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News Release No 2013/01
Contacts
In Washington:
Saul E. Gonzalez, tel. (+1) 202 473 2378
sgonzalez1@worldbank.org
In Stockholm:
Elisabeth Ekelund, tel. (+46) 8 698 5043
Elisabeth.Ekelund@sida.se
Washington, January 9, 2013 – The Global Partnership on Output-Based Aid (GPOBA) announced that the Swedish International Development Cooperation Agency (Sida) committed to making a supplemental contribution to GPOBA equal to approximately US$26.8 million (SEK 175 million) over the next few years. This additional amount nearly doubles Sida’s contribution to the Partnership, bringing GPOBA’s partnership total to almost US$320 million.
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NEWS RELEASE No. 2013/3
Contact:
In Washington: Saúl E. González
t.: +1 202 473 2378
email: sgonzalez1@worldbank.org
In London: Andrew Maclean
t.: +44 20 7023 0639
email: a-maclean@dfid.gov.uk
UK’s DFID Adds Funding to GPOBA’s Health Efforts for World’s Poor
Additional Commitments Increase Resources from GPOBA’s Longest-Standing Partner
Washington, March 28, 2013– The Global Partnership on Output-Based Aid (GPOBA) announced that the Department for International Development (DFID) of the United Kingdom has committed to donate an additional US$4,079,160 (GBP 2,700,000) to fund efforts focusing on the dissemination and impact evaluation of health projects. DFID’s share in the partnership is the largest, and with this supplemental contribution to GPOBA, DFID’s donations will total almost $113 million. The commitments will be disbursed in three installments over a two-year period, with the first tranche expected before the end of March, an additional one later this year, and the final one by July 2014. This contribution by DFID is its first funding to specifically target mainstreaming output-based aid (OBA) in the field of health.
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GPOBA announced ten award-winning pilot projects at the conclusion of GPOBA’s 10th Anniversary two-day conference. GPOBA's Panel of Experts served as the committee to select the ten projects that best exemplified successful and innovative implementation of output-based aid, with potential replication and scaling up, as well as adding to the diversity of the portfolio.
Projects meeting the criteria below were favored for selection:
*OBA pioneer (first pilot, new sector, frontier)
- *Leveraging partnerships with governments / donors / other development partners
- *Enabling private sector participation in the sector / country
- *Community / grassroots involvement
- *Impact on sectoral policy, scale up or replication effect
Of the ten awards presented, half were for pilots in the water sector, with the remaining sectors (energy, health, transport, education, and solid waste management) having one representative each. The awarded projects were:
1. Manila Water project
2. Honduras OBA Facility
3. Kenya Community Water project
4. Surabaya Water project
5. Andhra Pradesh Water project
6. Bangladesh Solar Home Systems project
7. Yemen Safe-Motherhood project
8. Vietnam Upper-Secondary Education Enhancement project
9. Nepal Solid Waste Management project
10. Argentina CREMA Program (Transport)
For more details about project updates and the teams who contributed to their fruition, click on the document below.
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Large development projects too often fail to include the poorest citizens, and output-based aid (OBA) is one mechanism the World Bank Group is using to increase access to basic services like electricity, water, sanitation and education.
“We can’t end poverty if we don’t invest in basic services for the very poor,” said Zoubida Allaoua, Acting Vice President for the World Bank Group’s Sustainable Development Network. “And our client countries won’t be able to capitalize on growth if half their population is excluded from basic services.”
On February 24, 2014 at a meeting of the OBA Community of Practice – sponsored by the Global Partnership on Output-Based Aid (GPOBA) in conjunction with Forum 2014 – development specialists talked about the future of OBA and ways to encourage a more laser-like focus on the very poor in all sectors and regions.
Ms. Allaoua noted that GPOBA “can really push the envelope” in untested sectors, piloting activities in areas like fragile states and solid waste management, which has major impacts on public health and the environment.
“What we have is an instrument that started 10 years ago with a narrow set of objectives,” she said. “It now has enormous potential on a much broader scale.”
Carmen Nonay, who manages the GPOBA program, cited three output-based aid projects that are in the process of large scale ups; in the health sector in Uganda, in the energy sector in Nepal, and in the water and sanitation sectors in Kenya.
“Our focus is on access for the very poor,” said Nonay. “Our pilot programs showcase successful collaborations across the World Bank Group and with other development partners, with results that are transparent and measureable.”
