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Overview

activity

The objective of the activity is to support the design and implementation of OBA subsidy schemes that aim to extend water and sanitation services to the poor in SSA. This will be achieved by providing technical assistance (TA) for project identification, design and implementation support.

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Webinar organized by the World Bank's Global Partnership on Output-Based Aid (GPOBA) on the use of results-based financing in scaling up pilot health project 2014 03 27

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In Kampala:
Steven Shalita, tel. (+256-41) 430 2236 sshalita@worldbank.org

In Washington:
Cathy Russell, tel. (+1-202) 458 8124 crussell@worldbank.org
 
Mbarara - September 18, 2008 – The Ministry of Health in conjunction with Marie Stopes International-Uganda (MSI) today launched a project to treat sexually transmitted diseases (STDs) and reduce maternal and infant mortality among poor people in western and southern Uganda.

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Press Release no. 2008/2

In Washington:
Hywon Cha Kim hckim@worldbank.org

In Uganda:
Steven Shalita sshalita@worldbank.org

Kampala, Uganda, and Washington, DC – February 19, 2008 – The World Bank, acting as an administrator for the Global Partnership on Output-Based Aid (GPOBA), today signed a grant agreement with Uganda’s National Water and Sewerage Corporation (NWSC) for US$2.5 million to support improved access to piped water services for poor households living in slum areas of Kampala, the capital of Uganda.

Full press release

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WASHINGTON, October 24, 2007– KfW Entwicklungsbank, a German government-owned development bank, yesterday signed a US$ 4.3 million grant to be administered by The World Bank, for the treatment of sexually transmitted diseases, and reduction of maternal and infant mortality amongst poor people in Uganda.

The grant is to be managed under the World Bank’s Global Partnership on Output-Based Aid (GPOBA) as a performance-based subsidy, which is designed to create incentives for efficiency and the long term success of development projects. The Output Based Aid (OBA) grant complements German cooperation funds of US$2.4 million that will develop local systems and capacity.

Following the signing, KfW’s Board member, Wolfgang Kroh said: “German financial cooperation aims at strengthening sustainable systems of social protection for the poor. Let us jointly support this new conceptual approach to pro-poor service delivery as well as to health financing under private sector participation and share the evidence with our partners globally.”

An innovative voucher program, which allows patients to choose among participating service providers, was introduced in Uganda in 2006 for patients with sexually transmitted diseases (STDs) seeking treatment. The program, funded by German financial cooperation, has shown to be successful, so that the grant signed yesterday will allow for the project to be extended by a further four years. The project extension will not only allow for more STD patients to be treated, but will also allow the provision of safe child delivery packages including 4 ante-natal visits, delivery attended by a trained medical professional and one post-natal visit.

“This is the first health project for GPOBA and it demonstrates the potential of OBA designs to contribute to the cost-effective use of public funds in the health sector. The project is a good example of the donor cooperation, working together to reach common goals. The project is results-based, and helps develop local capacity as well as the local market for private small scale medical service providers.” stated Patricia Veevers-Carter, Program Manager for GPOBA.

The two project components are expected to benefit up to 255,000 poor people in Western Uganda – 110,000 mothers and their children as well as 35,000 patients suffering from STDs. Use of local doctors and midwifes for the project will increase local capacity for providing affordable health care services for the poor. Given the output-based nature of the project, the medical service providers will only be reimbursed after service provision (the “output”). In return, the project will provide them with a secure income stream if they are able to provide quality service and attract patients.

The Global Partnership on Output-Based Aid (GPOBA) is a global partnership administered by the World Bank to develop output based aid (OBA) approaches across a variety of sectors including infrastructure, health and education. GPOBA’s current donors are the UK’s Department of International Development (DFID), the International Finance Corporation (IFC), which is a member of the World Bank Group, the Directorate-General for International Cooperation of the Dutch Ministry of Foreign Affairs (DGIS), and AusAid of Australia. The grant agreement signed yesterday was funded out of IFC’s contribution to GPOBA.

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Kampala, February 12, 2007 — US$3.2 million World Bank-administered grant agreement was signed today for improving access to water supply services to the poor in up to 12 small towns and rural growth centers in Uganda. The grant is funded by the United Kingdom’s Department for International Development (DFID), the World Bank’s International Finance Corporation (IFC), and the Netherlands Ministry of Development Cooperation (DGIS) under the Global Partnership for Output Based Aid (GPOBA) administered by the World Bank.

