cbo ind ii 2 presentation to ausaid 31january 2013
TRANSCRIPT
CBO Program IndII 2 – Outline Concept
31 January 2013
IndII Ratu Plaza Tower
2
Review of Phase 1 Project
Phase 1 Objectives : (i) assist 25 CBOs in 5 districts to access credit for expansion of their existing supplies; and (ii) support 20 CBOs in 2 districts to achieve CBO – commercial partnerships for service expansion and improvement.
Outputs from phase 1: 21 CBOs obtained loans totaling $225,000 for expansion of 3,108 connections;
2 CBOs signed build-lease-transfer investment contracts and 2 CBOs signed annual service/management contracts with local contractors.
3
What we learned from Phase 1
Credit model unwieldy – IndII MoU with Bank; IndII grant held in escrow; only kabupaten banks interested;
CBOs preferred grants – PDAMs get hibah, why do CBOs have to borrow ??
Strong demand from CBOs to expand.
IndII program generated interest at LG and Province.
CBOs not interested in ceding control – no PPP, but build lease transfer (BLT) contracts for expansion acceptable
CBOs not interested in multi user service contracts.
4
Summary of the Phase 2 CBO Project
• Phase 2 CBO program uses the on-granting mechanism.
• Phase 2 program increases the role and responsibility of the local governments >> mainstreaming and scaling up by GoI.
• CBO 2 will align with Pamsimas and only go to non Pamsimas LG
• The LGs will be responsible for preparation of CBO proposals for expansion.
• Local governments will be compensated by a grant for successful preparation of CBO proposals – on acceptance in the CBO grant program
• An IndII oversight consultant will assist the GoI implementing agency in the assessment the proposals.
• WSP parallel Capacity Development Program will support institutional strengthening and capacity development at CBO and LG.
• The CBOs will implement the expansions using an output based grant model requiring counterpart funding from LG and the CBOs.
• The grant is anticipated to cover approximately 60% of the cost of the expansion.
• CBOs may leverage the grant by borrowing from banks but this is optional.
5
Summary of the Phase 2 CBO Project
• Phase 2 CBO program uses the on-granting mechanism.
• Phase 2 program increases the role and responsibility of the local governments >> mainstreaming and scaling up by GoI.
• CBO 2 will align with Pamsimas and only go to non Pamsimas LG
• The LGs will be responsible for preparation of CBO proposals for expansion.
• Local governments will be compensated by a grant for successful preparation of CBO proposals – on acceptance in the CBO grant program
• An IndII oversight consultant will assist the GoI implementing agency in the assessment the proposals.
• WSP parallel Capacity Development Program will support institutional strengthening and capacity development at CBO and LG.
• The CBOs will implement the expansions using an output based grant model requiring counterpart funding from LG and the CBOs.
• The grant is anticipated to cover approximately 60% of the cost of the expansion.
• CBOs may leverage the grant by borrowing from banks but this is optional.
6
Summary of the Phase 2 CBO Project
• Phase 2 CBO program uses the on-granting mechanism.
• Phase 2 program increases the role and responsibility of the local governments >> mainstreaming and scaling up by GoI.
• CBO 2 will align with Pamsimas and only go to non Pamsimas LG
• The LGs will be responsible for preparation of CBO proposals for expansion.
• Local governments will be compensated by a grant for successful preparation of CBO proposals – on acceptance in the CBO grant program
• An IndII oversight consultant will assist the GoI implementing agency in the assessment the proposals.
• WSP parallel Capacity Development Program will support institutional strengthening and capacity development at CBO and LG.
• The CBOs will implement the expansions using an output based grant model requiring counterpart funding from LG and the CBOs.
• The grant is anticipated to cover approximately 60% of the cost of the expansion.
• CBOs may leverage the grant by borrowing from banks but this is optional.
7
More Lessons from Phase 1
• Many cases of investment to upgrade ‘overextended’ systems – yielded few new connections but upgraded connections to ‘normal’ service.
Description After
Actual Theoritical After
Investment Costs IDR - 163,375,000
Connection unit 742 353 793
New Connection unit - 51
Production Capacity l/sec 1.53 3.53
Water Consumption m3/unit/month 3.00 9.00 9.00
Before
Cap
acit
y /
Co
nsu
mp
tio
n
Connections
Cumulative demand
Supply Capacity
Design Point
Cap
acit
y /
Co
nsu
mp
tio
n
Connections
Cumulative demand
Supply Capacity
Design Point
Consumption per connection
BASELINE
Cap
acit
y /
Co
nsu
mp
tio
n
Connections
ApparentNew
Cumulative demand
Supply Capacity
Design Point
Upgrade SupplyConsumption per
connection
Actual New
11
More Lessons from Phase 1
• Many cases of investment to upgrade ‘overextended’ systems – yielded few new connections but upgraded connections to ‘normal’ service.
Description After
Actual Theoritical After
Investment Costs IDR - 163,375,000
Connection unit 742 353 793
New Connection unit - 51
Production Capacity l/sec 1.53 3.53
Water Consumption m3/unit/month 3.00 9.00 9.00
Before
12
Formulating the “output based” Component
• Separate New and Expansion costs: – Expansion $160 /hh
– Upgrading $50/hh
• Preparation of CBO projects supported by LG: – $50,000 / CBO grant for preparation
• Expansion Financing: Average cost/CBO $25,000 – Grant 15,000; LG 8,000; CBO 2,000
13
Anticipated Output
• 40 local governments
• 1,300 CBOs upgraded – 650,000 hh
• 20 New CBO built – 4,000 hh
• Total benefiting population approximately 2,600,000
14
Alignment with Pamsimas 2
15
Number of LGs 40
Number of CBOs/LG 30
Number of CBOs 1,200
Number of HH/CBO 500
Total HH 600,000
AU $
LG CBO Grant
Preparation Cost/LG 100,000 50,000 50,000
Preparation Cost 4,000,000 2,000,000 2,000,000
Investment cost/CBO 25,000 2,000 8,000 15,000
Investment cost/LG 750,000 60,000 240,000 450,000
Total Investment 30,000,000 2,400,000 9,600,000 18,000,000
ANNEXE – Assumptions and Costs
16
Next Steps
• Feedback and finalise Concept Note
• AusAID Peer Review CN
• Parallel start on CBO PDD – in collaboartion with BoI and WSP
• GoI advance selection of Kabupaten and longlist of Desa
• Complete PDD May 2013.