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- Morocco designed and implemented a water supply and sanitation pilot, utilizing an innovative output-based aid (OBA) approach.
- The pilot geographically targeted 11,300 households by looking at poor neighborhoods that had no piped services.
- The OBA approach has improved processes, overcome financing obstacles, and increased stakeholder partnerships. As such, it is well on its way to reach its 2010 objectives.
May 8, 2009 -Water is key to life. Although fresh water supplies remain constant, the demand for water increases every day. For the Middle East and North Africa (MENA) region, one of the world’s most water-scarce regions, this challenge is far greater. The need to develop innovative practices and technologies to maximize the use of what is naturally available is an ongoing challenge for MENA water experts, policymakers, and the general public.
Determining how to best aid impoverished peoples in need of water for drinking and sanitation is always a challenge. The obstacles of little money, poor infrastructure, and limited resources are as common as they are difficult to overcome.
Morocco, however, had an added complication. It already had good water infrastructure by regional standards, with 83 percent of households receiving continuous clean water service. However, its cities also have some of the poorest neighborhoods, recognized by the National Initiative for Human Development as among the 160 most disadvantaged urban and periurban communities. The cost and bureaucratic obstacles to provide these areas with drinking water and sewerage are very high, so the government wanted a new way to encourage water utility companies to serve them.
So how to focus limited resources to benefit only needy communities? By using the innovative approach of output-based aid (OBA). In traditional development assistance approaches, aid goes toward making a service, such as installing a water pipe, generally available. In contrast, output-based aid pays only for a specific result for those in need, such as connecting a poor neighborhood to clean water.
In 2007, using a subsidy mechanism, Morocco designed and implemented a water supply and sanitation OBA pilot. The pilot geographically targeted 11,300 households (HH) by looking at poor neighborhoods that had no piped services. Subsidies were awarded only to eligible HH that had agreed to pay the operator-specific beneficiary contribution. Furthermore, operators had to prefinance the subsidies, that is, they were required to complete the piping work before being reimbursed, thus giving all parties incentives to perform.
Although the pilot experienced a slow first year, connecting only 15 percent of the program’s 3-year objective, in the second year, connection rates doubled. A midterm review confirms direct benefits to households and high HH satisfaction with the services provided. The OBA approach is has improved processes, overcome financing obstacles, and increased stakeholder partnerships. As such, it is well on its way to reach its 2010 objectives.
“This pilot shows innovative solutions for reaching poor communities with basic water services,” says Vijay Jagannathan, the water sector manager in the World Bank’s Middle East and North Africa Region. “The Moroccan government has been able to achieve reliable water supply services through targeted subsidies that do not affect the incentives of service providers to bring reliable and safe water supply to the wider community.”
To learn more about OBA or the design and results of Morocco’s pilot interventions to increase water supply and sanitation to its poor, see the chapter (pdf).