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Water and Sanitation Program

FY10 End of Year Report

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Table of Contents

I. Message from the Manager ........................................................................................................................ 3

II. FY10 Highlights .......................................................................................................................................... 6

A. Scaling up Rural Sanitation and Hygiene ................................................................................................. 6

B. Creating Sustainable Services through Domestic Private Sector Participation (SS-DPSP) ................... 13

C. Supporting Poor-Inclusive WSS Sector Reform ..................................................................................... 18

D. Targeting the Urban Poor and Improving Services in Small Towns ...................................................... 22

E. Mitigating And Adapting Water and Sanitation Service Delivery to Climate Change Impacts ............. 24

F. Delivering WSS Services in Fragile States ............................................................................................. 27

III. Knowledge and Partnerships ................................................................................................................... 28

IV. FY10 Portfolio, Budget and Expenditure ............................................................................................... 35

V. Funding raising activities ......................................................................................................................... 36

Annex I: FY10 Disbursements (US$’000) ....................................................................................................... 37

List of Boxes:

Box 1 Reaching Children in Tanzania 7

Box 2 Sanitation Marketing Takes off in Cambodia 12

Box 3 PSP in Rwanda 13

Box 4 Obstacles to Doing Business in SS-DPSP Countries 15

Box 5 The Business of Developing Business 17

Box 6 Developing a viable WSS Sector Program in Rwanda 21

Box 7 City sanitation ranking in India 23

Box 8 Disaster Resilient Ponds 25

Box 9 Climate Change: Managing Risks of Changing Climate Patterns 26

Box 10 South - South Learning and Exchange 29

Box 11 WSP Communications and Knowledge Dissemination 31

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I. Message from the Manager

I am pleased to share with you this End-Year Report (EYR), which provides a summary of the Water and

Sanitation Program‘s (WSP) business activities for Fiscal Year 2010 (FY10) from July 1, 2009 - June 30,

2010. This document reports progress and results against some important building blocks for the next

phase of WSP‘s results-based management.

Two years ago, WSP initiated a strategic planning exercise to strengthen its business planning and

management processes. The resulting FY 2009 – 2018 Global Strategy: Scaling Up Sustainable Services

was endorsed by the WSP Council and provided a roadmap for the program going forward. A preliminary

results framework was also developed to measure the program‘s effectiveness in achieving the strategy.

During FY10, WSP refined the basic results framework, implementing a significant shift towards

monitoring for the results of WSP‘s engagement in the sector, strengthening the linkage between the

global results framework for each country program and every staff member. We believe that the progress

WSP has made to link non-lending technical assistance to concrete and measurable results on the ground

is notable among sector organizations. This has required significant effort of all WSP‘s staff in each of

our offices around the world. We have been able to do this because of the strong support of the WSP

Council, urging us not only to make progress in the water and sanitation sector, but also to act as a model

for delivering results.

Leveraging knowledge is at the core of our strategy, and our work on the results framework has helped us

to understand and articulate this linkage better. The Program‘s approach to generating and delivering

knowledge involves country-specific projects supported globally by multiple instruments including global

projects, Global Practice Teams, strategic partnerships, and a robust communications strategy. The

flagship Scaling up Rural Sanitation (TSSM) project, for example, has helped an estimated 8.3 million

people gain access to improved sanitation in three WSP focus countries - India, Indonesia and Tanzania.

The knowledge and lessons on how to implement sanitation programs at scale, however, will have a far

greater impact within these countries and beyond. WSP's technical assistance under the project has

already helped leverage significant public and private investments of approximately US$80 million

(US$33 million from national and local governments and US$47 million from households). Sharing

knowledge and lessons from these countries will help scale up these results even further going forward.

In addition to the country results highlighted in this EYR, three cross-cutting priorities were integrated

more prominently throughout the portfolio during FY10. These included prioritizing gender sensitive

approaches; facilitating south-south horizontal learning; and mainstreaming monitoring for improved

services:

Beyond scaling up WSS services, WSP seeks to reduce poverty and inequalities within society

and prevent conscious or unconscious discriminatory practices that hinder the wider development

agenda. WSP prioritized a gender approach that supports the participation of women in particular,

recognizing their key role in the supply and management of water and sanitation services. WSP

created a Gender Global Practice Team in FY10 to help each country mainstream these

approaches throughout the portfolio in FY11-15.

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Facilitating south-south learning processes to complement capacity building approaches across

WSP‘s focus countries is an important part of WSP‘s knowledge strategy and helped deliver

significant results in FY10. Horizontal learning is one important tool in this south-south

knowledge exchange. Horizontal learning starts from the assumption that capacities already exist

and that peers learn more effectively from each other, with benefits to both parties. In Africa and

Latin America, for example, WSP designed and facilitated an exposure visit by a delegation from

Lusaka Water and Sewerage Company to Brazil and Peru to learn about condominial sewerage

systems in Brazil, and peri-urban initiatives in Lima. Lusaka Water is now piloting a condominial

system serving 1700 households. Similarly in East Asia, WSP‘s TSSM team from Indonesia

conducted training of trainers on community-led total sanitation in Lao PDR in January 2010,

creating the first nucleus of CLTS experts in Lao PDR. By June 2010, six villages in two

provinces were declared open defecation free.

Finally, mainstreaming monitoring at the regional, national and local level has helped ensure the

sustainability of WSP‘s results and to help governments make the best use of available resources

and inform sector planning. In India, for example, WSP‘s support to service benchmarking has

now been embedded in the national urban reform agenda, with service level benchmarking now a

pre-condition for fiscal transfers to local governments. One of the main reasons water and

sanitation services in many developing countries are plagued by poor service levels and

inefficiencies is the absence of mechanisms for accountability. Assessing progress towards targets

and reporting the results is vital for managing action by all stakeholders and is an important step

towards achieving the water and sanitation MDG targets. Going forward, each business area in

WSP‘s FY11-15 Business Plan will include some aspect of helping governments and service

providers to monitor to improve services.

We look back at the last few years of progress with a sense of accomplishment. However, while our focus

on refining the results management strategy has had a deep impact on how the Program can deliver,

monitor, and report its results, the process has also required profound changes in the structure of the

Program and the mindset of WSP staff.

In order to commit WSP to one set of results in a stated time period, the Program has moved to a five-year

sequential business plan. As highlighted in the FY04-08 External Evaluation, WSP‘s rolling funding

structure will place additional pressures on the Program. Flexible and predictable funding will be critical

if WSP is to continue to support governments and partners in making informed policy choices and

ensuring that water and sanitation services do reach underserved populations. In addition to working

closely with the WSP Council to help ensure predictable funding, forming strategic partnerships to fully

maximize WSP‘s knowledge creation and dissemination by scaling up activities and leveraging additional

funding will be a key objective of the Program‘s Management Team.

Furthermore, WSP‘s staff and the knowledge and experience they bring ultimately form the Program‘s

key comparative advantage. WSP was proud to see a number of our staff selected for senior positions

within the World Bank and with partner organizations including UNICEF and the Bill and Melinda Gates

Foundation. Managing these transitions to maintain continuity in each focus country will need to be a top

priority for the Program‘s Management Team going forward.

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The following sections in the EYR provide highlights of results achieved in FY10 under the six business

areas outlined in WSP‘s Business Plan, while also providing information on budget, expenditures, human

resources, fund raising activities, and a summary of project delivery status during this period.

Thank you for your support to WSP.

Jaehyang So

Manager

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II. FY10 Highlights

In FY10, WSP identified six core business areas where the program aims to contribute to progress in the

sector through knowledge and technical assistance to support client governments and other stakeholders.

These business areas reflect the Program‘s sector expertise and its demand-driven approach to supporting

governments:

1. Scaling up rural sanitation and hygiene;

2. Creating sustainable services through domestic private sector participation (SS-DPSP);

3. Supporting poor-inclusive WSS sector reform;

4. Targeting the urban poor and improving services in small towns;

5. Mitigating and adapting WSS delivery to climate change impacts; and

6. Delivering WSS services in fragile states.

WSP has made solid progress against these business areas in FY10, with the continuation of global and

regional initiatives as well as the start of new ones. WSP‘s global projects, including the Scaling up

Rural Sanitation and the Scaling up Handwashing projects have started exploring opportunities to

leverage project lessons to replicate the results in the three initial focus countries and in other WSP focus

countries. The Economics of Sanitation Initiative (ESI), which was initially implemented in East Asia

region, has now been replicated in South Asia and will be conducted in Latin America in FY11. WSP‘s

work on domestic private sector participation in the water and sanitation sector has also been strengthened

with a new round of funding from DFID of GBP 8 million for the Sustainable Services through Domestic

Private Sector Participation (SS-DPSP) initiative. Other donors have also expressed interest in

contributing to this multi-donor trust fund.

The following sections highlight results from each region under the six business areas, which consolidate

these global initiatives with ongoing activities in each focus country.

A. Scaling up Rural Sanitation and Hygiene

With over 2.6 billion people in the world still lacking access to improved sanitation, WSP‘s role in

scaling up sanitation services for the poor is critical. The flagship Global Scaling up Rural Sanitation

(TSSM) and Scaling up Handwashing with Soap (HWWS) projects continue to build on the results

delivered and outcomes achieved in their project countries. An estimated 8.3 million people have gained

access to improved sanitation facilities and are no longer defecating in the open as a result of WSP‗s

capacity building and institutional policy development support for national and local governments and the

private sector under the TSSM project. Under the HWWS project, an estimated 40.7 million women and

children across have been exposed to TV and/or radio spots promoting HWWS, and about 2.3 million

women and caretakers have been engaged through Inter-Personal Communication consisting of face-to-

face interactions and exchanges between trained community-based workers/volunteers.

i. TSSM in Focus

TSSM combines two types of interventions that will reduce the incidence of open defecation and enable

households to continue to move up the ―sanitation ladder‖: (i) community-led total sanitation to stop open

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defecation and stimulate demand for sanitation facilities; and (ii) social marketing to reinforce demand

and bolster supply of sanitation products and services. The project is on track to either meet or surpass

original project outcomes in the states of Himachal Pradesh and Madhya Pradesh, India, and in East Java,

Indonesia. In Himachal Pradesh, rural sanitation household coverage reached more than 90 percent as of

May 2010. In Madhya Pradesh, 410 Gram Panchayats have been verified as Open Defecation Free

(ODF), representing almost 790,000 people, or 53 percent of the initial project targets. In East Java,

Indonesia, almost 750,000 people have gained access to improved sanitation and nearly 1,400

communities have been declared open defecation free. Sanitation sales points and a supply network of

trained providers selling affordable and upgradable improved pit latrines were also developed in 14

districts. Local government successes have prompted requests for further support by government and

partners and were complemented by a growing national awareness of the urgency to address sanitation:

the new Medium-Term Development Plan of the Government of Indonesia includes the achievement of

an open defecation-free Indonesia as a performance target. WSP estimates that more than 1 million people

in East Java will gain access by December, 2010 and that the original target of 1.4 million will be

achieved by the end of the project in November 2011.

In Tanzania, WSP is supporting government efforts to

improve the implementation and monitoring of rural

sanitation programs. The Government of Tanzania cannot

currently reliably report on the number of people that have

gained access to improved sanitation facilities, and

currently only tracks access to basic sanitation. WSP is

supporting the government redraft definitions and

performance indicators in line with JMP definitions. This is

a significant milestone and lays a foundation on which to

build capacity at the village, ward and district levels in

monitoring and data collection. WSP also supported the

government roll out a village registration system to collect

data on nine key indicators, including access to improved

sanitation. Joint government and donor missions and

reviews on the TSSM experience in Tanzania have resulted

in a budget of USD 13 million for a national sanitation

campaign led by the Ministry of Health and Social

Welfare. The campaign is planned to start in 2011.

