers and high demand from potential expansion customers5 utilities ready to borrow between $60,000-400,000 (average $200,000)

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WSP Global Learning Elements

Global Projects

Action Learning and Pilot Projects

Scaling up HandwashingTotal Sanitation and Sanitation Marketing Domestic Private Sector ParticipationDevelopment Marketplace

Global Practice Teams

Themes

Rural waterUrban services to the poorSanitation and hygieneFinanceCommunications for reform

Global projects and knowledge activities provide important learning opportunities for WSPMore work to be done on linking global and regional knowledge and lessons

Global Learning

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FY08 Highlights: IYS

International Year of Sanitation

Africa:AfricaSan Conference (2008): To assess progress, challenges, and lessons towards achieving the MDGs and to launch the International Year of Sanitation in Africa33 ministers endorse eThekwini Declaration and commit to:

Dedicate separate budget line for sanitation0.5% GDP to sanitation

East Asia and the Pacific:EASAN was the first high-level ministerial meeting on sanitation in East Asia, with the declaration feeding directly into the First Heads of States Summit on Water in AsiaEASAN follow-up has been tied into the launch of IYS in the various countries in the region

Latin America and Caribbean:LATINOSAN: Ministerial declaration; 23 country sanitation reports; 8 new sanitation countries; Condominial study tours; and national workshops

South Asia:SACOSAN III in Delhi: strong ownership by Government of India

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FY08 Highlights: DPSP

Context: Facilitating Market-Based Financing to Larger UtilitiesMany reforming urban and regional utilities have led to increased operational efficiency, better governance and increased levels of cost recovery, thus providing an opportunity to access market-based financing.

WSP Support:Developing concept and projectBroker – bank, utility, community, government partnershipHelp raise financingSupport for scale-up plan

Results Expected:Shadow credit ratingDeveloping an urban water financing facility in TanzaniaFacilitating first-ever bond transaction in UgandaKey financial reforms in Burkina Faso

Domestic Private Sector Participation

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Major global programs:Scaled-up HandwashingTotal sanitation and sanitation MarketingDomestic private sector program (DPSP)Development Marketplace (M&E)

Small global core team for coordination and special expertise (M&E, marketing, SME)

Country teams leading implementation

DPSP results and lessons highlighted this year

Global Learning

Global Projects

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Urban Services to the Poor GPTOvercoming policy, institutional, management, and other obstacles to providing services to urban poor (Guidance Notes)

Sanitation and Hygiene GPTUnderstanding and addressing the political economy of sanitation Developing financing policies and practices for reaching the poor with improved sanitation and hygiene interventions

Global Learning

Global Practice Teams (GPTs)

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134 Projects and $48.4 million total budget

0

2

4

6

8

10

12

14

Africa East Asia LatinAmerica

SouthAsia

Global

Budg

et ($

000)

05101520253035404550

# Pr

ojec

ts

FY08 Portfolio and Major Activities

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FY08 Indicative Distribution by Scale and Sector

Scale

Small Towns,

19%

ural, 36%Urban, 45%

SectorHygiene,

22%

Sanitation, 33%

Water, 45%

FY08 Portfolio and Major Activities

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(in US$ thousands)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Africa East Asia Latin America South Asia Global

FY07 to 30 Apr 07 (10 months) FY08 to 30 Apr 08 (10 months)

Disbursements by Region (FY07 to FY08)

23%58%

15%

26%

44%

Funding

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Contributions FY06 to FY08 (Apr) (USD 38 million)

UNDP, 0.1

United States, 0.3

World Bank, 4.5

Norway, 2.9Netherlands, 13.6

France, 0.9Denmark, 3.2

Canada, 6.4

Bill and Melinda Gates Foundation,

19.1

Belgium, 0.5

Austria, 1.2Australia, 8

Switzerland, 7.1

Luxembourg, 1.3Ireland, 2.5

Sweden, 19.7

United Kingdom, 20.3

Funding: Contributions

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Balance of individual work programs between demanding country counterparts and need for global activities

Adjusting to new internal systems

External environment -- Political events, naturladisasters, change in client teams, shift in reform focus and concepts

Challenges in FY08

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WSP Draft Strategy

Regional Updates

Three-year Rolling Business Plan (FY09-11)

Looking Ahead

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Historical Annual Budget by Region(in US$ thousands)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

AFRICA EAST ASIA SOUTH ASIA LATIN AMERICA GLOBAL

FY04 FY05 FY06 FY07 FY08 FY09 draft

Funding