Morocco: Output-Based Aid Subsidies for Water & Sanitation Connections in Poor Peri-urban Areas

1,393 views

Published on

This presentation shares experiences from output-based aid (OBA) pilot schemes to provide access to water services for low income households in poor, peri-urban areas of Morocco.

Published in: Education
  • Be the first to comment

  • Be the first to like this

Morocco: Output-Based Aid Subsidies for Water & Sanitation Connections in Poor Peri-urban Areas

  1. 1. Morocco: Output-Based Aid (OBA) Subsidies for Water & Sanitation Connections in Poor Peri-urban Areas Xavier Chauvot de Beauchêne Sr. Water & Sanitation Specialist Middle East and North Africa International African Water Congress & Exhibition March 16, 2010
  2. 2. Morocco OBA Pilots – Project Background  Growing informal peri-urban settlements, with no water and sanitation service.  Unaffordable service connections, priced to cover network expansion.  National Human Development Initiative (INDH) to promote basic services in poor communities.  Broad water sector reform program, supported by a Bank DPL.  Output-Based Aid (OBA) as potential tool to promote access to service. Morocco: A lower MIC, 11 km from the EU
  3. 3. Morocco OBA Pilots – Scheme design  Objective: Test OBA to enable WS&S service connections in poor peri-urban areas of Casablanca, Meknes and Tangiers.  Outputs: Household water & sewerage connections.  OBA subsidy: Gap between optimized connection costs and estimated maximum affordable household contribution.  Grant Agreement: Signed Jan 2007 for 3 years. Number of Connections Grant Amount Water Supply Sanitation (USD million) LYDEC 6 218 6 218 3.5 RADEM Urban Areas 602 794 1.5 RADEM Rural Areas 1 209 - Amendis – Tangiers 3 200 3 200 2.0 TOTAL 11 229 10 212 7.0
  4. 4. Morocco OBA Pilots – Subsidy Amounts & Disbursement  Subsidy disbursement in two tranches:  60% of subsidy amount upon verified working connection; and  Remaining 40% upon satisfactory service provision for six months Subsidy level Beneficiary Subsidy levels MAD Per connection to (% of combined Contribution to (USD) water supply Sanitation connection cost) Connection Cost MAD 1 458 MAD 3 609 LYDEC 28% MAD 4 000 W&S (USD* 162) (USD* 401) MAD 1 467 MAD 4 158 Amendis - Tangiers 24% MAD 12 000 W&S (USD* 163) (USD* 462) MAD 1 422 MAD 7 821 RADEM Urban areas 53% MAD 9 240 W&S (USD* 158) (USD* 869) MAD 5 319 Ineligible to MAD 4 620 RADEM Rural Areas 74% (USD* 591) GPOBA funding (water supply only) * MAD/USD exchange rate as defined in the Grant Agreement. Disbursements are made in MAD.
  5. 5. Institutional Framework: Roles and Responsibilities World Bank supervision Ministry of Interior / Ministry of Finance Grant agreement with GPOBA operators and 5. Makes Municipalities or delegating authority government subsidy 3. Reports to payment per Legal connection to Mandate authorities Operational pre-financing and GPOBA responsibility operator Operator (Amendis Tanger, LYDEC, RADEM) 2. Pre-finances connection to Output Delivered = 1. Requests requested water 4. Verifies outputs Connection to piped connection supply and/or reached and makes water supply and/or and provides sanitation and recommendation on sanitation services discounted provides service subsidy payment installed and providing contribution good quality service Poor household living in peri-ruban area without access to service Independent technical reviewer Operator’s Water and Sanitation Service Area Fund flow Information flow Contractual relationship
  6. 6. Progress to date Connection Progress as of Progress in Operator (City) Grant size Progress rate target December31, 09 2009 Service USD million Water Sewerage Water Sewerage Water Sewerage Water Sewerage LYDEC (Casablanca) 3.5 6 218 6 218 1 401 1 401 22,5% 3% 3% RADEM (Meknès) 1.5 1 811 794 717 498 39,6% 62,7% 26% 19% AMENDIS-TANGER 2.0 3 200 3 200 2 856 2 856 89,3% 50% 50% TOTAL 7.0 11 230 10 213 4 974 4 755 48,7% 46,6% 25% 19% 80.0% 70.0% 60.0% Casablanca/LYDEC 50.0% 40.0% Meknès/RADEM - 30.0% Water 20.0% Meknès/RADEM - 10.0% Sanitation 0.0% Tanger/AMENDIS Delivery progress per operator
  7. 7. Key lessons learned and next steps  Key lessons learned include: • Strengthened local partnerships led to local governments’ involvement to develop pragmatic solutions, including • Countersigning beneficiaries’ lists; • LG-backed guarantee scheme for household with no legal status; • Revolving fund for 0% interest loans. • Operators developed proactive and dynamic client relations approaches to integrate their new clients • Improvement of operators’ internal processes (e.g. monitoring, filing) • Obstacles faced independent of the OBA approach, linked to the involvement of third parties. • Demand exceed expectations • Recovery level often exceed average of the operator  Next Steps: Operators, local governments, and GOM interested scaling up at the national level.

×