document of the world bank€¦ · 29/9/2014 · the world bank report no: icr00003080...
TRANSCRIPT
Document of
The World Bank
Report No: ICR00003080
IMPLEMENTATION COMPLETION AND RESULTS REPORT
(TF-91503 and TF-91509)
ON A
GRANT
IN THE AMOUNT OF US$5.25 MILLION
TO THE
REPUBLIC OF CAMEROON/CAMEROON WATER UTILITIES CORPORATION
FOR THE
CAMEROON WATER LEASE – OBA FOR COVERAGE EXPANSION
SEPTEMBER 29, 2014
Water GP (GWADR)
Central Africa 1 (AFCC1)
Africa Region
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CURRENCY EQUIVALENTS
(Exchange Rate Effective July 3, 2014)
Currency Unit = XAF
1.00 = US$ 481.9957
US$ 1.00 = 0.0021
FISCAL YEAR 2014
ABBREVIATIONS AND ACRONYMS
AFD Agence française de développement
AfDB African Development Bank
Camwater Cameroon Water Utilities Corporation
CAS Country Assistance Strategy
CDE Camerounaise des Eaux
CP Commitment Paper
CPS Country Partnership Strategy
EFA Economic and financial analysis
EIB European Investment Bank
GA Grant Agreement
GDP Gross Domestic Product
GoC Government of Cameroon
GPOBA Global Partnership for Output Based Aid
HIPC Highly Indebted Poor Countries
ICR Implementation Completion and Results Report
IRR Internal rate of return
IVA Independent Verification Agency
JMP WHO/UNICEF Joint Monitoring Program
M&E Monitoring and Evaluation
MDGs Millennium Development Goals
MTR Mid-Term Review
NPV Net present value
OBA Output Based Aid
MO Manual of Operations
PDUE (*) Projet de développement urbain et du secteur de l’eau
PIU Project Implementation Unit
POE Panel of experts
PPP Public-Private Partnership
PRS Poverty Strategy Reduction
SAR Semi-Annual Report
SNEC Société Nationale des Eaux du Cameroun
UWDS (*) Urban and Water Development Support
WSS Water Supply and Sanitation Services
iii
Senior Global Practice Director: Junaid Kamal Ahmad
Country Director: Gregor Binkert
Practice Manager: Alexander E. Bakalian
Project Team Leader: Miguel Vargas-Ramirez
ICR Team Leader: Miguel Vargas-Ramirez
ICR Primary Author Véronique Verdeil
iv
CAMEROON
Cameroon Water Lease – OBA for Coverage Expansion
CONTENTS
Page
Data Sheet
A. Basic Information………………………………………………………………………………….vi
B. Key Dates…………………………………………………………………………………………..vi
C. Ratings Summary…………………………………………………………………………....….…vii
D. Sector and Theme Codes…………………………………………………………………...….….vii
E. Bank Staff…………………………………………………………………………………………vii
F. Results Framework Analysis………………………………………………………………..…….viii
G. Ratings of Project Performance in ISRs…………………………………………………………...ix
H. Restructuring …………………………………………………………………………….……...…ix
I. Disbursement Graph………………………………………………………………………….….…ix
1. Project Context, Development Objectives and Design ............................................................... 1
1.1 Context at Appraisal ..............................................................................................................1 1.2 Original Project Development Objectives (PDO) and Key Indicators ..................................3
1.3 Revised PDO (as approved by original approving authority) and Key Indicators ................3 1.4 Main Beneficiaries .................................................................................................................3 1.5 Original Components .............................................................................................................4
1.6 Revised Components .............................................................................................................4 1.7 Other significant changes .......................................................................................................5
2. Key Factors Affecting Implementation and Outcomes .............................................................. 5
2.1 Project Preparation, Design and Quality at Entry ..................................................................5
2.2 Implementation ......................................................................................................................6 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization .......................9
2.4 Safeguard and Fiduciary Compliance ..................................................................................10 2.5 Post-completion Operation/Next Phase ...............................................................................11
3. Assessment of Outcomes .......................................................................................................... 11
3.1 Relevance of Objectives, Design and Implementation ........................................................11
3.2 Achievement of Project Development Objectives ...............................................................12 3.3 Efficiency .............................................................................................................................13 3.4 Justification of Overall Outcome Rating .............................................................................14 3.5 Overarching Themes, Other Outcomes and Impacts ...........................................................15
3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops ....................16
4. Assessment of Risk to Development Outcome ......................................................................... 16
5. Assessment of Bank and Borrower Performance ..................................................................... 17
5.1 Bank Performance ................................................................................................................17 5.2 Grantee Performance ...........................................................................................................18
6. Lessons Learned........................................................................................................................ 19
v
Annex 1. Project Costs and Financing .......................................................................................... 21
(a) Project Cost by Component (in USD Million equivalent) ...................................................21 (b) Financing (in USD Million equivalent) ...............................................................................21
Annex 2. Outputs by Component.................................................................................................. 23
Annex 3. Economic and Financial Analysis ................................................................................. 32
Annex 4. Grant Preparation and Implementation Support/Supervision Processes ....................... 37
(a) Task Team members ............................................................................................................37 (b) Staff Time and Cost .............................................................................................................37
Annex 5. Beneficiary Survey Results ........................................................................................... 38
Annex 6. Stakeholder Workshop Report and Results ................................................................... 39
Annex 7. Summary of Grantee's ICR and/or Comments on Draft ICR ........................................ 40
Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................................... 41
Annex 9. List of Supporting Documents ...................................................................................... 41
Map IBRD 41072 ………………………………………………………………………………..43
List of boxes and figures
Box 1 - The urban water sector reform in Cameroon and reasons for financial deterioration ....... 2 Box 2 – The Cameroon water OBA project: main features ............................................................ 4
Figure 1: Project’s total investment cost and actual cost sharing ................................................. 15
Figure 2: the OBA project lifeline: implementation, milestones, achievements .......................... 22
Figure 3: Complex flows of project data contributed to low achievements ................................. 23
Figure 4: PDO progress over the project life: a 47% achievement rate ........................................ 24 Figure 5: Unit cost and cost sharing per connection varied over the project life ......................... 25
Figure 6: In Koumassi business unit (Douala), Camwater’ contribution decreased from 2010 ... 25 Figure 7: OBA profiles: low monthly consumptions .................................................................... 26 Figure 8: In total, 10% of OBA connections became inactive ..................................................... 27
Figure 9: 1 in 3 new domestic connections during the project is subsidized by GPOBA ............ 28 Figure 10: Eligibility and verification criteria evolved during the project life ............................. 30 Figure 11: Ex-ante and ex-post assumptions and economic and financial analysis ..................... 33 Figure 12: Cost effectiveness: unit cost and cost sharing analysis ............................................... 35
Figure 13: Access to piped water and to other sources of water in urban areas ........................... 36
vi
A. Basic Information
Country: Cameroon Project Name:
Cameroon Water Lease –
OBA for Coverage
Expansion
Project ID: P106794 L/C/TF Number(s): TF-91509,TF-90503
ICR Date: ICR Type: Core ICR
Lending Instrument: SIL Grantee: Cameroon Water Utilities
Corporation
Original Total
Commitment: USD 5.25M Disbursed Amount: USD 1.82M
Revised Amount: USD 5.25M
Environmental Category: Partial assessment (B)
Implementing Agencies:
Cameroon Water Utilities Corporation (Camwater)
Camerounaise des Eaux (CDE)
Cofinanciers and Other External Partners:
In the design, Cameroon Water Utilities Corporation (Camwater) is considered as a co-financier
Note: The project was initially (2006) conceived as an integral part of the IDA- funded Urban
and Water Development Sector project (P084002) and is referenced in the Project Appraisal
Document that was approved on May 1, 2007. However, it was initiated under the procedures of
the GPOBA project cycle and followed them until signature of the agreement.
While this lending operation got a separate number in early 2008, it has kept closed linkages
with the “parent project”, including for implementation support and reporting. This has some
impact on this ICR, which will be detailed in the relevant sections below.
In the ICR, the IDA-funded project will be named by its French acronym, as used by the
stakeholders: PDUE (projet de développement des secteurs urbain et de l’eau).
B. Key Dates
Process Date Process Original Date Revised / Actual
Date(s)
Concept Review: 08/28/2006 (*) Effectiveness: 02/16/2009 -
Appraisal: 09/25/2007 (*) Restructuring(s):
Approval: 05/01/2008 Mid-term Review: 03/14/2012 03/14/2012 (**)
Closing: 12/31/2011 10/31/2013
(*) Under GPOBA procedures, the Concept Note and Commitment Paper (CP) were reviewed by a Panel of Experts,
and endorsed by GPOBA management (appraisal). The CP is used as an equivalent of a PAD.
(**) The Mid-term Review date is the PDUE MTR (P084002). There was no MTR dedicated solely to the GPOBA
project.
vii
C. Ratings Summary
C.1 Performance Rating by ICR
Outcomes: Moderately Unsatisfactory
Risk to Development Outcome: Moderate
Bank Performance: Unsatisfactory
Grantee Performance: Unsatisfactory
C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)
Bank Ratings Grantee Ratings
Quality at Entry: Moderately
Unsatisfactory Government:
Moderately
Unsatisfactory
Quality of Supervision: Unsatisfactory Implementing
Agency/Agencies: Unsatisfactory
Overall Bank
Performance: Unsatisfactory
Overall Grantee
Performance: Unsatisfactory
C.3 Quality at Entry and Implementation Performance Indicators
Implementation
Performance Indicators
QAG Assessments (if
any) Rating
Potential Problem Project
at any time (Yes/No): No
Quality at Entry
(QEA): None
Problem Project at any time
(Yes/No): Yes
Quality of Supervision
(QSA): None
DO rating before
Closing/Inactive status:
Moderately
Unsatisfactory
D. Sector and Theme Codes
Original Actual
Sector Code (as % of total Bank financing)
Water supply 100 100
Theme Code (as % of total Bank financing)
Water resource management 67
Urban services and housing for the poor 33 100
E. Bank Staff
Positions At ICR At Approval
Vice President: Makhtar Diop Obiageli Katryn Ezekwesili
Country Director: Gregor Binkert Mary A. Barton-Dock
Practice Manager: Alexander E. Bakalian Eugene Ouayoro
Project Team Leader: Miguel Vargas-Ramirez Philippe Marin
viii
ICR Team Leader: Miguel Vargas-Ramirez
ICR Primary Author: Véronique Verdeil
F. Results Framework Analysis
Project Development Objectives
As stated in the Grant Agreement (GA), the objective of the project was to promote, following an
output-based approach, piped water access for the urban population of Cameroon by adding
about 40,000 low income Beneficiary Households (representing approximately 240,000 persons)
to the urban water supply system.
