WaterWorX: The role of Water Operator Partnerships in leveraging finance for SDG 6 objectives

The Twelfth Session of the World Urban Forum (WUF) convened by UN Habitat will be held in Cairo, Egypt from 4-8 November 2024. The return of the WUF to the African continent after 20 years coincides with the 20-year existence of VEI (previously known as Vitens Evides International), which facilitates partnerships between water utilities worldwide.

WaterWorX is the joint programme of all ten Dutch water companies set up to ensure a substantial contribution to this Dutch WASH Strategy. In 2015, former Foreign Trade and Development Cooperation Minister Ploumen pledged that the Netherlands would contribute to the Sustainable Development Goal 6 by providing 30 million people with sustainable access to safe drinking water and 50 million people with sustainable access to improved sanitation. This proposal has been detailed in the Dutch WASH strategy 2016-2030.

The WaterWorX programme is implemented by  the WaterWorX consortium led by VEI, which brings together the capacity and experience of the Netherlands’ 10 public water operators in the context of long-term  Water Operator Partnerships (WOPs) with utilities located in Africa, Asia and Latin America.  The WaterWorX consortium has committed itself to contribute to the achievement ensuring or increasing access to sustainable water services for 10 million people between 2017-2030.

The Aim of Water Operator Partnerships

WOPs are long term, not-for-profit partnerships. In a WOP, peer to peer knowledge and experience is provided and exchanged between water and sanitation operators in order to improve peer utilities’ operations and extend their service. The areas of expertise transfer range from technical expertise, such as maintenance of water distribution systems and reducing water losses, to organisational improvements, e.g. in the areas of leadership and management, financial planning, human resources and professional customer communication.

WaterWorX is a programme of WOPs. The programme invests in long term partnership between water and sanitation utilities focusing on the transfer of knowledge to improve the access and quality of services, and building together a more inclusive, (climate) resilient and sustainable water sector.

The aim of the WaterWorX partnerships is threefold: the first objective is to “embark on a planned trajectory of performance improvement to improve technical, commercial, financial and organizational work processes”. Formulated differently, the aim is to strengthen the viability (and thus the long-term sustainable operation) of the partner organisation by improving its financial and technical operations as well as the relations with customers in its supply area.

One of the most common topics discussed within WOP’s is Non-Revenue Water (NRW): this is the difference between the amount of water that is produced by a water utility for consumption/use, and the amount of water that is billed to customers. NRW can be the result of physical losses in the system such as through leaks, bursts, or illegal connections, and it can also be the result of commercial losses caused by lack of metering, inaccurate meters, unauthorised consumption, or internal problems in data processing. There is a role to be played by technology in reducing NRW by, for instance, enabling real time network monitoring and leak detection. Other activities include: improving the efficiency of water treatment plants, ensuring energy savings of pumping installations, establishing a customer care/complaint department, improving billing efficiency, development of strategic plans, development of human resource remuneration and succession plans - each in every possible department of a water utility.

A second area of work in WOPs is the strengthening of the ‘enabling environment’ in which utilities operate: this could include support for the revision of water and sanitation legislation and regulations, as well as reform of sector financing and policies.

A third objective of cooperation is to help increase access to water infrastructure investment finance, by developing investment proposals and engaging with domestic and international financing organisations and banks. This includes direct infrastructural investments in low-income areas that VEI mobilises through the Water for Life Foundation.

Under the WaterWorX program, WOPs were established with a total of 41 utilities with the objective of improving the operational, maintenance, financial and administrative processes of the partner utilities. These improvements in turn are intended to result on the one hand in increased access to sustainable water services for the customers of the utilities, and on the other hand to generate realistic investment opportunities that have an effect on equitable access to water services, i.e. pro-poor investments.

After an initial phase of project visioning in which the partners work together to identify the priorities within the collaboration, a capacity development phase ensues which features classroom and online trainings, on-the-job operational guidance, extensive review of existing managerial and operation practices, technical support and operational investments on the incorporation of tools and systems to improving operations.

