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1 ST NATIONAL WATER & SANITATION FORUM FINANCING WATER SUPPLY AND SANITATION INVESTMENTS By Engr B.M Tahir FMWR

1 ST NATIONAL WATER & SANITATION FORUM FINANCING WATER SUPPLY AND SANITATION INVESTMENTS By Engr B.M Tahir FMWR. Sheraton Hotel & Towers, 29 th August – 1 st September, 2006. Key content of this session. Why Financing Water Supply and Sanitation Investments?

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1 ST NATIONAL WATER & SANITATION FORUM FINANCING WATER SUPPLY AND SANITATION INVESTMENTS By Engr B.M Tahir FMWR

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  1. 1ST NATIONAL WATER & SANITATION FORUMFINANCING WATER SUPPLY AND SANITATION INVESTMENTSByEngr B.M TahirFMWR Sheraton Hotel & Towers, 29th August – 1st September, 2006 1st National Water & Sanitation Forum

  2. Key content of this session • Why Financing Water Supply and Sanitation Investments? • Investment gaps in the WSS sector • Possible sources of funds • Policy arrangements for capital investments • Water Investment Mobilization & Application Guidelines • Issues for consideration 1st National Water & Sanitation Forum

  3. Why Financing Water Supply and Sanitation Investments? • Improved water supply and sanitation will boost economic growth and contribute greatly to poverty eradication • Poor country with access to WSS services enjoy annual growth rate of 3.7% GDP; those without grew at just 0.1%. • The economic benefits far out-weigh the investments costs • Economic benefits could be gained in health, productivity, education and industrial sectors. 1st National Water & Sanitation Forum

  4. Why Financing Water Supply and Sanitation Investments? • Investing in Water is good business. • Investing in water and sanitation would lead to increased production and productivity within economic sectors. • Every Naira spent on water supply and sanitation is with strong potential for a solid return. The annual benefits could range from $3 to $34 per $1 invested. • The Investments needs for improved water supply and sanitation are considerable. 1st National Water & Sanitation Forum

  5. Investment gaps in the WSS sector 1st National Water & Sanitation Forum

  6. Possible sources of funds • Fiscal Sources • Federal Government • State Government • Local Government • Credits and Loans • International Financing Agencies (WB, AfDB etc.) • Domestic loans (Commercial banks) • Grants • Friendly Governments (European Union, Japan Govt., China Govt. etc) • Donor Agencies (Unicef, UNDP, UN-Habitat etc.) • Non-governmental Organizations (WaterAid, Carter Foundation etc.) • Community Based Organizations (CBOs) 1st National Water & Sanitation Forum

  7. Possible sources of funds • Users/Community Contributions • Tariffs • Monetary and non-monitory contributions by communities • Capital Markets • Investment funds • Pension funds • Insurance Companies 1st National Water & Sanitation Forum

  8. Agency Agency Rural Water Supply Rural Water Supply Small Towns Water Supply Small Towns Water Supply Urban Water Supply Urban Water Supply Federal Govt. Federal Govt. 50% Nil 50% Nil 30% Nil State Govt. State Govt. 25% 10% 30% Nil 60% 100% from tariff Local Govt. Local Govt. 20% 20% 15% Nil 10% Nil Communities Communities 5% 70% 5% 100% 0% Nil National Policy arrangements for Investments Cost sharing for Capital Investment Cost sharing for Operation & Maintenance 1st National Water & Sanitation Forum

  9. Water Investment Mobilization & Application Guidelines (WIMAG) • Objectives • To mobilize funds for increased service coverage, Improved levels of service &Improved water quality • To promote internal efficiency of Water Agencies through reduction of unit costs and cost recovery • To improve financial performance and Investment Efficiency 1st National Water & Sanitation Forum

  10. WIMAG Procedure FGN & State wish to improve WSS. FGN and State sign MOU/WIMAG. Survey conducted & targets agreed State implements reforms & WIMAG Water service provider in state desires project funding Ongoing monitoring & reporting of compliance SWA meets conditions for funding under WIMAG. SWA applies for funding under WIMAG. 1st National Water & Sanitation Forum

  11. WIMAG Institutional Arrangement • Management • Federal – WIMAG Implementing Unit (WIU) • State - SWRC • Financing • Reporting, monitoring and evaluation • Information and transparency 1st National Water & Sanitation Forum

  12. The Guidelines • Conceptual framework • Objectives prioritisation and activities • Development and investment plans • Operational management • Indicators (output based) • Independent scrutiny • Further funding subject to satisfactory performance 1st National Water & Sanitation Forum

  13. Issues for consideration • Localizing the national policy financial arrangements • What instruments should be put in place to ensure compliance with the policy? • Mobilizing private investments for water supply and sanitation; • Assisting Water Agencies to achieve cost recovery towards meeting their O&M costs • What should be the extent of community contributions to the cost of water supply and sanitation? 1st National Water & Sanitation Forum

  14. THANK YOU 1st National Water & Sanitation Forum

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