Sanitation financing models for the urban poor – new IRC thematic overview paper

Sijbesma, C., 2011. Sanitation financing models for the urban poor. (Thematic overview paper ; 25).  The Hague: IRC International Water and Sanitation Centre
120 p. : 44 boxes, 1 fig., 4 tab.
Includes references, glossary and lists of resources.
Available at: <http://www.irc.nl/top25>

The provision of sanitation services in low-income urban areas is one of the greatest challenges in development. Population growth in developing countries currently outpaces sanitation growth, especially in urban areas. Consequently, in urban areas where poor people reside, and where “formal” sanitation services are not available to them, they experience the compounded effect of serious economic disadvantages such as high risk to public health; a dirty and contaminated environment; no basic human dignity and safety for a large part of the world’s population, especially for adolescent girls and women.

Meeting the challenge of financing water and sanitation : tools and approaches

OECD (2011). Meeting the challenge of financing water and sanitation : tools and approaches. (OECD studies on water). Paris, France, OECD Publishing. 142 p. : 13 fig., 5 tab.
ISBN : 9789264120525 (PDF) ; 9789264120518 (print)
doi: 10.1787/9789264120525-en

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This report provides an overview of key issues related to financing the water and sanitation sector in both developed and developing countries (part 1), and presents tools and approaches developed by OECD for both policy makers and practitioners (part 2).

Sanitation costs and financing – presentations at IRC’s 2010 Symposium

The following papers on sanitation costs and financing were presented at the IRC Symposium 2010, ‘Pumps, Pipes and Promises: Costs, Finances and Accountability for Sustainable WASH Services’, held in The Hague from 16-18 November.

The economics of sanitation initiatives (ESI) for sanitation decision making in Southeast Asia. Author: Guy Hutton

This presentation discusses cost data from 5 Southeast Asian countries in various forms (by technology, by site/project, by hardware/software, by financing source, by timing, and under different infrastructure capacity use levels) to aid decision makers in intervention selection and to draw more general lessons about sanitation financing, efficiency and sustainability. Cost data were triangulated from household surveys, project or provider documents and local market surveys to estimate investment and annualized life cycle costs per household and per individual.

Full paper

WSP/ADB – Sanitation Finance in Rural Cambodia

Sanitation Finance in Rural Cambodia: Review and Recommendations. Andy Robinson. Water and Sanitation Program; Asian Development Bank. May 2010.

Download Full-text (pdf, 1.37MB)

The study primarily contains a comparative analysis of different approaches to financing sanitation:  CLTS, project subsidies and social marketing. The report also makes a suggestion for a sanitation financing system based on conditional cash transfers, which to date have been mainly used in education and health care.

Some of the main findings include the following:

Comparative analysis of case studies

The comparative analysis confirms that public finance for sanitation in Cambodia is not reaching those below the poverty line. Ninety percent of the public finance for the large ADB program goes to non-poor households, and the two sanitation marketing project will require households to contribute at least USD 30 in order to obtain a latrine, whereas the willingness to pay data imply that USD 10 is the maximum amount that most poor households are willing to spend on a latrine.

The Plan CLTS program promotes far cheaper and simpler facilities than the other programs, which should be more affordable and appropriate for poor households. However, 35 percent of households in its program communities continue to practice open defecation, and most of these open defecators are likely to be poor households.

The use of public finance to subsidize the development, promotion and marketing of appropriate sanitation products is to be encouraged, but there is a risk that the current sanitation marketing programs will not benefit many poor households. It is important that an appropriate amount of public finance is directed towards developing and marketing products and services that are specifically targeted at the poorest households and those that cannot afford the USD 30 sanitation core package.

Finally, few of the programs examined have been successful in achieving collective sanitation outcomes, such as open defecation free communities, which should be the ultimate aim of all sanitation programs (in order to achieve the optimal benefits). The population segment that practices open defecation in the program communities is largely made up of poor households, and generally includes those with the highest disease burdens, i.e. those that are most likely to transmit diseases to others through unsafe excreta disposal. As a result, the benefits achieved by these sanitation programs may be limited.

