Introduction of CMP in to OWNP
Eyob Defere
OWNP Consultant, August 2013
Outline
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Sector Policy
Rural WASH
Evolution of CMP
Description of CMP
Introduction of CMP in to OWNP
1-The Sector Policy
 Understanding the sector policy the key to appreciate CMP in
Rural WASH
 It is also essential to assess whether CMP is supported with
the sector policy
 It is vital to analyze the introduction of CMP in to OWNP
within the context of the sector policy
1-Sector Policy
 Promote the development of water supply and sanitation on
participation-driven and responsive approaches without
compromising social-equity norms
 Identify and promote the development of appropriate,
efficient, reliable and affordable WSS technologies, which are
demand driven and have got great acceptability among the
local communities.
 Create and promote a sense of awareness in communities of
the ownership and their responsibilities for operation and
maintenance of water supply and sanitation systems and
develop participatory management practices
1-Sector Policy and Strategy
 Ensure self-reliance through promotion of self financing; To
this end, engage the participation of banks, private operators,
micro financing institutions
 Ensure transparency, fairness, responsibility and
accountability in the utilization and management of the
Water Supply and Sanitation (WSS) funds, namely through
Community Water Committees
1-Sector Policy
 Provide incentives to local stakeholders such
as community groups, to encourage their
participation in the planning, design,
implementation and management of WSS
systems
2-Rural WASH
 Rural WASH is providing essential social service to
over 80% of the population of the Country
 Providing water supply to hundreds of thousands of
communities with different socio-economic and
cultural identities
 It requires organizing tens of thousands of
communities to operate and sustain these schemes
2-Rural WASH
 It requires strong government structures at woreda
level that will organize and provide technical
support to communities and small scale service
providers
 It requires small scale service providers that will
construct the schemes and provide post construction
services when required
 Enabling environment is required to facilitate the
implementation of Rural WASH
2-Rural WASH (Targets)
 Water supply access in rural areas is increasing
substantially from 19% in 1990 reaching 67% in
2013
 The target is achieving universal access by 2015
with 98% access to water supply, and reduction of
proportion of non-functioning facilities to 10%.
2-Rural WASH (Plans)
 To realize universal access to water to rural
communities plans have been developed based on
GTP targets
 A total of over 100,000 schemes of which 58,118
conventional new water points and 19,190
household dug wells and 25,038 community dug
wells and rehabilitation of 20,610 existing schemes
2-Rural WASH (Challenges)
 Main challenges in rural WASH are
– Low implementation capacity
– High level of non- functionality of schemes
– Low absorption capacity
– Significant human resource capacity challenges, in
particular at woreda level, despite large but limited
program/project-based capacity building initiatives
3-Evolution of CMP
 Desire by the GOE to empower communities has led to
higher level of community involvement in rural WASH in
late 1990s
 Challenges of Rural WASH required a new approach with
innovative financing and implementation modality
 RWSEP (which was launched in 1994)recognizing policy
directions and GOE’s commitment towards more
community empowerment, established community
development fund (CDF) in 2003 (progressively)
 Since 2007, project funds have been transferred via the
Bureau of Finance and Economic Development (BoFED)
at regional level
Milestones of CMP
RWSEP started
1994
Fund management
was shifted to
BoFED
Community Development
Fund piloted
2003
2005
2007
CDF scaled up to
BSG and UNICEF
CDF modality
operational in
12 Woredas
2009
2011
CDF incorporated
into WIF (CMP)
and COWASH
started
3-Evolution of CMP
 Recognition of the success of RWSEP by JTR and
other studies led to growing interest by GOE and
donors to understand CDF more
 Consequently, the World Bank, Water and Sanitation
Program (WSP)-Africa has been requested by the
Government of Finland , to undertake an
independent study to evaluate the achievements of
CDF and to recommend concrete and feasible
measures to scale up the [CDF] funding mechanism.
3-Evolution of CMP
Evaluation of CDF by WSP
The main findings of the study were that:
 The RWSEP implementation rate has increased by up to a factor
of 5 (from an average of 200 water points per year (1994-2003)
from 2003, to over 1000 water points per year in 2008/9) (by
then the National average was 30 water points).