WSP has drawn on lessons and the evolution of the TSSM

project to develop its approach to scaling up rural

sanitation under the FY11-15 business plan. While

interventions in each country differ because the existing

―eco-system‖ of the sector in each country is different, some key lessons have emerged across TSSM and

other WSP focus countries that will help define the strategy going forward:

Well targeted subsidies can be effective in reaching poor people: Public investments of varying

forms including subsidies can and have helped trigger significant increases in access to household

sanitation. WSP‘s analysis found that well designed subsidy programs are effective at helping the

Box 1: Reaching Children in Tanzania

As part of the project‗s Choo Bora campaign, a

radio soap opera launched in May features

Mtafungwa, a loud and opinionated sanitation

skeptic and rural household head who is

convinced to install an improved latrine. He is

so impressed with the results that he gets

training to become a mason and constructs and

sells upgraded latrines. In Rufiji district, during

the stage set up for a community sanitation

education event, the children began singing the

show‗s Choo Bora theme song.

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poor gain access to improved sanitation. Output based approaches are the most effective approach

for hardware subsides, where financial subsidies for improved household sanitation facilities are

provided as rewards after a community has become open defecation free. However, the use of

scarce public funds needs to be optimized in order to achieve maximum results. Financing

approaches need to be designed at the outset of programs. When resources are scarce, the biggest

‗bang for the buck:‖ of pubic dollars is to use them to finance demand creation activities such as

CLTS triggering and behavior change communications. Determining who should pay for what

can impact the extent to which programs can be sustained. Households are also critical investors

but may require specific financing mechanisms such as access to micro-credit.

Strengthening the enabling environment at the national level is essential but not sufficient to

operationalize an effective and sustainable large scale national program: local policy and

regulatory support and local government capacity building efforts are critical. WSP has found

that the approach of working through local governments with the support of resource agencies to

build capacity of local governments is fundamentally sound in decentralized countries. Even

though local governments lack capacity in some areas, they remain the only structure in the

country that has the legal mandate, the staff, and the physical infrastructure required to implement

large scale rural sanitation programs.

When effective demand for sanitation products and services is created at a large scale, the

capacity of the local rural private sector to scale up supply is limited. Current capacity-building

efforts to strengthen the private sector‘s ability to meet the demand created through TSSM are

beginning to show their limitations, particularly in Indonesia and Tanzania. A recent external

study in East Java funded by IFC found that all of the sanitarian entrepreneurs interviewed had

backlogs of orders, the highest being about 150 latrines. Information collected through field

supervision visits in Tanzania also suggests that masons are facing a similar challenge. While

there are several business models to accelerate supply, encouraging small and medium

enterprises, such as hardware stores located at the district level, to enter the market by offering

incentives including exclusivity in operations for a period can be very effective (e.g., through a

concession type of arrangement). These findings show that sanitation marketing programs need to

go beyond the traditional ―mason model‖ and explore ―market transformation‖ approaches that

have been used in other sectors such as energy. This will mean exploring partnerships with other

organizations that can provide the necessary technical assistance. The revised strategy also

recognizes that not every mason can be an entrepreneur. Access to financing mechanisms is

another significant obstacle small-scale private suppliers face.

Performance benchmarking and monitoring can improve performance of local governments.

Benchmarking enables governments to understand performance by flagging areas of strength,

areas that need improvement, and the linkages between them. Benchmarking helps put a spotlight

on the efficacy of resources being invested and the corresponding results on the ground.

The project has one year left to conduct the impact evaluation and to document deeper analysis on how to

scale up sanitation programs sustainably and effectively. WSP has already started leveraging these

emerging lessons to replicate the results further within these countries and in other WSP focus countries,

where WSP has tailored rural sanitation and hygiene activities following the TSSM approach to the local

country context.

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ii. Scaling up Rural Sanitation and Hygiene in WSP Focus Countries

Community-Led Total Sanitation (CLTS): In Lao PDR, Pakistan and Uganda, WSP focused on

piloting CLTS approaches to stimulate demand for sanitation services. In Lao PDR WSP‘s support in

two southern provinces, Champasak and Sekong, resulted in the first-ever open defecation free

declaration of a village in Sekong province, followed by five additional villages in Champasak province.

Government and development partner representatives participated actively throughout the pilot, including

training of a national core team of CLTS facilitators and the actual open defecation-free status verification

process, to replicate in other provinces.

In Pakistan, an estimated 750,000 people in over 670 villages are no longer exposed to the indiscriminate

disposal of human excreta. This has been achieved by a collaboration of federal and provincial

governments, decentralized municipal agencies, and, particularly, communities and NGOs focused on

eradicating open defecation and sustaining quality sanitation on a community-by-community basis. WSP

has supported these NGOs through training of trainers and through promotion of the barefoot consultant

model. In order to institutionalize the process WSP is also supporting provincial governments in

streamlining their sanitation policies and strategies through representation on every provincial water and

sanitation working group.

WSP is supporting piloting of TSSM in 6 districts in Uganda. This involved training 40 CLTS national

master trainers who in turn trained almost 200 facilitators/district extension staff. These have triggered

675 villages of which 25% have been declared ODF. The program also trained 90 masons in three

districts. Of those sampled 6 months after the training, 80% went on to market their services and reported

a success rate of 62%. Lessons from these activities have been consolidated into an intermediate package

and the methodology that has been adopted by the government which is rolling out implementation to an

additional 20 districts. 10 more districts are expected to apply TSSM under the Global Sanitation Fund.

Sanitation Marketing: In Bangladesh and Cambodia, WSP has

focused primarily on the sanitation marketing aspects of TSSM

while other development partners conduct CLTS to raise demand.

In Bangladesh, there has been shift by government and partners

to support a community-led movement to eradicate open

defecation. While open defecation has reduced dramatically, the

quality and sustainability of latrines is a huge challenge. This

demands another shift to support market based mechanisms that

enable households to move up the sanitation ladder. In preparation

for this shift, WSP has improved access to technical options and

credit facilities for entrepreneurs resulting in 16,000 consumers

using improved quality sanitation services. The program in

Cambodia has revolved around marketing the ‗Easy Latrine‘,

developed last year with WSP support, and includes demand

creation, marketing and supplier training. Over 3,000 latrines (30% of the program target) were sold by

nine trained suppliers in two provinces supported by WSP and USAID, and some of them started to

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employ sales agents working on commission. Similar approaches are also being explored in Peru, which

are described in the next section on SS-DPSP.

Handwashing with Soap (HWWS): In Peru, Senegal, Tanzania and Vietnam, WSP‘s programmatic

focus lies on HWWS. In Vietnam a Memorandum of Understanding was signed between World Bank

and Vietnam Women‘s Union to integrate HWWS into all their activities throughout 64 provinces. A

children‘s handwashing education entertainment program was also rolled out through national mass

media program and implemented in 550 schools throughout the country. In Senegal, the partnership with

the Ministry of Education has helped to expand HWWS into the School Health pilot program. The pilot

includes handwashing orientation, training, and materials for teachers, developed under the project. In

Tanzania, the country team has helped international organizations adopt the project‘s approach to

HWWS behavior change within several ongoing program including UNICEF programs in school

sanitation and in its learning districts; AED‘s Tanzania Marketing and Communications for AIDS,

Reproductive Health, Child Survival and Infectious Diseases (T-MARC), currently being piloted in

Morogoro; and in outreach activities conducted by SNV (Netherlands Development Organisation),

WaterAID, and the Water and Sanitation Collaborative Council in their respective districts. One of the

largest soap producers in Tanzania, Tarmal Industries, has also launched a soap brand which includes key

Global Scaling Up HWWS messages and the project logo on the packaging.

WSP has been effective in building synergies across health,

nutrition, and education sectors in Peru, as well as between public

and private entities to strengthen the reach of national hand-washing

with soap programs. Approximately 1.5 million mothers and

children have improved their hygiene practices by including

handwashing with soap. Longitudinal studies have determined that

beliefs and attitudes towards soap have improved significantly

among the target population over time, improving health standards

for children during their years of formative growth. Closer

integration and coordination of sanitation and hygiene approaches

are being prepared for both rural and urban populations in Peru. In

addition to scaling up HWWS within the four project countries, the

Peru team has undertaken efforts to replicate HW behavior change

in other Latin American countries. Using Peru‘s methodology for behavioral change in schools, WHO/

Pan American Health Organization (PAHO) in Guatemala are designing its manuals developed to help

teachers promote HWWS in their classrooms. In addition, PAHO contacted DURAPLAST in Peru and

ordered 10,000 Super Jaboncin HW soap devices that will be distributed in 3,000 primary schools to help

combat the spread of the AH1N1 virus.

Building on the success of the first phase of TSSM and the experiences from the other rural sanitation

initiatives, WSP has proposed a second phase Global Scaling up Rural Sanitation project that aims to

contribute to support up to 50 million people gain access to improved sanitation and leverage an estimated

US $200 million in funds over five years. WSP will also actively seek to share lessons and tools, and

promote collaboration, coordination and replication with WSP staff and development partners such as the

World Bank, UNICEF, WaterAID, and PLAN. This will help replicate and scale up the TSSM approach

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to help increase sustainable access to improved sanitation and open-defecation free communities.

Potential countries include: Bangladesh, Cambodia, Honduras, Lao PDR, Mozambique, Philippines,

Pakistan, Peru, Nicaragua, and Peru.

WSP has already been able to leverage its knowledge to support the World Bank and other partners

implement sanitation and hygiene projects. At the regional level, WSP contributed substantially to the

improved regional knowledge of rural water supply and sanitation by its design and implementation of an

international seminar, ―Challenges of Rural Water Supply and Sanitation in Latin America: 10 years

later‖, which convened decision makers and practitioners from 13 countries in Latin America to identify

trends, lessons learned, and new challenges. WSP was also able to leverage its knowledge to support a

World Bank project in El Salvador by designing a component of the Municipal Development Project to

include water and sanitation services for the poor. Through this project, the government has increased its

ability to provide funds for basic infrastructure needs of the country‘s 260 municipalities, 80 rural

municipalities of which will be targeting improved WSS services. This is an important step for engaging

with the government on needed sector reforms that address the inequities that persist between urban and

rural populations, and the importance for improved service provision to the poor.

In Ethiopia, WSP is working with partners including the WB, AFDB, DFID, UNICEF, Finland, Carter

Center, and NGOs, to support the implementation of ―at scale‖ hygiene and sanitation promotion, which

has reached approximately 5.8 million people in Amhara Regional State and leveraged more than

$3million from development partners and donors. An end-line survey conducted in June 2010 indicates

that an estimated 4 million people have achieved ODF status in Amhara Regional State from 2008 to

2010. The challenge now is to improve the quality of these latrines to acceptable standards and introduce

and promote social marketing in the process.

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Box 2: Sanitation Marketing Takes off in Cambodia

The Sanitation Marketing Project was launched in Cambodia in early

October 2009, aiming to have over 10,000 toilets installed by households in

rural villages over a period of 18 months through market force and demand

creation activities. Unlike conventional approaches to sanitation

improvement, which usually provide hardware subsidies to households and

overlook the market as a driving force to sustainable sanitation, the current

approach focuses on market-based solutions and the sustained behavior

change of sanitation practice within communities.