Revised Project Development Objectives (as approved by original approving authority)
N.A.
(a) PDO Indicator(s)
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 1 : Number of water social connections
Value
quantitative or
Qualitative)
0 40,000 18,854
Date achieved 04/07/2008 04/07/2008 10/31/2013
Comments
(incl. %
achievement)
Definitions in the agreed Grant Agreement refer to the “verified outputs” or
“households eligible pursuant to the criteria set forth in the Operations Manual”.
At completion on October 31, 2013, 25,254 new connections had been executed by
CDE under the OBA program. However, only 18,854 were verified and declared
eligible to the GPOBA subsidy by the IVA. The achievement is of 47%.
Indicator 2 : Number of people in urban areas provided with access to Improved Water Sources
under the project
Value
quantitative or
Qualitative)
0 240,000 150,000
Date achieved 04/07/2008 04/07/2008 10/310/2013
Comments
(incl. %
achievement)
This core sector indicator reflects the project’s outcome in terms of population reached
(based on 6 people per household using each connection).
The total connections implemented (25,254), even if not verified, if functional, actually
provide access to an improved water source, and thus increase the number of people
who benefitted from the project (150,000). The achievement rate hence reaches 63%.
There is no other external source of information to measure to which extent this
increase in number of people served contributed to improve the national coverage rate –
a development outcome that was expected in the CP.
(b) Intermediate Outcome Indicator(s)
Comments The CP does not include a Results Framework with IOIs.
ix
(incl. %
achievement)
The initial SARs include a reporting framework with 9 indicators, but no formal end-
target values.
G. Ratings of Project Performance in ISRs
No. Date ISR
Archived DO IP
Actual Disbursements
(USD millions)
1 02/04/2013 Satisfactory Moderately Satisfactory 1.11
2 10/27/2013 Moderately Unsatisfactory Moderately Unsatisfactory 1.11
Note: Many GPOBA Semi-Annual Status Reports (SARs) are available. They do not include
ratings on PDO achievement and IP. The first ISR was prepared in February 2013. The second
one was completed in October 2013. The GPOBA project is mentioned in some of the PDUE
ISRs, but only briefly. These shortcomings are highlighted in the relevant sections of this ICR.
H. Restructuring (if any)
N.A.
I. Disbursement Profile
1
1. Project Context, Development Objectives and Design
1.1 Context at Appraisal
1. Cameroon was, at project identification in 2006, a low-income country struggling with low
access to basic services in cities. Despite a per capita income slightly above sub-Saharan Africa
average, poverty remained widespread, with about 40 percent of a 16 million population living
under the poverty threshold (US$1 per day) and several social indicators lagging behind. Over
half of the population lived in cities: the urban population growth peaked at around six percent
per year, twice that of the whole country. The stock of urban infrastructure, housing and access
to basic services had not increased since the late 1980s, while the population had more than
doubled. The country’s performance was in some instances weaker than countries with lower
GDP. For instance, only 35% of the urban population had access to piped water, a coverage rate
well behind that of Cote d’Ivoire and Senegal, 70 and 80 percent respectively.
2. A promising macro-economic situation forged hope and fueled donor support to poverty
reduction. The Government had finalized the first poverty reduction strategy (PRS) in 2003. The
strategy promoted, among others, empowerment of the private sector as the main engine for
growth and partner in delivering social services and developing basic infrastructure. Cameroon
also reached the completion point of the Heavily Indebted Poor Countries (HIPC) Initiative in
April 2006, freeing up significant resources for development. In June 2006, the Paris Club
creditor countries agreed upon a substantial reduction of Cameroon’s stock of debt, to allow the
Government to implement the PRS and an ambitious economic program providing the basis for
sustainable economic growth. In this context, several donors considered new or additional
assistance in various sectors.
3. The urban water sector reform in 2005 made way for a complete overhaul to dramatically
increase access and quality of water services and introduced a PPP scheme. After 20 years of
underinvestment and poor governance from the national public utility SNEC, existing
infrastructure was not sufficient to meet demand and services had deteriorated markedly. After a
first concession contract negotiation collapsed in 2002, GoC learned from other successful
public-private partnership experiences in Western Africa. To increase the sector financial
autonomy, the reform established a dual system (see Box 1) combining a public asset-holding
company (Cameroon Water Utilities Corporation, Camwater), in charge of sector development
through concession contract, and a private operator (Camerounaise des Eaux, CDE) under lease
contract (thereafter named affermage). Camwater was established in 2006. An international
consortium led by the Moroccan firm ONEP won the bid and started operating as CDE in the
early 2008. The GoC’s commitment to sector reform attracted donors, including the Bank, AFD,
EIB, AfDB and China.
4. Rationale for Bank Assistance. In this favorable context, the GPOBA operation was initially
conceived as an integral part of the Urban and Water Development Support IDA loan (P0840021,
1 PDUE Component 3, Sub-component 3.3: Support to the PPP; Improvement and development of access.
The PDUE PAD was approved on May 1, 2007, a few months before the GPOBA Commitment Paper.
2
PDUE in French). Following a 2004 Urban Economic and Sector Work, this project was a direct
contribution to the GoC’s new National Urban Strategy and PRS focusing on: i) reducing
poverty in urban areas; ii) resuming the development of water services to help achieve the
Millennium Development Goals (MDGs); and iii) spurring private sector growth and better
governance, as featured in the FY04-06 CAS for Cameroon. It was also well aligned with Bank
and other donors’ programs on decentralization and urban development, and benefitted from the
Bank’s PPP experience, over 15 years, in urban water services in West Africa.
Box 1 - The urban water sector reform in Cameroon and reasons for financial deterioration
5. Rationale for a connection subsidy program. Lessons learned from other projects showed that
the upfront connection cost was the major barrier for poor and middle-income households to
access the service. A survey carried out during preparation confirmed2 that the connection cost
was on average one month income for the richest quintile, three to four months income for
families in the intermediate quintiles, and as much as eight months income for the poorest
families in the two lowest quintiles. Without a subsidized connection program, the expertise and
efficiency brought by the private operator would not increase access to the poorer populations.
6. Rationale for GPOBA involvement. GPOBA has a mandate to fund pro-poor infrastructure
services through output-based subsidies, with special emphasis on the poorest countries and a
particular interest in increasing access to water in Sub-Saharan Africa. The project, as designed,
was fully in line with GPOBA operational criteria, also prominent in the reform, to: i) increase
accountability and efficiency of the national water utility; ii) provide incentives for innovation in
expanding service to poor people; and iii) enhance sustainability of the PPP reform and better
2 This socio-economic study was not in the Bank’s files or maintained by stakeholders.
3
monitoring of results and beneficiary profiles through targeted subsidies. GPOBA was expected,
as co-financier for the PDUE Sub-component 3.33, to leverage overall pro-poor efforts.
1.2 Original Project Development Objectives (PDO) and Key Indicators
7. As stated in the Grant Agreement (GA), the objective of the project was to promote, following
an output-based approach, piped water access for the urban population of Cameroon by adding
about 40,000 low income Beneficiary Households (representing approximately 240,000 persons)
to the urban water supply system.
8. The key indicator to measure increase access to piped water was the number of new individual
household connections added to the system via the subsidy scheme, or “number of social
connections.” A second outcome indicator was the “number of people in urban areas provided
with access to improved water sources under the project.”
1.3 Revised PDO (as approved by original approving authority) and Key Indicators
9. No formal revision of the PDO was made.
1.4 Main Beneficiaries
10. The primary target group was the urban poor to lower-middle income population with no
individual connection to the public water service provided by CDE. According to the CP, the
project beneficiaries were households of the 2nd and 3rd poverty quintiles, with a daily income
per capita of less than US$ 0.40 (US$ 68 monthly for an average family of 6). Households of the
1st quintile were too poor to afford water bills and the upfront connection cost, even if
subsidized. The 4th and 5th quintiles typically were already connected to the water network. The
project did not set strict socio-economic eligibility criteria at the design stage. A mid-term
review after two years of implementation was set to assess beneficiary profiles and consider, if
needed, further targeting to the poor.
11. With no specific geographic criteria set, all urban areas in the country and respective CDE
agencies within the affermage area were eligible. At preparation it was assumed that families
eligible for subsidy were located in the neighborhoods without distribution networks, as well as
in reticulated areas when they could not afford the high connection fees. In both cases, they
typically purchased water at a much higher price that the tariff paid by households with a
connection, from unsafe local wells, street vendors or privately managed standpipes, and
neighbors with individual connections in areas with network.
12. Camwater, the asset-holding public utility and direct grantee, was expected to benefit from
the grant for strengthening its capacity in procurement, fund management and project monitoring
3 In the PDUE PAD, Sub-component 3.3 financing plan was: US$14.2 million funded by IDA, US$10
million funded by GPOBA, leveraging an additional US$2 million from Camwater. In the Grant
Agreement, GPOBA committed US$5.25 million and Camwater’s contribution was not explicit.
4
through the combined GPOBA and IDA projects. The IDA loan included a technical assistance
component to support Camwater’s coordinating unit.
1.5 Original Components
13. Component 1: Connection to Water Services (US$ 5 million). This component was the
core of GPOBA support, in the form of subsidies for eligible “working connection to water
services delivering water to about 40,000 Beneficiary Households, through the provision of
works, goods and consulting services.”
14. Component 2: Monitoring and Evaluation (US$ 0.250 million). This component aimed to
“support project monitoring and evaluation activities by the hiring of an independent verification
agent” (IVA). Implementation arrangements and responsibilities are presented in Box 2 below.
Box 2 – The Cameroon water OBA project: main features
1.6 Revised Components
Not applicable
5
1.7 Other significant changes
15. In January 2010, after project effectiveness, the financing plan was changed when Camwater
and CDE decided to set a fixed connection cost instead of the variable fee set in the project
design (see Box 2 above). Consequences of this change on the project aimed to overcome the
project’s difficulties, particularly Camwater’s unstable financial situation, are presented in
Section 2.2.
16. The project closing date was extended by 22 months from December 31, 2011 to October 31,
2013. This change, approved by CD, was proposed to allow the full utilization of the Grant
proceeds and to contribute to the PDO achievement. Designed for a 4-year disbursement period,
the project lifetime was reduced at appraisal to align with the parent trust fund closing date of
December 2011. In addition, the GA wasn’t declared effective until February 2009, 10 months
after signature. Implementation had a slow start due to financial difficulties and institutional
changes within the sector. Contingent on the execution of network extensions, the duration of the
extension seemed reasonable to achieve the PDO and fully commit the Grant proceeds, since
around 14,000 connections were already verified (or 35% of the DO) and 3,000 more were in the
process of verification in December 2011.
