 My name is Katherine Bliss, and I direct the project on global water policy here at the Center for Strategic and International Studies, CSIS. And it's really a pleasure to welcome such an early and energetic crowd here this morning for today's learning forum on making progress in the water, sanitation, and hygiene sectors. I have to say that the project is very pleased to be able to co-host this session with several partners, including Global Water Challenge, Tetra Tech ARD, and the Wash Advocacy Initiative. And we've really been honored to have been able to work with such a broad range of organizations in setting this up. And this includes the World Bank Group, including the IFC and the Water and Sanitation Program, the Safe Water Network, Duke University's Nicholas Institute for the Environment, the University of North Carolina at Chapel Hill's Water Institute, and Water for People. It's really been a broad group putting this session today together, and it's been great to work with all of the different partners. So as all of you know, tomorrow is World Water Day. I think it feels like World Water Week already, because there are so many activities going on. The theme this year is Water for Cities, addressing the urban challenge. And as urban populations in both the developing and developed countries grow, the multiple demands placed on water supplies pose ever greater challenges for public officials, entrepreneurs, civil society, and researchers alike. UN Water put together an interesting set of facts and figures related to the Urban Water Challenge. And if you haven't checked out the official World Water Day website, I encourage you to do so. Here are some of the most striking numbers. Half of the world at this point lives in cities. Every second, the urban population worldwide grows by two people. According to recent data regarding progress on the Millennium Development Goals, cities are doing better than rural areas in extending drinking water and sanitation services. But nevertheless, 141 million city dwellers do not have access to safe drinking water. And 794 million live without access to improved sanitation facilities. Beyond the challenge of extending service to those without is the problem of maintaining existing services. And for an interesting perspective, or a set of interesting perspectives on what this means for the urban, poor, and developing countries and for managers of utilities in our own country, I encourage you to take a look at the Healthy Dialogue blog maintained by the CSIS Global Health Policy Center at the website www.smartglobalhealth.org. This month, we will be featuring a series of guest blogs on global water challenges. And we started the series last week with a look at urban issues. Andy Northcutt of African Cities for the Future and Paul Gunstensen of Water and Sanitation for the Urban Poor, along with George Hawkins, the general manager of DC Water, each described some of the challenges inherent in managing urban water systems. Now, we're not focusing just on urban issues today, but I think you will find that many of the presentations and discussions will provide information that is highly relevant to the urban challenge, whether it is how to engage the private sector in water and sanitation, the implications of climate change for washed progress, or how to improve transparency and accountability in the water sector. I hope that all of you will be able to stay with us for the entire day. We will do our best to keep you well hydrated and fed so that everyone can listen closely to expert presentations, engage in lively debate, and articulate a set of recommendations for the sector. Let me just give you a few little housekeeping notices or items. If you've come in and it's still raining outside and you wanna hang up your raincoat, we have a coat closet just down here to the right. After you leave the room to the left, it's over here to the right. There are restrooms at the far end of the hallway down here. For those who need a haircut in the middle of the session, there is a barber shop over here. If things get too pressing, there's a travel agency also at the far end. All of your needs are taken care of. We're really a full service operation here. For those who attended last year's roundtables that we hosted on World Water Day in 2010, let me also encourage you to take a look at the publication that came out of those discussions. It was called Paths Forward for the Global Wash Sector, and you will have copies of that along with copies of publications from many of the other organizers of today on a flash drive, and they're also available outside. This year, we will be putting together a similar report to capture and disseminate what I know will be a wide-ranging discussion today. And so look for that to be posted sometime later this spring on our website, http water.csis.org. And so now, without further ado, let me turn the microphone over to Chris Magehi, who is Senior Associate in Water Resources and Environmental Health at Tetra Tech ARD. Chris will be serving as today's Master of Ceremonies, and he will provide you with an overview of today's events. Thank you. Thank you very much, and welcome to everyone. Quick thanks to CSIS for their years of involvement in innovative leadership in this sector. They've been bringing people together here for the better part of two or three years, and you're all a result of that and this whole day will be. Thanks to the Global Water Challenge for their unsurpassed ability to connect partners, implementers, and investors, and thanks to Tetra Tech for letting me sort of take the day off and come here today. And a special thanks to the Wash Advocacy Initiative for their work in communications, sustainability, and partnerships that really made this whole thing possible, and we'll recognize those people throughout the day, because there's some very, very special people who are with us today. This is, to me, an absolutely phenomenal day. I've been working in this sector since the early 1980s, and I have never seen in one room the diversity of people, the diversity of backgrounds who are coming to this sector, and it's just an amazing group, and I invite you to make sure that you get a copy of the participant list, which is on your tables, and take a look through that. It's really an astounding group of representatives from the private citizen sector, from implementing organizations, both contractors as well as NGOs. Academia is extremely well represented, as is the U.S. government, the multilateral funding organizations are very, very well represented, and the media is also represented here, which represents, to me, the elevation of this sector and the current prominence that it has, and we'd like to welcome all of those people. I'll go quickly through the agenda, and then we'll launch right into the first session, just to let you know that this day is designed to be a two-way learning session. You're going to learn an enormous amount from the panelists you'll see. All of the panelists throughout the day, in my opinion, are at the front edge of the state of the art of work in the water supply sanitation hygiene sector. They're a very forward-looking group. They're a very innovative group, and you'll learn an enormous amount from their experiences where they are and where they're trying to go, but we've also set up the day so that it's going to be a very interactive day. Because of those of you who are in this audience, you have an enormous amount of experience also. So we're going to pull that out of you. We have several interactive sessions designed so that you can contribute back to these panelists and contribute to the sector as a whole. This first group, we'll talk about their smart lessons initiative, and that's a program to share best practices and lessons learned across regions and topics, something that I don't think we do enough in this sector, and there's been a significant investment by the organization that you'll hear from first. Right after that, we'll have a brief coffee break, and I'm going to be a very, very tough time cop. So don't irritate me. I'll just warn you right there. We'll come back for a session organized by our colleagues from the Safe Water Network. And the Safe Water Network focuses on core areas of entrepreneurship, urban service provision, realistic business models, and local ownership and participation. And we'll hear from several of their colleagues and many, one of their field program staff is also with us today. Several of the people from Safe Water Network have come down and joined us, and we'll make sure and recognize people throughout the day. Then we'll have a brief session by our colleagues from the Nicholas Institute at Duke University. And for those of you who didn't get a chance to ever see or read the 2005 Silent Tsunami report, this was a major and significant document put together by the Nicholas Institute and the Aspen Institute. And one of the authors, Hattie Babbit, will be with us today, and they'll talk about the update that they're doing to that document. And then I'll have some tasks for you to do over lunch. Also over lunch, we'll have a flash drive available to each one of you that has over 35 documents on it that are relevant to the presentations that you'll see today. There are documents on there. There are videos on there. We'll have those ready for you at lunchtime. When we come back after lunch, the University of North Carolina will lead the afternoon session about a very forward-looking issue, climate change and water supply sanitation hygiene. Then our final session will be hosted by our colleagues from Water for People. And they will focus on accountability and transparency, which is a very serious focus of that