A Thirst for Change: The World Bank Group’s Support for Water Supply and Sanitation
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Findings from IEG’s report – A Thirst for Change: An Evaluation of the World Bank Group’s Support for Water Supply and Sanitation with Focus on the Poor.
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A Thirst for Change: The World Bank Group’s Support for Water Supply and Sanitation
- 1. evaluations that matter A Thirst for Change: The World Bank Group’s Support for Water Supply and Sanitation #Goal6
- 2. A Thirst for Change: An Evaluation of The World Bank Group’s Support for Water Supply and Sanitation 2007-16 Ramachandra Jammi Senior Evaluation Officer, Sustainable Development Unit, IEG
- 3. Evaluation Questions Independent Evaluation Group 3 How effective has the WBG been in supporting Clients to improve WSS services? How well is it equipped to support Client countries in keeping with SDG 6? 1 2
- 4. Context –Access Gap and Disparities Lack of access to adequate WSS services is especially concentrated • in Sub-Saharan Africa, South Asia and East Asia; • in low and lower-middle-income countries; and • among the urban and rural poor. Lack of access to sanitation is of great concern because of impacts in human health and the environment Independent Evaluation Group 4 Worldwide 600 Million Lack safe water supply 2.4 Billion Lack adequate sanitation Most live in low-income and lower-middle-income countries
- 5. Context – SDG 6 SDGs are the core business of the World Bank Group, and thus SDG 6 now frames the World Bank Group’s strategy for Water Supply & Sanitation SDG 6 has raised the bar from simple access to water supply and sanitation to sustainable and universal access to adequate, reliable, safe and affordable service delivery by 2030 Independent Evaluation Group 5
- 6. Context –Access Gap and Disparities SDG 6 calls for an investment of US$1.7 trillion over the next 15 years, which is three times historic levels (!) This is a difficult target for World Bank client countries, given the sector’s poor cost recovery record, traditional dependence on public funds, and low and uncertain fiscal transfers. Independent Evaluation Group 6 Investment needed to reach SFC 6 by 2030 1.7 Trillion Sector resource flow 2007- 2015 (US Billion) $125.2 MDBs* $31.4 Private Sector *MDBs: WBG, ADB, AfDB, IDB
- 7. Context – Growing Cross-sectoral Impacts Cross-sectoral impacts caused by poor Water Supply & Sanitation Services and competing pressures from agriculture and industry are growing: • First, self-provisioning of water in urban areas has placed undue stress on groundwater quantity and quality. • Second, Unregulated wastewater and sludge disposal has resulted in serious groundwater and surface water pollution. • Third, Climate variations are giving rise to greater uncertainties in water availability. On the positive side, the expansion of the digital economy, and new decentralized service models, present a wide range of opportunities. Independent Evaluation Group 7
- 8. Context - Poor Cost Recovery Independent Evaluation Group 8 Indicative Water Tariffs Utilities - Cost Recovery Ratios (2014) Source : Global Water Intelligence 2015 Source: http://www.ib-net.org REGION/COUNTRY Number of reporting utilities Average cost recovery (%) Sub-Saharan Africa 212 60 East Asia (except China) 262 6 E. Europe and C. Asia 461 38 Brazil 1145 40 Latin America (except Brazil) 55 67 M. East and N. Africa 3 67 South Asia 55 22
- 9. WBG support for W&S, FY2007-16 Independent Evaluation Group 9 World Bank / IFC / MIGA Shares World Bank $28.4 Billion 93% IFC $1.5 Billion 5% MIGA $0.4 Billion 2% World Bank Group: $30.3 billion
- 10. WBG support - by Country Income Group Independent Evaluation Group 10 Commitments (US$, billions) Country Income Category WB US$28.5 billion IFC US$1.2 billion MIGA US$0.4 billion High and Upper Middle 37% 50% 100% Lower Middle 50% 50% - Low Income 13% - - ALL 100% 100% 100% Low income countries received negligible assistance from IFC and MIGA
- 11. WBG Support – Urban vs. Rural focus • Rural areas receive less attention in Sub-Saharan Africa • Urban areas receive less attention in South Asia • Small Towns receive low emphasis in all regions Independent Evaluation Group 11 % projects with a subsector objective; total projects = 163 Category SSA EAP ECA LAC MNA SAR Urban water Urban sanitation Rural water Rural sanitation Small towns SSA: Sub Saharan Africa; EAP: E. Asia and Pacific; ECA: E. Europe and C. Asia; LAC: Latin America and Caribbean; MNA: Middle East and North Africa; SAR: South Asia
- 12. Tracking Outcomes – Large Gaps in measuring Service Delivery • There are large gaps in measuring service delivery attributes for both water supply and sanitation • This is especially so for sanitation and for rural areas, and for affordability Independent Evaluation Group 12 URBAN Sub-Sector No. of rated projects No. of projects measuring ADEQUACY QUALITY RELIABILITY AFFORDABILIT Y Water supply 82 45 35 23 - Sanitation 55 15 - - - RURAL Sub-Sector No. of rated projects No. of projects measuring ADEQUACY QUALITY RELIABILITY AFFORDABILIT Y Water supply 45 22 12 7 - Sanitation 36 - - - -