In many cases, a broad spectrum of positive results can ensue from the collaboration. Typically, it is possible to substantially increase the coverage of water supplies to customers in the supply area of the utility (see case study below). Similarly in the field of revenue, some utilities report transitioning from a negative net revenue to a positive one, directly attributed to the WOP. And in the field of investment, it is possible (although difficult) to secure investments in infrastructure as a result of the increased confidence in the operations of the utility. At the end of 2023, 4.3 million people were provided access to water and or sanitation services through the programme.

Case Studies and Financial Benefits of WOPs

As mentioned, WOPs can help utilities to transition from negative net revenue to a net positive revenue, as well as secure the sustainability of infrastructural investments. Based on experiences/cases, it is possible to demonstrate that investment in combination with accompanying technical assistance, delivered through WOPs, have proven an interesting collaboration to all involved.

By 2023, the combined portfolio of WaterWorX partners had provided 45 million people with water services and 4.5 million people with sanitation services. The total population in the combined service area is 98 million people. Therefore, the remaining 50% of the population still needs to be connected to water supply systems and thus every effort is necessary to increase coverage.

Infrastructure Investments

Through the programme, small scale infrastructural projects are implemented in direct collaboration with partner utilities. VEI supports developing project proposals together in order to secure funding to expand the number of connections and provide first-time access to water and sanitation services. As of 2023, the progamme has realised 1.5 million connections with funding raised internally (i.e. VEI, together with WfL and in collaboration with partner utilities) of approximately € 14 million.. In the Philippines alone, 45.000 people gained access to services through six partners of WaterworX. These are significant contributions to utilities that individually serve currently between 20,000 and 97,000 people. Since 2017, these efforts have resulted in an additional 345,000 people gaining access to water and sanitation services in Ethiopia.

WaterWorX maintains that directing investments toward enhancing the operational processes of partner utilities represents the most suitable approach to achieving results that foster sustainable access to water and sanitation services. These investments, implemented in combination with capacity development programs lead to an improved provision of services to those connected today and in the future (including new customers). WaterWorX only recently (since 2022) started monitoring these efforts and has so far catalogued and provided examples of 700,000 connections.

Investment leverage

The WOPs have proven to facilitate the leveraging of investments. Under the programme, services have been provided to 434,000 people in Ghana with funds from the World Bank, UNICEF and UN-Habitat. Similarly, the programme is currently engaged in technical assistance for activities in Malawi, funded by the World Bank that will provide services to a further  240,000 people.

In the first phase of cooperation between VEI and four water districts in the Philippines (2017-2021), support was provided to the water districts of Bayawan, Carcar, Toledo and Bogo. The project had a budget of EUR 2.3 million sourced from VEI (37%), the Dutch government (54%) and the remainder from partner utilities (of which 24% was allocated to infrastructure costs. During this period, it was possible to increase the coverage of the water supply service by 59% in the case of Bayawan, 27% in the case of Carcar, 2% in the case of Toledo and 7% in the case of Bogo.

Another example is a partnership that was established between VEI and the National Water and Sewerage Corporation (NWSC) in Uganda for the sustainable delivery of cost-effective water services to a rapidly growing urban population. As a result of the partnership, it was possible to ensure supply network extensions which translated into the connection of an additional 48,900 customers within the supply area. To attract additional funding, support was provided for the development of a proposal for faecal sludge management in Kampala attracting € 700,000 for a Feasibility study from Invest International, the Netherlands. Similarly, support was provided to submit a proposal for financing of up to € 30 million for network extension in the capital Kampala through the DRIVE initiative funded by the Dutch Government.

WaterWorX is therefore well advanced with its commitment to provide support to the government of the Netherlands in contributing to SDG 6, ensuring the availability and sustainable management of water and sanitation for all.