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Promoting Equitable Private Sector Participation in Water and Sanitation Development: The Case of Urban Water Supply and

This report explores the potential of private sector participation in water supply and sanitation projects, with a focus on risk mitigation through framework clarification and dialogue processes. It outlines the need for a common understanding of business models, as well as clarity on roles, responsibilities, and spheres of action. The report also discusses potential work streams and the importance of translating policy principles for the financial sector.

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Promoting Equitable Private Sector Participation in Water and Sanitation Development: The Case of Urban Water Supply and

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  1. Promoting equitable Private Sector Participation for Development: The case of water and sanitation Urban FreiecosBasel, Switzerland for theSwiss Agency for Development and Cooperation (SDC)

  2. Overview • Private Sector Participation in water supply and sanitation -a concrete case of Financing for Development • Risk mitigation through framework clarification • dialogue process around principles • project implementation guidelines • Sustainable service delivery and financing requires • common understanding of business models • clarity on roles, responsibilities and spheres of action • 3 potential work streams branching off • translate for the Financial Sector --> rating instrument • identify obstacles for access to financing --> analysis • generalize for other basic services --> UN level initiative

  3. Why am I here • Public-Private initiative of SDC, seco and Swiss Re: Mobilize the potential of the private sector in water supply and sanitation projects • Water Supply and Sanitation as a concrete case • sector requires huge, long-term financing to meet MDGs • Inclusive developing process for „Policy Principles“ • in an internationalMulti-Stakeholder Process • ready for local discussion and application • Main idea: Attract financing by risk mitigation through inclusion of all relevant stakeholders in the design, implementation and operation of a project

  4. Policy Principles Policy Level WHAT should be done? Implementation StrategiesHOW can it be done? Specific Guidelines Tools What KNOWHOW is available? toolkits, cases, best practice The idea behind the overall system

  5. Risk mitigation … on the framework level • Fair and stable frameworks (legal, regulatory, macro-economic) • Mutual trust and open communication --> Conducted a first international Multi-Stakeholder-Dialogue including the financial sector (also non-MDB) … on the implementation level • Projects need clarity on roles, rights, responsibilities, incentives and sphere of action of stakeholders --> Local Multi-Stakeholder Dialogues to identify common goals and assign / confirm roles • Sound business model and carefully structured, transparent, and sustainable project financing --> Exchange between experts, business and future users

  6. “Policy Principles” with impact on financing • Basic Values • Good Governance • Safe, affordable and sustainable services • Key Factors • Accountability • Transparency • Socially responsible (but sound) financing • Sharing interests and incentives • Proactive Risk management • Framework Development • Local ownership and leadership • Adequate framework for investments • Effective Regulatory Mechanisms • Roles & Responsibilities

  7. Next on our agenda • Translate the Policy Principles for the Financial Sector --> Develop a rating instrument for projects Is it doable? What are the requirements? What would the right context be to place it? • Analyze past projects for business model and financing bottlenecks --> Research hypothesis: W&S services create huge value, but projects fail to access available funds. Why this? Does it add value? Is the outcome obvious to experts? • Broaden the scope to cover provision of other basic services --> UN-initiative: identify common framework elements for successful provision of basic services Can it strengthen local capacity and decentralization?

  8. Conclusions • Risks are lowest in stable frameworks • Frameworks are stable if all stakeholders agree • Facilitating agreement is a participatory process • Communicating the agreed framework around a “deal” needs target-group-specific translation: • Picture books for multilingual / analphabetic target groups • Implementation guidelines for project managers • Rating capability for financial sector ? • Analysis of bottlenecks for project financing ? • UN Declaration for national governments ?

  9. Thank you for your kind attention - but don’t hold back with criticism… Please visit http://www.pspwater.org for more information

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