2. Key Factors Affecting Implementation and Outcomes
2.1 Project Preparation, Design and Quality at Entry
17. Lessons learned from other water projects in the sub-region and socio-economic evidence
informed the project design. Project preparation built on the experience gained in Côte d’Ivoire,
Senegal and Niger, where subsidized water connection programs had been successfully
implemented under affermage contracts. The socio-economic survey in Cameroon confirmed
targets’ profiles in terms of access to water services and poverty that helped set an output-based
approach that was relatively new in Western Africa.
18. The project design introduced innovations to foster pro-poor service delivery. The Cameroon
project was the first GPOBA designed to directly support an affermage arrangement:
The newly established asset-holding public utility Camwater became the contractual
counterpart and recipient of the grant, bearing the financing risk instead of the private
operator as experienced elsewhere in OBA projects;
The project introduced financial incentives to enhance the private operator’s incentive to
expand access to poor households and ensure full cost recovery even from small customers:
in addition to the volumetric fee, the remuneration formula entitled the private operator to
receive the monthly fixed fee paid by each new customer (about US$ 3), therefore
expanding its revenue base;
Contrary to other schemes, where the eligible customers only had to pay a guarantee deposit
for a fully subsidized connection, in Cameroon the overall investment cost was divided
between Camwater, GPOBA and the customer. The customer was required to bear at least
5% of the overall connection cost and a deposit, covering three months of consumption;
6
To ensure a pro-poor approach within the PPP and sector reform, the OBA scheme was
included in the lease contract, embedding the OBA project in the PPP structure and linking
its development to the overall urban water sector development.
19. Risks were well identified and extensively discussed with the GPOBA Panel of Experts
(PoE). Putting the financial risk on the public entity was considered needed to ensure a
successful tender of the lease contract in a market context where private operators were reluctant
to take the additional risk of pre-financing the connections under the proposed OBA scheme. The
team also acknowledged operational risks linked to the two-layer structure (connection
implementation vs. investment), in particular potential implementation delays if extensions were
not realized by Camwater prior to connections to be done by CDE.
20. Despite POE’s concerns, in the CP those risks were considered low to moderate. Camwater’s
ability to make planned investment was considered very likely because it was ‘cash positive’ and
was incentivized to develop more connections. Potential operational delays in network extension
programs were not specifically addressed and the subsidy was focused on connections only.
Design did not plan for a progressive implementation to match evolving realities on the ground.
21. Consultations with the Grantee on project design were elicited in the Manual of Operations4
(MO), although it did not recall Camwater’s expected financial contribution (US$ 5.75 million),
a major project feature for the subsidy calculation and cost sharing responsibilities.
22. The Grantee’s implementation capacity assessment could have proposed specific measures to
support Camwater to successfully manage the reporting, monitoring and disbursing procedures
required in result-based funding like GPOBA. In OBA projects, the IVA has an important role to
assist the implementing agency, which could have been more explicit in its TORs.
2.2 Implementation
External factors that have affected implementation and outcomes
23. The urban water sector financial deterioration impacted Camwater’s cash-flow and capacity
to pre-finance the OBA project (see Box 1). Despite a strong commitment to set up the PPP,
GoC did not comply with some PPP financial requirements to support Camwater. These financial
difficulties, far beyond the OBA project, affected Camwater’s ability to invest and CDE’s
revenue collection and financial equilibrium. Despite institutional and financial agreements on
swap debts between the Government, Camwater and CDE, this situation has not yet being fully
solved as of June 2014, impacting own- and externally-supported programs. Although the funds
at stake for the OBA project were relatively small, Camwater failed to replenish the Subsidy
Connection Fund (SCF) to enable continuation of the works.5 CDE pre-financed the connections
from end-2009 to early 2013, which allowed the project to continue and connect new customers.
4 The MO is the only project document available in French, the Grantee’s working language.
5 The Subsidy Connection Fund was set up to channel Camwater and GPOBA funds to the project.
Camwater paid and initial contribution of FCFA 400 million (US$ 0.8 million) in end-2008.
7
24. Low quality water service in some areas and delays in network extension affected customers’
willingness to connect to the public network. Production capacity was insufficient in several
centers when CDE took over the service provision in May 2008. The IDA and AFD-EIB-funded
projects were ongoing with the objective to increase water production, expand networks and
resolve severe water shortages. Delays in procurement affected the emergency water works in
Douala and Yaoundé. Moreover, even before OBA effectiveness, CDE had to execute a large
number of still-pending domestic connections sold by the previous utility, SNEC. But delays in
getting connections impacted effective work and existing customers’ satisfaction, and limited the
effect of the communication campaign promoting the OBA connections.
Internal factors that have affected implementation and outcomes
25. Figure 2 in Annex 2 detail project developments over its near 4-years of implementation,
including milestones and factors that affected implementation and progress toward the PDO.
26. Late effectiveness and late recruitment of the IVA slowed progress at start-up. OBA project
effectiveness depended on a legal covenant for the IDA-funded project: the recruitment of the
PPP auditor. The recruitment of the Independent Verification Agency (IVA) that would strictly
audit the OBA project was not a condition for effectiveness. Difficulties in procurement led to an
initial unsuccessful bid and a transition period with an individual consultant. The 10-month delay
between signature and effectiveness was followed by another 24-month interim situation with
two verifications from the individual consultant and a resulting backlog in connections to be
verified. The second IVA6 contract started in February 2011 and its first report was submitted in
April 2011, when Camwater was urged to request an extension of project closing date after
December 2011.
27. Reporting and reimbursement arrangements proved to be difficult to implement because
there were two data sets to harmonize: connections sold by CDE and connections eligible under
the OBA program. Due to initial delays in implementation, the first invoices from CDE to
Camwater included OBA connections “sold” to new customers, but not necessarily already
executed, or executed but later on declared not eligible by the IVA. These gaps led to lengthy
discussions over eligible vs. rejected connections between CDE and the IVA and/or Camwater.
These reporting and financial arrangements (see Box 2 above) were considered complex by CDE
and Camwater during ICR discussions.
28. Delays and slow pace of implementation translated into low PDO achievement and low
disbursement rate. Project reports show a gap between the objective of 40,000 OBA connections,
the 25,254 executed and the 18,854 effectively verified and eligible (or 47% achievement rate).
The first disbursement occurred in June 2010 and GPOBA disbursed five times during
implementation. The last verification covered the end-2012 period7, before its contract ended in
6 The three financial proposals initially received were far above the amount budgeted for the IVA. The
“second” IVA finally selected (the consortium Hydroconseil-GMUS) was the same firm as the winner of
the initial unsuccessful bid, with a revised budget. 7 Verification was initially planned quarterly, but Camwater had to wait to get a critical mass of
connections to justify the field deployment of the IVA.
8
March 2013, six months before project closure. CDE stopped promoting the OBA connections in
early 2013, but executed some 3,000 connections during the last nine months. These connections
were not verified, thus not reimbursed. In total, 15% of the 25,254 connections executed could
not be verified and an additional 10% were verified but declared not eligible.
29. Recurrent questioning of eligibility criteria and verification methodology created delays in
verification. Responding to the definition of “Beneficiary Households” in the GA, the MO listed
criteria as proxies for social connections: with small diameter (low consumption), for domestic
purposes and immediate use (on inhabited plot, with consumption metered), for households that
had never had a connection. Other “technical” criteria were introduced when the project started
and efforts were made to refine or change some criteria8 and clarify the verification methodology.
Disagreements regarding the IVA results on non-eligible (hence not reimbursed) connections
delayed IVA reports and Camwater’s requests triggering disbursement from GPOBA.
30. The setting of a fixed connection fee introduced a shift in Camwater’s responsibility that
impacted the project outcome. With the January 2010 decision to set the OBA connection cost at
a fixed fee of FCFA 60,000, Camwater was confident that its financial contribution would be
adequate to maintain its cash-flow equilibrium and avoid putting the project at risk. But the
resulting reduction in Camwater’s contribution was not offset, thus de facto limited the project
scope. It also changed the subsidy calculation formula and modified the original cost sharing
between Camwater, GPOBA and the customers.9
31. Additional costs for connections were transferred to the beneficiaries. Beneficiaries were
initially intended to pay an average of 5% of the connection cost, with Camwater paying the
difference after GPOBA subsidy. In the new design they had to bear FCFA 6,000 or 10% of the
cost. To match the FCFA 60,000 cost, CDE also had to adjust the connection fittings and
customers were often charged for the additional cost beyond the first five meters.
32. The second IVA carried out a thorough assessment of the project features, socio-economic
profiles and recommendations on poverty targeting, as required for the project’s Mid-Term
Review. An important finding was that beneficiaries paid a lot more than their share to CDE, for
the additional plumber works and/or extensions, especially in areas with no network, underlying
the urgent need for network extensions to reach the poorest populations.
33. The OBA project, a sub-component of the IDA-funded PDUE project, was shadowed by its
parent project. The project team focused on the continuous degradation of the sector’s financial
situation, a core issue for PDUE. Two project milestones should have triggered action:
a) After the January 2010 changes, the IVA’s mid-term review report released in April 2011
did not trigger follow-up action on its findings and recommendations on poverty targeting
8 See Box 2, Annex 2, Figure 10: how criteria evolved over time. The connection length criterion in
particular was affected by the absence of network extensions, with direct impact on the subsidy
calculation. For practical reasons, verification was done on a sample of connections, first through the
database and customer applications, second in the field. 9 See Sections 2.3, 3.3 and Annexes 2 and 3 on this issue.
9
for instance. The PDUE MTR took place in March 2012, only taking note of the GPOBA
project’s delays in implementation and disbursement requests;
b) The project extension for an additional 22 months aimed to achieve the PDO and allow
for full funds disbursement. However, the gap in closing dates between the IVA contract
(March 2013) and the project (October 2013) meant that all outputs executed after
December 2012 could not be verified unless its contract was extended until December
2013. The issue could not be solved on time to ensure the IVA’s contract extension.
34. Finally, the lack of institutional capacity was a major impediment to progress toward the
PDO. Technical assistance funding through the IDA loan was intended to support the PDUE
coordinating unit, including Camwater staff, operating costs, training, monitoring and technical
and financial audits, and also benefit the OBA project. In reality, the same people were in charge
of these two projects, in addition to their regular work. Delays in recruiting the IVA and not
securing its extension demonstrated some capacity limitation in effective procurement especially
when a new national procurement system was introduced and affected all Bank projects.
