Financing
Blending schemes between donor money and investors are practiced in the MDG-period 2000-2008. CSR (Corporate social responsibility) by corporations, private business and western utilities promote public-private arrangements in management, operations, building and even ownership structures. Privatisation of WASH is partially practiced, by concession politics for larg(er) utilities. Aid driven donor money was blended with low -interest investments from development IFIs (Institutional Finance by development banks and the World Bank) but still requiring (even today) the sovereign guaranties from national finance ministries (which limits the investments). However, an interesting contradiction remains, in the fact that privatisation of water in developing countries has been actively promoted by developed countries such as The Netherlands and Sweden, while these countries' own water supply is publicly managed - a comparison can be found here.
The PPP thinking with outsourcing services to private players under PPP-acts and/or concession contracts opens the floor to private investors and commercial banks/pension funds although the risk perception and linked risk mitigation activities are still largely dependent on donor and aid-philanthropy money.
Actors and instruments
Official Development Aid turns into International Cooperation (reflected in the name DGIS) giving a position to private sector initiatives and encouraging public-private partnerships between financing parties (DGIS-private sector) and public private partnerships in receiving countries (P3SW program). More on Dutch developments can be found here. Various drinking water utilities in the Netherlands have cooperation programs , developing varieties in Water Operator partnerships.( see https://gwopa.org/)
Developments and lessons learned
During this period the awareness around sustainability started growing, when being confronted with the extreme short life cycle of donated infrastructural aid. Donors, DFI’s and philanthropic players increasingly wished to see a long term sustainability, whether addressing decentral small scale equipment/facilities (like handpumps, toilets, decentral treatment systems) or addressing large infrastructure (like boreholes, piping systems, treatment -and pumping stations). Cost recovery of OPEX (operational expenditures) including money for maintenance and repair/replacement was not established. IRC ao started the triple S approach (Sustainable Supply of Services) which affected the VLOM concept (Village Led Operation and Maintenance) substantially.
A key turning point came, when the Dutch Ministry of Foreign Affairs (MoFA or DGIS) proclaimed the set-up of a sustainability clause in 2007, insisting a 10 (later 15) years guaranty on sustaining the services (by sustaining the infrastructure that was financed with ODA money). The first 3 programs that were confronted with this sustainability clause were UN Habitat Lake Victoria Water and Sanitation Program, UNICEF and Aqua for all-WASH program. WASH became a more business wise oriented service sector. A product oriented investment approach building facilities focused on access to water (and sanitation) is changing into a more service oriented approach where sustainability, cost recovery, quality and service performance is becoming leading. Viability of investments stays uncertain, the business ecosystem bound risks are acknowledged but difficult to address. Blending finance is upcoming.