February 2007

Past Issue: February 2007

New GPOBA Projects

During October 2006-February 2007, GPOBA has signed three (3) grant agreements, approved five (5) projects for commitment, and approved eleven (11) projects for eligibility. In addition, GPOBA has received new funding as well as pledges from donors during the period. Details are further described below.

GPOBA Grant Agreements

Kenya-Community Water
On December 6, 2006, a grant agreement was signed for the Kenya-Community Water Project in the amount of $1.2 million to provide over 60,000 people with improved access to water services. The objective of this project is to pilot the use of micro-finance funding linked to OBA to increase access to the poor and improve the sustainability of small community-managed water supply projects. GPOBA subsidies will support communities upon achievement of specified outputs: new connections and revenue collected. Key elements of project design include a strong micro-finance sponsor, K-Rep Bank, and a demand-driven participatory process with the selected communities. For more information, please contact Kameel Virjee or Piers Cross.
Morocco Urban Water
A grant agreement in the amount of US$7 million (GPOBA's largest to date) was signed on January 29, 2007 in Morocco. The project targets three municipalities keen on exploring OBA approaches for improved water and sanitation: Casablanca, Tangier, and Meknes. The two former include private operations, while Meknes includes public operations. 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 allowing connections to approximately 11,300 households. For more information, please contact Xavier Chauvot De Beauchene.
Uganda Small Towns and Rural Growth Centers
On February 12, 2007, a grant agreement was signed by GPOBA in the amount of US$3.2 million to provide access to clean water to Uganda's poor living in small towns and rural growth centers. The project will increase the role of existing local private operators, whom will be selected to expand and operate the systems through a competitive tendering process. GPOBA funds will support the development of new yard taps and stand posts in small towns. In rural growth centers, the scheme will involve the development of greenfield operations in addition to targeted yard taps and stand posts. The project plans to provide improved access to over 40,000 Ugandans. GPOBA is working with IFC and the Acumen Fund to improve the local operators' ability to access finance that is required to pre-finance the outputs. For more information please contact Yogita Mumssen.

Projects Approved for Commitment
The projects below have received a commitment* for GPOBA subsidy funding.
Nepal Biogas
Carbon Finance is an example of an output-based mechanism that internalizes the cost of a negative global environmental externality -- green house gas emissions. GPOBA has been approached to support a biogas projects in Nepal, where GPOBA would be working with the World Bank’s Community Development Carbon Fund (CDCF). The project aims to replace traditional energy sources, used by the rural population with modern biogas plants targeting approximately 37,300 households. Biogas plants use anaerobic decomposition of organic material (mostly animal manure) to produce a flammable gas called biogas, which can be used for cooking and light. For more information please contact Bilal Rahill.
Targeted Service Expansion through Water Loss Reduction - Ho Chi Minh City and Tra Vinh Province, Vietnam
GPOBA technical assistance funding has been used to design an OBA scheme which would provide incentives to the public utilities and to reduce leakage and connect some 29,100 targeted poor households of Ho Chi Min City and the province of Tra Vinh. The primary objective of the project is to increase and sustain piped-water access for poor households in the targeted areas, utilizing water savings made through reduction of physical losses. Reduction of non-revenue water is a key component of the US$40 million IDA supported Vietnam Urban Water Supply Development Project. For more information, please contact William Kingdom or Iain Menzies.
Rural Community Water in Andhra Pradesh
The percentage of rural households in India without access to adequate sources of drinking water is 18%. The Naandi Foundation, an Indian NGO promoting alternative for safe water provision, has identified 25 villages in the coastal area of Andhra Pradesh for an OBA pilot project. This pilot aims to provide safe drinking water to 12,500 households (earning less than US$20 per month), through an innovative village-based public-private partnership model. The project will aid poor rural households to switch from water sources unfit for human consumption to safe water at affordable rates. For more information please contact Cledan Mandri-Perrott .
Extension of Water and Sanitation in Low income areas of Honduras
One of the three poorest countries in Latin America and the Caribbean, Honduras’s economic development is hindered by low coverage of potable water service and sewerage especially in peri-urban and rural areas. GPOBA is supporting the preliminary assessment of potential projects which would be suitable for OBA approaches and will assist in setting up a national OBA facility for the water and sanitation sector. The OBA Facility will be responsible for funding specific projects throughout the country aimed at improving access to water and sanitation services to approximately 25,600 low income households. For more information please contact Gustavo Saltiel or Cledan Mandri-Perrott .
Senegal On-Site Sanitation Project
Over the past few years, Senegal has been implementing the World Bank-funded Long Term Water Project with the objectives of increasing access to sanitation services to the poorest segments of the population living in the peri-urban areas of Dakar. This new GPOBA-funded project aims enhance and scale-up the existing program by providing demand-based sanitation services to about 18,500 additional poor households in the Dakar region. The government sponsor of the project is ONAS, the national sanitation agency, although project management has been delegated to Agetip Senegal, a non profit contract management organization. The GPOBA-funded project will disburse mainly upon the delivery of on-site and/or semi-collective sewerage systems. For more information, please contact Sylvie Debomy.