organization right now. As I said, we'll have formal presentation times and then we've designed each one of the sessions to be slightly different, interactive, to give you a chance to get your questions out, comments out, but in a way that keeps us on time throughout the day. We're here to build on a 25-year history of what we know and really solidify a foundation for the vision moving forward. So without further ado, we'll get right into our first panelist who it's wonderful to have here. They're a bit, if I can call you a non-traditional participant in the water sanitation hygiene sector, but it's wonderful to have them here. It's representatives from the World Bank Group and IFC. I'm going to turn the session over to Dan Rundy, who is here on my left. He is the director of the project on prosperity and development and the William Shrier Chair in Global Analysis here at CSIS. Previously, Dan was the head of the Foundations Unit for the Department of Partnerships and Advisory Service Operations at the International Finance Corporation, IFC, which is the private sector arm of the World Bank Group. And from 2005 to 2007, he was director of the Office of Global Development Alliances, which is where I first met him at the US Agency for International Development, USAID, and he led the GDA Partnership Initiative. Earlier in his career, he worked for both Citibank and Bank Boston in Buenos Aires, Argentina. So with that combination to me, he seems to know where all the skeletons are, where they're all hidden, and so I'm going to turn the session over to him and we'll see how many that he'll tell us about. Thanks, Dan. Thanks, Chris. Thanks, everybody, for coming in this morning. It's a little bit rainy, probably appropriate for a discussion on water. The topic today for the panel is business behind the tap. Smart Lessons, for those of you that don't know it, and I'll get into some of the detail, has a branded approach to these discussions about various smart lessons called smart talks, so this is also a smart talk as well. But why don't I first explain a little bit about the context of where IFC and the World Bank fit into this discussion on water and then I'm gonna get into a brief discussion on what the role of smart lessons are and then I'm gonna turn it over to the panelists. So the bank, everyone's familiar with the World Bank, they lend resources to governments all over the world and provide expertise through various lines of financing, one's called IDA, one is called IBRD. IDA is for lower income countries and the other one is for middle income countries and many of those projects pertain to the water sector and the public sector sense, and there's a significant engagement with regulatory agencies and what we call a development business policy dialogue with governments on how to run their water systems most efficiently. As part of that conversation, there's also the private sector arm of the World Bank Group, IFC, the International Finance Corporation, which has primarily two lines of business, one is lending money and making equity investments, that's the investment side of the house of IFC and then there's a technical assistance side of the house but it's not called that, it's called advisory services and that's the advice that's provided to both governments and to companies of various sources and I think you'll hear a mix of all of these various parts of the World Bank over the course of this discussion panel about water. One of the great ways in which IFC, having used to work there, captures information and captures knowledge is through a knowledge product called smart lessons and their public website is smart lessons, S-M-A-R-T-L-E-S-S-O-N-S, dot I-F-C dot org, smart lessons dot I-F-C dot org, which is a way by which originally IFC could share across the system because it's now a decentralized system, over 50% of IFC staff is in the field, how do you share learning, how do you share knowledge in any large decentralized organization, how do you capture learnings and how do you share it is tricky and it's particularly tricky in the development business where it's decentralized organizations like IFC or USAID or NGOs that learn some innovation in one part of the part of the world and you wanna be able to apply it to another, oftentimes that's a very inefficient process and IFC has I think very successfully found ways to shorten the time by which learnings in Paraguay can be applied to the Philippines or to Benin and it's through this product called smart lessons. Smart lessons is sort of a cliff notes, if you will it's sort of a three to five page quick learning and so you're gonna hear from three different authors of three different smart lesson notes, so this is an example of one, I think many of you have them at your, they're either outside or they're at your table but I also think as part of the goodie bag that you're gonna get, I think you'll get it electronically or in a saved electronic version of several, many of the smart lessons that are gonna be discussed. And so this is a way by which we can capture learnings and we're gonna talk about three specific smart lessons. One is a World Bank one, what's happened over time is that IFC has opened up the smart lessons concept both to the broader bank group and you'll hear from Elizabeth Kleemeyer who's a World Bank specialist in water, talk about some learnings that she had from a desk study that she did of 25 different water projects around the world and then also from two IFC specific smart lessons but there's an opportunity, smart lessons has been further opened up to external organizations so you can submit smart lessons if you're in the water community and you have a key learning that you think is something you wanna share with the broader water community, this is a way to do it. Just internally at IFC, something like 150 to 250 downloads for each one of these smart lessons so think about the sub-community of people in the bank system that are thinking about water, that's probably a very large percentage of the folks that think about water in the bank system are reading these, are downloading them, are sharing them and so this is a particularly interesting tool that's available to you in the broader water community. So let me now get to the issues at hand around water. There's only so many dollars in the public sector to fund water projects, there's only so much that the public sector can do in providing access to water. I know many of you spent much of your career thinking about how can we enlarge the amount of monies that go into the water sector. I think over time there's been an evolution in thinking that either for reasons of scale or for reasons of sustainability that the private sector has an increasing role to play perhaps mixed with public sector monies or in terms of with smart engagement with governments to do that whether from a regulatory standpoint or in terms of various sorts of subsidies or what's called output based aid and so there are various examples of these discussions in the three case studies that we're gonna talk about. I'm gonna ask Elizabeth Kleemeyer to start because I think her smart lesson this is so as I was saying earlier this is the cliff notes version of the 25 page desk study that also includes 50 pages of annexes, you can read the 75 pages or the five pages, I picked the five pages but Elizabeth I think has done a very interesting job of looking at 25 cases in the bank system and what we can learn about the role of the private sector and the water sector. So with that out further ado Elizabeth over to you. Thank you, the reason I was able to produce the cliff version notes from the longer studies because I really have just a very simple message that I'm delivering through these products and that is the private sector is sometimes a better option for managing rural water supplies than community management is. That's it, don't even have to read the cliff version. It's a very simple message. Nonetheless, I think there are probably three ways in which that message could be misunderstood so let me just clarify. I did say managing rural water supplies. This is not a statement about supply chains. Various community management models typically and rightly assume a role for the private sector in some kind of supply chain, either supplying services or supplying spare parts and equipment. What I'm talking about is a very different kind of role for the private sector. That's in managing or operating the supplies themselves. So the private sector is sometimes a better option for managing rural water supplies than community management is. The second possible misunderstanding is that I did say sometimes. This is not about advocating some new rigid orthodoxy that everywhere and every place, the private sector should take over from community management and replace community management with private operators. Quite the contrary, this is an attempt to get rid of a previous rigid orthodoxy that said everywhere and every place, community management is the best solution for managing rural water supplies. So the private sector is sometimes the best option for managing rural water supplies than community management is. And finally, a third misunderstanding could creep in by what the private sector means. We're not talking about a private sector or private operators that look like the large private operators that come in to manage big urban schemes. This is not necessarily some French multinational that moves in with a lot of capital and technical staff to take over. This study is based on a review of 25 cases in which there have been rural water supplies managed by private operators. And those 25 private operators look extremely diverse. There are a few examples