Clive Harris, who manages Public Private Partnerships for WBI, noted that output-based aid is “inherently more transparent,’ since its “all about paying for delivery based on output.”
“There are a lot of areas where GPOBA can move forward,” he said. “GPOBA has defined the concept of output.”
GPOBA works closely with other development partners, including the IFC. Catherine O’Farrell, Principal Investment Officer for the IFC, said the IFC’s work with GPOBA is a “natural fit.”
“GPOBA and Public Private Partnerships are really a perfect combination,” she said. “The next frontier for us is working with GPOBA across sectors.”
Energy and water currently constitute the two largest sectors in the GPOBA, with 41 percent of GPOBA projects concentrated in energy and 38 percent in water.
Africa is the largest player among the regions, with nearly 40 percent of GPOBA projects.
In Africa, where access to services presents a big challenge, “OBA is an ideal model in terms of needs,” said Alex Bakalian, the World Bank Group’s Sector Manager for the Africa region. “We have to solve the problem of the poor not being connected.”
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Lessons from a West Bank solid waste management project – supported by the Global Partnership on Output-Based Aid (GPOBA) -- were featured during a recent seminar at the World Bank Group (WBG) headquarters.
“This is one of the first solid waste projects to use the output-based aid approach,” said Carmen Nonay, GPOBA’s program manager. “It is a great project, in a fragile and conflict affected situation, exemplifying collaboration between different institutions of the World Bank Group.”
The World Bank provided the capital investment for construction of the landfill, the IFC provided technical assistance to establish a public private partnership for running the landfill, and a GPOBA grant helped attract an international solid waste disposal operator by addressing long-term cost recovery and sustainability issues.
The World Bank and the IFC jointly requested the GPOBA grant to improve the collection rate for household garbage fees, and improve collection service. The GPOBA grant incentivizes municipalities and village councils by providing financial subsidies for improvements in solid waste collection.
“This successful operation shows how IFC, Bank and GPOBA teams can work together effectively in fragile and conflict-affected situations for the benefit of our client and poorer segment of the population,” said Franck Bousquet, World Bank sector manager for urban and social development in the Middle East and North Africa region. “We have been able to draw important lessons for successful public private partnerships in the fragile states, which is a priority for the WBG.”
One of the main lessons drawn from the project is the importance of addressing major technical obstacles for the public private partnership, particularly the capacity deficit of the client and low incentives for the international private sector to operate in the Palestinian territories.
In a conflict situation, the governorates and the international landfill operator faced significant direct and indirect political and economic risks. To mitigate those risks, the World Bank, the IFC and GPOBA brought together the expertise to address the entire chain of solid waste management issues, from waste collection to waste disposal and treatment.
The project provided about 840,000 Palestinians access to – for the first time – a professionally managed solid waste facility, with accompanying health and environmental benefits.
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Access to irrigation is a challenge for small-scale farmers in developing countries, particularly when it comes to financing that access against future production. On October 8, GPOBA featured a webinar with irrigation specialists from GPOBA, the World Bank, the IFC and the Water and Sanitation Program brainstormed ways to create sustainable irrigation solutions.
In a recently released report, GPOBA looked at the opportunities and risks in using an output-based aid (OBA) for small-scale irrigation schemes, drawing on examples from India and Zambia. (See The Use of Output-Based Aid in Small Scale Irrigation Schemes in Developing Countries.) OBA differs from traditional aid in that it pays based on results, or outputs.
Irrigation is an extremely complex sector, because so many factors influence outcomes. Sustainable solutions can be difficult to achieve, but necessary to help developing countries reduce poverty and share prosperity.
“The outlook is generally positive” for the use of OBA in small-scale irrigation, said Jacob Burke, a lead irrigation specialist with the World Bank Group. “There is a last mile gap where small holders not covered and OBA could be used to close those gaps.”
GPOBA has successfully tested OBA approaches in water, energy, and health sectors. Irrigation is a new area for GPOBA – a less-tested sector where there is little experience with OBA.
Rajesh Advani, who leads GPOBA’s water efforts, commented that the webinar was designed to “stimulate thinking in terms of OBA and irrigation. We want to gauge intent as to what the appetite is for an OBA project and find a suitable environment for a project.”
This was the fourth webinar in the series sponsored by GPOBA.
