Tag Archives: small-scale private water providers

Urban water provision in sub-Saharan Africa: the role of the domestic private sector

In 2010, UNDP’s Poverty Group and Environment and Energy Group launched a joint project to examine to what extent the domestic private sector in sub-Saharan Africa (SSA) contributes to achieving the target for access to safe water under MDG7. The project carried out in-depth case studies of three countries: Kenya [1], Tanzania [2] and Uganda [3]. The studies are based on household and provider surveys as well as interviews with government officials and other stakeholders. Additional studies are planned for 2011, covering Angola, Burkina Faso, Mozambique and Senegal.

The findings of the case studies so far are that small-scale private providers increase water supply coverage and reduce time spent on fetching water, often providing a vital service, particularly for low-income households. However, in the absence of a coherent policy framework with effective tariff enforcement and water quality monitoring, small-scale providers often deliver services that are very costly and of varying quality.

[1] Small-Scale Private Water Providers in Kenya: Pioneers or Predators? By Degol Hailu, Sara Rendtorff-Smith and Raquel Tsukada

[2] Services and Supply Chains: The Role of Informal Water Vendors in Dar es Salaam By Kate Bayliss and Rehema Tukai

[3] The Role of the Domestic Private Sector in the Delivery of Urban Water in Uganda: Contracts for Small Towns By Kate Bayliss and Sam Kuloba Watasa

To obtain copies of the case studies please contact:
Sara Rendtorff-Smith by e-mail: sara.rendtorff-smith@undp.org or by telephone: +1 212 906 6371.

Related web page: UNDP – Water Supply and Sanitation

Source: UNDP (2011). Urban water provision in sub-Saharan Africa: the role of the domestic private sector in accelerating MDG progress. (Issue brief, 15 Mar 2011). 2 p. Download full brief

Peri-urban water supply: a sustainable model in post-conflict Angola

One of the important challenges of post-war reconstruction is to provide more and better quality basic services, such as water. Previous attempts at upgrading main supply systems to accommodate peri-urban areas have been overwhelmed by the explosive demographic growth of Angola’s major cities brought about by many years of civil war.

A new paper [1] by the International Institute for Environment and Development (IIED) documents strategies developed by the informal private sector and local communities themselves to meet the demand for water services that the Angolan Government has been unable to provide.

The paper demonstrates that local communities’ own engagement in the management of water distribution and their assumption of the responsibility for maintenance and the payment of service fees is a sustainable and affordable model. The paper also points out that building on the successes of existing locally driven initiatives, can bring national and international water targets closer to realisation and that local innovations not only improve water provision, but do so in a manner that involves and responds to the urban poor more than conventional water projects do.

Drawing on a literature review and the experience of Development Workshop (DW) in supporting peri-urban water services in Luanda, the paper provides lessons and recommendations for partnerships, financing and cost recovery, mapping tools, and scaling-up.

Angolan politicians have often defended the position that basic services should be free of charge, but this has in practice resulted in a lack of funds being available for maintenance of the existing services. Central government income from the country’s extractive industries has rarely trickled down to basic service provision in peri-urban and rural areas and as a result, the poor find themselves paying more for essential services from the private sector or losing income because of frequent illness from contaminated water.

An opposite position, the “privatization” approach, has been promoted by international financial institutions, resulting in an obsession with “profitability”, with little attention being paid to affordability, accountability, maintenance, and regulation.

To provide a sustainable service, it is necessary to adopt cost-recovery principles and to charge an affordable fee for water that is used to keep the local infrastructure operational. Relying solely on centralized funds from the state budget to maintain local infrastructure in the peri-urban bairros has proved unrealistic. An inevitable part of developing sustainable basic services is the creation of accountable institutions. These principles have been incorporated into the legal framework for water services that has been formulated in the Water Law, 6/02, published in 2002. This document provides an overall policy and strategies and defines the organisational structures for an integrated management of the water resources. In this document amongst other regulations, it is indicated that users should pay a financial contribution (“taxes”) for the maintenance of their water systems.

In 2008 the Government launched the “Agua para Todos“ or Water for All Programme. At its launch the National Water Director made a public commitment to provide water to communities “wherever they are” signaling a new more inclusive government policy to bring water to poor-previously excluded communities.

[1] Cain, A. and Mulenga, M. (2009) Water service provision for the peri-urban poor in post-conflict Angola. (Human settlements working paper series. Water ; 8). London, UK, International Institute for Environment and Development (IIED). 56 p. ; 10 fig., 8 photos, 15 tab. ISBN 978-1-84369-754-1

Download full publication

Small-scale providers: success story highlights the need for cheap and accessible financing, Philippines

Elsa D. Mejia is General Manager of the Inpart Waterworks and Development Company (IWADCO), a family enterprise that started as a small construction company specializing in the production of water tanks for small towns and municipalities in and around Metro Manila, Philippines.

During the 1990s, IWADCO (then known as Inpart Engineering) invested US$350,000 over a 5-year period in low-income communities. Raising this amount, which enabled IWADCO to deliver water to 125,000 people either through piped connections or hose connections from storage tanks, wasn’t easy. Commercial banks refused to give loans, forcing Ms. Mejia to lend from relatives and other nonbank lenders, often at usurious rates of 5%-15% interest per month.

Ms. Mejia took this risk knowing that IWADCO can recover its costs and even earn profits because people were willing to pay for water. With its US$100,000 investment (around US$30-40 per household), IWADCO sold 30,000 cubic meters (m3) of water in a month, serving over 3,000 households.

Since then, governments have shown increasing interest in partnering with small enterprises for water supply provision. With its extensive experience, IWADCO stands out as one of the most viable and trustworthy partners in the water sector.

In August 2007, Ms Mejia became president of the National Water and Sanitation Association of the Philippines (NAWASA), a new organization of small-scale private water providers (SSPWPs) in the country.

When asked what where the most important lessons she had learned, Ms Meija mentioned:

  • the need to create a strong relationship with partners (local government and other SSPWPs),
  • the need to work together to be able to appeal more strongly to donors, the government, and big private companies for support, especially for greater access to cheaper and accessible financing, and
  • the need to learn from collective experience, use better technologies, and become more efficient and sustainable water providers.

Read more: Cezar Tigno, Water Champion: Elsa Mejia – Small Private Providers at the Water Front, ADB, June 2008