of big multinational firms moving in, Gabon, Cote d'Ivoire, Burkina Faso. But there are also examples that look the other end of the spectrum. In Mauritania, it can be a village elder that works part time at managing the village rural water supply. In Cambodia and parts of Vietnam, these are families that have invested their family savings in building a small pipe network and then run the scheme to supplement the family income, perhaps provide an income during retirement to the entrepreneur who has invested in them. And these private operators can be anything in between. It could be a national construction firm like in Paraguay. It could be more regional based firms. It could be local entrepreneurs. By stretching the definition a little bit, in Bangladesh we're talking about some local construction firms but also NGOs. Those of you that have worked in Bangladesh probably know that NGOs there are quite commercially oriented and so sort of move into the private sector. So the private sector is sometimes a better option for managing rural water supply. So that's the message. I look forward to discussing it today. In addition to today, the World Bank has opened an online forum for both bank staff and external experts such as yourself who are interested in discussing the question issue of how to use rural public-private partnerships for rural water supply schemes. So if you're interested in continuing this discussion afterwards, I encourage you to come and register with me. What's the, is there a website address for that? You have to register. So you say, water, www.water.com or something? No, this is the bank computer security team is very rigid. So you have to register with me first and then you gain access to the site. Great. I'm gonna ask Will to go next and to talk about his smart lesson on thinking outside the pipeline, venturing into distributed off-grid water markets. I think you're gonna hear about a very interesting case called Water Health International, which in 2004, IFC made an early investment into Water Health International and then followed up with a much larger equity investment. So I think you'll hear a little bit about that as well as some other learnings. Yeah, good morning, everyone. I'm actually based in the Nairobi office in Kenya with IFC. I just come over every now and then when I miss the rain. And actually, unlike my fellow panelists, I'm only 50% of a smart lesson. This was actually a joint effort between myself and actually in Kenya, I've been very lucky that I have a colleague Vikram Kumar who he's now in the Kenya office. Previously, he was in the Delhi office for IFC and in Delhi, he actually managed the recent IFC investments in the company, Water Health International, which Dan just mentioned. And so this paper was really an effort for myself and Vikram to combine both his experiences with making investments in Water Health International in India, and now Water Health is expanding beyond there with work that I've been helping IFC to set up in Kenya to basically look at how we can develop water and sanitation markets across the board. And as Dan mentioned, there's the advisory side and the investment side of IFC. Vikram sits on the investment side. I sit on the advisory or the technical assistant side. With Water Health International, actually, I noticed there's a lot of Water Health stakeholders in the room. You'll be hearing from Safe Water Network later on. They were a catalyst behind the move of Water Health International into Ghana. And I also spot Mark from the Acumen Fund, another investor in Water Health International. So, and I noticed they're both speaking. So I won't talk too much about Water Health International. Otherwise, you'll be numb by the end of the day. But let me talk a little bit about basically the concept of private sector investment in smaller-scale water supply services. And so you'll also be hearing, I just had a quick look at Nicola's paper. And for IFC, the kind of bread and butter in the water and sanitation has always been large-scale infrastructure investments. For the simple reason that this is where transaction sizes are big enough to get IFC interested, frankly. It's where commercial investment sizes are of a scale that our investment departments are eager to invest. And therefore, this has always been where IFC's primary avenue for engagement has been. The trouble is, of course, these kinds of transactions are a little limited. You get, particularly in coming from Africa, you don't get all that many big city PPP deals coming up that often. So there's a limit to how much IFC can do if it only focuses on large-scale infrastructure. And also, as all of you know very well, that this often misses the heart of the problem. Most of the water and sanitation problems in the region that I work are in rural areas. They're in peri-urban areas. They're in informal settlements, which are often not reached by network grid utilities, if you like. So for IFC, if we're going to do more business in the water and sanitation sector, we need to look a little downscale, if you like, and understand how we can help the private sector to become a bigger part of the solution in relation to smaller water and water supply schemes and also smaller sanitation systems. So the obvious question then is, how do we do that? How do we attract the private sector? How do we attract private finance into smaller, more decentralized water supply systems? And what we call distributed water supply services, which is probably not very catchy. And so it might not catch on. So this was anyway the basic subject of the paper. And it's the heart of the, or it's the fundamental question behind what I've been working on in Kenya. And frankly, it's still early days. The project that I've been working on is really less than a year old. And so we've probably unearthed more questions than we have answers. So I'd be very keen to hear from other people when we get to the discussion. But let me just focus on three issues that the smart lesson brought out. As it mentioned, it's only four pages, so we only got to three issues. But these were, one, the need for an aggregation mechanism. Secondly, the need to do a better job for all of us of blending public and private financing. And thirdly, the need to develop partnerships that more effectively crowd in the private sector rather than crowding them out. And so what I mean by aggregation is basically the problem with small scale water systems is that they're small, right? So for the private sector, that means small contracts. It means small systems generally with high operating costs and therefore limited opportunities for surplus revenues if we think about a kind of per system model. So obviously to make the economics more attractive, we need to find some way of aggregating the number of systems somehow. Now in the case of water health, there's a kind of natural aggregation mechanism within the company. Just to give you a very brief background, Water Health International is a company that installs and operates what they call water health centers in villages and peri-urban areas, primarily in India, but as I mentioned, they're starting to expand to other countries. And so basically by installing more and more systems, there's a natural aggregation within the business model. And the more systems you install, the lower the marginal cost of each new system. So if you're doing one or two or three, obviously it's very expensive if you can get up to a scale where you're doing 100 or 200 micro water treatment systems, then the operational costs progressively go down and you've got to naturally the economics of the business model make more and more sense the bigger that you get. And obviously the challenge there is one that we're coming up against with similar businesses that we're looking at in Kenya and elsewhere is how do you get up to that initial scale? How do you get over those initial barriers where the costs are so high to get to a scale where the economics of the model start to really make sense? I mean, that's just one example. There are lots of other examples for example when we're working with governments, for example, then in Kenya, there's starting to be some interest within the private sector in community water system management. So quite small scale community water systems, the benefits of the private sector coming in to help operate the systems, as Elizabeth mentioned, can be quite profound if the environment is right. The trouble again is that these are small contracts for the private sector. So when you're working with governments, the question then is how do you pool contracts? For example, how do you basically generate transactions that are of sufficient size to get good private operators in by maybe giving them access to five or 10 systems as opposed to just looking at individual systems on an ad hoc basis? The other kind of aggregation mechanism if you like when you look at smaller scale systems is to pool the construction contract with the management contract. And so then it's starting to look like a kind of build operate transfer model and you see that the private sector are much more interested in those kind of models where the management is built in to a construction contract rather than it just being a say a management contract which is when we're talking about systems, small community systems in Kenya, their revenues are maybe $10,000, $15,000 a year. So it's really not of a scale where the management contract alone is sufficient to attract the private sector. I'll speed up a little bit rather than take all the time, but number two, am I okay for you? Yeah, okay. The second issue that the paper touched upon was this probably predictable issue of blending public-private