As part of the market-based solutions, an affordable and simple latrine core

was designed and branded as ‗Easy Latrine‘, and introduced to the market

through local producers. The innovative pour-flush latrine sells for as low as

US$25 in villages and producers are receiving training in sanitation and

hygiene education, latrine production, and basic business and sales

management. This process leverages the local market while at the same time

making low-cost sanitation solutions available to communities. Producers are asked to invest a minimum of

US$500 and produce three latrines per day. Five producers have participated in the project and there is a backlog

of other producers waiting to be trained as the sanitation marketing concept moves forward.

A local mason—having seen his monthly income jump from US$50 to nearly US$400 in a matter of weeks—

decided to invest more by purchasing another trailer for his motorbike in order to deliver more latrines to villages.

He has also begun to sell his latrines to supply shops in the region as a secondary means of distribution. One

supply shop is even selling the latrine core without making a profit, as they expect to earn their profits from the

above-ground components that they will sell in conjunction with the core.

Experience shows that the sanitation marketing approach is more successful in villages where demand has been

developed through the no-subsidy CLTS approach than in villages which have received hardware subsidy in the

past. People in a CLTS village are more receptive to sanitation and hygiene messages and more willing to invest in

sanitation than those in a non-CLTS village.

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B. Creating Sustainable Services through Domestic Private Sector Participation (SS-DPSP)

Engaging with the domestic private sector continued to be a key component of WSP‘s program

throughout FY10. To date, an estimated 16 million people benefitted from improved services through 275

providers in 10 countries. Many of these results can be attributed to activities that were initiated during

the first phase DPSP. Evidence from WSP‘s focus countries shows a changing, more significant role for

the local private sector from isolated small scale services to being a critical player in providing WSS

services to poor people. WSP has consolidated lessons and approaches and will move into a new phase

with additional funding of GBP 8 million from DFID for the Sustainable Services through Domestic

Private Sector Participation (SS-DPSP) initiative in FY11-15. Specific results from FY10 that have

helped define WSP‘s role under SS-DPSP include:

i. Developing and sustaining local PSP

WSP‘s support has focused on increasing efficiency and functionality of systems by expanding

engagement with the local private sector, developing tools for delegated management, strengthening the

enabling environment for the private sector to grow, and building mechanisms to help providers access

domestic finance for WSS development. In India, the Government of Orissa cleared the establishment of

a shared regional treatment and landfill facility for municipal solid waste through a Public-Private

Partnership (PPP). The facility will initially cater to Bhubaneswar and Cuttack municipalities, which

account for nearly 30 percent of municipal solid waste generated in the state. It will also accept waste

from the neighboring municipal councils of Jatni, Khorda and Chaudwar to provide safe solid waste

treatment services for a population of 1.8 million people. WSP provided pre-transaction technical

assistance to the Government of Orissa, including technical, financial and policy assessments and PPP

options, with the support of PPIAF to inform this government decision making process.

In other countries, markets that are not viable for larger

commercial businesses present an opportunity for the

participation of smaller private participants. WSP‘s

experience in Cambodia, Mozambique, Mali, Rwanda,

Senegal, the Philippines, and Uganda has shown that

correctly allocating risks can help draw the private sector

into these markets. WSP is supporting delegated

management models for piped systems in to improve the

sustainability of WSS services through local PPPs in Benin,

Rwanda, and Mali. In Rwanda, WSP provided technical

assistance to scale up rural water PPPs through capacity

building for local districts and private providers. Now, over

160,000 people access improved rural water supply services

through local PPPs, while in Mali, 20 PPP contracts have

been implemented delegating management of rural piped

systems covering more than 250,000 people.

In Indonesia, WSP is supporting systems for corporate

Box 3: PSP in Rwanda

In 2002 private operators were virtually

unknown in the sector. By the end of 2007,

16% of systems were being operated by

private operators, rising to 31% in 2010. An

estimated 58 rural systems, supplying the

equivalent of over 17000 households, are

managed by private institutions and the

management of over 200 systems have been

delegated to private operators.

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organization, registration and licenses involving five support intermediaries and local governments

covering over 600 community-based water organizations in two provinces. WSP will build on these

results to address other expansion constraints such as access to finance with an investment support project

in FY11. In Pakistan, more than 40,000 people in 27 rural communities are paying for 24/7 metered

community managed water supply that has been refurbished with assistance from rural consultants. This

model has been replicated locally in Punjab and Khyber-Pukhtunkhwa provinces where WSP is providing

technical advice in developing the form of the partnership between communities, NGOs and the

government for these schemes.

In Latin America, WSP is pursuing innovative possibilities for domestic private sector participation.

Public-private alliances are being created to address issues such as improved hygiene behavior, and

private sector participation is also playing innovative roles in filling unmet needs. A WSP-led initiative

on creating sanitation markets in Peru, for example, demonstrated the capacity and willingness of poor

people to pay for improved sanitation infrastructure and the potential of improving economic indicators

by developing sanitation markets. Over 8,000 households now have improved access to sanitation

through this public-private partnership, representing a collective investment of US$1.2 million by

households and US$571,000 by private partners for training, promotion, and lending. Local labor used to

install baths and latrines has benefitted from the additional income and local hardware stores have

benefitted from increased sales. 86% of the households that have improved their access to basic sanitation

utilized their own resources to make improvements to their sanitary infrastructure, 8% have utilized

consumer loans, and 6% have utilized a mixture of both.

Small-scale service providers also continue to provide services in other parts of the region, often, with

little regulation and low service standards. In Bolivia, WSP has been identifying opportunities for

improving fecal sludge management in metropolitan areas for households not connected to sewerage

systems. Analytical work in Santa Cruz, the second largest city in Bolivia, has provided much needed

insight in understanding the nature and type of services being supplied by small scale providers, the assets

held by them, the tariffs they charge, and the minimal regulation being undertaken by principal providers.

This analysis will contribute to the implementation of the Government of Bolivia‘s national strategy to

improve basic services in peri-urban areas.

ii. Strengthening service provider capacity

Supporting businesses that cater to the poor needs deliberate and multi-pronged strategies in sales and

marketing, product development, financing, as well as general capacity development. In Cambodia, WSP

supported nine domestic water suppliers by helping build technical and business administration capacity

through plenary training, on-site mentoring, and exchange visits within Cambodia. The program has

resulted in three suppliers investing in upgrading their treatment facilities and production capacity, and in

reaching 100% computer use for billing, bookkeeping and supply management. In the Philippines, WSP

built on previous support to 11 small water utilities to improve performance and accessing finance by

helping develop a Performance Improvement Toolkit for Small Water Utilities and a Guide for Ring-

Fencing of Local-Government-Run Water Utilities. The Program also commenced work to establish a

technical support program for small utilities to scale up the improvement planning process.

15

Accessing commercial finance, generally a more

sustainable source of capital, requires confronting

fundamental issues of whether service providers are

credit-worthy, their ability to develop credible

investment plans and loan proposals, and whether

revenue from tariffs can cover the cost of investment

and finance. WSP‘s technical advisory services and

transaction support to overcome these constraints in

Kenya helped leverage over US$1.2 million in

market-based financing to finance 21 community-

based water projects funded by GPOBA and K-Rep

Bank. This has subsequently attracted additional

funding from PPIAF, the EU Water Initiative, and

USAID Development Credit Authority. Two

management contracts have been signed and

activities aimed at expanding private sector

involvement in management as well as in providing

business development services to small piped systems is on-going as is development of guidelines for

accessing market finance.

WSP also helped governments establish and implement monitoring systems to improve resource

allocation and service provision. Systematic monitoring is needed to improve resource allocation. WSP

used tools such as International Benchmarking Network of Water and Wastewater Utilities (IBNET) to

establish benchmark standards and monitor progress across participating countries, states, cities or

villages. IBNET is the largest public database that provides utilities and sector stakeholders with

performance data from nearly 2,600 utilities in 110 countries. IBNET has been able to help develop

standard indicators and maintain data to help WSP‘s client governments efficiently allocate financial

resources and develop sector improvement programs that address water and wastewater services for all

consumers including the poor.

In South Asia, the domestic private sector is playing an increasingly significant role in the storage,

treatment, transportation and sourcing/disposal of water, waste water and solid waste. WSP has been

working to link domestic private sector efficiencies to public oversight to ensure inclusion and minimum

standards. In Bangladesh, 0.7 million people are now consuming water that is safe from arsenic

contamination. This has been achieved through the local government led replication of a pay-for-use

source testing, marking and switching program covering 78,000 predominantly private improved water

sources. Through the Horizontal Learning Program, WSP is linking the replication of arsenic screening by

union parishads to the policy revision process.

iii. Launching SS-DPSP

WSP also launched SS-DPSP, a global project that consolidates knowledge from the first phase of DPSP

to mainstream the strategy throughout WSP‘s portfolio under the FY11-15 Business Plan. WSP envisions

SS-DPSP as a vehicle to support client governments leverage domestic private sector finance and

Box 4: Obstacles to Doing Business in

SS-DPSP Countries

Source: World Bank Enterprise Survey

0 2 4 6 8 10 12

Electricity

Access to Finance

Practices Informal Sector

Tax Rates

Political instability

Corruption

Tax Administration

Access to Land

Crime, Theft & Disorder

Labor regulations

Licenses & Permits

Courts

Customs & Trade Reg

Inadequately educated workforce

Transportation

Number of SS-DPSP Focus Countries

16

expertise to scale up water and sanitation services for poor people. WSP‘s experience under the early

phase of the initiative points to a significant role for the local private sector. While DPSP-I explored the

role of the domestic private sector, this project will exploit their potential.

WSP appointed a global coordinator to lay out an analytical and operational framework to help drive the

knowledge agenda of SS-DPSP globally. The focus of the global knowledge agenda will be to draw on

lessons from each country to understand how to help client governments draw on the financial and

technical capacity of the domestic private sector to reach more low-income customers. WSP‘s analytical

framework is premised on a market-based approach for delivering services. The scale of domestic private

participation in services for the poor can be increased where support is focused on ways to meet demand

for services and products at the price levels of the poor and to improve the environment within which

these markets function. WSP proposes interventions along three main lines of activities in order to help

governments remove the market and non-market constraints to scaling up services: (i) Supporting the

business of water and sanitation entrepreneurs, (ii) public-private participation in non-traditional sectors,

and (iii) banking the ‗unbanked‘ water and sanitation providers.

SS-DPSP will be implemented in 12 focus countries based on an assessment of their readiness to support

domestic private sector participation. The countries are: Bangladesh, Cambodia, India, Kenya, Mali,

Mozambique, Nicaragua, Peru, Philippines, Rwanda, Senegal and Uganda. In addition to the SS-DPSP

focus countries, WSP will support the domestic private sector in a few other countries such as Benin,

Burkina Faso, Democratic Republic of Congo, Indonesia, Lao PDR, and Mali, where engaging with the

domestic private sector is increasingly a critical strategy to moving the sector forward.

17

Box 5: The Business of Developing Business

Expertise and competence is usually vested in the public sector, particularly in undeveloped markets, because of its

traditional role in providing WSS services. Building the capacity of local private providers is a key strategy to widen

the pool of credible providers to serve in emerging markets.

WSP‘s work with the domestic private sector emphasizes tailoring capacity building interventions to strengthen the

ability of private actors and entities to deliver efficient and quality services to poor people. Interventions are not

limited to training, but include the use of benchmarking and peer learning; development of reference manuals and

commercial tools such as financial models; coaching and hands on support for investment planning; and even,

working with providers to formalize, comply with regulations and strengthen internal governance systems.

