East Meets West Overview<br />USA based nonprofit organization (NGO)<br />USD 17 million annual revenues<br />110+ employe...
East Meets West<br />3<br />5/16/2011<br />East Meets West's core program work is in the areas of education, medical and h...
Programs<br />4<br />5/16/2011<br />Clean Water and Sanitation<br />Healthcare<br />Education<br />
Guiding Principles<br />5<br />5/16/2011<br />Long term View: We maintain an active presence after the project is complete...
Defining Output-Based Aid (OBA) <br />A method for improving the delivery of basic services – (e.g. water supply, electric...
OBA Core Concepts<br />Explicit and predetermined subsidies for defined outputs:  Helps ensure transparency -- who provide...
OBA Models In Vietnam<br />8<br />5/16/2011<br />EMW applies 3 models <br />EMW is service provider<br />Private entrepren...
Model 1<br />EMW is service provider taking performance and financial risk by pre-financing the capital cost and get reimb...
Model 1<br />Targeted poor<br />communities<br />WB / GPOBA<br />Authorities<br />GPOBA<br />Grant<br />Provincial authori...
Model 2<br />Private enterprises are service providers, pre-finance capital cost, and get partial reimbursements upon veri...
Model 2<br />WB / GPOBA<br />Authorities<br />GPOBA<br />Grant<br />Provincial authorities<br />(PPC/CERWASS/DONRE)<br />G...
Model 3<br />Adapt to household sanitations<br />Eligible households pre-finance installation of sanitation latrines<br />...
Results since 2008<br />20,000 household connections completed and verified under Model 1<br />20,800 connections under Mo...
Lessons Learnt<br />Pre-financing is challenging so it is not for everyone<br />Definition of outputs need to incorporate ...
For more information<br />East Meets West<br />1611 Telegraph Avenue<br />Suite 1620<br />Oakland, CA 94612, USA<br />510-...
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Cash on delivery - Innovative financing to achieve sustainability in the

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WASH 2011 conference: Minh Chau Nguyen

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  • Explicit and pre-agreed subsidies: Helps ensure transparency as the roles and responsibility sharing need to be clear up-front, in particular who provides subsidies for what output, and clarify the condition to meet to consider the output satisfactory. Payment on output delivery: Shifts performance risk to provider by making him accountable.Service providers are reimbursed a pre-agreed set subsidy after satisfactory delivery of the (pre-) agreed output. Independent verification before payment. Service provider depends on demand from people for outputs, which puts additional risk.Innovation and efficiency: Predetermined subsidy paid on outputs instead of inputs provides incentives for innovation and efficiency; competition or benchmarking proven to lead to value-for-money, as confirmed in many examples.Mobilizing the private sector: Opportunity to leverage private finance and benefit from management expertise.Monitoring: Regular reporting on outputs is necessary prior to payment, it is hence an integral part of the project design.Sustainability: Demand driven leads to sustainability as beneficiaries commit to what they requestSubsidies that minimize distortions in consumption.
  • Cash on delivery - Innovative financing to achieve sustainability in the

