Financing Access to
Basic Utilities for All
Mobilizing Finance: Zambian Experience
Sam Gonga
DTF
Overview
Background
 Overview of Financing Options
 Financing WSS services for urban poor in
Zambia
 Conclusion

Background

Service Provision
Central Govt
L/Authorities
Sector Reforms - NWP 1994
Commercial
Utilities
PSP
Challenges after 1994 NWP





Low capital investments
Dilapidated Infrastructure
Low Govt spending on water & payment of bills
Tariffs not able to meet capital costs
Limited skilled personnel
Difficulty accessing finance from donor &
domestic sources
Financing WSS for urban poor –
DTF Zambia
Basket fund for WSS
 Financed through govt & donor grants
 Sustainable in the short to medium term
 Target: improved access of the poor to WSS
 Provided as grants to water utilities – no
excuse for poor service delivery

Priority to peri-urban areas
DTF: Fund Components
DTF
General Fund (GF)
Objective
Eligible
Applicants
to assist CUs in extending WSS services
to the urban poor.
all CUs (unless excluded)
Performance Enhancement Fund (PEF)
to support initiatives by a CU that aim at
enhancing its financial viability.
CUs with proven efforts to improve WSS
situation for urban poor within past 12
months;
previous DTF projects well implemented
Project Types: water supply, sanitation,
capacity building (any combination)
Eligible
Projects
Project Area: peri-urban or low cost,
legal situation clarified
Project Volume: within specified
thresholds
Projects improving financial viability of
CU; i.e. reducing operational costs
and/or increasing revenues.
DTF Funding Arrangements
Agree
d%
DTF
1
CPs
2
GRZ
Account for
Project Funds
(EUR)
DTF Admin.
Account
(EUR)
Account for
Project Funds
(ZMK)
CUs
3
Monthly
requirement
s
DTF Admin.
Account
(ZMK)
Investments
4
Project Selection
Call for
Proposals
Submission of
Project
Proposals
Initial
Screening
•Adressed to all CUs (exceptions possible)
•Eligibility
•Scope/content of eligible projects
•Completeness
•Thresholds for project value
•Application forms
Detailed
•Review of proposed measures
Assessment
•Review of implementation concepts
•Review of BoQs and Cost Estimates
Prioritisation
Funding
Decision
•Cost per Beneficiary
•Current WSS Situation
•Recommendation by DTF Management
•Potential to reduce Health Risks
•Decision taken by DTF-Committee
•Sustainability Risks
Financing
Agreement
Overview of Committed Funds (2006 –
2010)
Source of Funds
GRZ Commitment
416,667
5%
8,700,000
95%
9,116,667
Danida,
1,600,000
100%
CP Commitment
TOTAL Funds
Amount
(in EUR)
KfW, 3,000,000
GRZ, 416,667
ACP-EU-Water
Facility,
4,100,000
Impact on Target Population
11.5 Million
46%
70% in low
income area
2005: 3.7 Million
2015: 4.4 Million
DTF Programme
2006 – 2010
Urban
1.0 Million
No access to safe water
2015: 2.85 Million
DTF Programme
2011 – 2015
1.85 Million
With adequate funds, almost all the urban
population can have basic access to safe and
sustainable water supply by 2015!
Achievements
Six pilot projects completed between
2003-2005
 Cost US$450,000; beneficiaries 120,000
 Large scale financing under way: 2006/7
US$1.2M projects, 135,000 beneficiaries
 Another US$1.4M projects for 2007

Conclusion
Increase govt spending & donor aid in the
short to medium term
 DTF effective approach to serving the periurban areas
 Possible to reach many peri-urban areas
by CUs using DTF approach

Thank you
Targets for Water Supply Projects
(2006 – 2010)
Funding
secured
Total
Planned
Unit
Total Funds required
4,330,000
7,000,000
EUR*
Average Project Size
70,000
70,000
EUR*
62
100
10,000
10,000
EUR*
7
7
EUR*
433
700
No.
649,500
1,050,000
No.
Total No of Projects
Cost per Kiosk
Cost per Beneficiary
Total No of Kiosks
Total No of Beneficiaries
Funding Gap:
*Assumption: 1 EUR = K 5,800
2,670,000
EUR*
No.
Allocation of Funds (2006-2010)
8%
16%
48%
11%
4%
13%
General Fund: Water Supply f or poor urban areas
Perf ormance Enhancement Fund: Increased f inancial viability of CUs
Sanitation: Demonstration Phase
Sanitation: Investment into Sanitation solutions
Consultancy Services
DTF Administrative Costs