World Bank to tender US$30mn water and sanitation project in 2013

Bnamericas Published: Friday, November 30, 2012

The World Bank recently approved a new strategic partnership program with the Nicaraguan government that contemplates interest free loans and donations totaling up to US$60mn each year between 2013 and 2017.

A key aspect of the program concerns the expansion of access to water and sanitation services across the country.

BNamericas spoke with Lilian Peña, a water and sanitation specialist at the World Bank, about the proposed programs and the current state of water and sanitation services in Nicaragua.

BNamericas: What are the key challenges facing the water and sanitation sectors and why has work to improve sanitation coverage lagged behind that of potable water?

Peña: In the past 20 years Nicaragua has made progress in water coverage and is well on its way to achieving the Millennium Development Goal [MDG] of 87% in access to improved water sources. Water coverage in the country increased from 74% in 1990 to 85% in 2008. Despite this progress, access to sanitation is lagging and there is great disparity between urban and rural areas, both in water coverage - 98% in urban areas versus 68% in rural areas - and sanitation - 63% of coverage in urban areas compared to only 37% of coverage in rural areas. Across the world, sanitation coverage frequently lags behind water coverage. For most people and governments, having access to water, a very basic need, is a priority, while having sanitation is usually seen as a secondary priority, depending on other priorities and funds available.

BNamericas: The World Bank's new strategic partnership contains a commitment to support the establishment of a national strategy to close the gap between urban and rural areas in terms of access to drinking water and sanitation services. What does this entail?

Peña: The new strategy includes a US$30mn project for rural water and sanitation [planned for 2014], which will mark the continuation of our engagement in helping the government move forward in consolidating this important sub-sector towards closing the coverage gap. The project represents about 54% of the lending commitment for that year, or about 11% of the total lending program for the five-year strategy. The World Bank will also support the development of new techniques of sanitation marketing [with potential collaboration from International Finance Corporation, IFC], local capacities for small rural and peri-urban projects, and disaster risk mitigation in urban water systems.

BNamericas: Can we expect to see any water or sanitation tenders within the next six months to a year?

Peña: In our active projects, both in urban and rural water and sanitation, we have several tenders planned for the next six months. Around 20 rural communities should start new projects within the next six months.

BNamericas: What is the World Bank doing to assist in strengthening Enacal's efficiency and financial administration?

Peña: Enacal will be receiving more funds from several donors within the next years and there's consensus among the government and the donor community that Enacal must improve its efficiency and financial sustainability. This will help ensure that these new investments will yield a better and sustainable service to the people. The World Bank is currently supporting Enacal through a US$40mn project to increase access to reliable water and sanitation services for the population of the greater Managua region. We're also providing technical assistance for topics such as its modernization and financial sustainability

BNamericas: Is there a place for private sector involvement in the Nicaraguan water and sanitation markets?

Peña: Funding for investments comes mostly from donors and is channeled to Enacal for implementation. There is room for private sector participation in the water sector in different ways: energy efficiency contracts in which the private sector provide expertise and investments that help the utility to save resources, part of which are retained by the firm as its return; management contracts, including for smaller utilities as has been done in the past in Nicaragua; build and operate arrangements such as the recent Managua sewerage plant. 

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