Webinar Recording: Innovations in Development Financing for Small-Scale Irrigation Projects >>
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A new report on municipal solid waste management , sponsored by the Global Partnership on Output-Based Aid, takes a look at results-based financing (RBF) in eight different municipal solid waste (MSW) projects, capturing new and important lessons for financing projects in this sector.
“Sustainable financing is a major obstacle for municipalities seeking to improve solid waste management,” said Carmen Nonay, GPOBA’s Manager. “Municipalities are caught in a vicious cycle; they are unable to generate the necessary fee collection rate until they improve service and, conversely, people are unwilling to pay for poor service. Policymakers need innovative financing mechanisms to increase cost recovery levels, and improve service delivery and outcomes in this basic and critical sector.”
Despite significant investment in MSW projects, there is an existing US$40 billion global shortfall in the sector. GPOBA has been exploring the use of RBF as way to stimulate innovation and results in this area.
“This report expands the lessons and analysis of RBF in the solid waste management sector, draws on GPOBA’s experience, and provides an opportunity for GPOBA to make significant contributions to the further exchange of knowledge in this area,” said Ms. Nonay.
The report, Results-based Financing for Municipal Solid Waste, delivers eight examples of RBF design, tailored to specific situations faced by different municipalities and grouped into three categories; low-income countries like Nepal, where service delivery is poor or non-existent and fee collection is challenging; middle income countries like China and Malaysia -- where waste collection is high – and governments want to promote recycling and source separation and; in both low and middle income countries, where governments are trying to strengthen waste collection in under-served and low income communities.
The report found the RBF can benefit MSW projects in all three areas, and can jump start solid waste services in areas where the private sector may be reluctant to enter, such as fragile and conflict-affected situations. The models of RBF can also be adapted in the context of other countries.
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There is a lot of innovation from the World Bank Group in output-based aid, and the Global Partnership on Output-Based Aid (GPOBA) recently recognized six World Bank Group projects for outstanding innovation, collaboration and inclusion using output-based aid (OBA) or other forms of results-based financing (RBF).
“We are pushing the edge of the envelope and, as a result, we are seeing a tremendous amount of innovation using OBA and other RBF mechanisms,” said Ede Ijjasz-Vasquez, Senior Director for the Social, Urban, Rural and Resilience Global Practice, who presented GPOBA’s second annual “Inn-OBA-tions” awards on December 3, 2014. “The nominations and awards come from all corners of the World Bank Group, demonstrating how OBA/RBF connects our global practice to other global practices, sectors and partners.”
Carmen Nonay, GPOBA’s manager, noted that GPOBA currently works in six of the global practices, and two of the cross-cutting solutions areas. GPOBA also has extensive experience working with the IFC, with 20 joint projects.
For every dollar GPOBA put into a project, it has leveraged 2.3 dollars in total from governments, the private sector or beneficiaries. That leverage is figured in the truest sense; if GPOBA had not been involved in the project the additional financing would have disappeared.
The “Inn-OBA-tions” awards were divided into three categories; the Collaboration Award, exemplifying collaboration in OBA/RBF projects; the Inclusion Award, honoring OBA/RBF projects targeting indigenous people, women or other traditionally excluded groups; and the Pioneer Award, for OBA/RBF projects, innovations, or designs implemented in challenging environments and sectors where there is little or no OBA/RBF experience.
Collaboration Award
Kenya Electricity, led by Mitsunori Motohashi, worked to establish electricity connections in Kenya’s poorest information settlements – where communities and connections are often controlled by gangs and cartels – the team pulled in colleagues from the urban, water and transport to lend expertise and share knowledge. As a result of the collaboration, the number of electricity connections went from 3,500 over a two-year period to 12,000 in the next five months.
Inclusion Award
Bolivia Decentralized Energy for Universal Access, led by Lucia Spinelli, used output-based subsidies for rural households, micro enterprises, schools and clinics, carefully targeting 60,000 primarily indigenous people living in the some of the poorest parts of the country. The project involved interaction with local communities and organizations and developed a sense of ownership among the beneficiaries, and served as a transition between its IDA predecessor and the follow-up operation.
Pioneer Award
The Zimbabwe Health Sector project team, led by Ronald Mutasa, for its pioneering use of RBF mechanisms to address health care supply-and-demand issues in a challenging environment. The project combines pay-for-performance, vouchers and a pay-for-quality scheme, and has strengthened the Zimbabwe health system’s response to maternal, neonatal and child health needs.
