PPP’s & rural water supply

RWSN7 forum / Friday, December 2, 14:30-17:30

Presentation by Marlies Batterink

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About Aqua for All

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Outline

1. Why PPP’s?

2. 4 Starting points for looking at PPP’s

1. Integration

2. Types of partnerships

3. Incentives for partnerships

4. Financing

3. PPP approach in Kenya RAPID program

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Working with PS? A new paradigm

Why public private partnerships?

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1 2 3 Improve access to basic services

Increase quality and efficiency

Mobilise capital

• Accelerated construction • On-time and on-budget delivery • Regular maintenance and

upgrade

• Higher quality standards • Better identification and allocation of risks • Sharing risks with private sector • Increased efficiency of facilities and

services • Access to best practices and expertise

• Access to new private financing

• Better budgetary efficiency • Value for money

PPP’s can help to:

Four starting points for looking at PPPs:

1. Integrated approach

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2. Types of Partnerships

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PS engagement in the devpt context

HOW?

1. SME / business devpt support creating sust. Supply

chains

2. Private Sector Engagement in PPPs;

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A range of strategies to improve service delivery (in fields of e.g. water, sanitation), by

collaborating closely with private enterprises and/or private foundations

Philanthropic / CSR partnership

Transactional partnership

Integrative partnership

3. Incentives for PS -> different partnerships

Transformative partnership +

inte

rdep

end

ency

-

Funding strategy for PPPs starts

with focussing on a business case

• CAPEX

• OPEX

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4. Financing PPP’s

Capital expenditure & funding plan

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Finance: The business logic:

operational expenditure

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sustainability

Grants & Private Funds in CapEx & Opex

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ODA contribution as: • De-risking first loss capital • Working capital, bridging pioneer gap • Subsidy for social impact Private Sector contribution as: • Trade-oriented contributions • CSR, philanthropy for CAPEX • CSR, philanthropy for OPEX • Bonds, loans, equity

Financing strategy: which fund to

prioritise?

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Opex

Capex

• Portion of Repayable Finance is likely to

increase

• Moving away from grant based instruments

• Grants & transfers for enabling a sustainable

business case – not financing it

• ODA as derisker: ODA…

• …for Technical Assistence

• …to derisking (first loss capital)

• …NOT for capital expenditures

Changing world of development

programs

PPP lab learnings on finance

www.ppplab.org/publication/new-insights-series-04-

financing-public-private-partnerships/

All publications:

www.ppplab.org/publication

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.

(PPP models in) Kenya RAPID program Resilient Arid Lands Partnership for

Integrated Development

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From

37% to

50%

Water Coverage

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Program goal, objectives, approach

Kenya RAPID program:

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How? By triggering PS development (new concepts), engagement (blended finance) and enhancement (SME’s)

• a playground delivering proof of scalable concepts in WASH services & livestock mgt

• Showcases for learning and exchange

TK group

WaterSewerageCompanies

Biogas

Philanthropic / CSR partnership

Transactional partnership

Integrative partnership

Different partnerships

Transformative partnership

PPP models in Kenya RAPID

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1. Lease / O&M borehole equipment 2. Solar energy for WASH

3. Mobile payment systems 4. Water kiosks

Experiences: barriers and opportunities

in Kenya RAPID context

• Finding and showing the business is not easy

• Preparations of PPP’s are time consuming (and

program timelines are limited)

• Need for opportunity thinking and flexibility in

the use of ODA, govt and other finance options

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Thank you