1. Girma Aboma
Research & Influencing Coordinator,
WaterAid Ethiopia

2. • 85% of Ethiopian population lives in the rural areas ; rural population
are thinly scattered threatening achievement of universal access by
2015
• Results from national WASH inventory has indicated that in 2012
rural access to water is below 50% (more than 36 million people
living in the rural area are still lacking access to improved water
sources)
• Besides significant percentage of rural water facilities are non-
functional mainly because of lack of adequate finance for O&M
• Rural water services are supposed to be managed by communities
but they still need strong backstopping support, which also require
proper financing of direct supports
• Hence, this study aims at creating understanding on the lifecycle
costs of rural water services that results in financial sustainability

3. • IRC lifecycle cost approach was used to develop tools
• Sampling
– Amhara & Oromiya regions were selected as they are: (1) WAE
intervention regions; (2) cover wider geographical area
– 3 local governments per region (criteria – presence of HDW, SW & SoS)
which totals to 6)
– 3 villages per local government – 1 users from HDW; 1 from SW & 1 from
spring on spot (total of 18 villages)
– 50 households per village, a mix of different income groups, gender and
age (900 HHs in total)
• Key informant interviews done by 2 WAE staffs in 6 local governments
• 3 local water office staffs engaged in conducting household survey

4. • Only communal rural water sources are considered in this study including hand
dug well, shallow well & spring on spot (doesn’t include source with distributions &
individual connections)
• Capital expenditures are synonymously used with initial costs of developing new
rural water system (including hardware & software)
• Major maintenances expenditures are equivalently used with capital
maintenance expenditures which includes costs of replacing major parts of rural
water system; needs technical supports from water offices or zones
• O&MM expenditures are limited to salary of tap attendants, costs associated with
committee meetings, purchase of minor parts like rods, U-seals, facets, etc
(assumed to be financed by users) that can be easily done by community water
technicians
• Financial roles & responsibilities as indicated in water policy are used in
calculating financing gaps & affordability
• Standards specified in the national water quality guideline & universal access
program are used in determining service levels

5. Quantity Quality Accessibility /
crowding
Reliability / Security
Dendi woreda
(Oromia)
34% sub-standard 35% sub-standard Basic level
66% No Service 65% basic level
Dodota woreda
(Oromia)
100% No Service 100% sub-standard Sub-standard Basic level
Hitossa woreda
(Oromia)
89% sub-standard 28% basic level Sub-standard 33% basic level
11% No Service 43% sub-standard 31% sub-standard
29% No service 36% No Service
S/Achefer
woreda
(Amhara)
80% sub-standard 81% basic Basic level 74% basic level
20% No Service 18% sub-standard 25% sub-standard
1% No Service 1% No Service
Burie Zuria
woreda
(Amhara)
35% sub-standard 30% basic Basic level 38% intermediate
65% No Service 36% sub-standard 61% basic
34% No Service 1% sub-standard
Dembia woreda
(Amhara)
97% sub-standard 76% basic Basic level 38% intermediate
3% No Service 23% sub-standard 60% basic
1% No Service 2% sub-standard

6. • Developing new
communal water
sources requires $21
per person, ranging
from $15 to $25
• Cost variation was
larger for shallow
well mainly because of
variation in geological
formation, hydrology
(depth), labor cost &
distance
$0
$5
$10
$15
$20
$25
$30
$35
$40
Dendi Dodota Hitossa S/Achefer Burie Zuria Dembia
Initial cost ($ per person per technology)
Hand dug well Shallow well Spring on spot

7. $0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
Dendi Dodota Hitossa S. Achefer Burie Dembia
Hand dug well Shallow well Spring on spot

8. $0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
Dendi Dodota Hitossa S/Achefer Burie Dembia
($per person per year)
Hand dug well shallow well spring on spot

9. $0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
Dendi Dodota Hitossa S. Achefer Burie Zuria Dembia
($ per person per year by technology option)
Hand dug well Shallow well Spring on spot

10. • Total recurrent
expenditure ranges
from $3 to $7 per
person
• Recurrent cost for
SW was lower as it
serves more people
• Recurrent costs for
SoS is higher as it
needs more labor
hours (demolition)
$0
$1
$2
$3
$4
$5
$6
$7
$8
Dendi Dodota Hitossa S.Achefer Burie Dembia Average
(In $ per person per technology)
Hand dug well Shallow well Spring on spot

11. $1 $1 $1 $1 $1 $1 $1
$4
$5 $5
$6
$5 $6 $5
$0
$1
$2
$3
$4
$5
$6
$7
$8
Dendi Dodota Hitossa S. Achefer Burie Zuria Dembia Average
($ per person per year)
Initial cost Recurrent cost

