Sustainable finance for universal rural water services

Achieving the global goal of universal water services in rural Africa requires new and sustainable financial models. Oxford University and partners convened a special session at World Water Week 2015 in Stockholm, to present new evidence and debate emerging approaches being tested across rural Africa.

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Operation and maintenance costs for waterpoints in rural Africa are estimated at around USD 1 billion per year, according to new cross-country evidence (Foster). Mobile money platforms provide a promising but largely untested approach to improve rural water cost recovery (Nique). Public and private sector initiatives in rural Rwanda and Kenya illustrate emerging impacts and wider implications for Africa (Sano, Mikkelsen, Hope) with UNICEF supporting many initiatives across the region.

The session on 25 August saw Oxford University collaborating with partners from UNICEF (East and Southern Africa Regional Office), the Government of Kenya Water Services Regulatory Board (WASREB), Rwanda’s national Water and Sanitation Corporation (WASAC), Grundfos and GSMA (mobile industry).

The following conclusions were drawn:

  1. Water service regulation and financial support in Africa largely focusses on urban piped services with insufficient attention and support to promoting sustainable models in rural areas.
  2. The legacy of uncoordinated investments in rural areas has wasted significant resources with competing infrastructure cannabilising sources.
  3. The non-functionality rate of millions of rural handpumps is twice as high without revenue collection.
  4. Communities struggle with low probability, high cost repair costs often leading to use of more distant, dirty and often expensive water sources.
  5. There are affordability concerns for vulnerable groups. Interventions must leave no one behind through a universal service delivery approach.

Next steps identified include:

  1. Institutional investments to promote coordination and regulation of existing and future infrastructure assets and financial models.
  2. Information systems that provide timely and reliable operational and financial data to inform more robust institutional design and performance.
  3. Understand the potential of private sector engagement in testing new models at scale in partnership with government and civil society.
  4. Generate evidence of novel financial instruments that optimise rural water sustainability blending user payments (tariffs), donor contributions (transfers) and government (taxes).

 

Presentations

Why financial sustainability matters – evidence from Africa
Tim Foster, Oxford University
presentation slides

Mobile water payment systems
Michael Nique, GSMA
presentation slides

Financial sustainability of rural water wupply
James Sano, Water and Sanitation Corporation (WASAC), Rwanda
presentation slides

Public private partnerships for sustainable rural water supply
Rasoul Mikkelsen, Grundfos Ltd.
presentation slides

Financial sustainability for universal rural water services
Rob Hope, Oxford University
presentation slides

Understanding financial flows for rural water services in Africa

Financial sustainability is a necessary but often forgotten condition to advance global goals of universal, reliable, safe and affordable water services. Oxford University researchers are designing and testing new financial models to find out what works for the rural poor in Kenya.

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In rural Africa people are four times more likely to get their water from an unsafe source than those living in urban areas. Around one in three handpumps are broken at any one time.

The Water Programme at the Smith School of Enterprise and the Environment is trialling novel financial models to improve rural water sustainability and results from ongoing research in Kenya are published in two new Working Papers.

The unpredictable timing and magnitude of costs associated with operation and maintenance is a chronic problem for communities. The first study assesses the case for handpump insurance to reduce financial risks, and is supported by a grant from the UK Department for International Development and the Economic and Social Research Council.

While it seems unlikely that a standalone insurance product would offer a viable business model, the concept of pooling finances and spreading risk across multiple communities could help them pay for services that last.

The second study supported by UNICEF, builds on the teams earlier work and tests a model where water users pre-pay for a professional maintenance service that uses mobile-enabled data on handpump use. The report argues that improved institutional coordination and investment, and improved monitoring systems are necessary conditions for achieving universal rural water services.

The two papers will be launched at World Water Week 2015 in Stockholm, Sweden.

Read the reports

Insuring Against Rural Water Risk – Evidence from Kwale, Kenya
Financial Sustainability for Universal Rural Water Services – Evidence from Kyuso, Kenya

The Oxford Water Network at World Water Week

Oxford University will be active at this year’s World Water Week in Stockholm, Sweden on 23-28 August 2015, with several presentations and an Oxford Water Network booth.

water and development

The annual World Water Week is widely considered ‘the’ place to be for researchers, business, decision-makers and practitioners interested in global water issues. This year’s theme is Water for Development and the event takes place just weeks before world leaders adopt the Sustainable Development Goals (SDGs), the successors of the Millennium Development Goals.

