I, like most managers, enjoy reporting progress, whether it’s the completion of a new Safe Water Station, the community-owned water purification systems we build throughout Ghana, or meeting a commitment to advancing knowledge in the water sector. This past month, Safe Water Network hosted its third annual Ghana Beyond the Pipe Forum in Accra under the theme “Public-Private Partnerships (PPPs) for Community Water Solutions.” Each session not only engaged panelists and the audience in discussing how we can put PPPs to work for decentralized rural water supply, but also delivered on the key action points from last year’s forum.
The session, Addressing Barriers to PPPs, was chaired by Mrs. Magdalene Apenteng, Director of the Public Investment Division at Ghana’s Ministry of Finance, the key institution facilitating PPPs in addressing Ghana’s significant infrastructure gap. Her role at the forum was particularly fitting since she also wears the hat of Chair of the PPP Working Group, established by Safe Water Network after the 2014 forum to develop a clear policy framework that enables successful private engagement in the supply of rural water. The group, comprised of representatives from government, donors, private sector and NGOs, delivered on its first milestone to put forth recommendations (see below) within this framework, and began the process of broader sector engagement in a demonstration project to prove PPPs could work in Ghana’s rural water sector.
Safe Water Network, coordinator of the PPP Working Group, presented a preliminary analysis around a group of proximate Safe Water Stations, what we call a “cluster,” in the area of the lower Volta Lake. The financial proposition in this prospective case study grounds the idea of a demonstration PPP project in practical implementation experience.
We know others have tried PPPs with limited success, and that we don’t have all the answers ourselves yet. However, we believe we have brought new ideas to light on how to incentivize public and private funding for such a project, and want to show that partnerships can work.
The PPP Working Group and Safe Water Network are working to be part of the solution, and we welcome others who would like to participate. In parallel to the Working Group, we have been in dialogue with the Ghana Infrastructure Investment Fund to begin structuring specific PPP frameworks for community water provision. Next year, I expect to be reporting progress again with a clear project plan and financial commitments from the public and private sectors to drive this demonstration project.
Here are the highlights from the PPP Working Group Policy Recommendations:
- A cluster approach to implementing rural water systems improves financial viability (vs. independent water stations) and thus can broaden the extent of private sector participation.
- Ghana’s national water policy needs to clarify asset ownership regarding who owns what, and which types of PPPs are most practical.
- The sector should explore varied forms of partnership structures including Design-Build-Operate (a common World Bank partnership structure that is output based and involves significant upfront design) and risk sharing.
- Immediate opportunities include applying management and service contracts to existing rural piped systems and using public funds for infrastructure investment.
- There should be a balance in pricing so it can be both affordable and incentivizing to the private sector, but we must remove impediments to efficient pricing.
- National water policies need to accommodate the PPP policy, which was launched by the Ghana Government in 2011. This should be accompanied by a regulatory framework and an improved information flow about investment opportunities in rural areas and small towns.
We look forward to working with others throughout the sector to learn more about their experiences with PPPs.