Giving Compass’ Take:
• WASH Funders examines the financial soundness of six different service delivery models in the sector, specifically looking for institutions that can scale properly.
• Which models were most effective and how can they be replicated? One big takeaway is to never lose sight of the needs for consumers, especially those in low-income areas.
In a new publication we explore the financial viability of six urban WASH service delivery models. Each case study had three common features: 1) service delivery is overseen by a locally mandated institution, directly or through public-private partnership; 2) a significant portion of the target customer base (in most cases the entire customer base) live in low-income areas of the city; and 3) the model has demonstrated financial viability over a sustained period, with the result that the service provider can be confident of recovering costs and in some cases generating profit.
Ensuring that WASH services recover costs while remaining affordable for low-income households, and reaching the city’s most vulnerable residents, is a constant balancing act. Our publication, Balancing financial viability and user affordability, shows it can be done. In this blog we share some key insights.
Combined with the right incentives, targeted institutional support can bring a huge return on investment in terms of benefits to low-income consumers. A case in point is the institutional reform implemented by JIRAMA, the water utility in Madagascar. Since 2010 WSUP and JIRAMA have worked in partnership to implement a Non-Revenue Water (NRW) reduction program, aimed at improving the utility’s financial efficiency and overall performance.
By prioritizing leakage detection among other measures, the utility has made huge efficiency savings which have been used to strengthen water supply across the city. WSUP estimates that more than 700,000 low-income consumers have benefitted from the program, with a projected net financial gain to JIRAMA of US$ 2.4 million for the period 2011-2020 for reinvestment into services in low-income communities.
Read the full article about financial viability in WASH service delivery models by Sam Drabble at WASHfunders.
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