Achieving Financial Sustainability and Recovering Costs in Bank Financed Water Supply and Sanitation and Irrigation Projects

This note is a partial response to the above mentioned 2010 Independent Evaluation Group (IEG) evaluation. It covers the specific issues to be addressed in the Water supply and Sanitation (WSS) sector and in the irrigation sector in two distinct pa...

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Bibliographic Details
Main Authors:	McPhail, Alexander, Locussol, Alain R., Perry, Chris
Format:	Other Poverty Study
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCEPTABLE QUALITY ACCESS TO FINANCING ACCOUNTABILITY ACCOUNTING PROCEDURES ACCRUAL ACCOUNTING AFFORDABLE WATER AGRICULTURAL WATER USE AGRICULTURE ORGANIZATION AIC AQUIFERS ASSET HOLDING COMPANY AUTONOMY BAD DEBT BAD DEBTS BALANCE SHEETS BASIC SANITATION BILL COLLECTION BOREHOLES BORROWER BORROWING BUSINESS ACTIVITY CAPITAL COSTS CAPITAL MARKETS CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CAPITAL STRUCTURE CASH ACCOUNTING CASH FLOW CASH FLOW ANALYSIS CASH FLOW STATEMENTS CASH FLOWS CASH RESERVES CENTRAL GOVERNMENT COLLECTION OF WATER CONTRACTUAL OBLIGATIONS CONTRIBUTION TO COST COST OF WATER COST RECOVERY COST RECOVERY POLICIES COVERING CREDITS CREDITWORTHINESS CUBIC METER CUBIC METER OF WATER CUSTOMER BASE DAMS DEBT DEBT FINANCING DEBT SERVICE DEMAND FOR WATER DEMAND MANAGEMENT DEMAND MANAGEMENT POLICIES DEMOCRATIC PROCESS DEVELOPMENT BANK DISCRIMINATION DISPOSAL OF WASTEWATER DRAINAGE DRAINAGE SYSTEMS DRINKING WATER EFFICIENT WATER USE EMPLOYERS ENVIRONMENTAL IMPACTS EQUITY CAPITAL EVAPORATION EXCHANGE RATE EXCLUSION EXPENDITURE EXPENDITURES EXTERNAL SHOCKS EXTERNALITIES FARMERS FINANCES FINANCIAL ANALYSES FINANCIAL ANALYSIS FINANCIAL COST FINANCIAL COSTS FINANCIAL COVENANTS FINANCIAL PERFORMANCE FINANCIAL RESOURCES FINANCIAL SUSTAINABILITY FINANCIAL VIABILITY FINANCING COSTS FIXED ASSETS FLOOD CONTROL FOREIGN EXCHANGE FULL COST PRICING FUNDING SOURCES GENDER GROUNDWATER HANDPUMPS HOURS OF SERVICE HOUSEHOLDS HYDROLOGIC CYCLE IMPLICIT TAX INADEQUATE FUNDS INCOME DISTRIBUTION INCOME STATEMENTS INDUSTRIAL USE INFLATION INTERNATIONAL BANK INTERNATIONAL WATER INVENTORY INVESTMENT COSTS IRRIGATION IRRIGATION SYSTEMS IRRIGATORS LARGE DAMS LEAST COST LOAN LOCAL GOVERNMENT LOW-INCOME HOUSEHOLDS LRMC MAINTENANCE COSTS MARGINAL COST METERING NATURAL RESOURCES NUMBER OF BENEFICIARIES OPERATING COSTS OPERATING EXPENSES OPERATING INCOME OPERATING RATIO OPERATIONAL EFFICIENCY OPERATIONAL RISK OPERATIONAL RISKS OPERATOR TARIFF PENALTIES PERFORMANCE INDICATORS PIPED WATER PRESENT VALUE PRESSURE PRIVATE OPERATOR PRIVATE OPERATORS PRIVATE PARTICIPATION PRIVATE PARTICIPATION IN WATER PRIVATIZATION PRODUCTIVITY PROFITABILITY PUBLIC COMPANY PUBLIC SAVINGS PUBLIC-PRIVATE PARTNERSHIP PUBLIC-PRIVATE PARTNERSHIPS QUALITY OF SERVICE RAIN REPAYMENT RESOURCE ALLOCATION RETURN ON ASSETS RETURN ON EQUITY REVENUE SOURCES RIVERS RUNOFF RURAL COMMUNITIES RURAL SETTLEMENTS SANITATION FACILITIES SANITATION OPERATIONS SANITATION SERVICE SANITATION SERVICE PROVIDERS SEPTIC TANKS SERVICE DELIVERY SERVICE FEE SERVICE IMPROVEMENTS SERVICE PROVIDER SERVICE PROVIDERS SERVICE PROVISION SERVICE QUALITY SEWERAGE NETWORK SEWERAGE SERVICES STORM WATER SUBSIDIARY SURFACE WATER TARIFF ADJUSTMENTS TARIFF POLICIES TARIFF SETTING TARIFF STRUCTURE TECHNICAL ASSISTANCE URBAN AREAS URBAN CENTERS URBAN WATER URBAN WATER SUPPLY URBAN WATER UTILITIES USE OF WATER USER FEES UTILITIES WASTE WATER WASTE WATER TREATMENT WASTEWATER COLLECTION WATER ASSOCIATION WATER BODIES WATER COVERAGE WATER DISTRIBUTION WATER FEES WATER MANAGEMENT WATER POINTS WATER PRICING WATER PRODUCTION WATER PROJECTS WATER RATES WATER REQUIREMENTS WATER RESOURCE WATER RESOURCE MANAGEMENT WATER RESOURCES WATER RESOURCES MANAGEMENT WATER RIGHTS WATER SCARCITY WATER SECTOR WATER SERVICE WATER SERVICE DELIVERY WATER SERVICE PROVIDERS WATER SERVICE PROVISION WATER SERVICES WATER SOURCE WATER SUPPLIES WATER SUPPLY WATER SUPPLY COMPANY WATER SUPPLY SERVICE WATER SUPPLY SYSTEMS WATER SYSTEMS WATER TARIFF WATER TARIFFS WATER USE WATER USER WATER USER ASSOCIATION WATER VENDORS WELLS WORKING CAPITAL
Online Access:	http://documents.worldbank.org/curated/en/2012/06/16588086/achieving-financial-sustainability-recovering-costs-bank-financed-water-supply-sanitation-irrigation-projects http://hdl.handle.net/10986/17226

