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What are the opportunities for innovative water financing solutions?

Richard MacGeorge's picture
During SIWI World Water Week 2015,
World Bank Group Lead Infrastructure Specialist,
Richard MacGeorge, presented on the challenges
of financing for development in the water sector.

It’s been 27 years since I have been to Sweden, backpacking my way around the country and marveling at its beautiful natural environment. So it was with real excitement that I set off for the SIWI World Water Week in Stockholm that ran between 23-28 August. I was especially keen to understand better the big issues that the world is facing, particularly since the theme this year was “Water for Development.”

My World Bank colleagues, and particularly those from the Water Global Practice, were well represented and participated in 13 of the events during the week, so the stage was set for serious discussion. As part of that discussion, I presented on the challenges of financing for development in the water sector. I wanted to leave the audience with three key messages. These were that (1) water is physically but not financially transparent; (2) financial innovation has to be conducted in parallel with and reflect the transitional nature of capital markets and (3) other sectors can give us guidance.

Working on water across borders: Spillover benefits for the SDGs

Jonathan Kamkwalala's picture
At the heels of the Sustainable Development Summit at the United Nations in New York this past weekend, an operations team from the World Bank’s Water Global Practice (GP) is meeting with international development partners and African implementing partner organizations in Zambia this week as part of the fourth annual advisory committee meeting of the Cooperation in International Waters in Africa (CIWA) program, with deep commitment and support from the Governments of the United Kingdom, Sweden, Norway, Denmark, and the Netherlands. The timing is coincidental, but symbolically significant: water management will be key to achieving the 17 Sustainable Development Goals (SDGs), which set the wider global development agenda for the next 15 years. In much of the world, managing water resources means working across borders in transboundary river basins, adding complexity to realizing SDG #6, to “ensure availability and sustainable management of water and sanitation for all.”

5 potential benefits of integrating ICTs in your water and sanitation projects

Fadel Ndaw's picture

A new study was recently carried out by the Water and Sanitation Program (WSP) of the World Bank on how to unlock the potential of Information and Communications Technology (ICTs) to improve Water and Sanitation Services in Africa[1]. According to a Groupe Speciale Mobile Association (GSMA) report[2], in 2014 52% of all global mobile money deployments were in Sub Saharan Africa and 82% of Africans had access to GSM coverage. Comparatively, only 63% had access to improved water and 32% had access to electricity. This early adoption of mobile-to-web technologies in Africa provides a unique opportunity for the region to bridge the gap between the lack of data and information on existing water and sanitation assets and their current management — a barrier for the extension of the services to the poor.

What will you do with access to information?

Cyril Muller's picture
View full infographic here.

A new phase of openness began five years ago on July 1, 2010, when the World Bank launched its Policy on Access to Information, which provides access to any information in the Bank’s possession that is not on a list of exceptions. The policy has served as a catalyst and has created an ecosystem of transparency initiatives to make World Bank information and data available to the public. In the years since 2010, the Bank has applied the principles underpinning Access to Information to accompanying initiatives such as Open Data, the Open Knowledge Repository, Open Finances, and Open Contracting, among others. The spectrum of transparency and innovation even extends beyond these initiatives to include the World Bank’s vision on Open Government.

Open approaches are paramount to development. But while access to information and technology are important to the development process, they are only part of the equation in finding solutions. A crucial part of the process lies with global citizens who can – and do – utilize the information and data to engage with and better their communities.

​Five secrets of success of Sub-Saharan Africa’s first road PPP

Laurence Carter's picture
A view of the Dakar-Diamniadio toll road.

Why is Senegal’s Dakar-Diamniadio toll road, which opened on time and on budget in August 2013, so successful? The road has dramatically improved urban mobility around Dakar, reducing commute times between the city and its suburbs from two hours to less than 30 minutes.  
Building on this positive experience, in 2014 the Government of Senegal awarded a further concession to extend the motorway to connect it to Dakar’s new Blaise Diagne International Airport. Excluding South Africa, this is the first greenfield road PPP in sub-Saharan Africa. What lessons can we draw? 
  1. Political commitment. The Government of Senegal set the project as a priority. The first driver on the road was the President – who paid the toll. But commitment alone isn’t enough; it needs to be turned into action by government agencies. An intra-agency coordinating committee was set up. The National Agency for the Promotion of Investments (APIX) oversaw the preparation of the concession. The Public Private Infrastructure Advisory Facility (PPIAF) supported APIX with technical assistance, including the design of a framework for the oversight of the project.
  2. Toll plaza along the road
    Consensus-building and stakeholder engagement.  Part of PPIAF’s US$250,000 grant to the Government of Senegal helped to pay for seminars with stakeholder groups to discuss structuring options for the road and socio-economic drivers of the willingness to pay. The final structure chosen involved a relatively low toll, with an upfront contribution by the government to the cost, with the concessionaire taking full construction, operating and traffic risk. The combination of careful outreach to stakeholders, a fairly low toll, significant time savings and a well-maintained road meant that the first toll road in the country was accepted by the population. In addition, the fact that there is a free alternative road helped the Government and other stakeholders point out that motorists could always choose to use the other route.
  3. Experienced concessionaire with strong commitment to Senegal. The concessionaire, the Eiffage Group is one of Europe’s leading construction and toll road operating companies, with a long history of involvement in, and commitment to, Senegal. Eiffage, through the special purpose company set up to construct and operate for 30 years the road, SENAC S.A., ensured that the road was constructed and is being operated to a high standard, on time and within budget.  