Interviews with stakeholders confirmed difficulties to ensure communication between CDE and
the IVA, which created tensions among partners.
2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization
M&E design
35. The M&E design was intended to monitor the number of new household connections
meeting the eligibility criteria. Data to assess the project financing and socio-economic impacts
were to be collected at the customer level during physical verification.10
Commercial data were
to be provided by CDE, which had difficulties in harmonizing billing information coming from
the regional business units.11
In hindsight, the M&E framework was ambitious given the limited
capability in Camwater and CDE.
M&E implementation and utilization
36. Monitoring outputs proved more complex than expected due to different timeframes and
data12
at the various steps from selling/executing/verifying (through database and physically) to
10 The 2007 POE meeting requested the TTL to develop indicators and baselines to provide a results
framework in the MO. A template was prepared (see GPOBA SARs) but not used. Some indicators did
not have a baseline or were impact-oriented, thus difficult to use for quarterly monitoring. 11
CDE regional units and HQ were using different IT systems, with parameters not always harmonized,
submissions to HQ not synchronized. Data consolidation in CDE centralized commercial database took
long and could include inconsistencies. PDUE included support to improve the customer database, which
implementation was delayed. 12
See Figure 2. CDE provided quarterly reports in compliance for MO requirements, but data did not
include expected details on physical realizations and financing flows. The IVA regularly stated that
without commercial data from CDE, it could not assess intermediary indicators such as ratio of
disconnections among OBA customers or monthly consumption. On socio-economic profiles, the
information initially collected by CDE agents was limited and not systematically encoded. Information
10
invoicing connections (CDE to Camwater vs. Camwater to GPOBA). As discussed in Section 2.2
above, eligibility criteria allowed various interpretations between the operator and the IVA and
disagreements on connections rejected by the IVA.
37. Camwater was responsible for overall project supervision and monitoring including
recruitment of the IVA. Evidence shows difficulties in leading the discussions between CDE and
the IVA (e.g. on rejected connections). Assessment of socio-economic beneficiary profiles and
possible project re-targeting, as planned in project design, did not happen: a lack of common
understanding on output measurement continued until project closing. These issues constrained
assessment of the project at completion.
2.4 Safeguard and Fiduciary Compliance
Safeguards
38. The project did not raise any safeguard issue. The environmental assessment was carried out
as part of the overall safeguards evaluation of the IDA-funded Urban and Water Development
Support Project (P084002). The PDUE fell under Environmental Category B as no adverse long
term impacts were anticipated.
Fiduciary compliance
39. Financial management (FM) compliance was adequate. FM procedures for the OBA project
were aligned with PDUE procedures, annual FM audits did not report specific compliance
problems related to the OBA project. However, difficulties in invoicing (CDE to Camwater) and
requests for reimbursement (Camwater to GPOBA) led to considerable delays in disbursement
with the first OBA disbursement occurring in June 2010. In addition, Camwater was not able to
replenish the Subsidy Connection Fund, leading to CDE pre-financing from mid-2009 and
during most of the project. Such adjustments on financial flows and financial data did not
comply with procedures set in the MO. Camwater considered, during ICR discussions, that the
minimum FCFA 25 million threshold, a common FM request, was too high in this particular
project. It limited the frequency of requests for funds to GPOBA, delayed the Fund
replenishment and IVA payments in a reasonable time after IVA report issuance.13
40. Procurement was limited to IVA recruitment. Except for delays already noted above, there
was no issue with compliance.14
such as GPS localization, useful to locate connections to be verified, was not used anymore by CDE
agents after the first few months of the project. 13
The IVA received his fees after 12 months without payment and six months after the end of its contract. 14
CDE was selected through an international tender acceptable to the Bank: the operator could procure
works or goods needed for the project implementation following on its own procurement rules.
11
2.5 Post-completion Operation/Next Phase
41. In the last nine months of the project (January to October 2013), CDE decided to stop selling
OBA connections – both to stop pre-financing with late or no reimbursement and to manage
expectations, as in various cities, water production was not sufficient to ensure distribution to
existing customers. The operator focused on executing pending OBA connections. Moreover,
Camwater sent a request for project extension only in September 2013, including a request to
extend IVA’s contract that was closed since March 2013.15
The request came too late and was
not accepted by the Bank.
42. During the ICR preparation, both agencies expressed regrets about project closing when the
ongoing donor-funded projects such as La Méfou dam in Yaoundé or the IDA-funded extension
works that were supposed to start imminently, would have provided more production capacity,
restored customers’ confidence, and fueled demands for new connections. However, the financial
and institutional deterioration of the overall sector continued to overwhelm the partners’ ability
and willingness to overcome problems and envision any follow-up operation.
43. CDE’s claims for reimbursement to Camwater for those executed by not verified or rejected
connections amounted to over FCFA 700 million at project closing. According to CDE, this
outstanding amount was included in the first debt swap agreement decided end-2013 in the
overall PPP context. CDE did eventually not lose money on the OBA operation. The sum was
eventually endorsed by Camwater/the government without having leveraged more OBA
resources during the project.
3. Assessment of Outcomes
3.1 Relevance of Objectives, Design and Implementation
44. The rating for project Relevance is Satisfactory. The ICR considers the objective to be
highly relevant to the country and Bank priorities.
45. Relevance of the project objective to increase access to safe drinking water for low income
urban poor was and remains High given the country achievement in the water and sanitation
MDGs and critical issues in urban water service delivery. According to UNICEF-WHO Joint
Monitoring Program, in 2012 only 28% of the urban population has access to piped water16
on
premises (individual connections) and 16% at the country level. The 2011 Economic update on
Cameroon reports that in the last decade, the declining access to sanitation and drinking water, as
well as the increase in child mortality in some of the regions, was particularly striking, even in
the better-off regions such as Yaoundé and Douala.
46. The project objective fits well with the 2010-2014 Bank-GoC Partnership Strategy, whose
two pillars of engagement are: i) enhancing competitiveness and enhancing service delivery with
15 The last IVA report, issued in February 2013, was based on 2012 quarter 4 period.
16 JMP indicates a rate of 27% access to piped water in urban areas in 2005, to be compared with the
estimated 35% access to piped water at project appraisal (2006).
12
a focus on large-scale infrastructure; and ii) better governance and spending policies that target
the population’s needs and the poor. The OBA component was a needed social complement of
the IDA-funded infrastructure investments and institutional strengthening. This pro-poor
approach in the water PPP aligns with the Bank’s poverty reduction goal. The CPS builds on the
2009 Poverty Reduction Strategy Paper (PRSP) and on the Vision 2035 policy document,
reflecting the GoC principle objectives: i) reducing poverty to less than 10%; ii) becoming a
middle-income country; iii) being considered an industrialized nation; and iv) consolidating
democracy and national unity.
47. In the current context of difficulties in securing public investments for water, pre-financing
by the public entity, as in the original design, may not be the most appropriate design.
3.2 Achievement of Project Development Objectives
48. The ICR considers the project Efficacy as Moderately Unsatisfactory. The PDO has been
partially achieved. The project reached unserved populations and increased access to piped water
for urban populations, contributing to longer term outcomes and benefits. Implementation
challenges however led to low achievement of the outputs, thus justifying the MU rating.
49. The project did not achieve its key objective to add 40,000 low-income Beneficiary
Households to the urban water supply system. At project completion on October 31, 2013,
notwithstanding a 22-month extension, 18,854 new OBA connections were verified and declared
eligible for the subsidy, which is 75% of the 25,254 that were executed by CDE17
, or 47% of the
PDO as specified in the GA.
50. Yet the ICR considers that the project provided piped water to approximately 150,000 people
not previously connected. This is a 63% rate to the objective to benefit around 240,000 people in
urban areas. The OBA connections, over the project life, represented one-third of the total new
connections gained by CDE (see Figure 9).
51. Despite some uncertainties in such assessment, the ICR considers that the project reached the
targeted low-income Beneficiary Households. Some of the IVA findings on this topic remain
valid assumptions at project completion. However, data from a recent tariff study and from CDE
suggest that most of the new OBA customers have low to very low monthly consumption, which
is consistent with consumption patterns in the poorest households.18
On average, OBA active
connections were found to consume 7.8 m3/month, almost half the regular domestic connections
(13 m3). Field visits (see Annex 2) confirmed implementation in poor areas.
52. The project was to introduce an output-based approach in the water sector to better serve the
poor with more efficient services. In the Cameroon water OBA project, the results are mixed:
17 These figures were agreed upon by parties only during ICR discussions on March 17, 20140.
18 It is assumed that water shortages affect all households and that are consumption levels can be
reasonably used as a proxy for poorer households (i.e. consumption is regulated by expenses for the bill).
See more details in Figure 7 and Figure 8 in Annex 2. The tariff study confirms that consumption is
decreasing for lower poverty quintiles’ households.
13
a) Incentives for the private operator to include poorer households as an additional market
segment proved attractive enough19
for CDE to pre-finance for almost the entire project
life. CDE reports show commitment to provide affordable OBA connections. However,
some interviewees revealed longer delays to execute OBA connections compared to non-
subsidized customers that were considered more profitable than the small OBA
consumers, especially when reimbursement was delayed or denied;
b) While it is assumed that quality of service including reliability and continuity conditions
were similar for OBA and normal connections (e.g. depending on each region/city
production shortages, efforts to restore distribution, power supplies20
), the issue of
inactive connections (see Section 4.1) raises concern over output sustainability;
c) The project was a pilot with an innovative structure, both for GPOBA in a PPP
environment and for Camwater as a public asset-holding company. The 2010 agreement,
presented as a solution to save the project, minimized its contribution without due
consideration of the impact of the decision on targeted beneficiaries. There has been a
learning process, but it is not evident that Camwater will be able to efficiently adopt this
pro-poor, result-based approach widely without enhancing technical capacities to better
support their M&E systems.
3.3 Efficiency
53. The ICR rating for Efficiency is Moderately Satisfactory. The project achieved the
efficiency ratio set in the CP due to a unit cost cheaper than expected. However, the economic
benefits are mitigated by beneficiaries’ contributions higher than expected. More details are
presented in Annex 3.
