Global Water Operators Alliance activities  to improve financial management  of Water Operators Faraj El-Awar Global Water...
UN-HABITAT  to host the Global WOPs  Mechanism  with the  help of partners Many countries are off track to meet the water ...
What are WOPs? Global Water Operators’ Partnerships Alliance
<ul><li>The Global WOPs Alliance is an Alliance of Partners working to increase the scope and impact of WOPs, by: </li></u...
<ul><li>financial guidance </li></ul><ul><ul><li>identifying and helping extend access to existing WOPs funding sources at...
Links between small urban and rural water operators (1) <ul><li>SMALL URBAN CENTRES IN AFRICA </li></ul><ul><li>Intermedia...
Many solutions developed for the problems of small towns are applicable for rural settlements Links between small urban an...
Financial challenges for African Water Utilities <ul><li>Strong  reliance on subsidies from national government treasuries...
WOP Africa Utility Performance Assessment Variations in capital expenditures by Water Operators in East Africa: Average ca...
<ul><li>Assist utilities to enhance their overall  f inancial management to attract external funds </li></ul><ul><li>Enabl...
Water Operators Advisory & Financing Facility - 1 <ul><li>OBJECTIVE </li></ul><ul><li>To support the work of GWOPA in impr...
Water Operators Advisory & Financing Facility - 2 <ul><li>ACTIVITY AREAS </li></ul><ul><li>Pre-investment  technical  </li...
GWOPA Facility - Expected Accomplishments <ul><li>Expected Impacts of improved financial management  & operational efficie...
GWOPA Facility - Implementation <ul><li>TIMELINE </li></ul><ul><li>Start of the initiative in early 2010 </li></ul><ul><li...
GWOPA Facility – initial findings <ul><li>Improving operational efficiency  &  financial management of water operators can...
GWOPA Facility – initial findings (1)  Performance Indicators of 2 Water Utilities analyzed
GWOPA Facility – initial findings (2)  Achievement against targets of UN-Habitat Performance Improvements Plans (%)
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Session Finance 4b - Faraj El-awar and Christian Schlosser un-habitat (pptminimizer)

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Session Finance 4b - Faraj El-awar and Christian Schlosser un-habitat (pptminimizer)