Pushing the frontier of e-government procurement in Africa with the open contracting standard

Lindsey Marchessault's picture

Public procurement is a linchpin for good governance and effective public service delivery, both of which are critical to the sustainable development of Africa. In many countries throughout the region, strengthening procurement to address weaknesses in public sector governance has become a priority. 

Innovating through the 'valley of death'

Kristoffer Welsien's picture
Water flow sensor tested in rural Tanzania.
​Photo credit: WellDone

In December 2013, I was excited to receive funding through an Innovation Challenge Award to pilot water flow sensors in rural Tanzania, where the sustainability of rural water supply is a major development challenge. Approximately 38% of rural water points are not functioning properly. The sensor we wanted to develop would remotely monitor flow, making it easier to deliver operational information to the Ministry of Water’s water point mapping system.

The pilot brought one of the first 3D printers to Tanzania and we connected the American start-up WellDone International to the local non-governmental organization (NGO) Msabi. The project team implemented the gadget effectively, and my colleagues at the Water and Sanitation Program (WSP) and I navigated the procurement and implementation challenges. The pilot ended successfully in June of 2014 and we were proud of our achievement in bringing an innovative ICT solution to the Tanzanian rural water sector. 

Partnering with the mining industry in good times and bad

Anita Marangoly George's picture
Heading to my first African Mining Indaba in Cape Town, South Africa recently, I was wondering how receptive mining companies would be to the idea of greater partnership given that commodity prices were at historic lows. While there was some hesitation from isolated voices, the overwhelming consensus was, YES, partnerships that promote shared benefits are critical to the sector in both the good times and the bad.
The key in this commodities downturn is to develop win-win partnerships. A central theme at Indaba was the importance of hiring and training local people, and increasing the focus on local procurement which, in turn, helps diversify local economies through linkages to mines’ supply chains. Best practices in training for small and medium-sized enterprises in health, safety, environmental and quality standards were highlighted as well as initiatives to ensure women share in the benefits flowing from mining evenly.

Collaboration is also key to ensuring that the power generated for mining in Africa benefits communities. Power-mining integration is essential when you consider that Sub-Saharan Africa today only generates 80 gigawatts of power each year for 48 countries and a population of 1.1 billion people. Two-thirds of people in the region live entirely without electricity and those with a power connection suffer constant disruptions in supply. Without new investment and with current rates of population growth, there will be more Africans without power by 2030 than there are now.

Can we find a real and viable solution for women who need banking services?

Malcolm Ehrenpreis's picture

Since the beginning of time, women have been at a disadvantage when looking for financial loans. One reason is that women have less control over land and assets that can be used as traditional collateral. This puts a real damper on her ability to launch an enterprise or, even when she manages to launch one successfully, to take it to the next level.

In Africa, women’s entrepreneurial knack is self-evident to anyone who sets foot on the continent—just look at any roadside! So, this problem is likely quite costly and holding back development. Can we solve it somehow?

A Arne Hoels it happens, the Entrepreneurial Finance Lab, an entity that spun off from Harvard’s Center for International Development in 2010, has developed a tool using something called “psychometric testing”, which measures personal characteristics such as knowledge, skills, education, abilities, attitudes and personality traits as a means to predict how likely it is a person will pay back a loan. And it is proving quite effective. Could this be a way to finally help find a solution for women who don’t have any credit history or hold formal title to assets that are traditionally accepted as collateral?

The World Bank Group’s Global Practice for Finance and Markets (GFMDR) started thinking seriously about this, and worked to see it if it could be integrated in a Bank-funded project in Ethiopia (the Women Entrepreneurship Development Project, US$50m). Francesco Strobbe leads the project team, and started to discuss the issue with us in the World Bank’s Africa Region Gender Innovation Lab (GIL). “I thought this was a great opportunity to test some innovative measures to see if we could reach a real breakthrough with much potential for women entrepreneurs—in Ethiopia and elsewhere.”

Corridors for Shared Prosperity: A Case for Replication

Pallavi Shrivastava's picture

For those trying to address challenges in global poverty, inclusive businesses offer solutions to some of the world’s most intractable social problems. Business models that create value for the low-income communities are becoming viable - these have been tested, fine-tuned and perfected by some of the finest brains. Once perfected, it makes sense to contextualize and spread these innovations or the knowledge to markets across the globe. To be able to do this, replication is an important tool.