Public-Private Partnerships in the Water Sector

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Public-Private Partnerships (PPP) (= involvement of the Private Sector, particularly investment partners, in Water related projects and development activities) is a relatively new approach. UNDP/RBEC, in cooperation with BDP/EEG-LEF (Local Entrepreneurship facility), is engaged in pilot activities with first partners.

The issue of involving private investors (including Private and Develppment banks) in water-related projects in EECCAA countries is also discussed in the framework of the EAP Task Force (mandated to implement the Environmental Action Programme in the framework of the "Environment for Europe initiative".

Contents

Privatization & Involvement of private utilities

Issues

The "Privatization" and "Water as Public Good" Debate

On the CSO advocacy front, Public Services International has looked at evidence to support the case for public sector water undertakings and campaigns worldwide to resist privatization of water services.
Friends of the Earth, World Development Movement, and Public Citizen are just a few of many international CSOs making the case for water as a public good, and presenting successful efforts in developing countries. Some of these campaigns and experiences are catalogued on the PSI site.
(Source: Bharati Sadasivam, Policy Advisor, UNDP/BRSP - Civil Society Organizations Division)

Transboundary Water Management as a Regional Public Good

See also article on Globalization and the Water Sector


Controversy over the World Bank's PPIAF - Public-Private Infrastructure Advisory Facility
Over 130 groups from 48 countries will today (15 May 2007) call on donor governments and agencies to abandon support for the Public-Private Infrastructure Advisory Facility (PPIAF), a highly controversial element of the World Bank’s water privatization agenda.
The call comes a week ahead of a crucial meeting of the 13 donors to PPIAF. In an open letter, campaigners argue that aid spent on PPIAF’s water projects could and should be better spent. Earlier this year, the Norwegian government stated that it will not support PPIAF in the future as it no longer believes it is increasing access to water for the poor.
More... (Source: Abdullah Alshankiti [alshanki@yahoo.com], contribution on 'mena-water' e-list 16 May 2007)



Specific Issues for the Region

  • Low investment climate in EECCA region
  • Question of Water Pricing:
    • Currently too low Tariffs, not covering even Maintainance & Operation (M&O);
    • In South Africa, first 30 L / capita / day are free of charge --> idea of a progressive tariff structure.
  • But WHO calculated that the social return in investment into the water sector is 13:1 (if externalities are internalized). (see also HDR 2006)
  • Need for small local banks (for investments in rural areas) -> through NGOs?
  • Soviet Legacy: Over-sized systems, heavy metal, huge losses
  • Subsidizing should go to output (connection), not the input (pipes)
  • Needed Water Sector reform is not only about tariffs
  • "Blending funds" (combining loans and grants); criteria needs to be adjusted that this works (Vanessa Celosse)


Questions & Discussions:

  • Progressive Tariffs? -> In S. Africa for example, the first 30 L of Drinking Water per household are free of charge, ensuring safe access to (minimal) DW for everybody.
  • Partnerships with private companies can be used to also change companies' understanding and attitude towards environmental issues (e.g. Coca Cola cooperation in Danube Regional Project: Public Awareness Building on the example of empty CC-bottles NOT to be thrown into the Danube...)





National and Local private sector involvement

"Local private sector ("the other private sector") is already delivering services to between 20 to 50% of the poor in urban areas throughout the world. This reality cannot be ignored" (source: Carlos Linares's response to draft "Poverty Reduction and Water Management")



Resources

Reports and papers

Privatisation in Deep Water? - INEF Report 84/2006 on "Water Governance and Options for Development" (Annabelle Houdret & Miriam Shabafrouz)

Background papers and materials of the OECD Global Forum on Sustainable Development on "Public-Private Partnerships in Water Supply and Sanitation – Recent Trends and New Opportunities" (Paris, 29-30 Nov 2006)

Policy Principles for Private Sector Participation in Sustainable Water Supply and Sanitation Services

Implementation Guidelines for Private-Sector Participation in Sustainable Urban Water Supply and Sanitation Services

Fact Sheet on Policy Principles and Implementation Guidelines

Reports by Mukhtarov F.G., 2006.

