Our vision for the WASH sector lies in a paradigm shift from infrastructure development to service delivery. It means that the goals and objectives of the sector should in future be defined and monitored in terms of actual users provided with water and sanitation services at an agreed level, and no longer in term of theoretical design populations presumed to be provisioned by supposedly functioning infrastructure. It does not mean that new infrastructures are not needed. It means that decisions are to be made looking beyond construction of systems in order to ensure that services will be delivered forever, in compliance with environmental, economic and equity criteria. Levels of service for targeted population in defined areas are to be defined with respect to long term water resource availability and consideration to all life‐cycle cost components, and delivered to users at an affordable price.
This blog addresses issues related with financing strategies and mechanisms for rural and urban areas with a focus on the poorest and sustainability.
Multiple level planning, budgeting and monitoring characterise the governance of decentralised WASH services. Key processes for the decentralisation of WASH services are that funds will flow from the centre to the intermediate and the local levels to meet the costs of the functions that have been deconcentrated or decentralised, and that the capacities of these intermediate and local levels are strengthened to fulfil their new responsibilities.
Despite progress in harmonisation, relatively few countries have developed a Sector Wide Approach (SWAp) mechanism yet; in practice, multiple channels of financing and a mix of project, programme and different planning and budgeting processes are found. Even when SWAp processes are partially in place, the transfer of funds to intermediate and local levels remains a challenge and the ability to use and to monitor funds at these two levels needs to be strengthened.
Considering the limited funds available for in the WASH sector, the efficiency in using available funds is crucial. The costs of the different financing mechanisms matter as the cost of capital varies and the collection of taxes and tariffs also contains different costs. On the other hand, the regularity and the predictability of funding flows as well as the equity in fund raising –especially from users‐ are key issues, while the criteria to access and raise funds are often unclear. The explicit or implicit criteria to access funds and the regulatory mechanisms to check and balance their allocation and use may not provide appropriate or sufficient incentives to deliver cost‐effective WASH services.
This blog contains news related to the financing of water supply, sanitation and hygiene (WASH) services in developing countries, collected by Cor Dietvorst, the editor of E-Source published by the IRC International Water and Sanitation Centre, Jeske Verhoeven who is part of the WASH finance and Aid Effectiveness thematic area of IRC and Catarina Fonseca, the WASHCost Project Director.
WASH Finance includes both funding/business opportunities (consultancies, grants, prizes, scholarships, tenders) and news about funding mechanisms, new research and training opportunities. A selection of this news is edited for inclusion in the Funding Opportunities section of E-Source.