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.
AES Cameroon Rural Electrification
The overall goal of the project is to electrify about 13,000 low income rural households in Cameroon targeting customers who could not afford the connections fees, and therefore would otherwise be unserved. AES Sonel, the utility operator in Cameroon, seeks to determine whether this project approach offers a means to support new customer connections for the customers who cannot afford full cost-based connection fees and who fall outside the reach of both traditional utility network plans and government electrification programs. Successful completion of this pilot project could yield a service model replicable throughout the country. For more information please contact Cledan Mandri-Perrott.
Manila Water Supply
The Manila Water Company (MWC) provides water and sewerage services to the East Zone of Metro Manila, including the municipalities of Antipolo City, Baras, Rodriguez and San Mateo in Rizal province, and Taguig City. The objective of the project is to provide affordable potable water to the poor communities in these municipalities through service connections. Based on the assessment by the local government units and MWC, almost all of the target beneficiaries, amounting to 24,700 households, would not be able to afford the connection fee together with the standard meter and guaranty deposits. This will be a relatively new approach for MWC to service delivery to poor communities in Manila. For more information please contact Iain Menzies.
Reproductive Health Vouchers in Western Uganda
The maternal mortality rate and sexually transmitted diseases (STDs) are of particular concern in Uganda. KfW has approached GPOBA to help expanding its health voucher scheme in Uganda. The project will target rural and poor urban populations living in the catchment areas of approved providers in the greater Mbarara region in western Uganda. Vouchers will be sold at a nominal fee and will entitle the holder to the whole treatment cycle associated with safe child birth or the treatment of STDs. 150,000 households are expected to benefit from this project. KfW will finance the cost of designing the Reproductive Health voucher and implement the project on behalf of GPOBA. For more information, please contact Lars Johannes.
Pre-paid Health Scheme Pilot in Nigeria
The objective of this project is to help increase access to quality health care in Nigeria by subsidizing a pilot pre-paid health system, targeting 50,000 households. The project aims to demonstrate the benefit of pre-paid health systems and encourage its implementation on a sustainable basis. The project will utilize the structure established by the Health Insurance Fund ("HIF") -- a Dutch non-governmental organization -- in poorer parts of Nigeria to expand the provision of pre-paid health services to additional groups of beneficiaries. For more information please contact please contact Olaf Smulders.
Lesotho Health
IFC is advising the Government of Lesotho in the design and implementation of a Public Private Partnership (PPP) that will result in the design, construction, financing and full operation of a greenfield public hospital by a private partner for a contract period of 15 years, targeting approximately 74,000 households. The new hospital is estimated to provide a significant increase in the quality, volume and scope of services for a cost roughly approximating that of the existing hospital. The proposed GPOBA project will support the delivery of services through filter clinics and the new hospital and will allow (i) more patients to be seen at a higher level of service at the filter clinics; and, (ii) more patients to be seen at the new hospital, also at a higher level of service. For more information please contact Olaf Smulders.
Vietnam Rural Water (EMW)
This project aims to pilot an output-based approach to provide safe drinking water to 50,000 poor families (earning less than US$25 per month) in the central part of Viet Nam through an innovative village-based public-private partnership model. The project will test the viability of a well targeted OBA approach with full participation and ownership from the beneficiary community, a private operator working under a management contract and an NGO (EMW), and local government authorities. For more information, please contact Nguyen Cong Thanh.
Laos Water Project
Lao PDR is among the poorest countries in the East Asia region, and the performance of the country''s social indicators among the worst in the region. People in the small towns rely on shallow wells, ponds, and streams, which are unreliable and often contaminated. The objective of this project is to support the Government of Lao PDR in the provision of safe drinking water to 21,500 households in 21 district towns using local/regional private operators through the use of one-off output-based connection subsidies targeted to the poor. The project will be designed to ensure sustainable piped-water services in the identified towns. For more information, please contact Maria Margarita Nunez.
Yemen Safe Motherhood Voucher Program
The objective of the project is to provide sustainable maternal health services to women in Yemen. The project would implement a sustainable safe motherhood voucher program that would provide a "Mother-Baby package" of twelve services as defined by WHO, targeted at poor women of reproductive age (15-49) in Sana'a, Yemen. Services include antenatal care including birth attendance by skilled birth attendants, postnatal and complicated care services. The specific expected output will be to achieve 37,500 safe child birth deliveries attended by skilled birth attendants amongst the target population over the project period. For more information, please contact Olaf Smulders.
Mozambique Water Private Sector Contracts - OBA for coverage expansion
This project targets five cities in Mozambique that currently utilize PPP contracts: Maputo, Beira, Pemba, Quelimane, and Nampula. The aim of the GPOBA-funded project is to increase access to water services for poor households through further public-private partnerships. The proposed GPOBA contribution will subsidize around 36,300 new household connections. This represents a gain of approximately 30% in national coverage for urban water services. For more information, please contact Luiz Tavares.
Kampala - Water Connections for the Poor
This OBA scheme aims to provide water services to poor households previously not served in slum and peri urban areas of Kampala, Uganda. The OBA scheme will provide for a one off connection subsidy to partly defray the costs of new domestic metered connections. The total project envisages making 13,300 new connections per year for a period of three years i.e. a total number of connections of 40,000. The immediate outcomes will include increased water coverage in the urban poor settlements (from the current 40% to above 90%). For more information, please contact Yogita Mumssen.