While WSPs core strategy is to work with client governments to deliver capacity building and support services, it

also recognizes two other strategies:

1. The role of the private sector in business development support - the business of developing businesses: A pilot

supported from 1999-2006 in Central Senegal to delegate the O&M of systems managed by communities to

private operators have allowed communities to build up cash reserves to finance maintenance works, removing

reliance from the national government. At the same time, a monitoring system was established to support the

national drinking water program, using mobile and internet platform, through a partnership with a private

telecommunications company (Manobi) that invests its own capital. While the monitoring system itself may be

a cost center for the company, it invests in it because it helps it to penetrate a market that it would like to

position in.

In the Philippines, a vibrant engineering and business support industry already exists, but not enough are

investing in services that cater to small water providers, hence, their services remain inaccessible to small

private enterprises. The national regulator, with WSP support, is testing the deployment of public funds

(initially in the form of development aid) to accredit private consulting and engineering companies to work with

small utilities and provide small utilities access to finance through a capacity-building fund and the ability to

recover their costs through the tariff.

2. The role of the public sector in attracting the kind of private sector actor that already has credibility and the

right capacity: In Bangladesh, WSP is supporting the Bangladesh Water Supply Program Project (BWSPP) a

national water supply project funded by the World Bank to shift the management of rural piped water systems

to the private sponsor and community. In the next phase of work in this project, WSP will support capacity-

building of current private operators, and will also work with the World Bank to support the Department of

Public Health Engineering to develop and promote projects that will attract credible private sector actors to

participate.

18

C. Supporting Poor-Inclusive WSS Sector Reform

In FY10, WSP supported poor-inclusive sector reform by improving monitoring and benchmarking,

strengthening national policies and strategies, and developing an evidence base for reform. National

policy and strategy is an important starting point in mainstreaming the focus on poor people. Weak

policies and institutions lead to weak service standards, especially for the poor. WSP‘s approach is to

address both the vertical chains of reform in policy, accountability, technical capacity and resource

allocation as well as the horizontal framework of coordination, learning and cooperation so that local

governments and communities receive timely and adequate resources and capacity development support

to implement programs that are aligned with national priorities to ensure access to safe water and

sanitation. This approach is complemented by a focus on citizen engagement for social accountability to

enhance transparency, equity and accountability. WSP seeks to bring regional and global experience to

integrate bottom-up accountability with top-down planning addressing transparency and equity through

continuous engagement with all tiers of government.

Specific results in FY10 include:

i. Sector monitoring and benchmarking

Monitoring and benchmarking have been an important part of WSP‘s work program to help improve

sector performance through better planning, resource allocation, and monitoring by service providers,

governments, and donors. An important piece of work that WSP has been supporting this year is the

second phase of the Country Status Overviews (CSO2) to assess the performance of African countries in

delivering the WSS MDGs. CSO2 was conducted in 32 countries to assess progress towards the MDGs

and the underlying factors and is being delivered in a partnership led by WSP working with AFDB,

UNICEF, and WHO. Findings of the CSO2 have fed into the Global Annual Assessment of Sanitation

and Drinking-Water (GLAAS) report and are supporting the international policy dialogue for the

Sanitation and Water for All (SWA) initiative, an international response to the urgent need to get

countries back on track for the WSS MDGs.

WSP has also supported the development of Sector Information and Monitoring Systems (SIMS) and

testing new tools such as the Watsan platform and mobile-2-web technology to explore the potential of

new technologies and private sector participation in Africa. The Watsan platform enables governments to

rapidly develop, adapt and host a flexible online database for all water schemes in a country along with

information on their performance. Mobile-2-web technology facilitates data collection, analysis and

reporting on key parameters through mobile phones to inform decentralized planning, scheme

management and regulation. Both have been successfully tested in Senegal and are now being replicated

in Benin, Burkina, Mali, Niger and Rwanda. In Mozambique, the government has started rolling out

SIMS in provinces and is expected to cover all provinces by end of 2012.

In South Asia, the utility benchmarking process initiated by WSP in 2004 has sought to shift the focus

from asset creation to the operation and maintenance of water and sanitation services. WSP is providing

technical support to water and sanitation service benchmarking processes in urban utilities with over nine

million connections and delivering services to more than 50 million people. In Bangladesh, WSP

19

provided technical assistance to local government institutions to develop detailed work plans to carry out

the revised Implementation Plan for Arsenic Mitigation (IPAM) Benchmarking and Performance

Improvement Planning. An additional 1.08 million people have been connected to piped water supply

since 2006 by the 11 utilities that initiated the benchmarking process. More significantly, the 42%

reduction in the average revenue collection period since 2006 is a testimony to the greater focus on

quality of services. To oversee the service benchmarking process for the 1.2 million connections, these

utilities decided to establish an urban water utility network in 2009. The network increased to 17

members in 2010 and will expand again to include another 19 utilities from the World Bank funded

Bangladesh Water Supply and Sanitation Program (BWSSP).

In India, service benchmarking has also been embedded in the national urban reform agenda. In 2009, a

national benchmarking framework for water supply, waste water, solid waste and storm water was tested

in 28 urban local bodies representing 58 million people. After analysis of the data, the Government of

India committed USD 10 million to support these utilities to improve operating systems and strengthen

cost recovery to address quality of service. The 13th Finance Commission has subsequently included

service level benchmarking as one pre-condition for its fiscal transfers to urban local governments

totaling USD 1.7 billion. The Ministry of Urban Development (MoUD) is scaling-up the benchmarking

framework to over 1000 municipalities while 3 states have already initiated state-wide benchmarking in

all urban local bodies.

In Pakistan, benchmarking data from six utilities with over 2.4 million connections reveals service

improvements with collection efficiencies in some utilities increasing by as much as 50%. The UWSS

benchmarking data has been posted on the government of Punjab website and three utility performance

improvement plans under this initiative have been supported by ADB, French and Japanese donors. These

utilities are now in the process of forming a Pakistan Water Utility Network to oversee this process and

facilitate cross learning from each other.

ii. Supporting national policies and strategies for WSS

In East Asia, WSP supported policy and strategy reform focusing on sanitation in four out of five focus

countries. In Indonesia, the government used the Indonesia Sanitation Sector Development Program and

the city-wide sanitation strategies, developed and implemented by WSP, as the model for the new

National Sanitation Acceleration Development Program launched in December 2009. The program covers

300 cities and is set to increase planning support and national co-funding of local sanitation investments

by 700% over the next 5 years. In the Philippines, the Department of Health adopted the National

Sustainable Sanitation Program as a national priority program in June 2010, with operational guidelines

based on the lessons emerging from WSP‘s Sustainable Sanitation for East Asia Program as well as those

of other sanitation projects. The program, signed off as an Administrative Order by the Department of

Health, includes concrete targets beyond achieving the sanitation MDG by 2015 such as 100% coverage

of the population with sanitary toilets and a country free of open defecation by 2022, and universal access

to safe and adequate sanitary facilities by 2028. A National Sewerage and Septage Management Program

was also developed with WSP and Asian Development Bank (ADB) support as the basis for a multi-year

investment program that will target all municipalities and 17 highly urbanized cities.

20

In Lao PDR, WSP undertook a Sanitation and Hygiene Finance Study to support the government and

development partners in planning levels of financial support, types of initiatives, and the revision of

sanitation policies focusing on basic sanitation and hygiene. The study confirmed that current expenditure

levels for basic sanitation and hygiene were inadequate and would have to more than double to reach the

sanitation MDG. In Cambodia, the Rural Water Supply, Sanitation, and Hygiene Strategy was completed

with joint technical assistance provided by ADB, UNICEF and WSP and submitted it to the Government

for signature. A complementary Water Supply and Sanitation Sector Financing Strategy was also

completed together with the ministries responsible for different parts of the sector (rural, urban,

sanitation, finance). The financing strategy includes several financing scenarios based on an OECD model

for which training of government officials was also provided, and will be used to inform the government

development plans for the sector.

In Peru, WSP has provided key support to the sector for improving donor alignment around one approach

to rural water supply and sanitation. This alignment around a common approach under the leadership of

the government aims to provide strategic guidance to the activities and projects that are being financed by

the World Bank, JICA, and Spain/ Inter-american Development Bank (IDB). WSP efforts have focused

on building multi-lateral dialogue around key principles such as decentralization, integration of RWS with

broader local development initiatives, and more sustainable approaches to basic sanitation. WSP has also

played a key role in mainstreaming improved hygiene behavior changes targeted at mothers and children

in the national programs of the health and education sectors in Peru. Bridging these two sectors has been

pivotal to supporting shared objectives and complementary approaches in order to reach a similar target

population.

With WSP technical assistance in coordination with other donor partners, the sector in Nicaragua is

focusing on bringing together under one implementation manual a single standard for implementing WSS

projects. This effort, under the leadership of the government, will provide the guidance to projects funded

by the World Bank, Spain/IDB on a single approach to WSS, regardless of the different governmental

agencies that may be implementing their projects. WSP is currently undertaking an evaluation of the

single implementation manual to identify areas for improvement and lessons learned that will inform

modifications in the application of this manual.

iii. Developing an evidence base for reform

The Economics of Sanitation Initiative (ESI), which was first implemented in East Asia, helped develop

an evidence-base to support sanitation advocacy, raising the profile of sanitation, and has been an

effective tool to providing decision-makers at the country and regional level with economic evidence for

increasing investments, analyzing major health, water environmental, tourism and other welfare impacts

associated with poor sanitation. In Indonesia, the results from ESI contributed to ministerial

commitments to governors and mayors to increase investments in urban sanitation in over 300 cities by

2014. There has already been a 700% increase of national co-funding for local sanitation investment over

the next 5 years. WSP is now applying the same methodology in other regions, and has launched the

initiative in South Asia and will include Latin America in FY11-15. A second study phase focusing on

economic cost-benefit analysis of sanitation options in countries has been completed for the Philippines

21

and Cambodia, and will be finalized for Indonesia, Lao PDR, Vietnam, and Yunnan province of China by

the end of the calendar year.

Box 6: Developing a viable WSS Sector Program in Rwanda

WSP‘s roles and interventions both drive and respond to the evolution of the sector in countries: from upstream

policy and strategy development through program development, implementation support to facilitating

sustainable management mechanism. Upstream WSPs interventions involve intense dialogue with government

stakeholders on policy, strategy and innovation in service delivery. WSP‘s experience helping develop and

implement reforms in Rwanda helped lay the groundwork for many of the results we see today.

From 1995 to 2003, Rwanda moved from the ruins

of genocide to the implementation of advanced

macroeconomic management practices, public

financial management reforms, and progressive

improvements in basic service delivery. Restoring

and reforming the budget process steadily

progressed over the period. The ministries of

finance and planning were merged in 1997 leading

to a streamlined development budget. Since 1998

the budget has been adopted by the National

Assembly before the beginning of each fiscal year.

In 1999 a National Tender Board was established.

The Central Projects and External Financing Bureau

were established in the Ministry of Finance in late

1998 to monitor and coordinate donor funded projects.

In the late 1990s WSP linked its technical assistance directly to the preparation of a $20 million World Bank

funded rural water supply and sanitation project from 2000 to 2007. Responding to Rwanda‘s unique

topography, hydrology and demography, the project built capacity for the development and management of large

rural piped systems. The operational model that emerged from the project is one in which the development of

large piped systems is driven by community planning, with a centralised design, procurement and contract

management process, supported by district-level supervision and oversight. This is complemented by gap-filling

with simpler point source technologies implemented by district entirely by government using central government

subventions such as the Community Development Fund.