12. Cost items Who pays?
Capital expenditure Government & rural water service providers are expected to
finance 85% to 90% of developing new infrastructures
Communities are required to pay 10% to 15% in kind & in cash
for construction of new water system
Operation & minor
maintenance
According to the water policy communities are responsible to
finance O&M costs of rural water system
Capital
maintenance
It is expected that rural tariff setting is based on the objective of
covering operation & maintenance including major ones
But, this is not happening for communal water services for rural
areas; and government bodies are trying to fix by allocating
some budget
Direct support As these include refreshment training for community water
committees, regular monitoring of water facilities & providing
backstopping support for community water committees it is
expected to be financed by local governments / woredas
Indirect support Federal government / ministry of water and energy finances this
cost

13. $0
$5
$10
$15
$20
$25
$30
Dendi Dodota Hitossa S/Achefer Burie Dembia
Perperson($)
Financing gap for initial investments
Existing level Required

14. $0
$1
$1
$2
$2
$3
Dendi Dodota Hitossa S.Achefer Burie Dembia average
($ per person per year)
Existing level Required

15. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dendi Dodota Hitossa S/Achefer Burie Dembia
(percentage of required recurrent expenditures)
Existing level Financial gap

16. • Survey results indicated that a typical HH spends $903 per year on
major necessities (average spending on water being $2.5, which is
0.3%). Increasing this to the minimum requirement of $11.4 per family
will push HH spending on water to 1.3%, which seems reasonable
& affordable.
• But, results from individual interviews indicated that even the
existing level of tariff is not affordable for a typically poor
households, as this made them to use water from both protected &
unprotected sources
• Under existing condition local governments allocate $0.3 (ETB5)
per person as capital expenditure, accounting only for 23% of the
requirement (reason - lack sufficient resources).
• Considering the existing resources available to local governments
through block grants from regions, it is not realistic to conclude that
financing of rural water services is affordable.

17. • Sustainability is about lasting benefits achieved from continuous use of
services. Hence, planners should put a particular interest in planning for
sustainable services with basic understanding of the lifecycle costs.
• Cabinet & budget standing committees are also required to have adequate
understanding of the lifecycle costs to make informed budget decisions
• But, the reality under present conditions indicated that there is low
awareness on the lifecycle cost of rural water services
• Existing financing levels for developing new rural water services are not
realistic in terms of addressing actual expenditure needs – as it is reaching
universal access to water may take additional 45 years; or requires local
governments to allocate $368 per person continuously for 10 years).

18. • Capital maintenances & direct support costs are not usually given
sufficient attention during budget decisions; & hence less financed
• Hence, under financing of recurrent expenditures will affect institutional
capacity to address problems associated with sustainability of rural water
services.
• Existing level of community financing for O&MM of rural water services was
not found to be realist as this doesn’t match with the actual expenditure
need.
• Tariff setting procedures are not based on recovering O&MM & this
causes user communities to pay less against the need.
• If existing situations continuous more & more number of rural water
system will be unsustainable, & hence more rural people will go back to
use water from unprotected sources, which can most likely result in an
outbreak of water born diseases

19. • Ministry/Bureau of water to take the lead in creating awareness on lifecycle
costs & start mainstreaming in program planning & budgeting.
• Ministry/Bureau of water to play its roles to bring about greater clarity
over financing recurrent expenditures for rural water system; put in place
proper mechanisms for setting realistic water tariffs.
• Ministry/Bureau to play its roles in ensuring better recording & reporting of
financial expenditures on water services including community contributions &
water tariffs
• Future research to look into financial sustainability of water sources with
distributions including spring gravity schemes & deep wells
• M/BoFED to mainstream lifecycle expenditure needs for rural water
services in the criteria informing making budget decisions.
• Budget standing committees & cabinet should be aware of evidences on
lifecycle costs for rural water services during budget decisions.

20. • Donors agencies to prioritize financing recurrent expenditures for rural
water services so as to ensure sustainability
• Civil societies & donor partners to promote mainstreaming of lifecycle
cost approaches in planning and programming of rural water services
• Civil societies to play its roles in disseminating the concepts of lifecycle
cost approaches in the areas they have active water supply projects
• Civil society organizations to use evidences of expenditure needs in
allocating budget to rural water supply projects & create similar
understanding among other stakeholders
• Water committees to create understanding among users on their financial
roles & responsibilities in sustaining rural water services.
• Every user should be aware on the minimum amount required for them to
pay so as to finance O&MM of communal water sources.