- 13. Tracking Outcomes – Focus on the Poor Only 15 projects covering 13 countries had KPIs explicitly directed to outputs or outcomes for people classified as poor However, the recent WASH Poverty Diagnostic covering 18 countries across six regions, is a strong basis to renewed focus Of the 152 projects only 33 projects (22%) had substantial and high ratings for M&E Lack of baseline data, inadequately defined parameters, and poor implementation and feedback to operations Independent Evaluation Group 13
- 14. WBG Portfolio Performance Of 152 rated projects, 107 projects (71%) had Moderately Satisfactory or better Development Outcomes at project completion However, of the 107 well-performing projects, 45 projects (42 %) had Substantial or High Risk to Development Outcome The Risk arose mainly from – lack of financial sustainability – low institutional capacity (especially in rural areas) – and insufficient borrower leadership and commitment The ratings do not reflect environmental sustainability because they take longer to become visible (e.g. farmland pollution in China; water scarcity in Sao Paulo) Independent Evaluation Group 14
- 15. WBG Portfolio Performance - Financial Viability Independent Evaluation Group 15 Tariff Adjustment or Collection O&M Cost Recovery Debt Service Coverage Ratio Operating Margin and Operating Ratio Capital Expenditure Coverage Ratio Liquidity Ratio Debt to Asset or Equity Ratio Projects with covenants 37 33 32 13 13 9 7 Projects fulfilling covenants (%) 51 33 38 54 23 56 43 Financial Covenants had at best a marginal impact on improving financial viability of service providers
- 16. World Bank has supported client countries to address cross-sectoral impacts… Pollution of water resources caused by municipal, industrial, and nonpoint pollution from agricultural runoff (e.g. Argentina, China, Egypt, India, Mexico) Extreme water stress leading to unsustainable aquifer management (Brazil, Mexico, Yemen, and Tunisia) …however, there is no evidence of a systematic approach to these issues…in particular no models have been developed for lower middle income countries, which need them most WBG Portfolio Performance – Cross- Sectoral Effects Independent Evaluation Group 16
- 17. World Bank has supported a community-based model for improving rural WSS access and achieved moderately satisfactory or better results in 78 percent of 45 completed and rated projects (Indonesia, India, Sri Lanka, Nepal) Community-based approaches have succeeded with continued capacity-building support, where the Water and Sanitation Program (WSP) has played a significant role. Decentralized M&E through innovative use of cell phones and the internet has been piloted (Indonesia, India) However, long-term sustainability depends on – ongoing financial and technical support from local government – a transition strategy as villages grow into small towns and peri-urban communities WBG Portfolio Performance – Rural water supply and sanitation
- 18. World Bank supported behavior change in WSS service providers orienting them towards industrywide benchmarks linked to incentive mechanisms, e.g. Radical change in corporate management approach and work culture in Lima, Peru’s SEDAPAL utility Reducing non-revenue water losses in Phnom Penh’s Water Supply Authority and in Ho Chi Minh city in Vietnam. WBG Portfolio Performance - Promoting Service Provider Behavior Change Independent Evaluation Group 18
- 19. Only 14 projects approved during FY2007– 16 included behavior changes Formative research and monitoring and evaluation were generally lacking WBG Portfolio Performance - Promoting Behavior Change for hygiene and sanitation Independent Evaluation Group 19
- 20. World Bank’s Knowledge support and Convening Role Value addition of global programs WSP, WPP PPIAF and GPOBA in maintaining an edge on knowledge generation and sharing is widely recognized IBNET has played in important role in benchmarking of utility performance WB convening power low/uneven at country level compared to scale of lending and knowledge presence Independent Evaluation Group 20
- 21. Overarching messages Without tackling financial viability and service provider accountability head-on, the World Bank Group cannot provide credible support to countries to move towards SDG 6. Cross-sectoral impacts are reaching crisis proportions in many countries, and new technology and business models, and collaborative arrangements must be pursued with client countries. To these ends, the sector must leverage digital technology and the internet of things.
- 22. Recommendations Engage intensely with client governments on WSS sector reforms to strengthen the financial viability of service providers and to create conditions for increased access to commercial finance, in keeping with the new Cascade Approach. Enhance engagement for reducing disparities in WSS access between and within countries, and urban and rural areas. Increase cross-sectoral collaboration to address complex WSS-related challenges (such as municipal pollution, groundwater over-abstraction, and resilience to climate- induced events)
- 23. Recommendations Align the results frameworks and key performance indicators of World Bank projects with SDG 6 needs; and support client countries to build their evidence base for WSS service delivery Enhance knowledge and learning in the WSS sector in client countries through effective partnerships and capacity-building.