News Flash!
New Donors
As of December 12, 2006, the Netherlands Government has joined GPOBA as its newest donor. Over a period of three years, the Dutch contribution will amount to approximately US$28 million. This funding will support GPOBA toward providing performance based grants for the delivery of basic services to the poor in the water and sanitation sector, with an emphasis on Sub-Saharan Africa.

Effective February 28, 2007, Australian Government Overseas Aid Agency (AusAID) is joining GPOBA as a donor pledging US$250,000.
New Pledges
The Swedish International Development Cooperation Agency (SIDA) has indicated that it will make a pledge to GPOBA in the amount of US$6 million.
IDA14 Mid-Term Review
On November 20-21, 2006, an IDA14 Mid-Term Review meeting was held in Washington, DC. A paper, entitled A Review of the Use of Output-Based Aid Approaches was presented responding to a request made to review World Bank projects which use OBA approaches to the IDA deputies. The paper evaluates 83 OBA projects in the Bank, over half of which are in IDA countries. The total OBA portfolio amounts to around $1.6 billion, of which almost $280 million has been allocated to IDA and IDA/IBRD blend countries with the majority of projects in the water, telecommunications, and transport sectors mostly being piloted in sub-Saharan Africa and Latin America. The deputies welcomed the progress of the OBA in the World Bank, and encouraged scaling up as well as continued evaluation of new and ongoing projects.
GPOBA Road Show
WSP-GPOBA-PPIAF hosted a "road show" in West Africa. The road show consisted of workshops held in 3 countries, from Feb 5 - Feb 13, 2007 in Ghana, Burkina Faso, and Senegal. The objective of the road show was to: (1) discuss specific approaches to improve access to basic infrastructure services, specifically Public-Private Partnerships and Output-based Aid (OBA), including lessons learned to date and challenges ahead; (2) discuss origination of specific OBA pilot projects that can be funded by GPOBA; and, (3) demonstrate how these World Bank administered multi-donor trust funds can work together to help clients develop and deliver sustainable solutions. Several projects in the water and sanitation sector as well as the energy sector were identified in each of the three countries.
GPOBA Publications:
Output-based Aid and Carbon Finance (December 2006).
Carbon finance is an output-based approach to mitigating climate change. Under the Kyoto Protocol''s project-based mechanisms -- the Clean Development Mechanism and Joint Implementation -- projects in developing and transition economies that reduce greenhouse gas emissions can receive "carbon credits." Carbon revenues can help project sponsors close the financing gap between climate-friendly projects and conventional projects, and can help industrial countries reduce their cost of compliance with the Kyoto Protocol.

Read other GPOBA Publications

*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.