Sustainable Rural Sanitation Services Project in Egypt

The development objective of the Sustainable Rural Sanitation Services Payment-for-Results Project for Egypt is to strengthen institutions and policies for increasing access and improving rural sanitation services. The project borrower is the Ministry of International Cooperation while the Implementing agency is the Ministry of Housing, Utilities and New Communities.

The project is divided into two phases as follows;

• Phase I of the project covers three governorates, including Beheira, Dakahliya, and Sharkiya. It is financed through a World Bank Loan of 550 Million USD. Phase I started in 2015. The original loan closing date was October 2020, which was subsequently extended to August 31, 2022. Phase I of the project includes sanitation coverage for 150 villages through the installation of 167,000 household connections serving about 833,000 citizens.
• Phase II of the project covers five governorates including Damietta, Gharbia, Menoufia, Dakahlya and Sharkiya. It is co-financed equally by the World Bank and the Asian Infrastructure Investment Bank (AIIB) with a loam amount of 600 Million USD. The additional loan will have a closing date of December 31, 2023. Phase two starts in 2019. Phase II of the project includes the coverage of 133 villages through the installation of 178,000 house connections serving 890,000 citizens. Phase II will further strengthen the sector's institutions, especially the Egyptian Water Regulatory Agency (EWRA), and policy framework

Approach

The project supported the implementation of decentralized management approach at which the Holding Company for Water and Wastewater (HCWW) assumes the role of improving the performance of subsidiary companies while such companies, Water and Sanitation Companies (AWCs), assume more responsibilities in planning and investment including the construction of sanitation infrastructure, operation and maintenance of the household connections. The aim is to further empower local Water and Sanitation Companies by strengthening their operational and financial performance, and ultimately improving the sustainability of the national sanitation system.

The financial instrument for the SRSSP is the PforR which disburse against achievement of results rather than financing inputs, and the disbursement is a done upon the achievement of a number of Disbursement Linked Indicators (DLIs). To implement through such indicators teh project adopted the notion of Performance-Based Capital Grants (PBGC) as mechanism for financing investment by the Ministry of Housing, Utilities and Urban Communities to eligible Water and Sanitation Companies. The Ministry agreed with the WSCs on an action plan and is releasing funds upon the completion of each set of required actions. Those actions will strengthen accountability and promote transparency within the water and sanitation sector. In this way, World Bank loan installments will be disbursed based on the progress against agreed upon Investment Plans of the Partner Water and Sanitation Companies.

The project is mandated to engage an International Verification Agency (IVA) for the purpose of preparing and providing verification reports certifying the achievement of the results. The project design and implements an Annual Performance Assessment (APA) system for the Water and Sanitation Companies.

The project also supports an integrated approach to include environmental mitigation activities as well as increasing citizen engagement, buying-in and managing community concerns. A strong citizen engagement plan ensured the involvement of the local community in the program’s planning. The program has supported the establishment of systems that allow local citizens to provide feedback on the decision making of the local companies. Strengthening accountability both improves the quality of services and ensures that investments are in line with local priorities.

Project Objectives Development Indicators

• Strengthen institutions for increasing access and improving rural sanitation services. People are  provided with access to improved sanitation facilities
• Strengthen policies for increasing access and improving rural sanitation services including the approval of a National water and sanitation sector strategy and the increased operating ration of the concerned Water and Sanitation Companies

Intermediate Results Indicators

Results Area 1: Improved Sanitation Access

• New household sewer connections constructed under the program
• New Functioning household connections to working sanitation systems
• Development of construction plan and conceptual design
• Preparation and review of detailed designs, cost estimates and procurement packages
• Contract administration
• Construction supervision (supervision of supervisors) and quality monitoring

Result Area 2: Improved Operational Systems and Practices of WSCs

• Number of Water and Sanitation Companies achieving Annual Performance Agreement indicators
• Increased citizen engagement through beneficiaries feedback, citizens reports, satisfaction survey and grievance mechanisms
• Percentage of functioning wastewater treatment Plants operating per the Egyptian standards
• Institutional strengthening and capacity building of the WSCs

Results Area 3: Strengthened National Sector Framework

• Preparation and approval of new national tariff structure for water and sanitation services to allow for sustainable cost recovery
• Creation of a PMU with a mandate for the formulation and coordination of the National Rural Sanitation Strateg
• Technical Advisory services to the PMU including results monitoring and evaluation framework
• Development and implementation of procurement procedures manuals and standard bidding documents adopted by the Water and Sanitation Companies