October 2006

Past Issue: October 2006

New GPOBA Projects

GPOBA has signed one (1) additional grant agreement and received pledges from new donors during May 2006 through September 2006. These items, along with GPOBA commitment for future funding as well as project eligibility are described below.

Grant Agreements

Mongolia OBA Pilot Project of Universal Access Strategy — Results Delivered!
In July of 2006, the World Bank/GPOBA and the Government of Mongolia signed a grant agreement in the amount of US$260,000. GPOBA will support pilot projects focusing on telecommunication connections to communities through VSAT satellite telephones in Mongolia. In addition, GPOBA will also pilot connections to larger, non-herder population centers through a central wireless network. The GPOBA-funded pilot project will be followed by a larger IDA-funded project, and constitute a first step towards implementation of a universal access strategy following a country-wide analysis of the rural population. As of September 2006, the project is already delivering results on the ground with users exceeding more than 300 and the establishment of internet cafes and school access centers. For more information, please contact Tenzin Dolma Norbhu.

Projects Approved for Commitment
The projects below have received a commitment* for GPOBA subsidy funding.
Morocco Urban Water and Sanitation Project
Access to potable water and improved sanitation in Morocco increased significantly in the past decade. However, this increase does not reflect the fact that slums and illegal settlements scattered in metropolitan areas are deprived of access, particularly to the sewerage collection networks. The GPOBA project is targeted towards three municipalities keen on exploring OBA approaches for improved water and sanitation: Casablanca, Meknes and Tangier. While the details of the schemes vary, the common objective is to expand access to water and sanitation among the poor living in recently legalized informal settlements in urban and peri-urban areas. Funding for Technical Assistance has been provided by GPOBA to support connections being made by the private sector incumbent. For more information please contact Pier Mantovani.
Uganda Small Towns and Rural Growth Centers
In order to meet its poverty reduction targets of safe drinking water and increased rural coverage, the Government of Uganda is challenged to scale up service delivery in small towns and expand into RGCs. Since 2001, 67 Water Authorities have been appointed and 16 different private water operators are managing water supply services in 60 small towns through management contracts. GPOBA funds will be used to support private sector management of water supply services in small towns aimed at expanding access to piped water supply through increasing the number of active connections and extending the distribution pipe network, and, where appropriate, increasing production and storage capacity. For more information please contact Yogita Mumssen.
OBA National Water Sector Fund in St. Lucia
In St. Lucia, water supply and sanitation have emerged as a key bottleneck in economic development, as water supply is rationed and not reliable. The Government of Saint Lucia is pursuing a public-private partnership (PPP) for the utility, through a mixed capital company following successful experience with the model in the privatization of its electricity utility. PPPs in developing countries frequently face the problem of how to connect poor people in remote areas where high cost and low ability to pay make connections prohibitively costly. The GPOBA project will link subsidies to pre-defined outputs, and enhance the incentives to extend the services to poor communities at improved service levels by establishing a well targeted subsidy scheme. For more information please contact Jordan Z. Schwartz.