finance and I think all the experience we looked at when we're doing research in Kenya and elsewhere is that wherever private or market-based models have worked there's always been both public funding and private funding in the capital investment somewhere, wherever you look. And again, taking the example of water health, they actually, particularly during the early days, the reason they were able to get up to the scale that they've reached was because they were quite effective at mobilizing donor funding, NGO funding, philanthropic funding on behalf of the communities in which they worked. There are also lots of examples from Kenya and I would encourage everyone to also have a look at there was a smart lesson written this time on a Kenya WSP program where they're basically blending 40% output-based aid funding with equivalent matching funding which is provided by a local bank in Kenya for small-scale infrastructure in the water sector and it was written by Rajesh Advani who's a private sector specialist in the WSP Kenya office. It's an excellent introduction to the question of how to make, how to encourage banks to start investing in smaller scale water and sanitation infrastructure. And so rather than go into detail on that, I'll just refer you to that paper. And it's an excellent program and an excellently written smart lesson which actually got one of the first prizes this year. The trouble though when you look at these examples, you look at water health is that in most cases it's been an ad hoc and opportunistic approach. It's been individual relationships between say NGOs and private companies and the scale therefore is naturally restricted by the scale of funding that each individual donor can bring. So you see a lot of pilots, you see a lot of small scale initiatives but you don't see many going to scale because you don't see many cases in which the public funding is of sufficient scale to always is coordinated within a country in a way that enables the private sector to build models. And it's fundamental to what we're trying to do in Kenya is to understand how we work with the government to rationalize the use of government subsidies in ways that leverage as much private financing into the sector as possible. So I think that would be an interesting, another interesting topic to maybe discuss further as the day develops. The third issue we, and final issue we touched upon was what kind of can vaguely be described as partnerships but particularly partnerships that crowd in the private sector rather than crowd out the private sector. And in the water and sanitation sector, as you all know, there are a lot more stakeholders than in a lot of sectors. And so this question of who does what always is particularly important in the water and sanitation sector. So I think it's worth thinking about what role the private sector can and should be playing. And Elizabeth already touched on it a bit, but if we break it down, it's basically, the private sector brings finance potentially if the tariffs are set at a rate that generates some kind of return on capital, then an obvious benefit of the private sector is the finance that they bring. Second is the management capacity. And thirdly is the innovation and technology that the private sector brings to the table. And if we look at an example like Water Health International, actually you see all of those coming into play. All three of those attributes were brought to the table. In other cases you might see less than that. But I think the basic point is that in our experience things tend to work best where we create the space and the incentives that crowd in private sector finance and management skills and technologies. In contrast, where the private sector is crowded out, where there's large amounts of concessional funding or where there's large amounts of public engagement in water supply management, then for an institution like IFC it's very difficult for us to engage. There's just not the space for the private sector. So those were the three issues that the paper touched upon. I hope I've at least started to introduce the subjects and then hopefully we can discuss them a little more after the third presentation. Thanks. Thanks, Will. I'm gonna just make a comment before I hand over the Florida NICO Separiti. NICO has written a smart lesson on the World Bank Group's collaboration on the St. Lucia Water Public Private Partnership. And when you read it, it's in best bank understatement is the last sentence, which I'm gonna read just to put this in context. When dealing with a client who wants to benefit from the services and products offered by the different organizations, the World Bank Group, it is best to assume that the issue of conflict of interest will be raised multiple times and that the attitude of the client government officials cannot be taken for granted, which is sort of an interesting way to end it and is an interesting sum up of a fascinating case study that I'm gonna turn over to NICO, which I think will be able to unpack all of the issues that I think are summarized in that one sentence. NICO, over to you. Okay, thank you very much. So first of all, maybe a little bit of an introduction. The reason why I ended up writing this smart lesson on St. Lucia, which is a small island in the Caribbean is because I was involved in the water sector reform of this country at three different stages of my life. During the 90s, the public sector in St. Lucia had basically started to throw in the towel on because they were not achieving the desired results on with their water utilities. And so they have engaged the British water utility on a management contract and on a knowledge sharing basis. And so in the 90s, I was involved with an attempt to acquire this British utility. I was working for a European power utility at the time. And so in doing the due diligence, I found out that there is a tiny little contract in St. Lucia and a little bit, I was a little bit curious about that. Five years later, when I joined the World Bank Group, I was actually with the World Bank in the Latin America team and St. Lucia came up again. And I realized that, I found out that the government had definitely thrown in the towel and had requested the World Bank assistance to implement a reform of the water sector and implement a public-private partnership, invite private sector to manage the national water and sanitation company. And then a couple of years later, again with IFC, we were invited by the government to implement the final stage of the public-private, the implementation of the public-private partnership and helping the government find an investor for the water system. If you read our smart lesson that I wrote, you will find that it's a little bit of an inward-focused smart lesson. It's written for my colleagues, for them to be able to learn which can the amazing variety of tools that the World Bank Group makes available for interventions in the water sector and also a little bit for clients or prospective clients of the World Bank to learn about the same things. So it focuses on the issue of knowledge sharing within our organization where I highlight basically how being able to effectively put together the different tools, the knowledge in the water sector is to form the loans for investment on the side of the public sector, the availability to finance private sector investors from IFC, the ability for IFC to provide technical advice. All of this is available, but basically it relies a little bit on personal connections rather than institutional connections or at least that was the case three years ago when I wrote the smart lesson. I'm sure by now the institution has evolved and there are more efficient mechanisms to put all the tools together. And the second issue was the issue of conflict of interest which is one of primary importance within the World Bank Group Imagine when a country or a city or a municipal utility asks for advice, the World Bank Group on its public side can approach the utility and say we can provide you public funding and we can provide you technical assistance on basically how to improve your operations. And IFC on the other hand can approach it and say, look, you can implement a partial privatization or a public partnership and then we can finance it. So those two issues come from opposite sides and conflict of interest needs to be managed carefully. My experience from the government side is that as Dan pointed out when introduced my speech is that you can never take for granted what the government position is. I work on a number of projects similar to this and I've seen reactions from the government on all spectrum. Some governments really care about conflict of interest or at least perceived conflict of interest. Other really wants only to get the job done and this was the case in St. Lucia and they gave us green light to use all possible tools available. What you, the lesson that you will not see written in my smart lesson and perhaps this is the ideal form to share it is one that I've learned after a decade working on the water sector in St. Lucia is that private sector involvement may, it's not definitely the solution to achieve results in the water sector, but when governments want to implement a serious reform of the sector, giving accountability to regulators, to regulate to the policy makers to establish a long-term policy for the sector and to the entity that delivers the services. They need, more often than not, they need to reform the sector and there's a huge amount of inertia from all stakeholders involved in implementing this type of reforms if a radical restructuring of the sector is not contemplated and this is why you will find that private sector involvement