Private Sector Participation in Water Supply And Sanitation of the Secondary Towns of Azerbaijan

Privatization of Social Policy of Water Supply in South Caucasus


UN's "Unleashing Entrepreneurship" Initiative

Unleashing Entrepreneurship – Making Business Work for the Poor


Financing the Water Sector

See also separate Article on Financing the Water Sector

Involving Private (and Development) Banks

"Bankability" of projects

What does Bankability mean?


(Strategic Approach of KfW Development Bank in WSS Sector)


Case Studies of Bankable Water and Sewerage Utilities



UNDP Partnerships in the region

UNDP Partnership with SNS Bank


Other UNDP PPP projects with banks

Banking the Unbanked in Fiji: The ANZ Bank and UNDP Partnership

UNDP/BFV-SG (Societe Generale) Partnership in Madagascar



CSR - Corporate Social Responsibility

What is CSR?

Concrete UNDP Partnerships and projects

UNDP Partnership with Coke


The UN Global Compact

HOW TO GUIDE on Facilitating Global Compact Local Networks - If you would like to find out more about the Global Compact, in particular GC national chapters, role and interests of UNDP in facilitating GC local initiatives.

The CEO Water Mandate

See CEO Water Mandate



(Donor-) Initiatives, Events, Links

UNEP-FI
UNEP FI Expert Workshop on Water & Finance (Quarter One 2006, Davos, Switzerland) - Coordinated by UNEP FI’s Water & Finance Project to begin its work on a set of water-related risk management guidelines for financial institutions and policy makers. The guidelines are meant to serve as a basis to build capacities in the financial sector and at policy level into what and how water-related risks should be assessed, thus encouraging new sources of long-term sustainable investments in the sector.
Workshop ("Founders Workshop") planned at the Stockholm World Water Week 2007 (see UNEP-FI for details)

For further information, please contact: water@unepfi.org


Swiss Public-Private Partnerships for Water Supply and Sanitation
Initiative launched by the Swiss State Secretariat for Economic Affairs (seco), the Swiss Agency for Development and Cooperation (SDC) and the re-insurer Swiss Re; focus on Public-Private Partnerships. The Swiss Public-Private Partnerships for Water Supply and Sanitation initiative has issued a set of hands-on instruments, among which the Policy Principles and Implementation Guidelines, which are designed to support decision-makers and practitioners engaging in water sector restructuring and Public-Private Partnerships PPP in achieving high governance standards throughout preparation, planning and operations. (For further information, also visit: http://www.partnershipsforwater.net)


OECD Global Forum on Sustainable Development 
Public-Private Partnerships in Water Supply and Sanitation – Recent Trends and New Opportunities”, Paris, 29-30 Nov 2006
Background papers, presentations, proceedings (to be published in due time), list ofparticipants, etc.


External (non-UNDP) examples of PPP

  • International Development Enterprises UK (IDE-UK) has launched its new website in Nov 05: http://www.ide-uk.org. IDE-UK uses an enterprise-based strategy to tackle poverty among poor farmers in Africa and Asia. Through developing and promoting simple, low-cost technology IDE-UK enables poor farmers to access and control water thereby increasing crop production and profit. IDE- UK establishes sustainable private-sector supply chains, working with small and medium enterprises, and specializes in market creation. It also support farmers to access local and regional markets, and become active market participants.
  • Public private partnerships (PPP) for water supply and sanitation are demanding ventures. A set of hands-on instruments, policy principles and implementation guidelines could support decision-makers and practitioners with PPP processes. The website http://www.partnershipsforwater.net makes such instruments available for everybody with access to internet. The instruments are the result of a Swiss initiative that included extensive involvement of experts and stakeholders from the public and private sector as well as from civil society.



Documents and References

Small-Scale Private Service Providers of Water Supply and Electricity

Financing and Provision of Basic Infrastructure: Synthesis, Commentary and Policy Implications of Water and Electricity Service Case Studies (Commonwealth Foundation, Jul 2003)


External References and Toolkits

The World bank's Toolkits for Private Participation in Water and Sanitation -



References

See also

External Resources

Attachments

 KFW EUWI WG meeting.ppt  123.pdf

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