Projects Approved for Eligibility and/or Technical Assistance
These projects have been deemed eligible** for GPOBA subsidy funding and in some cases have received Technical Assistance.
Improved Communications Access in Rural Cambodia
GPOBA Technical Assistance funds have been used to help identify access needs in specific areas of rural Cambodia, and conduct a cost-benefit analysis. Funds have been provided to help design and finance a pilot project implementing an OBA based subsidy through a competitive tender to provide cellular coverage in five north eastern provinces. For more information please contact Peter Smith.
Improved Rural Community Water in Andhra Pradesh
In Andhra Pradesh, it is estimated that between 9 and 17 million people are exposed to water with high pathogen levels. 500,000 people live within areas with severe fecal in the coastal districts of Andhra Pradesh. Rural communities need access to better water resources as there are high incidences of water borne disease and deaths due to diarrhea. There is also a need to educate villagers aware of the risks posed by the consumption of unsafe water. The pilot is an output-based approached to provide safe drinking water to 10,000 families in the coastal area of Andhra Pradesh, through an innovative village based public-private partnership model. Naandi Foundation, an NGO in India with experience in the water sector, has identified 25 villages to be the focus of GPOBA funding. Naandi proposes a model whereby a participating Village Panchayat earmarks a common water source, as in-kind contribution, for the construction and installation of the water treatment plant and storage tank. Each plant will have a water distribution point from which users will purchase water in jerry cans. For more information please contact Cledan Mandri-Perrott.
Extension of Water and Sanitation in Low income areas of Honduras
Honduras is one of the three poorest countries in Latin America and the Caribbean. True potable water service and sewerage coverage are low especially in periurban and rural areas. As part of the national strategy for the sector, the Government of Honduras has endorsed the use of a centralized ministry to channel and oversee sector funding. The objective of the project is to develop an OBA Fund aimed at improving access to water and sanitation services to up to 40,000 low income households. The proposed OBA Fund is the first of its kind in Honduras and will be the instrument to channel national and IFI funding into the sector. For more information please contact Gustavo Saltiel.
Extending Telecommunications in Rural Indonesia
The Government of Indonesia has requested the World Bank’s assistance in redesigning its rural communications or universal service (USO) program on the basis of a public-private partnership approach. GPOBA funding will be used to design, implement and evaluate a pilot program targeting villages that are poor and disadvantaged due to a variety of geographical and socioeconomic factors. The objective of the project is to provide telecommunications services in a pilot area of 3,342 villages in Indonesia, reaching a total population of 6.3 million. The project is also a learning opportunity designed to highlight the issues and challenges that the government will eventually face in utilizing its own USO fund and disseminate knowledge and experience about PPP approaches across sectors and government institutions. For more information please contact Natasha Beschorner.
Improved Electricity Access for Indian Slum Dwellers
The city of Mumbai has over 6 million slum dwellers with a large number not having access to legal electricity service. Reliance Energy Limited (REL), a private utility, is the distribution concessionaire and serves over 2.2 million customers in urban and suburban Mumbai. USAID is providing support to REL for the design of the proposed scheme with a view to develop, test, evaluate and scale-up customized approaches to improve electricity access, normalize services and improve the quality of life and economic opportunities. GPOBA funds may be used to partially defray costs of electricity connections including internal wiring for households. For more information please contact Cledan Mandri-Perrott.
Cameroon Water Affermage contract - OBA for coverage expansion
Despite having one of the highest GNP per capita of sub-Saharan Africa, Cameroon lags well behind countries such as Cote d’Ivoire and Senegal in terms of coverage for piped water services. Only about a third of the population has access to piped water. The proposed GPOBA project would subsidize the cost of new connections for domestic customers, in order to facilitate access for low- to middle-income households without access to piped water. The project will have considerable catalytic impact and synergies with other donor funding, by ensuring that investment in urgent rehabilitation and capacity expansion of the systems does not only result in improved quality of service for the affluent population already connected, but also can fully translate into significant gains in low- and middle-income households. For more information please contact Philippe Marin.
Biogas Support Programme — Phase IV in Nepal
Nepal is one of the poorest countries in the world with a per capita GDP at US$ 311. In 1992, the Netherlands Development Organization together with the Government of Nepal, started the Biogas Support Programme to promote the use of this environmental friendly and affordable technology. Since 1997, the project has also received substantial funding from KfW. Phase IV of the Nepal Biogas Program should install 200,000 quality-controlled, small-sized biogas plants in the hill regions of Nepal during 2004-2011. For Phase IV, the World Bank administered Community Development Carbon Fund (CDCF) has set up carbon finance operations purchasing greenhouse gas emission reductions caused by the project. GPOBA will cooperate with the CDCF to improve the affordability of this energy source which has a series of benefits compared to traditional sources. The biogas plants displace traditional fuel sources for cooking-fuel wood, kerosene and agricultural waste and introduce a sanitary treatment of animal and human waste as well as produce a high quality organic fertilizer. For more information please contact Bilal Rahill.
Decentralized Electricity for Universal Access in Bolivia
With widespread poverty, particularly in rural areas, Bolivia is the poorest country in South America. For meeting infrastructure needs, the proposed project will extend electricity access to over 9,000 poor Bolivian households. In addition, the project will lead to the development of a mechanism for electrification of remote and dispersed households using a new form of public-private partnership with innovative, output-based “medium-term service contracts.” GPOBA is currently providing funding for technical assistance to help design the OBA scheme, including beneficiary identification, administrative and funds flow arrangements, monitoring and verification mechanisms, etc. Pending the results of the technical assistance, GPOBA intends to provide subsidy funding to help increase the access of poor households to solar home systems. For more information, please contact Dana Rysankova.

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Colombo Waste Water in Sri Lanka
SIDA, the Swedish International Development Cooperation Agency, is financing a wastewater disposal project in Sri Lanka through a concession loan agreement with the Sri Lankan government. GPOBA has been approached by SIDA and the implementing agency, the National Water Supply and Drainage Board, to provide subsidy funds for the connection of individual households to new public sewers. SIDA would like GPOBA to design and fund an OBA scheme that will provide a subsidy to the NWS&DB for each new working connection to a household. GPOBA has received a TAF grant in the amount of US$250,000 to fund these design costs. For more information, please contact Iain Menzies.
News Flash
New Donors

The International Finance Corporation (IFC) has joined GPOBA as a donor. The IFC has pledged US$35 million for projects in the infrastructure, health and education sectors that involve the private sector.

The Netherlands Government has made a pledge to GPOBA and will be on board soon committing US$28 million.

GPOBA has received a new pledge of US$250,000 from the Australian Government Overseas Aid Agency (AusAID).

*Projects receiving GPOBA commitment have been approved for subsidy funding pending conditions precedent being met.

**Projects receiving GPOBA eligibility have met GPOBA selection criteria and may in the future receive commitment pending results of project design and availability of funding.