or especially in the case of St. Lucia is a perfect excuse to do all the changes from an institutional reform, from a regulatory reform point of view that will take your water sector structure to the point where you want it to be. So to go back to St. Lucia, I'll give you a five-minute snapshot if we have the time. So in the 90s, it was basically the WASCO, there was a, no, actually the water service provided on the island was an agency called WASSA, Water Insanitation Agency, was effectively a branch of government. What they tried to do was to corporatize it with the help of government, with the help of the World Bank Group and some technical advice there and then they hire the best private sector managers or investors, the brightest minds of the island and put them on the board of directors to see if they could achieve any major result. When that failed and they tried the twinning arrangement or management contract with the British Water Company, and that worked for two or three years, but then the contract was not renewed and the situation failed to improve again. Tariffs were frozen, there wasn't a proper tariff setting mechanism in place, the utility didn't have funds to implement to finance investments. And so this is when they approached the World Bank Group and they made an agreement for a technical assistance loan and that loan financed the writing of a new water sector law with the regulations and implementations for tariff, for example. And also a due diligence, a detailed technical and financial due diligence on the water sector. The result of the technical and financial due diligence which was going on in parallel with the writing of the new water sector law and the tariff setting mechanism was that with the existing tariffs, a public partnership was not possible and that the company was not financially sustainable. So again, they approached the World Bank and Ida, because it's a very small country and so they access, I think, 50%, either 50% World Bank funding and they borrowed to make the one investment that made the water utility bankable which was an expansion of a couple of pipelines that basically constrained water supply to the north of the island and once more water was made available, people started using more water and so revenues went up and all of a sudden, the company reached an operating profit, at least. Tariffs had been frozen since the year 2000 in nominal terms so the company couldn't even recover inflation. So this is it for the World Bank intervention. The last part that the World Bank financed was the hiring of a Spanish investment bank to find an investor and they did indeed hire this investment bank, a very good one, only that the times of government approval of all these new laws and the Senate approval and implementation of the regulations were not exactly compatible with the times of private sector investment banks which after two years waiting for the Senate to pass on the new law, basically they cancelled the contract and withdrew from the country. So this is where IFC advisory stepped in and we fill in the gap left by this investment bank. This was less than investment banking type of activity and more of all-rounded assistance. I would say activity, we had to work with the individual members of government to see where they stood on the law. We had to help them find the papers of the law when they lost them between the Senate approval and the formal ratification by the head of government. We had them to provide assistance in with the appointment of the regulator in training of the regulator and well in the end when the regulatory framework was in place, we also implemented an international tender for the identification of the private sector investor and it was quite successful with the company in relatively good economic shape and with the regulatory system in place, the government received a number of good offers. The government also had the requirement that local funds would be mobilized. So we helped them engage in discussions with the local banks and with local industrial investors, namely the power utility of the island and when the local banks withdrew from the project because of a little bit of uncertainty because we were approaching 2007, 2008 financial crisis. I've seized the investment side, decided to make available funds for the capitalization of the new company as an equity investment and well, so this is a little bit the end of our story. If you want to know also how this ended, and I'll tell you why this really feeds perfectly into the conclusion of my greatest lesson that I learned working on the water sector is the fact that with the new water law in place, the new water tariff setting mechanism in place, a well-structured sector with an independent regulator which was now competent because it had been trained with a company that thanks to some fresh capital injection from the World Bank was able to make an operating profit. And also with, if you allow me, three or four solid and very detailed business plans or business proposals received from private sector investors. The government decided that it didn't need private sector investors anymore. And so basically they decided not to award the concession and to continue operating with the current formula. And I think during the last couple of years they've been pretty successful at that, so. Okay, thanks. I think you've heard a variety of messages from our three speakers. One is about that there is a role for the private sector in the water sector. You've also heard about some new examples that Will was talking about, about off-grid water markets, how to access the private sector in these off-grid water markets. I think you also heard about from Elizabeth that there's a broad spectrum of interventions that include the private sector. And then I think you also heard, at one level you heard sort of a traditional IFC discussion of large municipal infrastructure projects in the case of St. Lucia. And then the political risk perhaps of doing that in the sense that there's all sorts of, one of the reasons that the private sector sometimes doesn't invest is on these issues of political risk. And I think we saw that as well. It still leaves us with the challenge of only so many public dollars available for a massive need and that there's a huge gap between the public dollars that are available and that are gonna be available and the need to access clean water around the world. One of the issues that was also touched on, and I want each of the panelists to just touch on it if they would, is the issue of output-based aid. There's been some discussion about this in each of the smart lessons. And I know this is a topic for those of you that follow international development trends. This has been a particularly increasingly interesting topic for the development community. So I'm gonna start with Will and ask each of the panelists if they can make a brief comment on output-based aid and then I'm gonna turn over the floor to everybody here because I know there's a very knowledgeable group, Will. Yeah, I know I'm sure most people are familiar but basically output-based aid is aid that is paid according to outputs as opposed to inputs. So traditionally, public aid to developing countries is paid in advance. You give the government or the money or an NGO the money or whoever and ask them to deliver and if they do grade, if they don't, they've still got the money. Output-based aid is based on the performance, evaluated performance according to set indicators, whether it's number of water connections, whether it's number of teachers or school children attending in other sectors, then essentially you're delivering your aid based on outputs. The reason it's interesting, I think, is that when we're talking about public-private partnerships, it's quite a neat way of incentivizing the private sector to deliver on development targets as opposed to purely pursuing financial objectives. So for example, I know output-based aid was used in, IFC was an investor in Manila Water, a large city public-private partnership where output-based aid was used to incentivize the water company to increase the number of household connections in formal settlements. So these weren't commercially viable connections unless you subsidized them and the way you subsidized them was that you delivered aid to the company based on the number of connections that it provided. And I described the example in Kenya and I would again refer you back to the paper that was written on it. But basically it's a nice way to kind of skew private sector incentives towards the objectives that you as a development partner might have for a particular project. Elizabeth. Yeah, maybe there was a fourth misunderstanding that I should have covered as well, which I was very much just looking at rural water supplies, not peri-urban or urban. And so output-based aid, I did come across in some of these 25 cases of rural water supplies that I looked. And I think that Will just alluded to what you can imagine the problem is. I mean, it's one thing to ask the private operator that's coming in to manage Manila Water, which I don't actually know who it is, but I'm sure that it's a very big company that has lots of capital. And it's another thing to ask a small little entrepreneur that just kind of thinking, well, maybe I'll get into the business of rural water supply to come up with all this money in advance, right? Because output-based aid means you get the money after the construction is done. And maybe it's not even after the construction is done. Maybe it's after you've reached a certain number of connections have been made and after those connections have been run for maybe three months and reach 25% of the