The steady flow of funding from the World Bank supported project was instrumental in building the capacity of

local contractors. Almost non-existent in the RWSS sector at the beginning of the project, local contractors

carried out $10.6 million of construction works. Absorption capacity of the sector increased 10-fold during the

project period with the number of people getting access to improved water services each year jumping from

60,000 to 600,000 people. The service delivery model, the additional public sector technical and private sector

construction capacity developed under the project formed the core of a viable sector program attracting

additional funding from AfDB, EC, Austria, Belgium and Japan. The sector program also set the ground for a

transition into sector budget support in 2005.

22

D. Targeting the Urban Poor and Improving Services in Small Towns

In FY10, WSP supported national and local governments improve governance and services for poor

people in urban areas by developing poor-inclusive strategies and plans and improving monitoring and

oversight. The impact of service gaps is felt most acutely by the poor. Rapidly urbanizing populations in

Asia, which is expected to double its urban population by 2030, and Africa, where the urban population

quadrupled between 1971 and 2001, have fueled growth, but are straining the provision of services in dense

slum areas and fringe areas around cities and towns where service provision is challenging. An estimated

one billion people currently live in urban slums in developing countries, with many people relying on

expensive and unsafe water sources and low-quality latrines.

Specific results in FY10 included:

`

i. Developing poor-inclusive strategies and plans

In East Asia, WSP helped strengthen local government capacity to deliver sanitation services in

Indonesia and the Philippines by developing poor-inclusive urban sanitation plans and strategies. The

city-wide sanitation strategies and municipal sanitation plans were adopted by 18 cities and

municipalities. In the Philippines, four of the six municipalities developed tailored programs in support of

urban poor communities. These include sanitation behavioral change and disease surveillance programs to

reduce the prevalence of soil-transmitted helminthes and acute gastrointestinal diseases in Dagupan City,

and an open defecation eradication program in General Santos City and Polomolok as part of an inter-

local government collaboration on water quality management.

In Bolivia, WSP conducted key analyses of peri-urban areas that served as the basis for a US$100 million

National Program for WSS in Peri-Urban Areas. The analytical work was the first time basic services in

peri-urban areas in 43 Bolivian cities had been analyzed systematically. Stakeholder workshops that were

part of the analysis included water utilities, municipalities, and social organizations, and helped identify

key elements for designing the national program. The government has already secured financing for this

program from the Inter-American Development Bank and Spain, which aims at improving access to basic

sanitation of 2.5 million people. WSP is also providing technical assistance in Honduras to design

approaches for improved WSS in 61 small and medium-sized cities as part of the government‘s focus on

river-basin based development planning. WSP will be focused on supporting the development of an

investment program for small cities in priority river basins.

In Kenya, Tanzania, and Zambia, WSP has helped establish dedicated units to improve service delivery

for the poor in informal settlements. In Kenya, the Nairobi Water and Sewerage Company pro-poor unit

is partnering with NGOs, WSP, the asset holder and investment agencies such as the EUWF and the

World Bank targeting approximately 350,000 residents over a 5 year period in a manner that is formalized

and affordable. This work builds on an informal settlements strategy which WSP helped develop. In

Tanzania, WSP provided support to review the institutional set up of the Dar es Salaam Water and

Sewerage Company to help develop a strategy to establish a pro poor unit and a step wise implementation

for its establishment. In Zambia, WSP supported the Lusaka Water and Sewerage Company pro poor unit

to develop a sanitation marketing and hygiene promotion program for peri urban settlements of Lusaka.

23

ii. Building monitoring and oversight arrangements

WSP was awarded the 2009 team GAC runner up prize in recognition of the good practice in Kenya of

promoting accountability in the sector. Support to low income poor has focused on developing policies,

guidelines and models for water supply and sanitation service delivery to the urban poor, including

engagement of the domestic private sector. Support has been broad including voice mechanisms such as

citizen accountability to strengthen links between the government, regulators, service providers and

consumers. In South Asia, WSP has been supporting the development of a range of social accountability

and incentive instruments prioritizing inclusive approaches to targeting the urban poor. In Bangladesh,

four pourashavas are building city wide sanitation programs founded on bottom-up ward level visioning

processes. In May 2010, 14 more pourashavas joined this WSP supported process. A Government of

India ranking of 423 cities according to their cleanliness for all citizens led to strong responses from

cities (i.e. Trichy in Tamil Nadu which formed a sanitation task force to deal with open defecation), states

(i.e. Uttar Pradesh is seeking to introduce its own city sanitation monitoring system) and even a

Parliamentary Standing Committee has been appraised by MoUD.

In Pakistan, as a result of Citizen Report Card carried out in nine towns, the Karachi Water & Sewerage

Board (KWSB) has established a citizen report card and performance benchmarking cell within KWSB.

The Cell has recently developed a performance improvement plan for serving the almost 9 million people

mostly in Katchi Abadies in these nine towns.

Box 7: City sanitation ranking in India

The Government of India began a consultative process in 2004 to develop a

National Urban Sanitation Policy with incentives for cities to reach un-served

poor people with sanitation strategies and investments. The national policy was

launched in 2008 with WSP support.

From policy development to implementation: The Ministry of Urban

Development has set a target of four state strategies and 50 city sanitation plans

to be developed by the end of FY10. To promote competition between cities to

improve their sanitation, the government initiated a rating and awards scheme

that specifically targets poor people by weighing the rating significantly towards

the ODF rating, which affects mainly poor people. The ratings measures output

(9 indicators; max of 50 points), process (7 indicators; max of 30 points) and

outcomes (3 indicators; max of 20 points). Amongst all these indicators and

points, ODF status has been assigned 16 points, which is more than any other

indicator. This is in conformity with the national policy which identifies

"reaching the un-served and the poor" and "community planned and managed facilities" as priorities and key goals.

Over 400 cities are currently participating in the scheme, which will be extended to the remaining urban centers.

Source: Urban Development Ministry Survey

24

E. Mitigating And Adapting Water and Sanitation Service Delivery to Climate Change Impacts

WSP continued to develop its climate change strategy, concentrating efforts in FY10 to mainstream

climate change into ongoing programs by helping governments develop and implement climate change

adaptation and disaster risk management approaches for the water and sanitation sector. Governments are

increasingly turning to WSP with requests for technical assistance to address the impacts of climate and

natural events on basic services, one of the most visible and directly affected sectors that result from

climate-related natural disasters. Client governments have expressed an interest in tapping into WSP‘s

global knowledge and experience in advising reform processes that involve many different actors across

sectors. WSP is drawn to this challenge because the poorest populations often live in areas most affected

by natural disasters and are the least able to access services that break down as a result of natural

disasters.

Specific results in FY10 include:

i. Solutions for challenging environments and disaster risk management

Using data from IBNET, WSP prepared and published a report with the World Bank‘s Water Anchor on:

―Water Utilities and Climate Change: Challenges and Opportunities‖. The report seeks to provide

analytical and strategic assistance to client governments as they begin to consider the implications of

climate change on municipal water services provision. The document is based on an experience-sharing

workshop for twenty large water utilities (ten from WSP countries), background papers provided by

participating representatives, and on an internationally distributed questionnaire of utilities from

developed and emerging economies. Based on this work, WSP and the Water Anchor are now developing

water utility vulnerability indicators that will attempt to address climate change along with other elements

of the water utility performance.

In Peru, WSP is focused on supporting disaster risk management strategies for the government, building

on the opportunity to address structural issues in the way in which governments approach risk

management for WSS services as a consequence of the Pisco earthquake of 2007. WSP is directly

supporting four utilities whose networks were destroyed by the earthquake. The lessons taken from

improving regulation, investment planning, and climate smart construction codes, will help service

providers reduce the effects of long-term interruption of services to its customers, most severely affected

of whom are the poor. WSP is positioned to help introduce important reforms to improve disaster risk

management for urban water and sanitation utilities. Through WSP technical assistance, the sector is

gaining a better understanding of the costs of not integrating disaster risk management into UWSS, which

aspects of UWSS systems are most subject to risk and how to better control for these risks, identification

of budget and investment implications, and the introduction of financial protections.

In East Asia, WSP‘s focus is on sanitation solutions in challenging environments such as coastal,

riverside, high groundwater and flood-prone areas. WSP conducted a technical and social situation

analysis of people living in these environments in Indonesia, Lao PDR and Cambodia. Based on the

analysis, an estimated 15 million people need sanitation innovations that are acceptable and affordable.

Efforts to identify or develop more resilient sanitation solutions and adaptations for these countries,

25

including the Philippines, are under way. In FY10, WSP also started to conduct a vulnerability analysis of

water utilities in Ben Tre province of Vietnam and Yunnan Province of China, with climate change

adaptation plans to be developed.

ii. Identifying low cost climate change adaptation strategies for communities

Adaptation to climate change is also a critical issue for the water sector in South Asia. The rapid increase

in extreme climatic events means that the adaptation practices often precede adaptation policies.

Responding to the local adaptation practices requires a changed role for the intermediate tiers of local

government. In Bangladesh, the peer-to-peer accountability generated through the Horizontal Learning

program is strengthening the downward accountability of union parishads (local governments) and

changing the role of the upazila (sub-districts). Union

parishads have identified 35 good local practices for

replication (including seven climate change practices) and

the upazilas are learning from and facilitating the replication

of these practices. This process directly involves 235 union

parishads with constituencies totaling 5.6 million people and

indirectly touches more than 2000 union parishads

(comprising 50 million people) through the support partner

network.

In India, the new National Rural Drinking Water

Programme (NRDWP) guidelines emphasize 'water security'

through decentralised planning at village, block and district

levels. Village water security plans focus on water safety,

improved operational management and source sustainability

through the conjunctive use of surface, ground and

rainwater. NRDWP has allocated 1.9 billion USD in 2010/11

to be matched by state funds and Planning Commission grants for water security plans. In FY10, WSP

provided inputs to the national guidelines articulating the process / content for the water security plans

and drafting the implementation handbooks. In FY11, WSP will support a pilot demonstration of water

security planning in 16 agro-climatic zones as well as help the government prepare its strategy for 2010-

2012.

In Pakistan, in the face of depleting groundwater resources, provincial governments are in the process of

revitalizing the role of the district to regulate the sustainability of community managed water supply

schemes. In Punjab, the provincial government has established a USD 2 million fund for the district

PHED to support 2300 functional and 1300 dysfunctional CBO managed schemes. In Khyber-

Pukhtunkhwa, restructuring of several line departments has enabled the district PHED to provide

regulatory support to community managed schemes. WSP has been engaging with Punjab and Khyber-

Pukhtunkhwa on restructuring options to strengthen district oversight of community schemes.

Box 8: Disaster Resilient Ponds

After cyclone Alia, 7 local adaptation practices

developed by communities and NGOs were

identified for replication under the Horizontal

Learning program in Bangladesh. The creation

of disaster resilient ponds, for instance, has

since been replicated at least 152 times by

local governments and 72 times by

communities to safeguard drinking water for

more than 10,000 people.

26

Box 9: Climate Change: Managing Risks of Changing Climate Patterns

The urban poor in developing countries often inhabit unplanned

areas of the city that are prone to natural risks. Homes are often

built on hillsides or near floodplains, with little access. Water and

sanitation services in these areas are characterized by WSS systems

that with:

90 to 95% of the infrastructure built underground;

Infrastructure (often 50% or more) that is 40 years or older;

Poor enforcement of anti-seismic design and building codes

in earthquake-prone areas;

Highly exposed infrastructure in unplanned urban areas; and

Infrastructure investments that are not insured or protected

by risk transfer schemes.