 The technical quality of the facilities built is satisfactory and
functionality rates for CDF schemes (94%) are above average for
Amhara (estimated at over 75%)
 Utilization of investment budgets has increased from an
average of around 53% between 1998-2002 (pre-CDF) to close
to 100% during the end of Phase III / start of Phase IV
(compared to below 50% for other large donor programs).
 CDF can and shall be mainstreamed and scaled up in the
Country.
3-Evolution of CMP
Assessment of CDF by GOE
 In 2010 teams of government officials from MoFED and MoWR have made
an assessment visit in Amhara region to look in to the potential of
mainstreaming CDF and its compatibility with systems of GOE.
Findings were the following:
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Immediately open a serious dialogue with relevant WASH development partners
for the adoption of CDF as a funding mechanism.
There is no time to waste, as the sector is falling behind schedule to reach the UAP
targets
Amhara and Benishangul-Gumuz regional governments should be urged to take
immediate steps to scale up the CDF in their regions.
GoE procedures are effectively used in CDF. Outsourcing fund transfer
management to a financial intermediary (ACSI) was not perceived to pose a
regulatory problem for scaling up and/or replication in other regions.
Woreda and community level control mechanisms are not only sufficient but
effective. With minor modifications to the existing CDF procurement and financial
manuals it can be mainstreamed with the government procedures.
3-Evolution of CMP
Assessment of CMP by WAE-2013
 CMP approach has demonstrated benefits in terms of
implementation speed and functionality from which the NGO
sector could usefully learn.
 It brings higher level of sustainability of services
 NGO funding of community-run institutions via an MFI
intermediary should not be an impediment to their adoption
of the CMP model
3-Evolution of CMP
Public Finance Management Assessment Amhara
Regional Government, MoFED
Findings
 The Public Finance Review carried out in
Amhara Region by MoFED in 2010 found that
the RWSEP project financed by Government of
Finland for rural water supply is channel 1
(Since 2007).
3-Evolution of CMP
Initiation of COWASH
 Based on recommendations of GOE and WSP assessment
to scale up CDF, and the call from GoE, GoF decided to
provide new support to GOE to assist the scaling up
effort.
 Accordingly GoE and GOF initiated the COWASH Project
in 5 regions
 The objective of the COWASH phase I project;
– accelerated implementation of the Universal Access Plan
(UAP) through the adoption and application of communityled WASH financing mechanism”.
 Based on the positive experience of the first year
project and encouraging budget commitment of
regions GOF has also indicated its willingness to
double its support and allocate additional 11 MEUR,
making the total programme cost 22MEuro.
 During this period, following the sectoral
developments, CoWASH was revised and designed
to be a transitional programme towards the sector
wide approach to OWNP.
 Accordingly CMP was captured in the sector’s guiding
doc. the WIF
3-Evolution of CMP
Introduction of CMP in the WIF
 To consolidate the harmonization efforts and
creating more effective implementation mechanism
 To establish effective integration between water,
sanitation and hygiene interventions
 The emergence of CDF as an effective financing and
implementation modality
 Led to the establishment of WIF, where CMP has
been recognized as one of the implementation
modalities of Rural WASH
4- CMP
 One of the implementation and financing modalities
of Rural WASH
 Cost effective and sustainable solution
 Fully in line with Sector Policy and GOE development
agenda
 Enhancing implementation capacity in Rural WASH
4- CMP
MAIN ELEMENTS of CMP
 Community leads the development process – demand
based- planning to implemetaion and beyond
 Community owns the water system from the
beginning – no handing over only enauguration!!