Economic benefits and financial return with and without the project
54. The E-IRR is constant at 46% and underlines the project’s economic benefits.21
Considering
the low disbursement rate and lower average unit cost, the Financial IRR is higher after the
project than before. It quadruples with the project, with subsidy (65% compared to 16% before
the project). The E-NPV is positive, but also twice less for the 18,854 eligible connections than
for the 40,000 ones planned (US$ 5.1 vs. 11.7 million). Similarly, the Financial NPV is
acceptable, even though it was initially planned that the subsidy will add a lot of value to the
project, which is questionable: with F-NPV at US$ 2.2 million without the subsidy compared to
US$ 3.9 million with the subsidy, the project could have been viable even without the subsidy.
19 Except for the number of new domestic customers added, it is not possible in this ICR to assess the
operator’s increased revenues, if any, attributable to the project. 20
Field visits in North Yaoundé, where lack of supply and pressure affect all customers, confirmed that
OBA connections were almost dry. In central Douala, OBA customers confirmed water was available
almost 24/7. 21
Initial assumptions to value the benefits, kept unchanged for the ex-post assessment, assume in
particular that all time saved from fetching water is converted into additional earnings for the households.
This is relatively optimistic given the local informal economy.
14
55. The initial analysis assumed that monthly consumption would more than double and
expenses would be halved with the program. Ex-post, it was assumed22
that all sources of water
used should be considered in the assessment of consumption and expenses. Data show that the
poorest connected households, taken as proxy for OBA beneficiaries, do not get enough water
from CDE and need to complement with other sources, which adds to the water bill, although
they consume mostly in the 1st tranche of tariff. Overall, it is estimated that OBA beneficiaries
consume more water once connected, but also have higher water expenses.
Cost effectiveness and unit cost
56. A cost-effectiveness analysis was conducted to assess unit costs (per person and per
household) and compare with the expected costs for GPOBA and the beneficiary households.
The unit cost in the Commitment Paper was estimated at $198 for a 17-meter connection.23
57. At project completion, as already underlined in other sections of this ICR, the unit cost was
lower than planned at US$ 176 for all executed connections and US$ 153 for the eligible
connections/costs.
a) GPOBA met its objective to provide a subsidy of US$ 15 per person or below US$ 91 per
new connection. From a perspective of use of development resources, the OBA scheme
represent a substantial efficiency gain by linking payments to outputs. For donors and for
GoC and Camwater as well, this may be likely to be more efficient than a traditional
grant or lending operation where payments are made upfront with no guarantees that
outputs will materialize. This is a satisfactory aspect of the project.
b) Beneficiaries’ contributions are higher than expected. The cost sharing decided in 2010,
where applied, charged beneficiaries 10% of the fee (FCFA 6,000 or US$ 12) and
sometimes more. Lowering the cost to meet the fee reduced the chances for poor people
farther from the networks to afford the OBA connections. All in all, the subsidy made the
connection more affordable, but it is not clear how much the program really reduced
access cost for the poorer households. Nor how much they would have had to pay in the
absence of the program.
3.4 Justification of Overall Outcome Rating
58. The Overall Outcome rating is Moderately Unsatisfactory. The project’s objective to
provide piped water to more urban poor in Cameroon remains highly relevant to the country’s
priorities and the Bank. The key DO was partially achieved and other outcomes have mixed
results. Efficiency ratios are positive with high IRRs and decreased unit costs, demonstrating the
value of an output-based approach for donors and development resources.
22 The ICR team used data from the recent Tariff Study for Camwater (prepared by the firm Artelia and
funded by IDA, including a survey covering six cities including Douala and Yaoundé) and CDE data. 23
The subsidy calculation formula is outlined in Annex 3.
15
Figure 1: Project’s total investment cost and actual cost sharing
3.5 Overarching Themes, Other Outcomes and Impacts
(a) Poverty Impacts, Gender Aspects, and Social Development
59. Reliable data are missing to properly assess the impact of the project on poverty reduction
and gender. Some aspects are mentioned in the relevant sections of this ICR.
60. The impact of GPOBA project varied widely across regions. The initial design did not set
regional targets, and instead let the service provider propose objectives for each of its regional
divisions. On average, Douala and Yaoundé represent 2/3 of CDE’s customers and revenues. The
Western and Far North regions benefitted the most from the OBA program. Douala had 22% of
the total new domestic connections executed by CDE, of which 21% were OBA connections.
The largest share of the new CDE’s customers signed up in Yaoundé (32%) but only 3% of them
benefitted from OBA connections, the same as in the much smaller South West Division, also
suffering of severe water shortages (see Annex 2, Figure 8 and Figure 9). The striking
discrepancy between Yaoundé and Douala highlights the relative interest of each local CDE
Division or business unit in implementing the OBA program, taking into account water
constraints, profitability of applications, local political pressure or other motivations including
reputational risk to connect households with poor water service.
(b) Institutional Change/Strengthening
61. This project clearly provided an opportunity for Camwater to adopt an output-based approach
for connecting low-income households with direct subsidy. Given the weak overall sector
performance, especially on the financial aspects, it remains to be seen if Camwater will replicate
the approach with other sources of financing.
(c) Other Unintended Outcomes and Impacts (positive or negative)
Not applicable
16
3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops
62. Beneficiary surveys or stakeholder workshops are optional for Core ICRs. Due to the limited
achievements and the ongoing implementation of PDUE, no survey or workshop was carried out
at this stage.
4. Assessment of Risk to Development Outcome
63. Risks to development outcomes of the project are considered Moderate. While the
outcome was rated moderately unsatisfactory, the newly-built system is now part of the overall
network being operated by CDE. However, the current PPP context with its lack of financial
equilibrium puts most of the urban water sector investments at risk and creates uncertainties
regarding improvements in service provision, possible scaling up of a social policy for the urban
poor, and a coordinated approach to expand access to piped water in urban areas in Cameroon.
64. Without significant improvement in quality of service, there is a risk that OBA customers
disconnect or get disconnected. As experienced in other projects/countries, customers, especially
poor ones, may become reluctant to pay their bills, including a fixed fee (meter, taxes), if they
have poor or no service for a long period. According to CDE data as of March 2014, only a
negligible number of OBA connections were disconnected, but over 10% were inactive for
various reasons (see Annex 2). This figure may increase if planned investments in the sector do
not materialize. Where other water sources are available in the neighborhood, households may
use them with resulting issues of water quality, time spent in collecting water, and higher costs.
In the current PPP context when efforts are made to restore financial equilibrium, operational
and social risks on the achieved DO are moderate if these investments are proceeding in a
reasonable timely fashion.24
65. The OBA experience has the potential to develop a scaled-up social policy on access to piped
service for the urban poor. While this was not an explicit outcome, it worth noting that, despite
difficulties, the GPOBA program as a component of the lease contract raised interest from other
donors like AfDB, AFD and EIB on the “how” side, reflecting a shared commitment to poverty
reduction and results. Lessons learned may be an opportunity for the PPP to define a pro-poor
strategy that could apply to all projects and donors.25
How to: define “social connections”; set
users’ contribution vs. the subsidized part; for connection only or for a CAPEX including some
extension? How to proceed: result-based or not? Beyond access to the connection, how to ensure
affordable tariffs so that “poor” customers can pay the bills? A pro-poor strategy would help
leverage investments in network extensions and social connections to scale up the OBA program,
for a large number of potential customers.
24 The rationale for the PDUE extension requested by GoC in August 2014 was to give time to implement
two major contracts that are part of PDUE Component 3: a 8.6 million contract for tertiary network
extensions, and a 2 million contract to support 20,000 “social connections.” 25
In addition to the PDUE social connections, the AfDB project includes a component to finance “social
connections” (i.e. with diameter 20 mm). According to Camwater technical director, it would adopt a
result-based scheme and the subsidy would cover 90% or 100% of CAPEX. AFD and EIB also expressed
their interest in a common understanding for a social policy, in line with the proposed tariff reform.
17
5. Assessment of Bank and Borrower Performance
5.1 Bank Performance
(a) Bank Performance in Ensuring Quality at Entry
66. Bank performance on quality at entry is rated Moderately Unsatisfactory. The design
was built on previous experience in the region to introduce innovations in result-based and pro-
poor service delivery and relevant to address key social needs. Shortcomings in risk mitigation
and a design that proved difficult to implement weakened the project foundation from its
inception. The most important issues are:
a) Targeting was pragmatic but eligibility criteria not clear. The country-wide operation led
to uneven understanding and implementation in regional divisions and diluted
verification efforts. While the assumption to connect the unserved (= poor) population
was pragmatic, the assessment26
of willingness and capacity to pay did not translate into a
mechanism to establish explicit criteria that were easy to understand, implement and
verify. The issue of (lack of) network extension was identified, but the incidence of
distance between potential customers and networks, hence related investment costs and
cost sharing, proved to be a major constraint in implementation.
b) Capacity building and M&E arrangements should have allowed the implementing
agencies to better strengthen capacity to collect and deliver harmonized data needed to
implement the project and to report following a structured results framework.
c) The sector reform generated enthusiasm among donors. The PPP was presented as the
successful model for Western Africa, even before implementation started. The OBA
design was very optimistic toward the new PPP scheme and Government commitment
and put the risk on Camwater without mitigation measures in case of possible failure. The
reputational challenge, both for Camwater and CDE/ONEP, was assumed to be a key
factor fueling their respective commitment to successfully implement the PPP, including
its innovative, social component under the OBA project. Confident about the extension
programs to be implemented with external support, design did not include funds for
network extensions. The project started while extensions were not secured.
(b) Quality of Supervision
67. Bank performance on quality of supervision is rated Unsatisfactory. Many external and
internal factors severely affected implementation. Clear signals that the project was under threat
came early on. Based on available documentation, the project missed opportunities to provide
more customized support to Camwater and CDE to resolve impediments to PDO achievement.
a) The Bank’s team had responsibility for both the IDA-funded and OBA projects to
leverage supervision efforts. In hindsight, the OBA project deserved more specific
attention. The first supervision mission in April 2009 fully focused on the project and
26 This assessment is based on a socio-economic survey that the ICR team could not consult to assess its
robustness. The CP proposed categorization by quintiles, but did not say much on the actual practices and
expenses for water of the lower quintiles.
18
delivered a specific Aide-Memoire. After that, some PDUE missions mentioned the OBA
project but provided limited update and analysis.27
b) Formal project documentation included the GPOBA Semi-Annual Reports that do not
rate the PDO. The first ISR was created in February 2013 and rated the project as
Moderately Satisfactory even though DO achievement was not much higher than at the
time of the project extension. The second one was prepared in September 2013, three
weeks before project closing, and downgraded it to Moderately Unsatisfactory.
c) Except for the PDUE Restructuring in September 201028
, the project failed to take
proactive action to restructure the project in response to challenges in the sector.