population. So that leaves the question of where does the money come from between when you start constructing and when you get the money, especially, as again, as Will said, you're in a situation where banks aren't lending for this kind of thing. They don't think rural water supply is a good investment, seems a little bit risky to them. So that's the trouble I've seen with output-based aid in a number of these projects. So where does the financing come from? Nonetheless, there's an example in Paraguay, which admittedly I don't know that much about, but where output-based aid was very successfully used by the World Bank to reduce the level of subsidies that the Paraguay and rural water agency had been paying for subsidies. The private companies actually competed in their tender on the level of subsidy that they were willing to accept in order to build the scheme and the one that made the offer for the lowest subsidy required from the government did it. Those, the private operators in those cases were also constructing the schemes and they were national firms, so they didn't have this capital problem that faces entrepreneurs and say, entrepreneurs, NGOs in Bangladesh that are trying to come up with money. Nico. So yeah, also in St. Lucia, we had the OBA scheme. Basically, I think two or three million dollars were made available as a grant under an OBA framework to connect rural households that were not part of the system at the moment, that involved building small pipelines that went probably up to 100 or 200 meters in the jungle because St. Lucia is a very green country to connect those households that basically it would be absolutely uneconomical to connect under the normal framework for payment for new connections. And there, I totally agree with Elisabeth. The OBA scheme was a cornerstone of all the offers that we had received from private sector investors because they had a lot of capital available, they felt they could with limited risk achieve, deliver the results and end get paid. But once the PPP scheme was canceled, basically, under public ownership, the water company, no matter how well it was managed now and no matter the fact that they had a good regulatory system in place, they still lacked the basic capital to advance for the investment under the OBA scheme. And so I don't think that part of the, that component of the investment went ahead and I think those people in the forest are still without pipe to water supply. With regards to Paraguay, I think the OBA scheme needs to be of a sufficiently large scale and it needs to have sufficiently big and established brand name or repeatability so that financial institutions can advance the money. For the case of St. Lucia, in the case of St. Lucia, that was not possible. First of all, it was a tiny little subsidy, two, three million US dollars. It was a brand new scheme with no credibility so no financial institution would have advanced this money to the water company to implement those schemes. Okay, we're gonna open it up for questions. I'm gonna ask that folks, we have a microphone in the back ask folks raise their hands and give me their name and also their organization and to keep it in the form of a brief question or a extremely brief statement. I follow the Chris school of being a rigid police person for these issues, so please don't use this for your 10 minute soap box, right? Okay, so hands please. Okay, there's a gentleman up front. Catholic Relief Services, my question is about the privatization of the small rural schemes. Typically you will find in an area there'll be some schemes that work well with community management, many that do not. Now for a private operation to be successful, it was said that one needs to have a number of schemes, the larger the number, the more financially viable it will be. Well my question is, who decides that a community becomes part of a private scheme? Who makes the decision that it transfers from community management to private management? What role does the community have after that decision is made? Are they still having a role in the type of technology, to have fees to be paid, the responsibility for maintenance? The whole purpose of development is to instill a sense of ownership and responsibility. Does a private approach do that? Thank you, maybe I'd ask Will and perhaps Elizabeth they could take that. Will, do you wanna go first? Sure, and I would say the community should be the ones that make the decision. What's interesting in Kenya is that because banks or in the cases where banks are financing small scale community systems, it's actually the banks as much as anyone who are pushing the concept of private management because they see it as a much more reliable way of securing their investment. They are not comfortable lending, and I say they, I mean this is based on some limited experience and primarily one local bank in Kenya. But again, I'm referring to the WSP program that's underway there. But the experience that they've had is that the commercial lending to community managed schemes is a challenge for the banks. Whereas when you back that up with a private operator, a reputable private operator, there's much more of a sense of security that their loan finances is secure because they have more faith that a private operator is going to not only have the technical capacity but also have the independence in terms of shutting people off, for example, if they don't pay, then community management, community managed system might. So what we see is when there's commercial finance in the system, the incentives for private operation are heightened. That's not to say that this is being forced upon the communities, the community should of course always have the option. The question for the bank is maybe they want to make it a condition of their lending and I would argue that's up to them. And if the community doesn't want the funding, then they can carry on with their community managed approach. But that's just my limited experience of that issue in Kenya. Elizabeth, would you like me to comment on that? Yeah, there's quite a range of options. I mean, if you look as I did globally at 25 cases and 25 is no magic number, it was just all of the cases I was able to identify in the time I had for looking for cases. In some countries, like in Benin and Rwanda, there's a choice. The government has decided we're moving to a new management model and they, I mean, the government, the Ministry of Water. And so they offer, like in Benin, four different kinds of contracts. You can have one that's just purely a private operator. You can have one in which the Water Users Association hires a private operator. You can have one in which it's just the Water Users Association that runs the scheme. So in that case, there's a choice. And Rwanda's the same sort of thing. It's all delegated management. There has to be some group that runs the rural water pipe schemes. If it's an entrepreneur that wins the contract, fine. And a lot of them are entrepreneurs. But if it's a reformulation of an old community management committee, that's fine. As long as they sign the contract and accept the responsibilities and agree to deliver the services, meet the benchmarks. And if they don't meet the benchmarks and they're gonna lose the contract. In Niger, where the bank was working, they had to convince the Water User Associations to turn over the schemes. This was under a World Bank project that I'm familiar with. Although there are lots of donors in Niger that are doing the same thing. And that process of convincing the Water User Associations to turn over the work to the schemes to private operators held up the project for a while. Because these Water User Associations were basically corrupt and making a lot of money off of these schemes. And so there was a great reluctance to turn them over. But eventually I think they got 50 schemes. Niger is an interesting case because there was a fairly well done quantitative analysis of the performance of community managed schemes versus these privately operated schemes. And the management was basically much better on the privately operated one. There was still a role for the Water User Associations. In Niger, as in many of these, as in Benin, for instance, it's the Water User Association that signs the contract with the private operator. In Rwanda, that was another case, it's the district government that signs the contract with it. In Bangladesh, they didn't have a choice. It was the entrepreneur that went out and found the scheme and came up with a proposal to build it. So the community either agreed to have that and get a scheme built or they could just stay like they were. In Gabon and Morocco, I find those very interesting cases because for so much of my career, we were saying utilities couldn't manage rural water schemes. And those are two cases in which it's a utility that's very successfully expanding into rural areas. So again, in that case, it's already been decided by the government that these areas are within the perimeter of the utility company. So I would just say it's quite a variety. I would also say that for a long time, we've been saying that what's important is ownership of the scheme. But let me steal the idea of Peter Harvey, who's written about this at great length. He's now with UNICEF, but used to be with Swansea. Is that that place in that writes? Publishes a lot on water supply. Anyway, Peter Harvey made the point. Is it really ownership that we're worried about or is it willingness to pay for the water and maintain the scheme? Do we really? I mean, like for instance, I don't really care whether or not I own WSCC, WSSC. I want the service and I'm willing to pay for the service. So isn't instilling in rural people