- 24. Thank you Visit us at www.ieg.worldbank.org
- 25. A Thirst for Change: The World Bank Group’s Support for Water Supply and Sanitation #Goal6
Editor's Notes
- The evaluation addressed two questions How effective was the World Bank Group in in supporting client countries to improve Water supply & Sanitation Services? How well is it equipped to support client countries for Sustainable Development Goal or SDG 6
- It is well known that worldwide, there are at least 600 million people without safe water supply, and 2.4 billion without adequate sanitation. Lack of access is especially concentrated in Sub-Saharan Africa, South Asia and East Asia; in low and lower-income countries; and among the urban and rural poor.
- SDG 6 has raised the bar greatly from simple access to water supply and sanitation to sustainable and universal access to adequate, reliable, safe, and affordable service delivery by 2030.
- SDG 6 calls for investment of 1.7 trillion dollars over the next 15 years, three times historic levels (!) This is an ambitious target, given the sector’s poor cost recovery record, traditional dependence on public funds, and low and uncertain fiscal transfers
- Cross sectoral impacts are increasingly effecting Water Supply and Sanitation: First, unregulated self-provisioning of water in urban areas is placing undue stress on groundwater quantity and quality Second, unregulated wastewater and sludge disposal is causing serious groundwater and surface water pollution Third, Climate variations are giving rise to greater uncertainties in water availability On the positive side, new and decentralized technologies, and the expansion of the digital economy and the internet of things (IOT) hold great promise to address these issues
- This figure and table show how low tariffs and poor cost recovery are pervasive in the sector among many client countries. In particular, East Asia and South Asia are far behind other regions in these respects.
- The World Bank group provided 30.3 billion dollars to the sector during 2007 to 2016. Of this the World Bank accounted for 93% percent, IFC 5% and MIGA 2%
- As you can see from this table, Low Income Countries, received the lowest share by far of World Bank assistance, and none at all from IFC and MIGA.
- Rural areas in Sub-Saharan Africa and urban areas in South Asia received relatively less attention. Small town areas, where the problems of the future are brewing, received vey low emphasis.
- In sharp contrast to the expectations of SDG 6, there are glaring gaps in the World Bank’s tracking of service delivery parameters. This is especially so for adequacy, quality and reliability of sanitation in rural areas, and affordability across the board. This goes to the heart of accountability of service providers to consumers.
- Only 15 out of 152 World Bank projects rated by this evaluation had Key Performance Indicators for people classified as poor. However, the World Bank’s recent WASH Poverty Diagnostic covering 18 countries across six regions, can help re-focus on the poor. Of 152 projects, only 33 projects or 22 percent had favorable ratings for Monitoring & Evaluation. Lack of baseline data, inadequately defined parameters, and poor feedback to operations are common.
- Of 152 projects, 107 projects or 71% had moderately satisfactory or better development outcomes. However, of these 107 projects, 45 projects or 42 percent, had substantial or high risk to development outcomes, greatly reducing the impact of the Bank’s 28.4 billion dollar assistance in the last ten years. The risk arose by far from a lack of financial sustainability. This links to the finding that only 4% of the 152 projects had financial viability reflected in their project objectives.
- Several World Bank projects tried to address financial viability of service providers through covenants. However, as this table shows, the effect was marginal at the best.
- The World Bank has supported client countries to address cross-sectoral impacts on water supply and sanitation in some prominent cases. However, there is little evidence of a systematic approach to these issues across the World Bank Global Practices, or to support client countries to achieve inter-ministerial coordination to tackle these issues. In particular, no new models have been developed for lower middle income countries, which need them the most.
- The World Bank has successfully supported a community-based model for rural water supply in countries including Indonesia, India, Nepal, Peru, and Sri Lanka. Continuous attention to capacity building especially by the Water and Sanitation Program or WSP, was an important feature of this effort. However the long term sustainability of rural water supply depends on ongoing financial and technical support from local governments; and a transition strategy as rural areas grow into small towns and peri-urban communities.
- World Bank has supported behavior change among service providers in a few prominent cases. For example, it supported radical change in the corporate management approach and work culture in Lima, Peru’s SEDAPAL utility. It supported incentive mechanisms to reduce non-revenue water losses in Phnom Penh and Ho chi Minh City
- Only 14 projects approved during 2007-16 included components for behavior change in hygiene and sanitation. Even in these efforts, formative research and monitoring & evaluation were inadequate.
- The global programs WSP as well as WPP, PPIAF, and GPOBA have helped maintain an edge in knowledge generation and sharing IBNET has played a pioneering role in benchmarking utility performance, and can potentially leverage new digital and internet of things possibilities. The World Bank’s convening power is low and uneven compared to the scale of its lending and knowledge presence in many countries
- SOME OVER-ARCHING MESSAGES Without tackling financial viability and service provider accountability head-on, the World Bank Group cannot provide credible support to countries to move towards SDG 6. Cross-sectoral impacts are reaching crisis proportions in many countries, and new technology and business models, and collaborative arrangements must be pursued with client countries. To these ends, the sector must leverage digital technology and the internet of things.