 Community is responsible for the management of the
fund – high absorbtion capcaity
 Community is responsible for water supply operation
and maintenance (O&M) – low functionality sustainabity
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 Capacity building of communities extended to contract
and financial management, quick maintenance and
monitoring processes
 Woreda’s role: from implementer to coordinator,
controller, facilitator implementation and fund
management tasks, which are outsourced to the
communities and financial intermediaries
Total investments
1 Billion USD
Total number of planned water points: 93,000 WPs
Planned number of
new rural water points
vs. planned
investments
71,000 WPs
79 %
42 %
2013
2014
2015
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Current CMP Financing arrangements
Financier
BoFED
Water Bureau
MFI
Investments
Goods
Regional
Governments
WFO
Capacity
Building
Community
Services
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4- CMP
Why MFI were used
 Initially tender was floated for all interested
 CBE was not interested
 DBE was too expensive with 7% commission and capacity
building requirement
 Woreda Finance had no capacity and raised the issue of
WASHCO legality
 MFI’s cost effective (3% = 1.5 % commission and 1.5 %
capacity building) and access to communities and
compatibility with their core business
Water Bureau WaSH
Account
CMP Investment
Fund Flow
CMP Account
Finance Bureau
WaSH Account
Instructions to
transfer to WWT
CMP Account
Financial Intermediary
Account
CMP Account
Upon Request
Financial Intermediary
Sub-Branch Account
Reports and disbursement requests
Payment requests
Woreda WaSH
Team
WWT CMP Account
WASHCOs
Accounts/Ledgers
Withdrawal Authorizations
Artisans, suppliers,
contractors, etc…
O&M Saving accounts
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5. CMP Financing in OWNP
Principles of OWNP
 Program management based on GOE policy, systems,
rules and regulations
 Woredas at the center of the OWNP
 Woredas are responsible for deciding what kind of
modality to apply
 Woredas responsible for woredal level planning,
organizing, implementing, reporting and oversight
(when communities implement)
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5. CMP Fund
Channeling in OWNP
 Under the OWNP, Once Woredas decide to use
CMP then they will disburses directly to
communities using either the Commercial
Banks or the MFIs wherever they are
applicable
5. CMP Financing in OWNP
Why using MFI introduced as an
option?
 Channeling through MFI has worked for the past
10 years
 Now being scaled up in three more regions
reaching the total regions with CMP
implementations to five,
 WoFED can use its capacity to effectively
administer and regulate the overall WASH fund
5. CMP Financing in OWNP
How it works
 If a service provider or (MFI) is used, WoFED, in
agreement with the community, will enter into an
agreement with the service provider, subject to the
prior approval of BoFED to ensure compliance with
GoE’s public financial management rules.
 Disbursements to the service provider (MFI) will be
subject to prior approval from the WWT and WoFED.
5. CMP Financing in OWNP
How it works
 The service provider (MFI) will submit monthly
disbursement and utilization reports to
WoFED.
 Original copies of relevant financial records
will be maintained by the WoFED.
 WoFED will report quarterly to BoFED on
utilization of WASH funds, including funds for
CMP investment funds
5. CMP Financing in OWNP
Payment to WASHCOs
 After signing the Funding Agreement WWT
chairperson writes a letter to WoFED in order to
notify the signatories of the WASHCO and to release
the first installment to WASHCO.
 All payments to WASHCOs will be approved by the
WWT.
 Second installment of payments will be paid when
80% of the first installment is expended and evidence
for transaction is submitted to the CMP supervisor
and WASH accountant.
5. CMP Financing in OWNP
Payment to WASHCOs
 The receipts and transaction evidences shall be
submitted by WASHCOs to the CMP supervisor and
he will work with WASHCOs to clean up all receipts
and documents. Then the CMP supervisor will
submit the documents to the WASH accountant in
WoFED.
 If the WASH accountant does not approve the
documents then he will give it back to the CMP
supervisor for his follow up and correction.
5. CMP Financing in OWNP
Controls and Safeguards
 The community signs a funding agreement which specifies the
obligations of the community.
 For the payment to be released from the bank/MFI, two
signatories from WWT shall authorize based on
recommendations of the CMP supervisor on the progress of
the work
 Both the artisan and the WASHCO shall submit separate
progress reports for payment release to be effected and their
report shall be verified by woreda water office staff
 The WASHCO shall submit expenditure documents for 80% of
advance or previous payment for another request to be
effected.
5. CMP Financing in OWNP
Conclusion
 All efforts must be made that while working the
details that GOE financial management policies are
followed.
 The Generic CMP Financial Management Guideline
Once Finalized will be included as part of the one
WASH National Programme Document
 Regardless of the mode of channeling the
responsibility for managing CMP investment fund
shall be with WoFED
5. CMP Financing in OWNP
Conclusion
 For phase 2 beyond July 2015, the program anticipates to
channel CMP investment fund to the communities as far as
possible through WoFED via the Commercial Bank or MFIs as
appropriate.
 During phase I using only WoFED to disburse to communities
before building its capacities could hamper the effective
implementation of Program
 Implement the agreed Transition Plan to facilitate the smooth
transition during the two years period and ensure effective
implementation of CMP in Rural WASH
Thank You