The World Bank, acting as administrator for the Global Partnership on Output-Based Aid (GPOBA), has approved a grant for US$5 million for a scheme to expand access to water supply for poor households living in peri-urban areas of Yemen that are not currently served by the water network.
Around 210,000 people are expected to benefit from the scheme, including 38,000 people in the first phase of the project which will target low-income neighborhoods in Sana’a City, Ibb City, Dham-ar Governorate, and Hajah Governorate.
Only 56 percent of the urban population has access to piped water and many poor households living in peri-urban areas have to buy water from private tanker operators, who typically charge ten times more than the price of piped water from public suppliers. As part of its reform of the water sector, the Government has created Local Water and Wastewater Corporations and introduced policies to increase coverage for the poor, but many peri-urban areas still lack access to improved water services and the local corporations are unable to meet all the demands. Partnerships with the local private sector are now being explored to address the service gap.
Under the GPOBA scheme, private operators will be selected competitively, based on the lowest subsidy needed. The output-based approach will transfer operational and financial risk to the private operators by disbursing subsidies only after the agreed outputs have been delivered and verified. These outputs include building or rehabilitating water supply systems (wells, pumps, and storage), installing domestic connections, and delivering water supply for a period of three months. The beneficiary households will only have to pay 50 percent of the connection fee and will have an option to pay part of the amount in installments.
The Project Management Unit of the urban component of the multi-donor Water Sector Support Program, which is supported by the governments of Yemen, the Netherlands, and Germany, and the World Bank, will coordinate the tender process and manage the GPOBA funds.
GPOBA is drawing on funds from the UK’s Department for International Development (DFID) for this project. The scheme is also leveraging US$9.1 million from the World Bank’s International Development Association (IDA) and US$2 million from the Government of Yemen.
The Global Partnership on Output-Based Aid (GPOBA) is a global partnership program established in 2003 and administered by the World Bank. GPOBA’s portfolio includes 29 OBA subsidy schemes for a total of US$114.3 million in funding.
Source: GPOBA, 12 Apr 2010