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On the morning of February 28, 2009, Jeninah Komugisha walked into the Angella Domiciliary Clinic in Kashari, Uganda expressing labor pains. She gave the midwives a “healthy baby” voucher and was immediately offered assistance.

The midwife duly attended to Jeninah from 7:00 am to 3:00 pm, when she gave birth to a bouncing, beautiful baby girl named Kate. The birth was a normal delivery and both baby and mother are healthy.

“I am now feeling better and am grateful to the project,” said Jeninah. “There are many more mothers who ordinarily would find it difficult to use such facilities when delivering. They could not benefit because they simple lacked money, they are too poor,” she added.

Jeninah is the first Ugandan woman to have given birth safely, with attention from trained medical professionals, thanks to the GPOBA Reproductive Health Vouchers in Western Uganda project.

This pilot project, which builds on a health voucher scheme developed by Germany’s KfW Entwicklungsbank, was successfully launched in September 2008.

The project finances the diagnosis and treatment of Sexually Transmitted Diseases (STDs) for poor Ugandans and fights maternal mortality through provision of vouchers for safe childbirth.

The vouchers include ante-natal and post-natal visits, as well as birth attendance by trained professionals, and provision of caesarean section (where required).

The scheme targets rural and poor peri urban populations living in the areas of approved providers in the greater Mbarara region in western Uganda.

Up to 135,912 people will benefit from GPOBA’s intervention.

For more information please visit the webpages of the KfW Entwicklungsbank's Health Team.

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25 May, 2010 --- Africa Day, on May 25, is the annual commemoration of the 1963 founding of the Organisation of African Unity (OAU), now called the African Union (AU).

Many things have changed on the continent since 1963, some for the better. In fact, the Office of the Chief Economist for Africa at the World Bank recently published a collection of success stories titled simply, Yes Africa Can. In a recent speech at the Harvard Kennedy School, World Bank MD Ngozi Okonjo-Iweala spoke about many positive indicators for the continent's development and argued that it is time to reposition Africa as a destination for investment, not just aid.

What Output-Based Aid (OBA) means for Africa

Despite the encouraging success stories, as in other developing parts of the world, many poor people in Africa lack access to basic social and infrastructure services, including energy, health care, information technology and water and sanitation. This lack of access to basic services impacts their quality of life, health, and earning potential. According to the World Health Organization (WHO), 3900 children die every day as a direct result of lack of access to safe water. Further, statistics from the Water and Sanitation Program (WSP), a trust fund partnership administered by the World Bank, show that only 62 percent of Africans have access to safe water and just 60 percent have safe sanitation facilities to use.
 

OBA is an innovative approach which is used in cases where poor people are being excluded from basic services because they cannot afford to pay the full cost of user/connection fees. In Ethiopia for example, OBA is being used to address the "last mile" paradox, to help poor households gain access to electricity in a country with the lowest eletrification levels in Sub-Saharan Africa. The "last mile" paradox refers to the gap between access to services and actual connection rates. For poor households, the obstacle to access is quite often tied to the cost of a connection fee.

The Global Partnership on Output-Based Aid (GPOBA) uses subsidy funding to incentivise service providers to offer their services to low-income households. When an output-based project is designed, the output that will be measured and verified is agreed in advance among the project partners and other stakeholders. In a water project for instance, a service provider would agree to connect a certain number of households and be prepared to show proof of providing consistent service for a specified period. Once the pre-agreed output has been independently verified, the service provider receives payment.

In April 2010, Okonjo-Iweala highlighted OBA as one way to address the critical lack of access to clean water and sanitation services that impacts billions across the globe. In a speech to raise awareness about water and sanitation issues at a Spring Meetings side event. Okonjo-Iweala shared her personal experience of childhood in 1960s Nigeria and having to walk five miles to fetch water.

QUICK FACT: As of September 30, 2009, projects in Africa make up 33 percent of the World Bank Group's OBA portfolio, second only to the Latin America and Caribbean Region (LAC).

