Financial approaches
The Financial approaches portal illustrates a selection of approaches to water and sanitation service provision as well as some articles on project management.
Contents
- 1 Cost recovery for operation and maintenance
- 2 Cost sharing for capital investment
- 3 Cross subsidies
- 4 Differential tariff systems
- 5 Micro credit for private sector
- 6 Full capital investments by donor funds or government
- 7 Franchising
- 8 Franchised water treatment and sales
- 9 Improving financial efficiency
- 10 Innovative financing mechanisms
- 11 Loans/credits/guarantees
- 12 Innovative financing mechanisms
- 13 Output based aid (OBA)
- 14 Revenue financed expansion
- 15 Revolving funds
- 16 Revenue financed expansion
- 17 Self-financing
- 18 Build Own Operate and Transfer (BOOT)
- 19 Social development funds
Cost recovery for operation and maintenance
Cost sharing for capital investment
Cross subsidies
Differential tariff systems
Micro credit for private sector
Full capital investments by donor funds or government
Franchising
Franchised water treatment and sales
Improving financial efficiency
Innovative financing mechanisms
Loans/credits/guarantees
Innovative financing mechanisms
Output based aid (OBA)
Experience with OBA is new, but growing and interesting. The difference with other subsidies is that OBAs are targeted for example to the poorest families (Cambodia) or to the poorest neighbourhoods (Paraguay) clarifying why subsidy is given and they are performance-based. The provider largely self-finances the service, receiving reimbursement mostly after the verification of successful delivery. The latter may reduce possibilities for small providers with limited capital. A bonus-malus approach might be more feasible, perhaps linked to longer-term system performance. (http://www.gpoba.org/documents/OBApproaches_What_is_OBA.pdf).
