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Sanitation Strategy and Financing
- Cambodia
Ministry of Rural Development
Overview
• Introduction to Cambodia and sector challenges
• Sector strategy development
• Sanitation financing strategies
• Innovative approaches and next steps
We’d WELCOME feedback,
whether on strategy or other aspects of our work
cheasamnang@online.com.kh
Country Overview
Population – largely rural: Sanitation:
» 13.4 million people in 2008 » Cambodia MDG target 2015:
30% rural sanitation, 74%
» 80% rural, 20% urban with a density of urban sanitation
75 people / km2
» Growth impressive - it could be
sufficient to reach targets
Sector management and
coordination: Current percentage of
» Ministry of Rural Development (MRD). Households having access to
Rural water supply, sanitation and
Hygiene
toilet facility:
» Ministry of Industry, Mines and
Energy (MIME). Urban water supply and
sanitation
Rural Urban
» Municipalities. Urban sanitation and
drainage 23.24 % 81.46 %
» Coordinating bodies: Technical
Working Group (TWG) as formal body
for ministries and donors. WatSan sector Source: General Population Census of
group as informal body for government, Cambodia, 2008. Min. of Planning
NGOs, UN and others.
Key challenges in the sector interrelate and reinforce each
other in many ways
Users Service Regulators and Funders and
Providers Policy Makers Influencers
Country
Limited capital
investment
Supply
constraints Political will Unharmonized
No strategic planning
at sector level approaches (subsidies)
Geography
Flooding/climate No sector No evaluation of cost-
Poverty and Lack of Limited budget effective approaches
strategy or for sector
awareness capacity Low
regulation
capacity
Access to
finance Most of the capital
Demand comes
constraints Conflicting from outside aid
Undefined
approaches
responsibilities
Difficult to sustain Limited traction at
behavior change policy level
Uncertainty over
Technology decentralization
choice
Local
Interaction of, and coordination among these diverse players is being addressed through the
development of a National Rural Water Supply and Sanitation Strategy
Strategy is the bridge between policy and action in the medium-
term. Development process is based on analysis and planning
Strategy guides all sector stakeholders, and can thus not be overly prescriptive. Buy-in is crucial
for implementation, so use a fully participatory process.
Key Where are we now? Where are we going? How will we get here?
components
Government policy: National WSS Policy 2003 Strategy
Rectangular Strategy, step Sector Vision 2025: Universal Operational plans
II, 2009 -2013 access Action plans
Sector analysis CMDG targets 2015 Programs and projects
Definition of key issues National Strategic
Development Plan 2009-
2013
Analyze available Involve range of Recognize that different
Process
information (government stakeholders in “strategic stakeholders have different
records, consultancy thinking” focused perspectives which are all
reports, data) workshops valid.
Consult stakeholders at Aim for a way forward that
all levels. is “good enough” or better
than what exists.
Commission additional
studies as needed Do not hold out for a
perfect solution which does
not exist.
Key lesson: Proceed as best as possible in the face of complexity and uncertainty
Strategy Components National government
Main parts and cross cutting roles and
issues accountability
Regulation & policy making Sub-national
government
Env’t /
Service Climate
Disasters
Providers
Service delivery
Users Sanitation
Water
supply Gender
Vulnerable
O&M groups
Quality Hygiene
promotion
NGOs, Dev. Private
Partners, ... Sector
Planning, HRD &
monitoring & capacity
research building
Financing and subsidies
Financing sanitation – The cost to succeed
In rural areas, 80% of coverage is self supply by households; 20% is project financed
On urban side, very limited capital investment outside household expenditure
To understand financing demands as well as supply, used FEASIBLE model to develop
sector financing strategy; urban + rural, water supply as well as sanitation.
Even the baseline scenario costs more money than is currently available
The cost to succeed (II)
Starting from today, and reaching 100% rural coverage by 2025 using simple pit
latrines produces the following picture:
Reaching 100% rural sanitation coverage Million US$ Total per capita per
year (US$)
Uses of Funds 2009-2028
O&M 2,910 8.84
Investments (extensions + re-investments) 13,398 41.00
Renovation 0 0
Total $16,308 $49.54
The total cost to reach full coverage in sanitation is thus more than 16 billion US$, not
taking into account higher service levels or waste water/ sludge treatment
Combined financing from user charges, government budget, foreign grants and loans
does not begin to cover the requirements. There is scope to increase national budget
contribution to 1%-3% (in line with other countries in the region); current sanitation
contributions stand at 0.012% of the national budget (~$ 1million).