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A look at how output-based aid (OBA) is being used to help the urban poor access water services
 The theme of World Water Day (WWD) 2011 is Water for Cities: Responding to the Urban Challenge. Now in its 18th year, WWD is an annual opportunity to remind all of us about an ongoing global problem for many, the lack of access to clean and affordable water. According to the World Health Organization:
“1.1 billion people globally do not have access to improved water supply sources whereas 2.4 billion people do not have access to any type of improved sanitation facility. About 2 million people die every year due to diarrhoeal diseases, most of them are children less than 5 years of age.”
Urbanization, the movement of people from the rural to urban areas, has seen cities grow dramatically in both developing and developed economies. In developing countries, the lack of access to clean water and sanitation services is painfully illustrated in places like Kibera (Nairobi, Kenya), known as the biggest slum in Africa and one of the biggest in the world. The Kibera experience provides a snapshot of what the lack of water resources looks like for slum-dwellers on a day-to-day basis:
  • Until recent projects funded by the municipal council and the World Bank made clean water available and affordable (Ksh3 per 20 liters), Kibera’s population relied on water collected from the Nairobi dam.  The water from the dam is not clean and made the dwellers vulnerable to contracting cholera or typhoid; and   
  •  Most dwellings in Kibera do not have toilet facilities, relying instead on latrines which are just holes in the ground and each one shared by up to 50 shacks.
 
Output-Based Aid in the water sector
The Global Partnership on Output-Based Aid (GPOBA) has been piloting OBA approaches since 2003 as one way to help the poor gain access to essential services. A results-based approach, OBA can help facilitate access to basic infrastructure (water, energy, sanitation, transport) or social (health, education) services for the poor by tying subsidy payments to the achievement of pre-agreed outputs.  In water projects, a typical output could be a yard tap or kiosk connection to the water supply service for a target household. As with all OBA projects, the outputs are independently verified before payment is made to the service provider.
A recent review of the experience so far with OBA in water and sanitation found 22 OBA projects with subsidies funded by the World Bank for a total of US$82 million and subsidies funded by GPOBA for a total of US$54.9 million. Water and sanitation projects currently make up around 43 percent of GPOBA’s project portfolio, mostly in sub-Saharan Africa. 
OBA projects in cities around the world
GPOBA’s urban water portfolio has a total value of about US$28 million, expected to help over one million people worldwide  gain access to safe, reliable water and sanitation services. The portfolio has already delivered over 150,000 verified outputs, including yard taps, public water points and individual household connections, in countries ranging from Cameroon to Yemen.
  • In Cameroon, only about a third of the national population has access to piped water. A GPOBA pilot with a grant of over US$5 million aims to deliver new piped water connections for about 40,000 poor households. The project is the first GPOBA project to use an affermage contract, a model which transfers the operation of a national utility to a private operator while investment remains the government’s responsibility.  

 

  • In Indonesia, two projects with grants totaling about US$ 5 million aim to help low-income communities in Jakarta and Surabaya gain access to clean water. In Jakarta, unconnected households can pay as much as 15 percent of their household income on water. Often, the water that they do have access to is overpriced by informal providers or is collected from shallow wells and contaminated. In Surabaya, the pilot project aims to extend piped water access to over 77,000 people.

 

  • Although Morocco is a middle-income country with good access to clean and affordable water for most of the population, there are some poor communities in peri-urban settlements that faced the “last mile” paradox. So, although the water infrastructure was there, the cost of connecting to the network presented a barrier to access for poor households. In partnership with the government and the operators of water utilities in Casablanca, Meknès, and Tangiers, a GPOBA grant of US$7 million is helping over 11,000 households connect to local water networks.

 

  • In the Philippines, the Manila Water Supply pilot will help almost 100,000 people gain access to clean, potable water. So far, 45 projects have been completed and benefited 11,000 households. As well as enjoying the benefit of 24-hour access to clean water supply, the target households have also reported financial savings and a reduction in the incidence of water-borne diseases. Encouraged by the initial success of the Manila project, the Government of the Philippines is exploring the idea of a national OBA facility to help ensure access to water for people across the country.

 

  •  In Uganda’s capital city, Kampala, water connections for the poor will help bring access for communities in targeted urban settlements up to almost 100 percent by the project’s end.

 

  •  In Yemen, a GPOBA grant of US$5 million will help the poor in urban and peri-urban areas gain access to safe drinking water and sanitation services. The pilot project is also being used as a model to show that tapping into private sector expertise and encouraging competition in the water sector can both serve the poor and help to reduce infrastructure costs.
Although OBA is not the answer for every context, the pilots so far show encouraging signs that where an enabling environment exists – a regulatory structure with clear policies for setting sustainable tariffs, an experienced private sector that is able to pre-finance projects and an implementing body that is able to handle processes including monitoring and verification – then OBA can make an impact as a way to help the poor enjoy the benefits of reliable and clean water services. On World Water Day 2011, OBA is an innovative approach that communities, development partners, and governments alike should consider as one way to address an urgent global challenge, access to clean water.

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