WSP – Financing On-Site Sanitation for the Poor

Financing On-Site Sanitation for the Poor A Six Country Comparative Review and Analysis, 2010. 

Full-text: http://www.wsp.org/UserFiles/file/financing_analysis.pdf (pdf, 2.36MB)

Sophie Trémolet with Eddy Perez and Pete Kolsky.  Water and Sanitation Program (WSP).

This study aims to improve understanding of the finance of on-site household sanitation through careful analysis of practical field experience in a wide range of projects. The Sanitation and Hygiene Global Practice Team of the World Bank Water and Sanitation Program (WSP) initially conceptualized this study to offer better guidance to sector professionals developing on-site sanitation projects and programs.

The study addresses such basic questions as:

• How much does provision of access to on-site sanitation cost, that is, once all costs (hardware and software) are taken into account?

• Do the type and scale of sanitation subsidy affect provision and uptake? How?

• How can the public sector most effectively support household investment in on-site sanitation?

• Should it be via investment in demand stimulation, subsidies to households or suppliers, by support to credit schemes, or by other means?

• Should hardware subsidies be provided or should public spending be focused on promoting demand or supporting the supply side of the market? Where hardware subsidies are adopted, what is the best way to ensure that they reach their intended recipients and are sustainable and scalable?

• What innovative mechanisms (such as credit or revolving funds) can be used to promote household sanitation financing?

Asia – National Policy and Financing for Sanitation

Below is a link to a recent presentation at the National Sanitation Conference, 8 December 2009, in Jakarta Indonesia.

• Almud Weitz, on behalf of the Indonesia Sanitation Donor Group. National Policy and Financing for Sanitation: Examples from Asian Countries (pdf, 688KB). 2009.

Outline

A. Success factors for sanitation development in Asia

B. National approaches to sanitation development

• Thailand
• Vietnam

C. Financing Sanitation

• Urban Sanitation in Vietnam
• Rural Sanitation in India

D. Key lessons for sanitation progress

Aid groups push toilet finance as a crisis buster

Fri Oct 9, 2009

Aid groups and development banks have come up with the perfect, albeit ironic, solution for investors that have seen billions of dollars go down the pan during the financial crisis. Invest in toilets. The groups are trying an alternative way to try and address dire sanitation problems in developing countries, shunning the traditional route where governments fund and build toilets, and instead marketing toilets as must-have status symbols, creating demand among poorer populations. “It’s a bit like the mobile phone.” Jon Lane, Executive Director of the U.N.’s Water Supply and Sanitation Collaborative Council (WSSCC). “Before, nobody had a mobile phone but now everyone wants one and people who were selling fruit and veg are now selling Nokias and sim cards. That’s what needs to happen with toilets.”

The U.N. currently estimates that around 2.6 billion people or 40 percent of the world’s population do not have access to basic sanitation, with diarrhoea killing 1.8 million a year. The toilets Lane is talking about are simple pits, 2 metres (yards) deep and about 1 metre wide with a squat plate over the top. They cost around $100 to buy and build, and with an occasional sprinkling of soil or ash a typical family would not have to empty it for 2-3 years. The WSSCC and banks with development arms, like Germany’s KfW, want to change the way money is spent on such projects. Instead of paying people to do the work, they want to provide the cash to banks in the local countries who then give loans to those looking to create a business providing toilets. “The thing is that if local authorities go in and build a toilet in someone’s back yard, it has been shown that half of them are not even used,” said Lane. “People feel they weren’t asked about it, and they are not told how to use it so they don’t use it. But if it’s personally motivated then it tends to be different.”

The hope is to create a new source to tap for investors and that financing from banks like KfW and the European Investment Bank will feed a $40 billion investment in santitation.  KfW and the EIB would then sell their development project-based bonds to institutions and others keen to invest in the top-rated and ethically pleasing instruments. The WSSCC’s Global Sanitation Fund plans to bolster the private money with $100 million a year on marketing in countries ranging from India to Uganda, to drum up a must-have feel around toilets, and create the platform for entrepreneurs.