    1. 1.
    2. 2. East Meets West Overview<br />USA based nonprofit organization (NGO)<br />USD 17 million annual revenues<br />110+ employees in Asia<br />4 Star Charity Navigator Rating<br />Broad fundraising base<br />World Bank, Ford, Aus Aid<br />2<br />5/16/2011<br />
    3. 3. East Meets West<br />3<br />5/16/2011<br />East Meets West's core program work is in the areas of education, medical and health care, clean water and sanitation, and infrastructure. <br />Our programs reflect our commitment to removing the barriers that prevent people from enjoying life's fullest opportunities. Our primary mission is to serve the poor and the disadvantaged in Asia.  <br />
    4. 4. Programs<br />4<br />5/16/2011<br />Clean Water and Sanitation<br />Healthcare<br />Education<br />
    5. 5. Guiding Principles<br />5<br />5/16/2011<br />Long term View: We maintain an active presence after the project is complete <br />Scalable: Reach more people as funding increases <br />Community: Involve locals at every stage <br />Strong partnerships: Work with local and global partners<br />Creative: Innovative solutions to difficult problems <br />Measurable impact: High returns for the donors, partner and beneficiaries<br />
    6. 6. Defining Output-Based Aid (OBA) <br />A method for improving the delivery of basic services – (e.g. water supply, electricity or health) – when the users are not able to pay the full cost of access to service and where performance-based subsidies to complement or replace user fees are justified.<br />Connection fee =connection cost<br />Subsidy targeting poor households(GPOBA Grant during pilot)<br />Cost<br />Affordable beneficiary contribution<br />Affordability level<br />of poor households<br />Poor household cannot afford to connect<br />Poor household can afford access <br />(tariff not an issue)<br />
    7. 7. OBA Core Concepts<br />Explicit and predetermined subsidies for defined outputs: Helps ensure transparency -- who provides subsidies for what. <br />Payment on output delivery: Shifts performance and financial risk to provider, hence making him more accountable.<br />Innovation and efficiency: Predetermined subsidy paid on outputs instead of contracts for inputs provides incentives for innovation and efficiency; competition or benchmarking proven to lead to value-for-money.<br />Mobilizing the private sector: Opportunity to leverage private funding and management expertise.<br />Monitoring: Tracking of results embedded in the design<br />Sustainability: Subsidies that minimize distortions in consumption.<br />
    8. 8. OBA Models In Vietnam<br />8<br />5/16/2011<br />EMW applies 3 models <br />EMW is service provider<br />Private entrepreneurs are service providers<br />Consumer rebates in sanitation<br />
    9. 9. Model 1<br />EMW is service provider taking performance and financial risk by pre-financing the capital cost and get reimbursed upon independent verification of household connections.<br />GPOBA disburses 80% of the agreed amount for household connections, and 20% for 6 months of satisfactory delivery of services<br />9<br />5/16/2011<br />
    10. 10. Model 1<br />Targeted poor<br />communities<br />WB / GPOBA<br />Authorities<br />GPOBA<br />Grant<br />Provincial authorities<br />(PPC/CERWASS/DONRE)<br />Grant Agreement<br />Subsidy<br />Payment<br />for each output<br />DPC<br />MOU<br />CPC<br />Pre-finances<br />Selects, manages & supervises<br />Selects/ Monitors<br />Management Solution<br />Independent Verification Agent<br />Water manager<br />Private operator<br />Contractors<br />or<br />IVA<br />Output Verification <br />Operates<br />Build<br />Service provision to users demanding connection<br />Output Delivered =<br />1. Working Connections installed,<br />2. 6 months of Satisfactory Service<br />
    11. 11. Model 2<br />Private enterprises are service providers, pre-finance capital cost, and get partial reimbursements upon verification of household connections<br />EMW acts as a fiduciary agent of donors’ resources, but also takes performance and partial financial risks.<br />In this way, EMW mobilizes private sources, passes on part of financial risks and helps upgrade skills of private sector<br />11<br />5/16/2011<br />
    12. 12. Model 2<br />WB / GPOBA<br />Authorities<br />GPOBA<br />Grant<br />Provincial authorities<br />(PPC/CERWASS/DONRE)<br />Grant Agreement<br />Subsidy<br />Payment<br />for each output<br />DPC<br />MOU<br />CPC<br />Selects, supports & supervises<br />Subsidy payment<br />Independent Verification Agent<br />Private operator<br />Selects, manages & supervises<br />Pre-finances<br />IVA<br />Output Verification <br />Operates<br />Contractors<br />Build<br />Service provision to users demanding connection<br />Output Delivered =<br />1. Working Connections installed,<br />2. 6 months of Satisfactory Service<br />Existing customers <br />and Targeted poor<br />communities<br />
    13. 13. Model 3<br />Adapt to household sanitations<br />Eligible households pre-finance installation of sanitation latrines<br />EMW provides consumer rebates upon verification of household status and construction of latrines and hand washing devices<br />The amount is small so the support is structured as financial incentives not as subsidy<br />Households receive hygienic behavioral changes education along with rebates<br />5/16/2011<br />13<br />
    14. 14. Results since 2008<br />20,000 household connections completed and verified under Model 1<br />20,800 connections under Model 2<br />10,000 household sanitation facilities under Model 3<br />Mobilize about USD 1 million from private sources<br />Beneficiaries’ contribution both in-kind and in cash<br />5/16/2011<br />14<br />
    15. 15. Lessons Learnt<br />Pre-financing is challenging so it is not for everyone<br />Definition of outputs need to incorporate technical and services quality<br />Difficult to reach poorest of the poor<br />Disbursement mechanism from donors need to be more efficient<br />Independent verification is key to success<br />Cash on delivery approach can be applied to any sector <br />5/16/2011<br />15<br />
    16. 16. For more information<br />East Meets West<br />1611 Telegraph Avenue<br />Suite 1620<br />Oakland, CA 94612, USA<br />510-763-7045<br />www.eastmeetswest.org<br />info@eastmeetswest.org<br />Regional Office - Asia<br />No. 1 Lane 40<br />Linh Lang Street<br />Ba Dinh District<br />Hanoi, Vietnam<br />+84-4-3834-7790<br />Ms. Minh Chau Nguyen<br />Vietnam Country Director<br />Mobile: 84-9090-87921<br />minhchau@eastmeetswest.org<br />5/16/2011<br />16<br />

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