The theme is timely for us, given the recent launch of our global seven-year programme REACH which addresses water security risks in Africa and South Asia, specifically targeting the poor.

We will also be sharing insights from our Smart Water Systems research which designs and tests new mobile technologies and institutional models to transform water resource management and water service delivery in Africa.

The Stockholm International Water Institute’s report Water for Development – Charting a Water Wise Path frames the challenge. It argues that getting water management right is a prerequisite for sustainable development. Experts reflect on wide-ranging topics, such as the dedicated water SDG, reducing the risk of disasters, and the role of Information Communications Technology (ICT) for water and development.

Dr Rob Hope, Director of the Water Programme at the Smith School for Enterprise, will be leading a session on sustainable finance for universal rural water services, alongside UNICEF, the mobile operators network GSMA, the world’s largest pump manufacturer Grundfos Ltd and a water supply company in Rwanda.

An Oxford Water Network booth (located at G3 on the map) will provide a hub for people to meet and find out more about water research and education at Oxford University. If you are in Stockholm, then do come along and meet our researchers at the booth! A number of themed informal discussions have been scheduled.

Download the programme of presentations by Oxford University researchers.

Download the full schedule of activities at the Oxford University booth.

Follow World Water Week on twitter with the hashtag #wwweek and follow our activities via @oxfordwater and @reach_water

Watch the video One Water – for Sustainable Development

Schedule of presentations

Sunday 23 August

11:00-12:30, Room FH 300
Implementing the SDGs in the post-2015 development agenda
Convenors: GWP, Stockholm International Water Institute, UN-Water
Patrick Thomson presenting Implementing, monitoring and financing the water SDG in rural Africa

14:00-15:30, Room FH 300
Implementing the SDGs in the post-2015 development agenda
Convenors: GWP, Stockholm International Water Institute, UN-Water
Dr Katrina Charles presenting Can shared sanitation in slums be adequate sanitation?

Tuesday 25 August

9:00-10:30, Room FH Little Theatre
Eye on Asia: taking actions for a water secure Asia
Convenors: Asia Pacific Water Forum, Asian Development Bank, International Centre for Integrated Mountain Development, International Institute for Applied Systems Analysis, World Wide Fund for Nature
Dr Katrina Charles presenting Reducing water security risks for the poor

9:00-10:30, Room NL Music Hall / Musiksalen
Sustainable finance for universal rural water services
Convenors: University of Oxford, Grundfos, UNICEF, GSMA
Dr Rob Hope will lead a session providing new evidence of models that advance sustainable finance in Africa.
Tim Foster presenting Mobile water payment systems

11:00-12:30, Room NL 357
Information technologies for a smarter water future
Convenors: @aqua, Akvo Foundation, DHI, Stockholm International Water Institute
Patrick Thomson presenting Distributed monitoring of shallow aquifer level using community handpumps
This presentation will also be part of the interactive poster exhibition in the FH Congress Hall Foyer. Poster presenters will be available for questions during the coffee breaks at 10:30-11:00 and 15:30-16:00

Wednesday 26 August

9:00-10:30, FH Congress Hall B
Water as a driver for sustainable development and poverty eradication
Convenors: Stockholm International Water Institute, The World Bank Group, WaterAid, We Effect
Johanna Koehler presenting Pump-priming payments for sustainable water services in rural Africa.

Thursday 27 August

14:00-15:30, Room FH 307
(Re)thinking governance
Convenors: University of Nebraska, Stockholm International Water Institute, UNDP Water Governance Facility, Water Integrity Network
Johanna Koehler presenting Can decentralisation improve water security and promote equitable post-2015 development?

Schedule of activities at the booth

Monday 24 August

10:30-11:00
Groundwater risk, growth and development
Dr Rob Hope and Patrick Thomson

11:00-14:00
REACH: Improving water security for the poor
Dr Rob Hope and Dr Katrina Charles

14:00-15:30
Smart Handpumps
Patrick Thomson and Johanna Koehler

Tuesday 25 August

15:30-16:00
Meet the DPhils
Johanna Koehler, Tim Foster, Julian Kirchherr

Wednesday 26 August

14:00-17:30
MSc in Water Science, Policy and Management (WSPM) alumni

Thursday 27 August

14:00-16:00
Applying to Oxford University