and giving them the desire to maintain the service through making their contribution to that service important? Also, as I remember, if I haven't forgotten over these many years, it was you, Mr. Warner, writing about Malawi who said that these schemes would not be maintainable of the Malawi Rural Pipe Scheme, perhaps the most famous participatory community managed rural water system program in the world, that these schemes would not be maintainable under voluntary community management, which was the CM model that was being produced there because that undervalues the labor, the value of the labor of the community members that they simply have all of this time to walk the pipeline and clean storage tanks. And indeed, 25 years later, that's exactly what we saw, that a voluntary based village management structure for community management of the Malawi Rural Pipe Scheme didn't work. Okay, gentlemen sitting at that table there. Good morning, Joe Raza, Water Resource Sustainability for Coca-Cola. I'd be curious to see with these schemes, I mean, obviously there's a global reset and expectations on private sector water users, industrial water users, and we're also quite keen to manage our water related risk. So I would be curious to hear the panel's point of view for what the role of industry would be, industries that are present in these areas or potentially would want to be in those areas? Elizabeth, why don't you take a crack at that first, Elizabeth, maybe the other panelists want to talk. I don't think Coca-Cola has a strong presence in rural areas, because I was looking at places. I mean, I wasn't, again, the fourth misunderstanding. I wasn't talking simply about the edges of large towns. I was talking about real rural areas. So I'm not sure that I've ever heard of some place like Coca-Cola being there, but I have seen other things like maybe agricultural processing things, or even a cement factory located in those areas. I mean, I'd say there's a great role for them, particularly if they pay their water tariffs. And- Yeah, yeah, yeah. Yeah, I mean, commercial tariffs, like in any water system, that's a great way to keep the rates down for other people, particularly poor rural people, that might not be able to do it. So what I saw in these case studies, plus a mission I did for the bank in Vietnam was the mistake of the, particularly community-managed schemes to not get the tariff right for these commercial things, because I think you should pay a lot of money for that water. And the tendency was to kind of say, oh, a little bit more than what a rural household would pay. I think that's the best I can do with answering your question. You know, I mean, if I can have a little bit of an answer here. You know, I mean, for example, you're gonna see significant increases in what you might think is corporate social responsibility and investment. It's gonna be a dramatic increase in the next few decades in what private sector industry wants to do in terms of engagement to support the sustainability of resources. I think most industries tell you tariffs are no issue. In fact, they're incredibly low around the world, too low in unsustainable funding is the result of that. But so I mean, you know, in output-based aid, for example, private sector industries may have a role in the initial seeding of those and trying to spark some creativity. It's not just about the tariffs, but how can we be more engaged productively to help those communities to support the sustainability of resources to make these solutions economically viable and sustainable? Yeah, I know that Koch and Chevron, I think both have programs on water. I can't remember how many, how I'm looking at Sharon Murray who's in the audience and there's a relationship that Koch and AID have a, I don't know, how many people you reach Sharon between Koch and AID together now? It's half a million people in how many countries? Right, 23, so these sorts, in the case of Koch, it's a bit, this is central to its business, that this is a part of it and you're reaching hundreds of thousands of people beyond providing a beverage. And I know in the case of Chevron, I know this is also a critical issue of reaching access to water. So it may be that the subsidy that we've been talking about may come from grants from private sector actors or you may see companies that aren't in the rural utility business be making equity investments in companies. You could see that in the future as part of either as a CSR initiative or something that's part of a social license to operate initiative perhaps, right, in the future. Okay, other comments? There's a gentleman in the... Can I add just one thing is that, Water Health International, by and way, is one of the case studies in here. So, but with that and a few other exceptions, I don't think the idea that getting the private sector involved in managing rural schemes has paid off as a way to get private sector financing. And that's not surprising because it really didn't pay off in the urban water sector either. That the private sector's been a lot better at bringing management skills and technical skills and not so much a source of investment. And when you turn to looking at these very small rural schemes, that's true several times over. And then when you add on top of that that banks don't wanna lend either, you're not gonna see a lot of private firms bringing in capital because they wanna make a profit through rural water supply. But if there's a firm that wants to bring in money because they think it's a good thing to have rural water supply and they're really willing to help put in place a financially sustainable management model, I think that would be a great role for the private sector. Well, I'm gonna just ask, before we go to that gentleman back up, maybe you can make comment, and maybe Niko, if you've got any comment about this, I'd welcome that as well, but we'll first then Niko. I look, again to refer back to the case that I presented before, we had the issue of in solution of managing the hotel association. As you know, it's a powerful, powerful local lobby. They use a lot of water for swimming pools and for rooms way more than the per capita consumption of the households around them, and they have a lot of money. So throughout the decade in which I worked on the water sector and solution, there's always been this looming question, what do we do with them? So they are, I can say it was an extremely controversial issue between the hotel association would have been more than willing to participate in the shareholding of the company, but then the public was opposed to it because they say, oh, you just want to hand over the management of our water supply to the people who will hoard the available water for their own purposes. And then financially, they were already paying two or three times more than the average household, but that made very little difference on the average tariff level. So in the end, they ended up being invited to be present on the board of directors of the water company and to share knowledge with the managers of the water company on issues like revenue management or financing, this kind of stuff. Well, yeah, just briefly on that comment, it's not quite related to the sustainability issue, but what we are seeing in Kenya is that the market for industrial water efficiency is actually one of the catalysts for general private sector interest in the water sector. For example, we're working with a few private operators whose actual core business is water efficiency work with horticulture producers, with other primarily agribusiness because it's Kenya, not so much big industry, but that's certainly a key driver of the market for water companies and usually they're quite diversified. So I mean, it's a bit of a slightly off the topic of the question, but just an observation. I think, and I would defer to Elizabeth's general experience, because she quotes about 15 countries whereas I'm able to quote one. But what we are seeing in Kenya is that there is bank financing going into infrastructure. I would certainly agree that generally the private sector management seems to have been more effective than private sector bringing financing, but we are seeing both better run urban utilities accessing market financing and the example I've been giving of rural systems, market financing blended with output based aid subsidies, which I will certainly admit is early days and that model has yet to be proven, but I think for our IFC perspective, there's certainly, we're pursuing the idea that private financing can be leveraged in the water sector. Okay, the gentleman in the back. My name is Zach Cahillan and I'm with Evergreen International Aviation. And my question is mostly directed at will, but anyone can feel free to chime in. I'm not terribly familiar with the water health international, but I understand that they're mainly based out of India. And in a country like India or say Bangladesh, where your rural population just count is probably higher than your average rural population in pick a country in central and North Africa, do you anticipate WHI or a comparable company being able to overcome the whole economies of scale issue that you alluded to period or A in an ample amount of time and if not, what thoughts have you had preliminarily how to address that issue? Yeah, it's a great question. And I think it's fundamental to what we've been grappling with and actually what say Ford and Network have been grappling with their work with trying to help water health access the Ghanaian market. And I think fundamentally there's the water health model, there's some basic drivers. One is the population density. So you need quite high population densities within a village so