  1. 1. Global Water Operators Alliance activities to improve financial management of Water Operators Faraj El-Awar Global Water Operators’ Partnerships Alliance /UN-HABITAT & Christian Schlosser Transport and Energy Policy Section /UN-HABITAT International Symposium on Sustainable Rural Water Services Kampala, Uganda, 13-15 April 2010
  2. 2. UN-HABITAT to host the Global WOPs Mechanism with the help of partners Many countries are off track to meet the water & sanitation MDGs Urgent need to accelerate Progress Response to a Global Challenge Enhancing Water Operators capacity is essential to achieving the MDGs. Capacity development through PARTNERSHIPS between operators Water Operators’ Partnerships a key component of UNSGAB’s Hashimoto Action Plan to step up effort to achieve MDGs Global Water Operators’ Partnerships Alliance GWOPA formed as an alliance of partners to help increase the scope and impact of WOPs
  3. 3. What are WOPs? Global Water Operators’ Partnerships Alliance
  4. 4. <ul><li>The Global WOPs Alliance is an Alliance of Partners working to increase the scope and impact of WOPs, by: </li></ul><ul><ul><li>Establishing and Supporting WOPs Platforms around the world </li></ul></ul><ul><ul><li>Bringing together support partners </li></ul></ul><ul><ul><li>Promoting Key Principles </li></ul></ul><ul><ul><li>Supporting WOPs implementation with </li></ul></ul><ul><ul><ul><li>Brokering </li></ul></ul></ul><ul><ul><ul><li>knowledge Mgmt </li></ul></ul></ul><ul><ul><ul><li>capacity building </li></ul></ul></ul><ul><ul><ul><li>advocacy </li></ul></ul></ul><ul><ul><ul><li>financial guidance </li></ul></ul></ul>What GWOPA does Global Water Operators’ Partnerships Alliance
  5. 5. <ul><li>financial guidance </li></ul><ul><ul><li>identifying and helping extend access to existing WOPs funding sources at all levels </li></ul></ul><ul><ul><li>propagating successful financial and legal support mechanisms for WOPs </li></ul></ul><ul><ul><li>establishing a financing and advisory facility to support public utility improvements </li></ul></ul>What GWOPA does Global Water Operators’ Partnerships Alliance
  6. 6. Links between small urban and rural water operators (1) <ul><li>SMALL URBAN CENTRES IN AFRICA </li></ul><ul><li>Intermediaries between big or medium-sized cities and rural settlements </li></ul><ul><li>Important engines of economic growth for the rural sector </li></ul><ul><li>Sharing many features with rural settlements </li></ul>Water Utilities of small urban towns are facing similar challenges and problems as rural water operators
  7. 7. Many solutions developed for the problems of small towns are applicable for rural settlements Links between small urban and rural water operators (2) Business-type approaches in water provision are getting popular in rural areas Opportunity to expand urban Peer-to-Peer Twinning approaches to support entrepreneur’ capacity in operation and financial management
  8. 8. Financial challenges for African Water Utilities <ul><li>Strong reliance on subsidies from national government treasuries for m ajor rehabilitation works </li></ul><ul><li>O verstaffing, yet also limited qualified and trained staff </li></ul><ul><li>P oor financial management systems </li></ul><ul><li>H igh share of non-revenue water </li></ul><ul><li>L ack of revising / adjusting tariffs to capture increasing costs of services </li></ul><ul><li>L ack of enforcement of regulations </li></ul><ul><li>Lack of sufficient financial resources to fund new facilities </li></ul><ul><li>D raught -> shortage of water to supply </li></ul><ul><li>-> reduction of sales volume -> reduction of revenues </li></ul>
  9. 9. WOP Africa Utility Performance Assessment Variations in capital expenditures by Water Operators in East Africa: Average capital expenditures 2001-2006 (US$ per connection) Source: GWOPA Africa Utility Performance Assessment (2009) <ul><li>     Add to favorite </li></ul><ul><li>     How to buy </li></ul>                                                                                                                                                                                                                                                                                                                                                                                                                                                        K0909071 ReferenceNo Very clean interior Looks & runs great Runs & drives great FOUR-CYLINDER ENGINE 2002/10 H R C Must see Comment Anti-Lock Brakes / Driver Airbag / Passenger Airbag / Power Windows / Rear Window Defroster / Rear Window Wiper / Tinted Glass / A/C:front / A/C:rear / Power Steering / Digital Meter / AM/FM Radio / AM/FM Stereo / CD Player / Leather Seats / Alloy Wheels / Power Door Locks / Power Mirrors / Sunroof / No accidents / One owner Options - Mechanical Problem Used Condition Apr/25/2010(JST) Expiry Date Silver Interior Color Silver Exterior Color 4wheel drive Drive Type 7 Number Of Passengers 5 Door - BodyStyle2 SUV BodyStyle1 KMHNN81WP1U024265 VIN(Vehicle Identification Number)/Serial No. Specific information
  10. 10. <ul><li>Assist utilities to enhance their overall f inancial management to attract external funds </li></ul><ul><li>Enable utilities to improve operational efficiency and revenue collection </li></ul><ul><li>Assist utilities in developing business plans for identifying strategic investments for service extensions & extended coverage </li></ul><ul><li>Integrate technical assistance towards higher operational efficiency and improved financial management into general Capacity-Building activities directed at water utilities such as the GWOPA Twinning Programme </li></ul>What can be done?
  11. 11. Water Operators Advisory & Financing Facility - 1 <ul><li>OBJECTIVE </li></ul><ul><li>To support the work of GWOPA in improving operational efficiency in the public water sector </li></ul><ul><li>FOCUS </li></ul><ul><li>To improve financial management of public water operators </li></ul><ul><li>GOAL </li></ul><ul><li>To address the capital shortage of water utilities and facilitate </li></ul><ul><li>increased investments for </li></ul><ul><li>expanding services to the poor </li></ul><ul><li>through improved financial, operational & environmental efficiency </li></ul>
  12. 12. Water Operators Advisory & Financing Facility - 2 <ul><li>ACTIVITY AREAS </li></ul><ul><li>Pre-investment technical </li></ul><ul><li>assistance </li></ul><ul><li>Mobilization of seed capital </li></ul><ul><li>SPECIFIC SUPPORT SERVICES </li></ul><ul><li>Provision of information, expertise and technical assistance in financial management </li></ul><ul><li>Brokering of assistance by other partners, provided to partner operators in form of technical support, loan guarantees and/or loans for investment </li></ul>
  13. 13. GWOPA Facility - Expected Accomplishments <ul><li>Expected Impacts of improved financial management & operational efficiency of water operators: </li></ul><ul><li>Significant reduction of total costs and cost coverage tariff </li></ul><ul><li>Reducing the working ratio (operating expenses vs. operating revenues) </li></ul><ul><li>Reducing subsidy requirements from national government or other bodies </li></ul><ul><li>Increasing coverage of water supply services without drawing on additional external sources </li></ul><ul><li>Enabling utilities to access finance from domestic financial resources (local banks) at commercial rates </li></ul>
  14. 14. GWOPA Facility - Implementation <ul><li>TIMELINE </li></ul><ul><li>Start of the initiative in early 2010 </li></ul><ul><li>First steps: - developing a financial analysis methodology - s electing 2 pilot utilities in the Lake Victoria Region to test the analytical framework and develop recommendations for improvements </li></ul><ul><li>Next steps: - analyze results, develop investments strategies - Refine methodology - Identify further utilities & partners for up-scaling </li></ul>
  15. 15. GWOPA Facility – initial findings <ul><li>Improving operational efficiency & financial management of water operators can result in : </li></ul><ul><li>Significant reduction of total costs </li></ul><ul><li>and cost coverage tariff </li></ul><ul><li>Increasing per capita consumption of water </li></ul><ul><li>Reducing subsidy requirements from national government or other bodies </li></ul><ul><li>Reduction of the working ratio (operating expense to operating revenue ratio) </li></ul><ul><li>Increasing the coverage of water supply services in the absence of additional external sources </li></ul><ul><li>Enabling utilities to access finance from domestic financial resources (local banks) at commercial rates </li></ul>
  16. 16. GWOPA Facility – initial findings (1) Performance Indicators of 2 Water Utilities analyzed
  17. 17. GWOPA Facility – initial findings (2) Achievement against targets of UN-Habitat Performance Improvements Plans (%)
  18. 18. Thank you for your attention!

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