(c) Justification of Rating for Overall Bank Performance
68. This ICR rates the overall Bank performance as Unsatisfactory based on weaknesses in
an otherwise innovate design to address a risky environment and significant shortcomings in
supervision activities that were within the Bank’s control. It is however fair to underline the
team’s commitment to keep the project alive with the assumption that the sector environment
would become more conducive and bring results.
5.2 Grantee Performance
(a) Government Performance
69. The Government’s performance29
is considered Moderately Unsatisfactory. Despite a
strong commitment to implement the PPP model, GoC failed to comply with the financial
agreements under the concession contract and support Camwater in a timely manner. The first
disbursement was made only in 2012, two others in the second half of 2013 together with a debt
swap agreement that partly settled cross debts between Camwater, CDE and GoC. This led to the
overall financial degradation of the sector and put Camwater’s cash-flow under strain. It is to be
noted that all donor-funded activities were affected. During the first months of the OBA
implementation, it prevented the replenishment of the Subsidy Fund after its initial disbursement.
(b) Implementing Agency or Agencies Performance
70. Camwater’s performance is considered Unsatisfactory. In addition to the financial
constraints evoked above, internal implementation issues also hampered project performance.
Knowledge of the original project design and financial arrangements was lost over time. Contract
27 US$ 0.4 million was spent on supervision cost (Annex 1) over the project life; data on staff time
allocated to supervision is not available. 28
This PDUE Additional Financing allocated an estimated US$14.60 million for the Water
component, of which US$ 1.50 million was dedicated to expansion of networks and access. 29
The Government is not a signatory of the Grant Agreement dated April 7, 2008, entered into among
Camwater, grantee, and the World Bank International Development Association (IDA), acting as
administrator of the GPOBA Trust Fund. GoC is involved in this operation in two indirect, though
important ways: i) some GA provisions refer to the “IDA Financing”, i.e. the Financing Agreement
pertaining to the PDUE project signed between IDA and the Republic of Cameroon; and ii) in the PPP
scheme and concession contract, the GoC commits financial support to the asset-holding utility Camwater.
19
management, payment processing, and IVA verifications were subject to significant delay.
Communication and coordination with stakeholders would have enhanced mutual confidence.
Preparation of regular reports on the OBA project would have enabled effective monitoring,
supervision and mid-course corrections but were not forthcoming.
(c) Justification of Rating for Overall Grantee Performance
71. Grantee performance is rated Unsatisfactory. The absence of agreed-upon funding support
essential for achievement of the PDO, limited communication with partners, and limited capacity
for project implementation activities affected the enabling environment for the OBA project and
hindered project success. The commitment to implement more social connections under the
PDUE is a positive perspective in this regard.
6. Lessons Learned
72. Effective project preparation and supervision strengthen the foundation for
achievement of the PDO
a) Enable client ownership. Key project documents could be translated into the client’s
language to help ensure agreement on project objectives, activities, and accountabilities.
Convening activities may be conducted among project stakeholders to clarify objectives
and mutual expectations and agree on plans going forward.
b) Design projects with proper sequencing of activities. The availability of water supply
should be assessed prior to investing in new connections. Assurance of a reliable funding
stream is necessary in OBA projects that seek to connect “the last mile” for the very poor
who are more likely to live far away from existing networks and need extensions that are
more costly. A communications campaign to inform about the public about a connections
project should follow, rather than precede, capacity to deliver water.
c) Include mitigation measures in risk assessment. Known risks to a project during
preparation, and action steps to mitigate them, should be identified during project design
to strengthen the prospects for satisfactory project performance.
d) Provide effective supervision of OBA components of larger projects. The OBA project
was bundled with the PPP lease contract and IDA-funded PDUE and would have
benefitted from Bank supervision as if it were a stand-alone operation. Mid-term reviews
should be conducted, and relevant documentation should be included in the Bank’s
archives to enable monitoring, management oversight, and organizational learning.
e) Enable effective monitoring and evaluation Project design should ensure that
information systems can provide data needed for monitoring and managing mid-course
corrections, if needed.
73. For OBA projects, pragmatism and clarity are key for targeting and monitoring
a) Incentives are key to performance and operator engagement. In OBA projects the
financial risk should be placed on the service provider who has direct contact with current
and potential customers rather than on an existing asset-holding company. The service
provider is the entity that has interest in integrating the OBA customer category in its
20
commercial strategy. The incentives should be attractive enough for the service provider
to incorporate this customer category in its commercial strategy.
b) Pragmatic approaches should be used to target the poor. Criteria for targeting the poor
should be easy to understand by the population and field staff. Focusing on a limited
number of geographic areas is a good place to start. Countrywide operations should take
place in a subsequent phase. To supplement the lack of poverty data at project level,
second-hand data may help to qualify and quantify existing water services. Engagement
in communities can complement existing surveys to identify the poor. Criteria can also be
used to exclude higher income households.
c) M&E systems and capacity building should be strengthened. At design stage, data
requirements for the IVA, service provider and the implementing agency need to be
identified. The IVA requires commercial and operational data to identify OBA customers,
eliminate double counting in beneficiary listings, check customers’ connection quotes
and subscription files, and to monitor disconnection rates, bill recovery rate, average
consumptions, among other indicators. The commercial operator needs harmonized data
on prospective customers from all its business units. The M&E design should include a
plan to support for IT systems and capacity building along the project life.
d) The subsidy formula should be simple, absolutely clear and well understood by all
partners. The terms and conditions of subsidies should be transparent and easily
understood. When needed, the subsidy design could consider including funds for
extensions and other capacities to ensure water will reach targeted beneficiaries and be
delivered with a sustainable, good quality service.
e) A dedicated PIU could be considered with OBA projects. An OBA or result-based
scheme differs significantly from the Bank’s typical operations. A dedicated PIU
including dedicated staff within the implementation agency may offer training on OBA
principles, practices and roles and responsibilities to carry out a successful OBA. It also
gives foundation to build capacity and knowledge that can spread within the agency and
be captured for sharing in other country contexts.
f) Having the IVA in place could be considered a condition for disbursement in the dated
covenants. With the IVA operational at soon as possible after effectiveness, policies and
operations can be clarified among all parties at project kick-off. Cristal clear criteria
agreed by all parties would ensure smooth verification, invoicing and monitoring.
7. Comments on Issues Raised by Grantee/Implementing Agencies/Donors
(a) Grantee/Implementing agencies
Not applicable
(b) Cofinanciers/Donors
Not applicable
(c) Other partners and stakeholders
Not applicable
21
Annex 1. Project Costs and Financing
(a) Project Cost by Component (in USD Million equivalent)
Components Appraisal Estimate Actual/Latest
Estimate
Percentage of
Appraisal
Component 1 – Civil works:
connection costs 11.50
2.79
4.30 (*)
24%
35%
Component 2 – M&E: Independent
Verification Agent 0.25 0.18 72%
Total Project Costs 11.75 2.97
4.48 (*)
25%
38%
Project Preparation Costs 0.10 0.08 --
Project Supervision 0.37 0.34
Total Financing Required 11.85
(*) Costs include share pre-financed by CDE and not reimbursed by GPOBA
(b) Financing (in USD Million equivalent)
Source of Funds Type of
Cofinancing
Appraisal
Estimate
Actual/Latest
Estimate
Percentage of
Appraisal
Global Partnership on Output-based Aid 5.25 1.82 35%
Camwater 5.75 0.90 16%
Beneficiaries 0.75 0.28 38%
Sub-Total 11.75 3.04 26%
Camwater/GoC (debt swap) 0.00 1.51 --
Grand Total 11.75 4.55 39%
22
Figure 2: the OBA project lifeline: implementation, milestones, achievements
23
Annex 2. Outputs by Component
The project had two components:
1. US$ 5 million GPOBA grant for social connections (to be complemented by
Camwater’s and the Beneficiaries’ contributions)
2. US$ 0.25 million for Monitoring & Evaluation, through the services from an
Independent Verification Agency (IVA)
1. Outputs for Component 1 are shown in the Figures below:
Sources of data are not always fully consistent with each other either because of different
definitions or interpretations or because the data was produced at different times during
the project;
The year when the project added the most connections was 2010;
Implementation progressed at a slow pace but regularly until December 2012 when
verification stopped, limiting the number of verified and eligible connections;
In 2013, pending connections were executed, but could not be verified.
Figure 3: Complex flows of project data contributed to low achievements
24
Figure 4: PDO progress over the project life: a 47% achievement rate
Outputs’ costs:
Unit cost and cost sharing varied a lot between Appraisal (Commitment Paper) and
project completion, mainly due to the January 2010 agreement switching the connection
cost (based on the official cost schedule) to a fixed fee of FCFA 60,000;
Unit costs in the project first months in 2009 were much higher than the average cost
referenced in the CP (FCFA 116,800 for an average length of 19 meters vs.
FCFA 92,600 for an average length of 17 meters);
On average, when eligible connections only and equivalent investments (Camwater share
+ GPOBA reimbursements + Customers share) are considered, the cost per eligible unit
is FCFA 74,189. When the outstanding amount of money spent by CDE and assumed to
be paid back through the swap debt agreement is taken into account, for the total number
of executed connections, the overall investment cost is FCFA 85,216;
From incomplete data available on connection length, connections were on average
longer in 2009 (19 meters), then the average length decreased after January 2010, as a
result of the decreased price and cost; to achieve the lesser cost, length had to be
reduced30
;
Starting in the second half of 2010, data reported in CDE and the IVA’s reports do not
provide the real unit costs, only the standardized share decided in January 2010.
30 Data for Quarter 3 of 2010 show an increase that is attributed (ICR assumption) to confusion in
reporting from CDE agencies.
25
Figure 5: Unit cost and cost sharing per connection varied over the project life
Figure 6: In Koumassi business unit (Douala), Camwater’ contribution decreased from 2010
Data from a single CDE BU, in Koumassi Douala, is very consistent with the overall
evolution of cost sharing; Camwater contribution is null from 2011 to 2013;
Unit cost, FCFA
(per reporting period)
Appraisal
(CP)% 2009 Q2 2009 Q3 2009 Q4 2010 Q2
2010 Q3
to end of
project
Average
(# eligible)%
Average (#
executed)%
Total 92,657 116,829 107,989 103,731 61,232 60,000 74,189 85,216
Beneficiary Households 4,633 5% 20,219 14,829 16,306 13,223 6,000 7,483 10% 5,587 7%
GPOBA 41,696 45% 43,145 43,117 43,071 43,063 44,000 43,899 59% 32,774 38%
Camwater 46,329 50% 53,465 50,042 44,354 5,000 10,000 22,807 31% 17,027 20%
(Camwater/GoC) 29,828 35%
Source: CDE reports
26
In unit cost, GPOBA share was similar to the initial design but the beneficiary’s
share is, on average, higher than what was expected for this pro-poor project, both
per unit cost and total investments.
