Small Scale Water PPPs

Challenge

Effective in small towns and villages with few customers

Constraints

Significant impact to the less developed areas

• Leveraging local operators who need capacity building to creat a private market
• Allows an affordable average tarrif to be maintained for the households

Facts

• One in five without water supply reside in rural areas (Rural Water Partnership)
• World Bank's Millenium Develpment Goals provides for a target to halve the proportion of population without sustainable access to safe drinking water
• Nowadays, 1 in 2 people reside in a rural area

Facts (continued)

• By 2050, urbanization will see 80% of population living in cities or urban settlements
• Despite urbanization, rural dwellers will still account for 2.8 billion by 2050 (UN)

For dispersed rural communities...

Such as... development of...
cost effective boreholes
and/or
handpump technologies (Rural Water Partnership)

For closely knit rural communities

PPPs for the management and
operation of small towns and rural
piped water systems through lease, affermage
or management contracts

Small scale water in Uganda

Small scale PPP contract of up to 5 years for construction, operation, and management of drinking
water distribution networks in small towns and rural
growth centers

The contract
was awarded to Trandint Limited, which satisfied the
technical requirement, secured a financing arrangement
with lenders, and offered the lowest total bid price
of $270,000.

Risk allocation

• Operations, revenue and collection allocated to private party
• Contracting authority maintains ownership over infrastructure assets and also performs investments
• Private party performs investments on the operating assets, emplooys staff, operates and maintains the utility

Targets

The new operator agreed to install 400
new connections during the first two years and avoid
increasing tariffs for the duration of the five-year
management contract

Financing

The majority of the capital investment is funded by the
Global Partnership on Output-Based Aid (GPOBA).

Benefits

• Significant efficiency gains achieved through involvement of the private party include:
• Reduced NRW,increased staff efficiency
• Improved service coverage, water production from8 to 21 m3/hr and improved hours of service
• Increase with 430 installed connections and collections efficiency from 70 to 85%

Thank you very much for your time and for your consideration