that you have a captive market in one area. There's relatively easy access to water so you don't have huge expense in extracting from whatever your water source is and then there's the socioeconomics of the consumer. There's a willingness to pay for clean water within that area. How many sites in Kenya fulfill those kind of characteristics? We're not exactly sure yet and we're actually doing some market research at the moment actually in partnership with say Ford and Network to try and answer some of those questions because and what I would imagine is that the models that work will be very much adapted to different circumstances. So we're not trying to pull a model out of India and plant it into an African village and like a spaceship and hope that it somehow works. But what are the characteristics of the local market that will make these kinds of similar kinds of distributed business models work in different environments? But I would agree it's a more difficult market certainly. The woman up front here. Kendra Sam with Boozown Hamilton. And I apologize if you already went over this. I was late thanks to our metro assistant. Have you seen an increase in private sector involvement in market-based waterfront projects where downstream users pay for upstream stewardship? I think the signature example is in Keto. I don't know too much about it but I'm just wondering if you've seen it increased in projects like that. Elizabeth, do you want to take a crack at that? I'm not sure I understood. You mean like they're paying the consumers of a rural pipe scheme or something and paying for like watershed management? Is that what you, you know, in my 25 cases I didn't come across that. So I don't think I should say anything more. Others, gentlemen in the corner there. Brooks Keane from CARE. Certainly with community management of rural water schemes, we've seen some of the issues you're talking about with transparency of financial management. And I'm curious, and I guess this is mostly for Elizabeth, in your case studies, how have you seen that that problem gets overcome with private sector management of rural water schemes particularly in Sub-Saharan Africa where you'll have sort of a lack of information and educational level in communities might lack the sort of information to hold private sector or community management schemes accountable? You know, the danger about talking about something like this is that you tend to first off start sounding like an advocate that this is a really great thing that always works and then sort of by constant repetition start thinking that you're an advocate for it. So in the paper where I don't have those kind of pressures I'm much more balanced in saying, well, you know, this looks promising. There have been some cases where it works. There have certainly been some cases that I also document where it doesn't work. So it's more like we're on the cusp of something here. Let's keep working on it, you know, and but I keep monitoring it where it's worked well. And I'd say Burkina Faso is a great example. It hasn't been just going in and putting in private operators. It's been part of a whole sector reform process that went on and that's involved a lot of training. The water and sanitation program has been very much part of it and it's been setting up structures to enforce accountability so that, for instance, the district government that's supposed to play, perhaps again, I've said the point that there are many different ways institutionally you can arrange this, but let's say if the district government is supposed to play a role that you have better district government information about what their role is, you're much more clear. They're contracts, they're well-written contracts that spell out what's supposed to happen, who's supposed to do the auditing. In a number of cases that's involved the establishment it's something you might call like the level of the region. If we're talking about a district or a commune-based thing then some sort of regional level where you set up and contract the private sector, perhaps, to run a support function to support both the district governments and the water user associations and the operators. Now, having said that, that doesn't sound very good, right? Talk about conflict of interest, having one support group help everybody out, but, you know, there's a ways to go, but you know, there's promise. This Vernier-Hitreau having, which is the Burkina Faso model, that's the international French manufacturer of Vernier hand pumps, which I'm sure everybody in this room knows about. And so they're working with their local affiliate to try and help them run eight schemes. So some kind of franchising model. I mean, it's not that exactly, but sort of moving towards that idea of a franchising model where the more experienced big company helps a lower company. And in that case, you kind of get to see the sorts of technological innovations that Will was talking about, because it's being driven by the need for that local company to turn a profit. And so they're innovating in things like, you know, how they transmit financial data from the individual schemes to the central office in Burkina Faso in order to do better auditing and better management of their costs. Woman over there. My name is Rabais Ravastavam, a PPP project manager. I'm curious, you touched upon OBA measureables. Can you talk a little about assessment tools, case studies, issues you've come across, possibly very creative solutions, moving benchmarks, just kind of curious what you've come across in terms of assessing for OBAs? OBA assessments, measurement evaluation. Niko, you want to take a break? No. I'll give you the hard one. Yeah, no, look. I think the OBA group was set up at the World Bank as an experimental unit to demonstrate and collect that OBA schemes could work and collect evidence so that this evidence could be shared and spread and OBA could become a commonly accepted way to distribute subsidies or to achieve the Nintendo goals of policy goals of government or developmental institutions. Therefore, I would refer you to the OBA website. OBA.org, exactly where all this information is nicely collected and presented in the most accessible way. I could just add that the last time I was in a panel discussion like that, I threw out three issues for further discussion. One of which is how are we going to measure whether OBA is effective or not? Okay, last question to this gentleman here. James Diet with GETF. We've done a lot of talking, I think a lot of the questions here have touched on the water sector. And I was wondering if, as this final question, you might be able to talk a little bit about the sanitation sector and the opportunities for the private sector to enter sanitation. Will, do you want to start with that? And then Niko, do you want to? Actually, in Kenya we've got a great example of a very similar distributed service model for sanitation, which is extremely well known now, the ICO toilet. And unfortunately, there's basically one major company in the market. So we are looking at doing some work with WSP and also the PPP Department of IFC to understand how can we develop more formal concession frameworks for what are essentially, for those who don't know the model, municipal paper use sanitation facilities, which actually in urban areas in Kenya are quite good business. The question is how do you take that model and apply it to areas where the real sanitation problems are urban slums and so forth and potentially using OBA funding to help encourage the private sector to go into those kind of more challenging sites where they don't have access to sewage networks, water networks, so the costs of the business are higher. So that's the kind of parallel and it's mentioned actually in our paper as a sanitation example of a distributed service model. Kenya, fortunately for me, happens to be one place where it has kind of taken off. I mean, it's not a panacea for solving sanitation problems in a country. It doesn't solve the issue of household access, shared toilets still under JMP, classifications don't qualify as improved sanitation in some cases rightly so. There are big safety issues around using shared sanitation facilities in urban Kenya and so forth. But as an organization with a private sector mandate, it's certainly an interesting opportunity and I guess watch this space. It's something we're trying to work on and we hope we'll maybe come back next year and report on it. Elizabeth Niko, when are you gonna comment on this issue of sanitation? I can't offhand think of any of the rural water supply projects that I looked at that included sanitation. I do know that water for people has a great example of the private sector in sanitation in Malawi in Blantyre I believe and I think they're on the program for the afternoon. Sorry, we have to cut the short and Niko, do you wanna make a look at it from the perspective of large urban systems? This also presents a bit of a conundrum. From a transactional advisor perspective, these are often the easiest projects to implement because you always find an investor that wants to build a large technological facility that is a wastewater treatment plant. On the other hand, it's very difficult to find somebody to pay for it because it's an economic externality so. Just I wanna give one last plug to smart lessons that IFC.org. If you wanna contribute a smart lesson to IFC, I'm just thinking as I'm not sure who the right point of contact would be, would it be Abiola who's in the back there, her hands is raised and so if you have a smart lesson you wanna contribute to IFC, please contact Abiola who's in the back. Thanks very much. Please give a round of applause to this panel. Thank you.