Connections consumption:
CDE data show that on average, OBA active31
connections consume 7.8 m3/month,
almost half the regular domestic connections (13 m3);
The recent tariff study estimates that 55% of poorest households (first quintile) consume
below 7 m3/mo.32
and only 1/3 above 10 m3/mo.
According to CDE data, 54% of the OBA active connections consume below 5 m3/mo. or
an average 2.3 m3/mo. in this 0-5 m3 bracket, while less than 20% have consumption
above 11 m3 monthly.
A high percentage of connections have (or had, for those inactive) consumption in the
lowest bracket (below 5 m3/month) and almost 80% of active connections have
consumption below 10 m3/month and fall under the 1st tranche of the tariff structure,
called the “social tranche”.
Figure 7: OBA profiles: low monthly consumptions
31 This average is for active connection with consumption above zero.
32 Due to this important concentration of poorest households in the actual 1
st tranche of tariff
(293 FCFA/m3 for consumptions under or equal to 10 m3/mo.), the tariff study suggests to lower down
the upper bracket of the social tranche and set it at 7 m3/mo., which is very consistent with CDE data on
OBA consumption.
27
Figure 8: In total, 10% of OBA connections became inactive
On average, 10% of OBA connections (total executed) are not active anymore as of
March 2014;
For 6 out of the 10% inactive connections, CDE database shows they were deactivated
(CDE would temporarily remove the water meter) due to pending arrears;
For the OBA inactive connections, the average consumption reached 14.4 m3/mo during
the period it was active. An assumption is that households consumed a lot after getting
the connection and were not able to pay for related bills.
Regional distribution:
The OBA connections represent 1/3 of all new domestic connections over the project life;
The Ouest and Grand Nord regional divisions had the largest share of OBA connections,
with Douala in 3rd
position;
Yaoundé and the South East divisions had the smallest share of OBA connections;
The project started well in 2009 in Douala, North Ouest and Littoral divisions;
implementation was more successful in Grand Nord and Centre Sud Est in 2010;
Yaoundé had most of its OBA connections in 2011;
The percentage of OBA connections is not (at all) proportional, in most of the regional
divisions, to the distribution of new connections.
28
Figure 9: 1 in 3 new domestic connections during the project is subsidized by GPOBA
29
Field visits and interviews with OBA beneficiaries (December 2013)
30
Outputs for Component 2 are
IVA1: 2 reports
IVA2: Inception report + 9 reports, including the MTR report.
The IVA2 reports summarize eligibility/verification criteria and how connections were verified
(documentation or on site). The ICR team added comments on the changes that occurred during
implementation.
Figure 10: Eligibility and verification criteria evolved during the project life
N° CRITERIA SOURCE CHANGES during implementation
1 No double count / only 1 connection
per HH Agreement April 2009 Complied with (but many disagreements)
2 Connect to diam. 110 mm max. Agreement April 2009 March 2012: can connect up to 160 mm
3 Connection in HDPE Agreement April 2009 March 2012: PVC tolerated
4 Connection only in CDE service areas Article 42.5 du
Contrat d’Affermage Complied with
5 Connection Cost/Price
≤ 60 000 F CFA Agreement Jan. 2010
== Database does not reflect real costs, and who
pays the difference with 60,000 if any ==
6 Execution valid after effectiveness
only
Operations Manual
March 2012: CDE would like to be paid for
connections executed in end-2008 – not approved
7 New connection only (no reconnection
or rehab.) Operations Manual Complied with
8 DN ≤ 20 mm Operations Manual Complied with
9 Length ≤ 25 m Agreement April 2009 After Jan. 2010, the fee is for 5- meter connection
March 2012: length limitation removed
10 Functional connection (with functional
meter) Operations Manual
Feb. 2013: Bank objected to accept connections
without meters
11 Active connection (with water
consumed) IVA TORs
Feb. 2013: Bank did not object to accept connections
with no consumption
12 Domestic connection Operations Manual
Feb. 2013: Bank objected to accept commercial
connections but did not object to connect schools and
churches
13 Not in real estate areas Operations Manual Not used
14 On inhabited plot only Operations Manual Case by case basis
Verification process Database
Database and on-site
On-site
31
Main dates for “criteria meetings” are:
April 2009: meeting Camwater/CDE – Bank non-objection (AM April 2009)
January 2010: agreement Camwater/CDE, resolution by the PPP Steering Committee –
Bank non-objection is not documented
March 2012: meeting Camwater/CDE/IVA to clarify or modify some criteria – no
evidence of Bank non-objection
February 2013: meeting Camwater/CDE/IVA to suggest softening eligibility criteria –
Bank objected to the request to accept connections without meters and include
commercial connections and did not object to the proposal to accept “active” connection
(with consumption) and the possible inclusion of social connections for churches and
schools.
32
Annex 3. Economic and Financial Analysis
The project’s economic and financial analysis (EFA) was developed with the following issues on
the table: i) ex-ante, the EFA presented in the Commitment Paper was prepared with a 55,000
connections objective, which was downsized to 40,000 at negotiation (GA) without revisiting the
assumptions and financing plan; ii) ex-post, the discrepancy between the total executed
connections and the eligible outputs has a direct incidence on the financial flows’ valuation and
calculation of the economic benefits; iii) initial assumptions to estimate economic benefits may
be questionable. Results and assumptions are presented in Figure 11 and discussed below.
Economic benefits and financial return, with and without the project
Ex-ante, downsizing the objective from 55,000 to 40,000 connections at negotiation while
keeping the same assumptions and cost structure mathematically decreased the Economic Net
Present Value (NPV), from US$ 22.7 to 11.7 million, and the Economic Internal Rate of Return
(IRR) from 46% to 32% (all other things being equal). Even before implementation started, the
return on subsidy (with only GPOBA subsidy in project cost) was 76% against 102% as
endorsed in the CP.
Ex-post33
, the E-IRR is constant at 46% and underlines the project’s economic benefits.34
Considering the low disbursement rate and lower average unit cost, the Financial IRR is higher
after the project than before. It quadruples with the project, with subsidy (65% compared to 16%
before the project). The E-NPV is positive, but also twice less for the 18,854 eligible connections
than for the 40,000 ones planned (US$ 5.1 vs. 11.7 million). Similarly, the Financial NPV is
acceptable, even though it was initially planned that the subsidy will add a lot of value to the
project, which is questionable: with F-NPV at US$ 2.2 million without the subsidy compared to
US$ 3.9 million with the subsidy, the project could have been viable even without the subsidy.
33 For the ex-post analysis, the ICR team made assumptions both on i) the execution rate and related costs,
including amounts invested by CDE that did not benefit from the subsidy; and ii) the achievement rate
and costs related only to the eligible connections, to reflect viewpoints of GPOBA on the one side, and of
the implementing agencies on the other. 34
Initial assumptions to value the benefits were kept unchanged for the ex-post assessment – see below.
33
Figure 11: Ex-ante and ex-post assumptions and economic and financial analysis
EX-ANTE EX-POST
Appraisal Grant Agreement Execution Achievement
Sources: Commitment Paper, 2006;
Grant Agreement, 2008 Sources: Bank data, CDE data March 2014, Tariff Study Artelia 2012, ICR calculations
# OBA connections 55,000 40,000 25,254 18,854
Total Capital Cost US$ 11,500,000 11,500,000 4,437,190 2,884,040
GPOBA subsidy 5,000,000 5,000,000 1,706,529 1,706,529
Gov.co-financing (Camwater) 5,750,000 5,750,000 2,439,748 886,598
Beneficiary HH contribution 750,000 750,000 290,912 290,912
Economic and Financial Analysis
F-NPV (w/o subsidy) ($3,930,098) ($3,930,098) $2,378,334 $2,212,543
F-NPV (w/subsidy) $1,203,831 $1,203,831 $4,161,764 $3,995,973
F-IRR (w/o subsidy) 5% 5% 21% 24%
F-IRR (w/ subsidy) 16% 16% 36% 65%
Return on Subsidy 102% 76% 100% 78%
E-IRR 46% 32% 39% 46%
E-NPV $22,719,394 $11,705,588 $6,261,470 $5,170,009
Proportion of Benefits
Expenditure savings 4.23 4.23 -60.33 -59.29
Time savings 88.55 88.55 148.24 147.28
Health savings 7.22 7.22 12.09 12.01
EX-ANTE EX-POST
Without the project
Households not connected to piped water Households not connected
Consumption lpcd 15 32
Consumption m3/mo. 2.7 5.0
Expenses $/mo. 5.6 4.9
Cost FCFA/m3 1,000 -
With the project
Households connected to CDE through
OBA Households connected - Q1 (*)
Consumption lpcd 35 39
Consumption m3/mo. 6.3 5.9
Expenses $/mo. 2.2 7.3
Tariff FCFA/m3 176 293
Water leakages 30% 25%
(*) Q1 = the poorest quintile, or 20% poorer households (Artelia Tariff Study), are considered for this analysis the
closest to “households connected through OBA” (expected achievements with the project)
These results must be subject to caution due to uncertainties on initial assumptions and lack of
fully reliable data.
34
a) The ICR team could not get a copy of the socio-economic survey mentioned in the CP to
check the EFA assumptions, in particular monthly consumption and expenditures for
households without individual connections relying on other sources. It is not clear how
indicators with the project were calculated. It was assumed that monthly consumption
would more than double and expenses would be halved with the OBA program;
b) Ex-post data build on extended assumptions for the target group (see Figure 11). Artelia
Study35
considers all sources of water not connected households use, at various costs and
for various volumes (see Figure 13). The poorest connected households do not get
enough water from CDE and need to complement with other sources, which adds to the
water bill, although they consume mostly in the 1st tranche of tariff. The ex-ante EFA
considers 100% water is bought from vendors, while Artelia shows only 5% of urban
populations use vendors, water is cheaper than vendors when they buy water from their
connected neighbors, many people still use wells, etc. Overall, poor connected
households, taken as proxy for OBA beneficiaries, consume more water once connected,
but also have higher water expenses. It must be noted that the initial EFA used a tariff of
FCFA 176/m3, much lower than the FCFA 293/m3 or current tariff of the 1st, social tariff
bracket that entered into force in 2005 (below 10 m3/mo.).
c) Robustness of the initial assumptions on economic benefits could not be verified:
- The level of expenditure savings from being connected to piped water was expected
to have a limited impact, with water expenses reduced only by US$ 0.3 per month per
household (from 5.6 to 5.3); the analysis tends to demonstrate beneficiaries spend
more for water after the project;
- As for time savings, it is assumed that all time saved from fetching water is converted
into additional earnings, thus the massive economic benefits. This is relatively
optimistic given the local informal economy and indicators used (number of
household members having some revenues, discounted minimum wage, etc.);
- Finally, the value of health benefits builds on data used as “proxy from similar poor
households in Manila, Philippines”, WHO estimates for South East Asia, including
Indonesia and TTL estimates. The ICR team considered the situation and health
systems for poor households in middle-income countries like the Philippines and
Indonesia may have be different that the reality of Cameroon in the mid 2000’s. Total
expected benefits were anyway rather limited.