Natural events, such as major earthquakes, floods or mudslides

produce devastating impacts on already fragile WSS systems and populations with irregular access. As more

extreme weather patterns and climate phenomena increase, the stress of these already fragile systems and the need

for risk mitigation becomes even more urgent.

A study conducted in Peru shows the benefits of investing in disaster risk management in the WSS and why

opportunity costs not to incorporate risk management are extremely high. The 2007 earthquake caused direct

damage to the networks of four WSS urban providers of approximately US$27 million, equivalent to 3.4 times the

income of the four utilities in that year and 120% of the aggregate investment budgets of the four municipalities of

the affected area. Most importantly, a new WSP study shows that reconstruction and rehabilitation costs (US$27

million) would have been 27 times lower if both good operation and maintenance and anti-seismic materials had

been used in designing and building the underground infrastructure of the networks. This is equivalent to 8,123

new water connections and 7,925 new sanitation connections, or an increase in coverage of 7% and 9%

respectively, much higher than the 2.5% annual average increase the Peruvian government does.

27

F. Delivering WSS Services in Fragile States

In FY10, WSP continued to leverage knowledge and lessons from its core focus countries to support

government initiatives in fragile states, which are countries that are either steeped in or emerging from

conflict or political turmoil. WSP‘s strategy in specific fragile states remains adaptable to the ever-

changing circumstances in these countries. Fragile states are the countries at greatest risk of not meeting

the MDGs, and WSS services in fragile states are characterized by run-down institutions, often having

endured long periods of instability, erosion of capacity and financial collapse.

In East Asia, WSP is providing support to urban sanitation development in Timor Leste, which was

identified as a gap area by a WSP scoping mission earlier during the year. Working in close collaboration

with AusAID‘s Rural Water and Sanitation Program, WSP initially provided urban sanitation inputs to

the emerging National Sanitation Policy, and started to undertake an urban sector assessment to support

the development of a National Sanitation Strategy and piloting activities.

In Africa, close to 30% of the population in

Africa lives in fragile states. Sector assessments

have been conducted and finalized for

Zimbabwe, Liberia and Burundi, and work plans

have been established for Zimbabwe and Liberia

with a planned study visit to Uganda to share

lessons for developing a WSS sector program.

WSP is in the process of establishing limited

presence through contracting of consultants to

maintain the momentum while detailed

programming and fund-raising continues.

Based on the sector assessments and CSO2, WSP

has developed a concept note outlining a global program of support for $10 – 15m over 5 years. Looking

ahead, WSP‘s support will focus on developing policy-based sector programs comprising two main levels

of activity: (a) country engagement supporting sector transition from emergency humanitarian

interventions and ad-hoc rehabilitation to country-led, policy-based, sector programs; and (b) regional and

global learning to facilitate country peer-to-peer and stable-to-fragile country learning with a particular

focus on reform and institutional development.

28

III. Knowledge and Partnerships

Delivering knowledge and leveraging strategic partnerships are at the core of how WSP delivers results

and is reflected throughout the results under the six core business areas. The Program‘s approach to

generating and delivering knowledge involves country-specific projects supported globally by multiple

instruments including global projects, Global Practice Teams (GPTs), leveraging strategic partnerships,

and a robust communications strategy. This approach is anchored by the assumption that knowledge

needs to empower, and provide insight for decision-making in order to make the most impact. WSP‘s

approach of ―learning by doing‖ has proven that global projects can be effective incubation points for

knowledge on specific components of the sector. The flagship Scaling up Rural Sanitation (TSSM)

project, for example, has demonstrated how promising sanitation approaches can be successfully

combined to implement sanitation programs at scale. The extracted knowledge and lessons will have a far

greater impact within these countries and beyond. WSP's technical assistance under the project has

already helped leverage significant public and private investments of US$33 million from national and

local governments and US$47 million from households. Sharing knowledge and lessons from these

countries will help scale up these results even further going forward.

Specific results in FY10 include:

i. Leveraging global knowledge locally: Mainstreaming south-south learning

In addition to delivering knowledge to help build government and service provider capacity throughout

the 24 focus countries as described in the previous sections of the EYR, mainstreaming south-south

horizontal learning processes has been an important aspect of WSP‘s knowledge strategy in FY10. Where

traditional capacity building assumes a deficiency in capacity, south-south learning starts from the

assumption that capacities already exist and can be nurtured and scaled-up. Horizontal learning is an

inclusive process that fosters innovation, prioritizes tacit means of learning that can be applied across

communities, local and central governments. The peer-to-peer learning and review process also provides

an opportunity for key decision makers to learn from practices that are effectively being replicated on the

ground.

In Bangladesh, WSP has coordinated development of the horizontal learning program through which

local stakeholders identify their capacities and establishing peer-to-peer systems for the identification and

replication of good practices. The horizontal program has grown to 235 union parishads with

constituencies totaling 5.6 million people and indirectly reaches more than 2000 union parishads

comprising 50 million people through the support partner network. In FY10, 118 union parishads

allocated USD 847,998 from their own funds for the replication of validated good practices in 23 upazilas

across the country (see http://horizontallearning.net/ ). Furthermore, more than 22 development partners

as well as NGOs, and media, training and research organizations have joined the union parishad led

Horizontal Learning program facilitated by the Ministry of Local Government.

WSP‘s regional offices in Africa and Latin America designed and facilitated an exposure visit by a 10-

person delegation from Lusaka Water and Sewerage Company (LWSC) to Brazil and Peru. LWSC is

29

implementing a World Bank project that includes a component for services in peri-urban areas. The

LWSC delegation were exposed to condominial systems in Brazil, peri-urban WS services in Lima,

creating sanitation markets initiative in peri-urban area in Lima, and hygiene behavior change. LWSC

followed the exposure visit by piloting a condominial system servicing 1700 households, or 9,000 people,

in one of the low income settlements in Lusaka and will require technical assistance from WSP to do this.

In East Asia, Indonesian specialists from the TSSM team conducted training of trainers (25 persons from

government and NGOs) on community-led total sanitation in Lao PDR in January 2010. By June 2010,

six villages in two provinces that were supported by the new trainers were declared open defecation free.

The new trainers have by now conducted a second training session for an adjoining province, covering

triggering processes for at least another five villages. These trainers essentially form the first nucleus of

CLTS experts in Lao PDR with cross support provided from Indonesia.

In Pakistan, provincial and national level local government training institutes have created a common

platform for sharing capacities and reform ideas. The Government of Pakistan has subsequently allocated

USD 65 million for the Institutional Strengthening of these institutions. The Asia Pacific Rural

Development Organization (ARDO) has subsequently allocated USD 50 million USD to establish a South

Asian Center of Excellence at the National Centre for Rural Development (NCRD). WSP has supported

this process through dialogue, workshops and exchanges at the provincial, national and regional level.

Box 10: South - South Learning and Exchange

In FY10, WSP facilitated south - south learning between South Asia clients, partners and staff from Bangladesh,

India, and Pakistan to Africa. The focus of the visits was institutional reform to enhance utility performance and

models that serve the urban poor. Some highlights of lessons include:

Regulation: The delegation gained insight on the structure and functioning of an independent regulatory

institution. They studied the funding processes that make a regulator sustainable, policy and legislative

underpinnings of a regulatory framework and acknowledged the gains achieved in service delivery through

regulatory oversight. WSP staff will now help tailor a regulatory framework to the sector in India. Similarly in

Pakistan the director of the Urban Unit of Sindh has initiated discussions with relevant public functionaries on the

establishment of regulator and related legislation.

Services to the urban poor: The representative of Punjab Government is keen to replicate a partnership between

CBOs and NGOs observed from the Nairobi Water and Sewerage Company to extend services for informal

settlements. From the visit to Kampala, the use of pre paid meters were seen as a useful approach for the

Bangladesh delegation and strategies for replication of this are being explored.

Enhancing Utility Performance: An important take away from the exchange were lessons on enhancing utility

performance through institutional performance management tools and separation of roles to improve

accountability. In Uganda, the sector has introduced performance contracts for improved service delivery, and the

visitors saw the benefits of using a contract mechanism at various levels i.e. between government and utility, and

between utility and staff . As a response to this, the Dhaka Water and Sewerage Authority (DASA) has

disseminated these lessons and intends to introduce performance contracts with staff responsible for serving low

income communities.

30

ii. Global knowledge and communications strategy

WSP‘s global knowledge management and communications strategy seeks to identify and implement

activities that enhance and support the achievement of the Program‘s core results. In FY10, WSP‘s global

communications activities focused on identifying and utilizing strategic channels that could achieve this

objective in a limited resources context. These included:

Knowledge Products: One of WSP‘s primary knowledge dissemination tools is through knowledge

products. The Program launched two flagships products in addition to the dozens of knowledge products

produced in FY10, including Guidance Notes on Water and Sanitation Services for the Urban Poor, and

the Financing On-site Sanitation for the Poor study, which aims to improve understanding of the finance

of on-site household sanitation through careful analysis of practical field experience in a wide range of

projects. Strategic dissemination of knowledge products such as these helped maximize the impact, reach,

and relevance of the knowledge. The strategy behind disseminating the Economics of Sanitation Initaitve

(ESI) background materials and early findings in East Asia, for example, resulted in citation in editorials

of leading news outlets during seasonal flooding and disease outbreaks, which is when the effects of poor

sanitation pose the most risk for poor people.

Global Events: In FY10, WSP hosted an official side event at the IMF-World Bank Spring Meetings to

present evidence to, and call the attention of Finance Ministers and other significant decision-makers to

sanitation challenges, while also playing a key role in coordinating with, and drawing a focus on action to,

the Sanitation and Water for All partnership. WSP also selected events where sharing knowledge or

contributing to advocacy would maximize impact. These included Stockholm World Water Week, World

Bank Sustainable Development Week, World Urban Forum, International Water Association Congress,

and the WSP Sanitation Workshop, among others.

At LatinoSAN 2010, WSP presented regional experiences on inter-governmental initiatives, results from

the Peruvian sanitation markets project, as well as a parallel session organized along with Swiss Agency

for Development Cooperation to discuss the UNICEF/WHO Joint Monitoring Program (JMP), where

participants highlighted the need of water quality parameters and data collection mechanisms; the absence

of information on people who have no access to water and sanitation services; and the need to harmonize

JMP data with national statistics.

WSP also gathered specialists in water and sanitation from 13 Latin American countries and the World

Bank Group at the Cusco+10 meeting in Cusco, Peru, to analyze the most significant experiences in rural

water and sanitation over the last 10 years. The discussions were focused on challenges and trends,

helping participants evaluate the progress reached by the Latin American sector. Although all the

countries increased rural coverage in the last 10 years, almost 50% of the rural population still lacks basic

access to improved sanitation. The meeting gave a unique opportunity to learn about best practices in the

region, identifying key successful aspects such as: the need to pay for services; improving the

management model; and the importance and effectiveness of Partnerships. Several participants have

already improved the design of projects to reflect knowledge and lessons from this meeting: the second

phase of the Peruvian Pronasar Project, which reaches a rural population of 300,000 people, will include

31

lessons from Ecuador on local governments‘ participation; in Nicaragua, the new FISE Project, expected

to benefit 225 000 people in 380 rural communities, will adapt the experience on creating rural sanitation

markets in Peru; and specialists from Bolivian government publicly expressed interest in adapting the

Peruvian rural model with sustainability approach.

Academic and News Media Outreach: WSP‘s communications strategy focused on strategic channels of

knowledge dissemination that would foster thought leadership and knowledge effectiveness. These

included independent media outlets, multimedia (website, photos, videos, cartoon calendar), quality

improvements of outreach tools, strategic selection of events, and local, national, and regional

communications activities for advocacy, awareness, and development.

