World Bank Group: “Trends in PPPs in water supply and sanitation”

PPPs can help developing countries better manage their water supply according to the World Bank PPP Blog.

This post is based on a news item by Victoria Rigby Delmon which was posted on the World Bank PPP Blog on November 11th, 2015

PPPs are increasingly being used by public utilities in a more focused way, to manage a specific subset of activities or challenges, such as increasing energy efficiency and water availability through non-revenue water management, or development of a new water source. The trends seen around PPPs in water supply and sanitation are Build-Operate-Transfer (BOT) and Design-Build-Operate (DBO) as a business line. This is an area where private financing can be raised, often with the help of risk mitigation tools such as guarantees. Further, the Performance-Based Contracts (PBCs) have been in focus and for activities ranging from reduction of non-revenue water, leakage management to increasing connectivity have proved to be useful tools in increasing efficiency and expanding connectivity. A significant number of performance/ output based management contracts have been implemented in different parts of the world. Several emerging countries have seen the consolidation of large national private water operators:

Small scale private operators are becoming more and more commonplace in developing countries, with many donor-sponsored water or sanitation PPP projects for rural and peri-urban areas having been successfully implemented and scaled up, with new local operators emerging.  A major feature of the current environment is an overall push for a more customized approach to water PPP design. The development of water PPPs has become very country specific, with governments keen on developing their own PPP schemes.