Cost effectiveness and unit cost
The ICR team conducted a cost-effectiveness analysis to assess unit costs (per person and per
household) and compare with the expected costs for GPOBA and beneficiary households.
The unit cost in the Commitment Paper was estimated at $198 for a 17-meter connection. The
subsidy calculation formula was as follows:
35 The 2013 Tariff Study for Camwater, prepared by the firm Artelia and funded by IDA, is a resourceful
piece of work including detailed data from a large household survey (over 2,000 respondents). Major
indicators are sorted out by poverty quintiles, on average, for connected / not connected households and
by urban center (the survey covered six cities including Douala and Yaoundé). Data from CDE database
are convergent with those from Artelia.
35
- a Presidential Decree in 2007 before CP endorsement decided that the connection fee
would be halved in order to help people access to piped water. Previously, the fee was
set at the total cost to ensure full cost recovery;
- GPOBA subsidized access. The subsidy rate was set at a maximum of 90% of the fee,
up to maximum of FCFA 44,000 (US$ 91);
- Beneficiary Households were to pay at least 10% of the fee (FCFA 4,803 or US$ 10),
or more for longer connections;
- Camwater would pay the difference between the connection’s cost and fee, an
average of 50% of the total cost or US$ 99.
Figure 12: Cost effectiveness: unit cost and cost sharing analysis
Appraisal Agreement Execution Achievement
# OBA connections 55,000 40,000 25,254 18,854
US$
Unit Cost (*)
Cost/ head
Unit cost
Cost/ head
Unit cost
Cost/ head
Unit cost
Cost/ head
GPOBA subsidy 89 15 125 21 68 11 91 15
Gov.co-financing (Camwater) 99 17 144 24 97 16 47 8
Beneficiary HH contribution 10 2 19 3 12 2 15 3
OBA operation 198 35 288 48 176 29 153 25
(*) the cost at appraisal is the one presented in the CP; for other data, the exchange rate used throughout this ICR for
consistency purposes may slightly change the figures ($1 = FCFA 485)
At project completion, the unit cost is less expensive than planned, at US$ 176 for all executed
connections and US$ 153 for the eligible connections and costs only (Figure 12):
a) GPOBA met its objective to provide a subsidy of US$ 15 per person or below US$ 91 per
new connection. From a perspective of use of development resources, the OBA scheme
represent a substantial efficiency gain by linking payments to outputs. For donors and for
GoC and Camwater as well, this may be likely to be more efficient than a traditional
grant or lending operation where payments are made upfront with no guarantees that
outputs will materialize. This is a satisfactory aspect of the project.
b) Beneficiaries’ contributions are higher than expected. The cost sharing decided in 2010,
where applied, charged beneficiaries 10% of the fee (FCFA 6,000 or US$ 12) and
sometimes more. Lowering the cost to meet the fee reduced the chances for poor people
farther from the networks to afford the OBA connections. All in all, the subsidy made the
connection more affordable, but it is not clear how much the program really reduced
access cost for the poorer households.36
Nor how much they would have had to pay in the
absence of the program. This supports a moderately unsatisfactory performance from the
beneficiaries’ perspective.
36 Some CDE customers’ applications in 2011 or 2012 show that for a 12-meter connection of
FCFA 62,487; the customer invoice was FCFA 13,965 while Camwater was charged FCFA 4,522.
36
Figure 13: Access to piped water and to other sources of water in urban areas
37
Annex 4. Grant Preparation and Implementation Support/Supervision Processes
(a) Task Team members
Names Title Unit Responsibility/
Specialty
Lending/Grant Preparation
Philippe Marin Sr Water and Sanitation Specialist ETWWA TTL
Chantal Reliquet Sr Urban Specialist AFTU2 Co-TTL
Richard Verspyck Consultant AFTU2
Nathalie Munzberg Sr Counsel LEGAF
Kouami Messan Procurement Analyst AFTPC
Fridolin Ondobo FM Specialist AFTFM
Yvette Laure Djachechi Sr Social Development Specialist AFTS3
Africa Eshogba Olojoba Sr Environmental Specialist AFTS3
Xavier Chauvot de Bauchêne Infrastructure Specialist GPOBA Transaction Officer
Supervision/ICR
Jan Drozd Sr Water and Sanitation Specialist AFTU2 Former TTL
Esther Loening Infrastructure Specialist GPOBA Transaction Officer
Kouami Messan Sr Procurement Specialist GGODR
Daniel Coila Infrastructure Specialist GPOBA Transaction Officer
Miguel Vargas-Ramirez Sr Water and Sanitation Specialist GWADR TTL at completion
Patrice Rakotoniaina Sr Municipal Engineer GSURR
Véronique Verdeil Water and Sanitation Specialist GWADR ICR author
(b) Staff Time and Cost
Stage of Project Cycle
Staff Time and Cost (Bank Budget Only)
No. of staff weeks USD (including travel and
consultant costs)
Lending
Total: 9.19 $76,973.38
Supervision/ICR
Total: 48.9 $339,279.05
38
Annex 5. Beneficiary Survey Results
Not applicable
39
Annex 6. Stakeholder Workshop Report and Results
Not applicable
40
Annex 7. Summary of Grantee's ICR and/or Comments on Draft ICR
The Grantee acknowledges in its ICR that the project did not reach its objective to deliver
piped water to 40,000 new customers through the OBA funding scheme. It also underlines
the positive impacts of the project on the population, yet without reliable evidence on the
effectiveness and quality of water services provided the targeted beneficiaries.
Camwater also recognizes financial and technical factors that have affected implementation:
Financial difficulties: a majority of OBA connections exceeded the average cost
estimated at appraisal. This impacted Camwater’s contribution, as the company was
responsible for covering the gap between the total cost and the regular tariff to customers
(paid by GPOBA and the new customers). As a result, Camwater could not afford to
regularly replenish the connections’ Fund at the level expected during preparation after
the initial FCFA 400,000 payment (approximately US$ 0.8 million);
Technical difficulties: network extension programs under Camwater’s responsibility, as
the asset-holding company, were delayed due to procurement issues and implementation
delays by contracting firms. The extensions and improved water production capacity
were needed to supply the social connections to be executed by the private operator.
Such difficulties resulted in CDE starting to pre-finance the OBA connections with its own funds.
This situation raised two series of concern that were not anticipated in the MO:
Quality of connections executed by CDE: to comply with the 2010 agreement, CDE
had to decrease the connection cost to FCFA 60,000, which may have impacted how
connections were executed and the quantity of connections finally declared ineligible;
Increased financial gap for Camwater: connections pre-financed by CDE may have
resulted in expenses non-eligible for GPOBA reimbursement, thus putting a financial risk
on Camwater.
This risk materialized, with a total of 6,400 connections declared ineligible by the IVA and a
total financial gap of FCFA 888 million (approximately US$ 1.7 million) when considering the
total number of OBA connections executed, and in a large part pre-financed by CDE.
Lessons learned for future social connection projects focus on the project design and
implementation:
Simplifying the project design may include:
o Better define the respective roles of the various stakeholders;
o Simplify funding mechanisms and clarify upfront the procedures;
o Provide crystal clear definitions regarding the beneficiaries’ eligibility criteria so
that all stakeholders are in full agreement;
o Clarify the concept of “low income household” in the project design documents
such as the Manual of Operations;
o Undertake a study on the economic and financial returns, at short and long terms,
for each of the stakeholders (Asset-holding company if any, private provider,
GPOBA, beneficiaries).
Supporting factors to smoothen implementation may include:
41
o Implement the project in areas where network extensions are already available
and where water resources are sufficient to supply the new connections;
o Set up a monitoring mechanism to track project performance and indicators;
o Put an emphasis on communication and household awareness-raising about the
project features and benefits as part of the project implementation.
Recommendations suggested by Camwater to strengthen output-based aid projects mainly relate
to design and the verification/disbursement cycle. They include:
Simplify the eligibility criteria;
Avoid verification based on sampling, especially the first verification step focused on
the private operator’ customer database;
Specify in project documents that all executed connections will be verified physically
before being declared eligible;
Avoid the concept of pre-financing by one party only through a dedicated fund or
account collecting the borrower/grantee’s and the Bank/GPOBA’s contributions;
Adopt the principle of result-based financing with payment made only after the
connections are declared eligible.
Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders
Not applicable
Annex 9. List of Supporting Documents
Camwater-GPOBA, Rapports de vérification technique des branchements réalisés (DIENG
Babacar) : RVT 1, juillet 2009; RVT 2, février 2010
Camwater-GPOBA, Rapports trimestriels et semestriels de Mission de vérification technique
indépendante (HydroConseil-GMUS) : Rapport de démarrage et mise en place des procédures,
mars 2011 ; Rapport 1 – revue à mi-parcours, mai 2011 ; Rapports 3 à 8, 2012
CDE commercial data (extracts from the customer database), mars 2014
CDE, OBA projects quarterly reports
GPOBA Commitment Paper (49306): Cameroon Water Lease – OBA for Coverage Expansion,
September 13, 2007
GPOBA Grant Agreement (Water Lease Project), April 7, 2008
GPOBA, Semi Annual Status Reports
Marin P., Loehning E., Drozdz J., Subsidizing water connections in Cameroon. How to apply
output-based aid to an Affermage, OBApproaches, note #3.4, July 2010
République du Cameroun, Enquête Démographique et de Santé et à Indicateurs Multiples 2011,
rapport préparé by ICF International, Septembre 2012
République du Cameroun, Camwater, Banque mondiale, Elaboration d’une stratégie de
tarification de l’eau potable, rapport final : Artelia, mai 2013
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