BUT: Even if we had more money, the big question would be how to spend it and how
to mobilize the fund. Current evidence is that sanitation programs do not reach the
poor.
Financing sanitation using public funds
Case for public finance of sanitation is well known, but theory and practice often differ:
Theory Practice
Policy and strategy objectives Coverage (MDGs) prioritized
above wider development
Align public finance and programs with national development objectives objectives
Public finance for collective outcomes (no one exposed to unconfined Assumption that collective
excreta) outcomes (ODF) are hard to
achieve
Targeting
Best welfare-enhancing solution targets poorest first
(higher marginal value of monetary unit) Questionable assumption that
Advantages in targeting benefits to women and children everyone without sanitation is poor
(women allocate more resources to improving human capital of children; (Cambodia: 30% poverty; 77%
95% of diarrhoea-related deaths in Cambodia are among under-five without improved sanitation)
children)
Benefits
Cash transfers are preferable: avoid market distortions and maximise utility
(by respecting consumer sovereignty) Supply of materials & labor ensure
finance = toilet building (cash is more
Demand-side incentives (output or outcome-based) are preferable. fungible? more difficult to
Level of benefit should be large enough to justify administrative costs administer?)
Supply of services
Competitive supply of services; minimize administrative costs
Use of in-kind subsidies
Cambodia Examples
Three programs were studied:
ADB Tonle Sap project
» 5 provinces, total of $5.1
million spent on sanitation in 3
years
» Hardware subsidy of PF or dry
latrine with varying HH
contribution
» 46,000 latrines constructed
PLAN International
» Small CLTS program in 47
villages
» 3,900 latrines built, 67% usage
rate
» 34% of villages declared ODF
Program Total pgm Hardware HH cost ($)
IDE Sanitation marketing cost / Comp. ($)
» 2 provinces, total of $760,000 latrine ($)
budget in 2 years
ADB 140.- 88.- 113.-
» 10,000 latrines to be sold
» $25 PF latrine designed and PLAN 60.- 0.- 10.-
marketed by trained suppliers IDE 76.- 0.- 30.-
Public finance efficiency
Leverage ratio: US$ household Bang for buck: facilities per USD 1,000
investment per US$ program
expenditure
14
1.2 Increased access
Leverage ratio per USD 1000…
12
1.0
10
0.8
8
0.6
6
0.4 4
0.2 2
0.0 -
ADB Plan IDE LienAid ADB Plan IDE LienAid
Public finance efficiency (II)
Accessibility for the poor
300%
250%
Cost per household latrine 200%
$300 Household investment per
unit 150%
$250 Software support per unit
$200 100%
$150 50%
$100
0%
$50 ADB Plan IDE LienAid
$0 Hardware cost as % average income
Hardware cost as % poor income
ADB Plan IDE LienAid
Household investment as % average income
Lessons from the case studies
Elements Lessons learned
× Public finance is not reaching those below the poverty line
Service Demand creation is critical
Delivery × Cash contribution requirement excludes the poorest
× Rationing limits the number of poor obtaining any toilet (dry or PF)
× Service level may exclude the poorest
Sustainability × Few collective outcomes (in terms of ODF communities)
× Long term use and sustainability remain issues
We need more efficient ways to deliver public finance to the poor
Better evidence of the financial viability of pro-poor investments is
Financing needed to increase access to market-based finance
Better evidence of the health, economic and social impacts on the poor
is needed, in order to justify more and better-targeted public funding
Some innovative ideas are being proposed to improve the situation
New ideas to solve old problems
Empower sub-national levels (such as province, district,
commune councils) to tackle rural sanitation and hygiene
Test the use of “Conditional Cash Transfers” (CCT) to stimulate
better hygiene behavior and sanitation construction
The next big thing? – Sanitation innovation through CCT
The Grow-Up-With-A-Toilet Plan
Targeted at poor mothers on birth of first child
Five-year plan: intended to build sanitation habits in all poor children (high risk
group for diarrhea, malnutrition, worms etc)
Provision of assistance to improve sanitation through 5-year period
Connection subsidy + sustainability incentives (outcome-based)
Main features
Year 0: $ 15 toilet voucher on birth of first child
(retro-active for parents of U5)
Plus $ 5 rebate on construction of second latrine pit
Year 1-5: $ 0 - $ 10 Annual sustainable sanitation reward
based on: toilet usage (verified)
village toilet coverage (verified)
completion of hygiene course
handwashing facility
Supported by: Demand creation programs (CLTS, mass media)
Sanitation marketing programs (voucher redeemers)
Cambodia Strategy & Sanitation Finance
The End
THANK YOU!
WSP Cambodia: Sanitation finance 16
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