Box 11: WSP Communications and Knowledge Dissemination

WSP‘s thought leadership has continued to be evidenced in FY10

by citations of WSP knowledge in academic, peer-reviewed

journals such as the Asian Journal of Water, Environment and

Pollution, the Bulletin of the World Health Organization, Health

Promotion International, the Journal of Epidemiology, the Journal

of Planning Education and Research, the Lancet, the Lawrence

Berkeley National Laboratory, Social Science and Medicine,

Waterlines. Traditional news media also exponentially increases

WSP‘s target audience. There has been a significant increase in the

coverage of WSP knowledge in outlets citing WSP including the

Financial Times, National Geographic, India Wall Street Journal,

Associated Press, Xinhua, Voice of America, Gestion, Jakarta Post, the Global Post, Thai News Service,

and more.

WSP also continued to build capacity and demand of journalists to cover hygiene, sanitation, and water

issues. In East Asia, for example, WSP developed a network comprised of journalists from major national

news outlets and government officials from Indonesia, Lao PDR, and the Philippines, as well as WSP

staff to analyze, and develop solutions towards the MDG targets of 2015 for the low attention sanitation

receives from the news media and government. The groups developed communications plans of action to

increase the coverage of sanitation and to facilitate the flow of information from government offices to

the media.

iii. Global Practice Teams (GPT)

In FY09, the GPTs focused on specific knowledge products. In addition to written knowledge products,

the GPTs identified and produced knowledge sharing focus areas for the sector, such as Communications

for Reform and the Small Towns agenda. Specific results of the GPTs in FY10 include:

0

50

100

150

200

FY07 FY08 FY09 FY10#

of

Art

icle

s ci

tin

g W

SP

WSP print media coverage

32

Sanitation: The Sanitation GPT helped produce and distribute the flagship Financing on site Sanitation

for the Poor product in FY10. The Political Economy of Sanitation knowledge product is also currently in

the production process and its dissemination is planned for the second half of FY11. The GPT organized a

sanitation marketing workshop in New Delhi, India (November 2009) and has co-organized a series of

presentations around sanitation topics with the World Bank Operations and Sanitation & Hygiene

Thematic Group. As a next step of the workshop in Delhi, there is an ongoing sanitation marketing page

on the WSP webpage, which will help standardize information on WSP‘s sanitation marketing programs.

Hygiene and Handwashing: The Hygiene and Handwashing GPT (HHGPT) was established in FY10,

and focused on three key tasks during its first year: i) expanding the membership base, ii) developing

WSP‘s Hygiene Medium-Term Framework, and iii) prioritizing areas for engagement over the coming

years. Over the next five years, the HHGPT will focus on building the capacity of clients and partners to

deliver hygiene interventions. The measure of success of the HHGPT is the use of the tools by clients and

partners in their hygiene programming. This will be monitored by periodic reviews of national strategies,

PADs, and partners‘ programming to assess whether the tools are being used.

Rural Water: The Rural Water GPT strives to contribute to the development of a new reference

framework for scaling up sustainable services in rural areas and small towns. In FY10, the Rural Water

GPT organized three seminars for the community to reflect and review global practices and to understand

how these practices address the evolving needs of the sector. The topics covered include: i) the use of

Water Safety Plan with examples from India, Pakistan and Bangladesh (September 2009); ii) Governance

Reforms and Accountability in RWS with experiences from Maharashtra and Gujarat States in India

(November 2009), and iii) Self Supply in collaboration with the Rural Water Supply Network (December

2009). The case studies on best practices were prepared on Pakistan, Peru, Bangladesh, Indonesia,

Moldova, and India. Members of the Rural GPT were invited to present these papers to the International

Symposium on Sustainability in Kampala co-organized by IRC (International Water and Sanitation

Centre), UNICEF, Water Aid and WSP in April 2010.

Urban WSS: The Urban WSS GPT initiated a comprehensive study for the urban water providers for

more than 100 cities in Africa jointly with the UN Habitat and Global Water Utilities Partnership. A

comprehensive toolkit that covers all elements of water utility performance, including access for poor

people, has been developed and being implemented from April 2010. Improving WSS services for the

urban poor continues to be a challenge in all regions, especially in terms of equitable access. The Urban

WSS GPT has been addressing how utilities can be held more accountable to their customers, especially

those inhabitants not currently being served. A knowledge product on increased accountability is

currently being prepared and will be concluded in FY11.

Communications: The Communications GPT explores effective and innovative ways in which

communications can be used as a supplement to improve the impact of water and sanitation interventions.

Members acquire new knowledge through their communications support to WSP and share this

knowledge with other WSP staff. This knowledge is then transformed into tools that can be shared with

government officials or service providers to improve services. The principles underlying this knowledge

include advocating for stakeholder participation in reform efforts by service providers, engaging with

33

local and national third party voices, such as celebrities and news media, and supporting governments‘

efforts to reach out to communicate with their constituents. For example, nine out of 21 countries that

participated in the GPT‘s Communications for Development international workshop in Lima, Peru, are

already implementing initiatives based on the these principles.

Gender: WSP created a gender GPT in FY10 to help each country mainstream gender and disability-

related approaches throughout the portfolio. A gender response ensures that the sectors interventions

benefit those most disadvantaged, and promotes equity and inclusion. WSP aims to address this issue

through an institutional and a programmatic approach. Along the institutional dimension, WSP would

assess whether specific indicators and procedural guidelines for gender mainstreaming and gender

monitoring is included in projects and reflected in the global results framework. The programmatic

dimension includes an analysis of gender coverage by gender focused and gender integrated interventions.

The programmatic dimension should also assess whether WSP‘s work includes some level of gender

analysis as part of the design with some follow up in the form of gender specific interventions. Another

significant aspect will be to look at those program areas that could be gender specific such as urban

poverty, rural water supply, urban and rural sanitation, impact of inadequate sanitation on mother and

child health care.

iv. Strategic partnerships

WSP‘s capacity to maximize effective partnerships at the national, regional and global levels is critical to

how the Program leverages its knowledge. The program engages with a broad range of partners, including

governments, multilateral development banks and other international organizations, civil society

organizations, the private sector, academic institutions, and donors, in three ways:

Delivering WSP’s capacity building and technical assistance: WSP depends on partnerships at every

level of implementation to enhance the value and capacity of its own operations. At the national level,

WSP implements its activities on the ground in partnership not just with policy makers and service

providers to create ownership of results and increase capacity but also with other organizations, whether

donor agencies or national. For example, in the scaling up sanitation marketing pilot, which provides

capacity building for local sanitation entrepreneurs to sell the ―easy latrine‖ model in two provinces in

Cambodia, WSP collaborates with USAID‘s Watershed program, UNICEF, and NGOs such as IDE and

Plan International. Another important vehicle to carry out its capacity building work is through national

training institutes, particularly in South Asia where the focus is on governance and decentralization. At

the regional level, WSP actively seeks opportunities to build innovative partnerships with other regionally

oriented actors. In Central America, WSP supports the Forum for Central America and the Dominican

Republic in Water Supply and Sanitation (FOCARD-APS) to provide technical assistance at the regional

level on issues such as hygiene promotion and innovative sanitation technologies.

Influencing Sector Dialogue and Policy: WSP builds on its experience in facilitating processes of

change and sector reforms that are country-owned, through ongoing high-level dialogue. Regional

sanitation conferences, for example, serve as advocacy platforms in shaping regional agendas on

sanitation and hygiene. WSP serves as a chair or active member of sector donor and partner coordination

34

groups in many of its focus countries. This engagement helps harmonize sources of aid and shape the

policies and strategies adopted within the countries. Moreover, many countries in Africa, Asia, and Latin

America, embracing globalization, better mobility and communications, and geo-political opportunities,

have strengthened their regional collaboration. In some regions, WSP has established regional

partnerships to assist the transfer of knowledge and gain political support for policies that work. In

Africa, AMCOW was established to create a continent-wide leadership for water in Africa and provides a

forum for inter-government water dialogue, improved governance and sector coordination. At the global

level, WSP will continue to lead analytical work on aid effectiveness and financing modalities as a

member of the Sanitation and Water for All (SWA) initiative. WSP‘s ongoing support to governments on

the ground informs these global initiatives. The second round of Country Status Overview of 30 African

countries, for example, will assess progress in the delivery of WSS services that will help inform SWA‘s

policy dialogue.

Influencing Investment Financing: One of the more effective ways of scaling up WSP‘s results is by

influencing investment financing. WSP provides advice and technical assistance on infrastructure

investments to country clients and their financial partners, including bilateral agencies, the World Bank,

regional development banks, and other financiers to help scale up services to poor people. In Africa, for

example, a strategic partnership has improved synergies between WSP, the African Development Bank

(AfDB) and the World Bank. At program level, strengthened WSP/AfDB/World Bank collaboration is

influencing the quality and sustainability of investments in water and sanitation, and policy/investment

support to scale up large sanitation and hygiene programs. At the technical level, WSP provided

operational support to AfDB investment programs (RWSSI), and collaborated in knowledge sharing and

capacity building of sector institutions. WSP can also help link national level policy makers with

international best practice and potential funding partners and strengthen the capacities of country sector

actors to deliver better WSS services. Most of these partnerships are established at the country and

regional levels. WSP‘s alignment with the World Bank is also an important way the program leverages

investments. This alignment typically occurs in three types of engagements: (i) design of World Bank

projects; (ii) supporting implementation of ongoing projects; and (iii) knowledge that allows the World

Bank to prepare and finance projects.

35

IV. FY10 Portfolio, Budget and Expenditure

The FY10 operating budget was US$ 50.1 million. This is a 6% decrease over FY09 budget level of

US$53.5 million. FY10 final disbursement of US$40.8 million was over (3%) that of FY09. The

difference between FY10 budget and FY10 disbursements is due to delay in some large-scale activities of

the scaling up projects.

WSP FY10 vs. FY09 Budget and Disbursements

13.010.6

15.012.6

14.2

10.4

12.011.1

5.8

4.0

4.84.1

9.0

7.2

8.2

7.0

11.5

7.4

10.1

6.1

0

10

20

30

40

50

60

FY09 Budget -$53.5 million

FY09 Disb. -$39.6 million

FY10 Budget -$50.1 million

FY10 Disb. -$40.8million

US$

mill

ion

s Global

South Asia

Latin America

East Asia

Africa

36

V. Funding raising activities

In FY10 WSP received around USD 58 million in contributions. A total of USD 29.4 million in new and

supplemental contributions was signed in FY10. Of this, USD 10.8 million was for global core, USD 6.2

million for Africa Core MDTF, and USD 12.4 million for SS-DPSP. WSP gratefully acknowledges all the

contributions and pledges below.

New funding signed in FY10 (USD million)

July 2009 – June 2010

Funding partner Purpose F10

Receipts

FY11

Pledged

FY12

Pledged

FY13

Pledged

FY14

Pledged

FY15

Pledged

Australia Africa core

MDTF 4.8

Austria (ADA) Africa core

MDTF 0.5 0.9

Austria (MoF) Global Core 0.7 1.9

Netherlands Global Core 2.8 1.5

Norway Global Core 0.95 0.95

United Kingdom SS-DPSP 3.1 3.1 3.1 3.1

Gates Foundation Global Core 1 1

Total 13.85 9.35 3.1 3.1 0 0

Funding Strategy Indicators: The share of global core as a percentage of total funding has grown

significantly over last several years from 4.3 million (10%) in FY08 to 19.7 million (34%) in FY10.

