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Some challenges identified with regards to the use of OBA in irrigation sector in other countries include:
- Establishing a subsidy mechanism that adheres to core OBA principles and creates incentives for poor farmers to pre-finance irrigation related investments;
- Identifying measurable service level outputs against which subsidies can be disbursed, and the number of targeted beneficiaries can be accounted for;
- Defining poverty levels to justify the use of subsidies. (Note that farmers who are able to afford irrigation often cannot be classified as poor);
- Determining accurately farmers' ability to repay commercial loans
Structuring irrigation schemes with OBA subsidies with the objective of improving crop production, access to markets, and consequently the sustainability of small-scale irrigation;The study will analyze significant issues related to the financing, structuring, and implementation of sustainable small-scale irrigation schemes in Cameroon's cotton belt region targeted at low-income farmers, taking into account lessons learned from the Burkina Faso ongoing experience. As the context in which the irrigation activities are implemented varies somehow from country to country, the focus of the study will be on principles, concepts, financing, the role of the private sector, and contractual framework that requires attention when irrigation schemes are planned.
The study will examine the characteristics of the sector and various ways to leverage private sector financing using OBA mechanism. The study will also look at structuring an OBA operation with SODECOTON as implementing agency and the potential sources of market failure under such implementing arrangement. The specific objectives of the analysis are to:
1. Assess the applicability of OBA mechanism in Cameroon's irrigation and cotton sectors context focusing on the challenges identified above.
2. Assess, and define technical specification options for irrigation schemes that could be supported by OBA subsidies and eventually derive an OBA project scope (component and associated costs).
3. Evaluate and develop the types of contractual arrangements which need to be put in place to support sustainable small-scale irrigation schemes benefiting from OBA.
4. Develop an economic and financial analysis of a proposed OBA operation.The review will take note of Burkina's experience. The terms of reference will provide details of specific activities to be carried out under the consultancy.
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News Release No. 2008/4
In Washington:
Cathy Russell, tel. (+1-202) 458 8124 crussell@worldbank.org
In Yaoundé:
Henri Bateg, tel. (+237) 2220 3815 hbateg@worldbank.org
Yaoundé, Cameroon – April 7, 2008 – The World Bank, acting as an administrator for the Global Partnership on Output-Based Aid (GPOBA), today signed a grant agreement for US$5.25 million with Cameroon’s state-owned asset holding company Camwater to expand access to urban and periurban water supply for poor households.
The World Bank, acting as an administrator for the Global Partnership on Output-Based Aid (GPOBA), today signed a grant agreement for US$5.25 million with Cameroon’s state-owned asset holding company Camwater to expand access to urban and periurban water supply for poor households.
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A look at how output-based aid (OBA) is being used to help the urban poor access water services
- 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.
- 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.
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In Cameroon, network water supply coverage is estimated at less than a third of the urban population. With the support of the World Bank and other agencies, the government of Cameroon took a significant step to reform the urban water sector, delegating the service provision to an international private operator. The public-private partnership approach incorporates an output-based aid scheme aimed at addressing the cost of connection fees for low-income households.
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The Cameroon water connection scheme that started in 2008 is the first GPOBA project to be implemented under an affermage contract. It is also the first subsidized water connection program in West Africa to be implemented through an output-based aid (OBA) mechanism.
This note highlights the emerging lessons learned from the design of the project, summarizing the challenges and opportunities in applying OBA to the affermage model and how they were dealt with. A second note will share lessons from the project’s implementation.
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Le programme camerounais de raccordement aux réseaux d’adduction d’eau lancé en 2008 est le premier projet du Partenariat mondial pour l’aide basée sur les résultats (GPOBA) mis en oeuvre en vertu d’un contrat d’affermage. Il s’agit aussi du premier programme de raccordement subventionné à un système d’adduction d’eau en Afrique de l’Ouest exécuté à l’aide d’un mécanisme d’aide basée sur les résultats (OBA).