Description
Summary:	This note is a partial response to the above mentioned 2010 Independent Evaluation Group (IEG) evaluation. It covers the specific issues to be addressed in the Water supply and Sanitation (WSS) sector and in the irrigation sector in two distinct parts, because if WSS and irrigation have some common features, there are many distinctions to be made. Among the various water-using sectors, that include navigation, fisheries, hydropower, rain fed agriculture, irrigated agriculture, WSS, and more generally 'the environment', cost recovery issues are of primary concern, and are the focus for this note, in the WSS and irrigation sectors. This preliminary background Note is divided in four parts: a 'history' of the call for financial sustainability and cost recovery and the parallel documenting of the lack of progress. This section ends with what this Note hopes to achieve in the face of what is clearly a deeply rooted problem; an outline of options to be considered for achieving financial sustainability of WSS service providers and recovering the costs of the WSS service through tariffs, i.e., from users and through subsidies; a discussion on what makes financial sustainability of irrigation projects different from WSS projects; and a summary of recommendations to teams involved in the identification, preparation, appraisal and supervision of water projects and of practical measures and actions that both the water sector board and the water anchor could take to help improve the Bank's track record in achieving and financial sustainability of the water projects it finances.

Achieving Financial Sustainability and Recovering Costs in Bank Financed Water Supply and Sanitation and Irrigation Projects

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