Similarly share of regional core has also grown from 5.7 million (14%) in FY08 to 15.6 million (27%) in

FY10. While we will continue to track global and regional core percentages and trends in detail in the

annual financial report, we are discontinuing reporting on the funding strategy indicators which have been

largely successfully achieved since their introduction in FY05. We greatly appreciate your partnership

and commitment in helping us achieve these goals.

37

Annex I: FY10 Disbursements (US$’000)

Africa

Country / Program Activities

FY10

Disbursements

Benin Support to Handwashing Marketing in Benin

Support to WSS Coordination /MDG strategy and activities

Support to WSS Coordination in Benin

Support to WSS MDG strategy and action plan implementation for urban/peri-urban areas and

small towns in Benin

Benin Total 401

Burkina Faso National Sanitation Marketing Initiative in Burkina Faso

Support to WSS MDG strategy and action plan implementation in Burkina Faso

Burkina Faso Total 281

Communication Improving production, dissemination and effectiveness of knowledge and advocacy tools

Strengthening communication capacity of country and thematic programs

Strengthening Communications for MDG Advocacy

Communication Total 365

Democratic Republic of Congo Support to Community-based WSS services for small towns and dense rural communities

Support to DRC’s WSS MDG strategy and coordination

Supporting Urban Sector Reforms

Democratic Republic of Congo Total 120

Ethiopia Support to consolidation and acceleration of at scale Hygiene and Sanitation promotion in Ethiopia

Mainstreaming SWAP in the Water, Sanitation and Hygiene (WASH) Sector in Ethiopia

Sector Coordination and Road Mapping for Achievement of WSS MDG/PASDEP targets

Support to the development of a strategy for hygiene and sanitation in small towns and urban

centers

Ethiopia Total 585

Finance Country Status Overviews on Water Supply and Sanitation 2010

Leveraging Market-based Resources for the WSS Sector - Eastern & Southern Africa

Leveraging Market-based Resources for the WSS Sector - West & Central Africa

WSS Sector Finance and Monitoring – East and Southern Africa

WSS Sector Finance and Monitoring – West and Central Africa

Finance Total 2,012

Fragile States Africa Fragile States WSS development support

Fragile States Total 416

Kenya Develop a Model for Sustainable WSS Provision to Low Income Urban Settlements

Development of Kenya WSS-MDG Road Map

National Sanitation Marketing, and Hygiene Promotion

Support Kenya WSS Sector Reform Process

Kenya Total 783

Mozambique Building Capacity to Reach the MDGs

Decentralized Service Delivery

Sector Coordination and Communications in Mozambique

Strengthening Sector Information Management System in Mozambique

Mozambique Total 666

Niger Support to WSS MDG strategy and action plan implementation in Niger

Niger Total 241 Regional Sanitation & MDG AfricaSAN Follow-up

Economics and Financing of Sanitation and Hygiene

Support to regional partnerships

WSS MDG regional support program Africa

Regional Sanitation & MDG Total 715

Rural Drilling Entrepreneur Support Initiative (DESI)

Forming Rural Utilities Groups and Leases (FRUGAL)

Rural Water Supply Network (RWSN) Support

Rural Total 293

Rwanda Support DPSP to improve management of RWS systems In Rwanda

Supporting Sanitation Strategy

Supporting WSS Sector Reform in Rwanda

Rwanda Total 276

38

Africa

Country / Program Activities

FY10

Disbursements

Sanitation Total -

Senegal Scaling Up Handwashing Behavior

Support PSP in RWS Management

Support to WSS MDG strategy and action plan implementation in Senegal

Senegal Total 1,058

Tanzania Scaling Up Handwashing Behavior in Tanzania

Scaling Up Sanitation Coverage through Total Sanitation and Sanitation Marketing (TSSM)

Strengthening Coordination and Tanzania National WSS Program

Tanzania Total 1,742

Uganda Supporting Review of Institutional issues linked with Sanitation and Hygiene in Uganda

Supporting Roadmapping and Achievement of Sanitation MDG/PEAP targets in Uganda

Uganda Total 462

Urban Promoting Accountability and Strengthening Consumer Voice

Support to the WOP -Africa

Supporting policy and regulatory development for domestic PSP

Supporting the supply side of the urban market

Urban Total 897

Zambia Support to Utility Reform, Communication and Enhanced Service Delivery to the Urban Poor

Supporting Reforms for Sustainable Rural Water Supply and Sanitation

Zambia Total 258

Africa Program Management, Administration/other 696

Africa Other miscellaneous costs not assigned to any project yet 307

Africa Total 12,576

East Asia

Country / Program Activities

FY10

Disbursements Cambodia Country Sector Coordination and Advocacy

Expanding Water Treatment Technology Verification

SMPP Capacity Building – Sanitation Marketing

Strengthening Domestic Private Sector Participation in Cambodia

Support to sub-regional SAWAP activities in Laos and Vietnam

Cambodia Total 757

Indonesia Country Sector Coordination and Advocacy

Indonesia Multi-Village Pooling (MVP) Project

ISSDP - City-level Investment Support for Neighborhood Sanitation Pilots and Priority

Municipal Sanitation Actions

ISSDP - Develop a Coordinated Investment Framework

ISSDP - Developing an Effective Enabling Framework for Sanitation

ISSDP - Developing local level capacity

ISSDP - Stimulating sanitation demand through a targeted public awareness and marketing

campaign

ISSDP - SUSEA Support for Increased Demand for Sanitation Public Awareness Creation as

Support for ISSDP

ISSDP - SUSEA Support for Solid Waste Management (SWM) and Drainage included as part of

the City-wide strategies for Sanitation

ISSDP _ Project Management and TA

PPP for Hand washing with Soap Coordination

Scaling Up Sanitation Coverage through Total Sanitation and Sanitation Marketing (TSSM) :

Major Activity1 Project Management

Supervision of WASAP D: Sanitation Pilots

WASPOLA 2 - Country Sector Coordination and Advocacy

WASPOLA 2 - Knowledge Management

WASPOLA 2 - Policy Implementation

WASPOLA 2 - Policy Reform

WASPOLA Facility - Component 1

Indonesia Total 4,600

Laos Communications for Reform

Country Sector Coordination and Advocacy

LAO PDR Country Program

Marketing Good Practices in Sanitation and Hygiene to Communities

National Water Supply Governance Program

Laos Total 464

39

East Asia

Country / Program Activities

FY10

Disbursements

Philippines Country Sector Coordination and Advocacy

Developing an Institutional Roadmap for Reforms in Second Generation Water Supply Services

in the Philippines

Program for Sustainable Sanitation in East Asia - Philippines Component

Registration of Water Utilities for Regulation

Small Water Utilities Improvement and Financing Project - Phase 2

Philippines Total 1,253

Regional Affordable sanitation options in difficult areas

Expanding Water Treatment Technology Verification

Mekong Sub-region Sanitation and Water Partnership Initiative

Mobilizing the Domestic Private Sector for Water Supply and Sanitation

Policy Implementation--Review of WSS Sector Financing in Indonesia

Regional Communications for Water and Sanitation Advocacy

Regional Knowledge Building and Inter-country Support Mechanisms - Economics of Sanitation

Initiative (ESI)

Regional Knowledge Building and Inter-country Support Mechanisms – Overview and Project

development

Support to Coordination of the Sanitation and Water Partnership for the Mekong Region

Support to Engagement with Yunnan and Guangxi Provinces of China

Sustainable urban Sanitation Management Models

WSS Sector Financing Strategies to Achieve Regional MDGs

Regional Total 1,698

Vietnam Capacity Building and Support to Small Towns Water Supply Operations

Promoting the Integration of Sanitation into Water Resources Management

Scaling Up Handwashing Behavior

Support to Development of a Unified Sanitation Strategy and Action Plan (U3SAP)

Support to Rural Water Supply & Sanitation Strategy Updating

Support to Vietnam Partner Inputs to SAWAP Inter-Country Projects

Vietnam Country Inputs to WSP-EAP Regional Support Programs

Vietnam Country Project Coordination, Facilitation and Networking

Vietnam Handwashing Initiative

Water Supply and Sanitation Capacity Building

Water Supply and Sanitation Sector Responses to Climate Change Impacts

Vietnam Total 1,524

East Asia Program Management, Administration/other 647

East Asia Total 10,942

Latin America

Country / Program Activities

FY10

Disbursements

Bolivia Support Rural and Peri-urban Sanitation in Bolivia

Water Supply and Sanitation Peri Urban Strategy in Bolivia

Bolivia Total 295

Central America Promot.of small scale operat.in WSS of Nicaragua

Promotion of sustainable sanitation in Nicaragua

Sector support for policy reform in Nicaragua

Support Decentralization with focus on poor in Honduras

Support the Implementation of Sector Reform in Honduras

Support WSS modernization in Nicaragua to reach the MDGs

WSS MDG Strategy in Central America

Central America Total 593

Peru Alternative Pro-poor Sanitation Solutions in Peru (Sanitation as a Business)

Peru Post earthquake planning

Promot.of SSO in WSS services in Peru

Scaling Up Handwashing Behavior

Strengthening Decentralization and Governance in the Water & Sanitation Sector of Peru

Strengthening Mgmt of WSS Provision in Small Towns in Peru

Supp.Sust.WSSS in Peri-Urban Areas of Lima

Support Decentralization and Networking for RWSS in Peru

Water Culture Initiative in Peru

Peru Total 2,423

Regional Regional and Global Learning and Advocacy

Regional Total 214

Latin America Other miscellaneous costs not assigned to any project yet 16

Latin America Program Management, Administration/other Total 586

Latin America Total 4,127

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South Asia

Country / Program Activities

FY10

Disbursements

Bangladesh Developing city-wide strategies for environmental sanitation in urban areas.

Developing sustainable access to arsernic-free and safe water supply in rural areas

Ensuring scaling up and sustainability of Rural Sanitation

Improving decentralized customer focused service provision and sustainable access to urban

water supply.

Bangladesh Total 1,339

India Improving sustainability of rural drinking water supply

Improving urban sanitation and municipal solid waste management

Improving Urban Water Service Delivery

Policy, governance and fiscal incentives for improved services

Scaling up & Sustaining Rural Sanitation Outcomes

Scaling up total sanitation and sanitation marketing.

Other projects

India Total 3,665

Decentralized Service Delivery

Improving Rural Water Supply and sanitation Services

Improving Urban Water Supply and Sanitation Services

Pakistan Total 581

Regional knowledge sharing and exchange

Strategic Communication and dissemination

Other projects

Regional Total 411

South Asia Program Management, Administration/other Total 786

South Asia Other miscellaneous costs not assigned to any project yet Total (223)

South Asia Total 6,559

Global

Country / Program Activities

FY10

Disbursements

Global Practice Team Global Water Supply and Sanitation Finance

Handwashing GPT

Linking Multiple Uses of Domestic Water to Poverty Reduction & Improved Sustainability

Political Economy of Sanitation

Sanitation and Hygiene Global Practice Team

Sanitation Finance Policies Global Practice Team

Strategic Communications for Reforms

Water and Sanitation Services for the Urban Poor

Global Practice Team Total 577

Global Program Development Marketplace

Domestic Private Sector Participation Initiative

International Benchmarking Network (IBNET)

Scaling Up Handwashing Behavior

Scaling Up Sanitation Coverage through Total Sanitation and Sanitation Marketing (TSSM)

Secretariat for the Public-Private Partnership for Handwashing

Water and Health

WSP Global Communication

Global Program Total 3,317

Global Program Management, Administration/other Total 2,201

Global Total 6,095

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