Source – Reuters

Ghana – Ministry Provides Subsidies for Household Toilets

The Ministry of Local Government and Rural Development says it has a subsidy facility reduce the cost of providing household toilet facilities in a bid to reduce pressure on neighbourhood and public toilets.

This was announced by the Director of Environmental Health and Sanitation Directorate of the Ministry of Local Government and Rural Development, Mr. Demedeme Naa Lenason

He reminded landlords that it is an offence not to provide these toilet facilities for households and that steps were being taking to ensure that recalcitrant landlords are made to face the full rigors of the law.

According to the 2000 Population and Housing Census more than 20% of Ghanaians do not have any form of latrines and therefore resort to open defecation which posses serious environmental and health threats to society.

Speaking recently at a media briefing in Accra on “Health Menace of Public Latrines” Mr. Lenason said that the 2000 census revealed that 31.45% of households in Ghana use public latrines as compared to 8.5% using Water Closet , 22% pit latrine, 6.9% KVIP , bucket or pan latrine 4% and with 6.9% attending nature’s call in other people’s houses.

“Enhancing access to adequate Environmental Sanitation is known to be associated with improved quality of human resource and poverty reduction through its impact on favorable health outcomes and increased productivity,” he said.

Mr. Lenason indicated that the Ministry’s Environmental Sanitation Policy of 1999 is unequivocal on households and public toilets; the policy states that at least 90% of a population should have access to acceptable domestic toilet while the remaining 10% has access to hygienic toilets.

According to him hygienic public toilets are provided for the transient population in all areas of intense public activities such as markets, shopping areas, transport terminals, etc but unfortunately most people in Ghana use it as their permanent places of convenience.

He said with the increasing pressure on these public toilet facilities it is common to see neighborhood toilets become full and overflowing which often leads to their closure , thus depriving the users this essential service.

“The facilities are often messy, smelling, unhygienic and dirty, users will then have no other option than to resort to other unacceptable options such as “free ranging” he added.

The Director indicated that his outfit has over the years pursued strategies aimed at minimizing the health impact of poor neighborhood public latrines and the wide gap that exist in the access to sanitation.

Some of these interventions includes increase in participation of the private sector in the management of existing public toilets, promoting better and modern technologies , de-emphasing neighborhood public toilets to force landlords to provide households toilets for tenants, rehabilitating and conversion of existing public toilets to more modern ones .

In addition his outfit is working to strengthen institutions that have responsibilities for the enforcement of sanitation laws and development control e.g Environmental Health, Development Control Units of the various MMDAs and also enforcing standards and conditions of franchise agreements for public toilets through effective monitoring.

Government and its development partners have made large investments in the water and sanitation sector with the aim of accelerating the provision of safe drinking water and adequate sanitation in both rural and urban communities to enhance the achievement of the MDGs particularly goal 7 which aims at halving by 2015 the proportion of the population without sustainable access to safe water and basic sanitation.

Currently close to 2.6 billion people worldwide lack sanitation facilities and most of them are children.

Source – Public Agenda, Accra

India – Rising costs hit Centre’s sanitation scheme

Just as several flagship development projects like the construction of rural roads have been hit by rising input costs, the government has been forced to take a hard look at its cost estimates for building toilets for families below the poverty line in rural India. Soaring steel and cement prices have already hit the Centre’s toilet targets under the total sanitation campaign (TSC) in recent months.

More – Financial Express

See also: see also Total Sanitation Campaign (TSC) in the XI Plan, PIB, 22 Aug 2008

Congo – 6 billion FCFA for sanitation in Brazzaville

Brazzaville, Congo – The Congolese government Monday released 6 billion F CFA to improve sanitation in the capital, Brazzaville, which is facing serious sanitation problems.

The Congolese minister of the Economy, Finance and Budget, Pacifique Issoïbeka, and the MP and Mayor of Brazzaville, Hugues Ngouélondélé, signed an agreement Monday facilitating the release of the money.

More – Afriqueligne