Runner up: Indonesia Clean Stove Initiative, led by Yabei Zhang, which was the first to introduce and operationalize the RBF approach for clean cook stoves in Indonesia.
Runner up: Results-Based Financing for Municipal Solid Waste, led by Marcus Lee and Farouk Banna. RBF is new to solid waste sector, and this report was the first document a framework for future RBF work in solid waste.
Runner up: Oaxaca Water Supply and Sanitation Sector Modernization Operation, led by Charles Delfieux, which introduced an innovative RBF approach in the water sector, marking the first time PforR instruments have been used in Mexico and PforR operations have supported water and sanitation services sector institutional reform and improvements in urban water services.
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How can the benefits of water development projects reach the poorest communities?
This was the question addressed during a spirited panel discussion titled “Using results-based financing to connect the poor: who, where, why?” convened by GPOBA, with representatives from the Bill and Melinda Gates Foundation and the Government of Ghana at the annual World Water Week Conference (August 21-25, 2015) in Stockholm.
The panel discussants examined how a results-based financing (RBF) approach can be an efficient and practical tool to expand water services to the world’s poorest communities, as well as bridge the investment gap needed to connect households; it was also recognized as providing greater accountability compared to traditional development financing, thus ensuring that subsidies benefit the targeted population. Innovation was also attributed to RBF, citing a quote from economist Steven D. Levitt: “Human ingenuity—when given proper incentives—is bound to be larger.”
RBF’s suitability as a financing tool was also discussed, alongside its limitations in cases where outcomes are difficult to measure. Another advantage attributed to RBF was the lower overall cost to service providers who pre-finance projects; as local providers might often face difficulty in obtaining financing at reasonable interest rates, they can resort to a blend of RBF subsidies and commercial financing. The success of RBF projects can also attract subsequent flows of private capital in underfunded regions, and enhance the visibility of public-private partnerships as success stories. Audience members engaged with the discussants on the applicability of RBF on a larger scale, as well as its use in conjunction with a wide array of project designs, given its flexibility to fit each project on a case-by-case basis.
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Results-based approaches are producing creative and dynamic solutions to development issues. The Global Partnership on Output-Based Aid (GPOBA) presented its Third Annual Inn-OBA-tions Awards on January 12, 2016, recognizing the achievements of World Bank projects that employ particularly innovative methods. All winning projects used output-based aid (OBA) or other forms of results-based financing (RBF) to support the delivery of basic infrastructure and services for poor and marginalized communities. The four winning projects are West Bank Solid Waste Management (Pioneer Award); Moldova Biomass Heating and Energy Conservation Project (Social Inclusion/Green Award); Uganda Energy for Rural Transformation (Collaboration Award); and, Indonesia Local Government and Decentralization (Governance Award). (Click on the award categories for team and project information).
The awards were presented by Ede Ijjasz-Vásquez, Senior Director for the Social, Urban, Rural and Resilience Global Practice (SURR), who praised the winning projects for their strong links to the goals of both GPOBA and SURR. “All of these projects support more resilient, inclusive, sustainable communities,” he said. “They push the frontiers of development approaches in ways that are producing real results.”
Carmen Nonay, Practice Manager for SURR’s Partnerships and Resource Mobilization unit, expressed her appreciation to the teams within the World Bank that are working with OBA and RBF approaches. “Collaborating on projects is a very rewarding experience, and these innovative approaches have the potential to change the way we all view development solutions.”
Catherine Commander O’Farrell, Head of GPOBA, part of SURR’s Partnerships and Resource Mobilization unit, stressed the range of the winning projects and the challenges they overcame for successful implementation, whether working in areas affected by conflict and fragility or utilizing climate-change mitigation mechanisms in untested regions, noting “Each project is pioneering in its own way.”
The Inn-OBA-tions awards were divided into four categories to recognize specific achievements using results based approaches. The Pioneer Award recognizes a project that takes a visionary approach to working in less-tested sectors or challenging environments; the Collaboration Award goes to a project that leverages partnerships and exemplifies cooperation among World Bank units, governments, and/or other development partners; the Social Inclusion/Green Award honors projects supporting the development of green, inclusive, and resilient communities while addressing the social inclusion of the poor, vulnerable, and other excluded groups; and the newly created Governance Award goes to a project that exemplifies accountability and capacity building through effective governance.