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Output-based aid for water supply in Uganda

Children standing by a communal water tap in Uganda. Note the water meter with the blue cap in front of the tap. Many households in Uganda collect their water from supplies like this. 
 Photo: COWI.

COWI has designed an output-based aid scheme supporting private sector participation in water supply services in Uganda.

Output-based aid (OBA) is a strategy for explicit performance-based subsidies for the delivery of basic services.

It is explicit because it is recognised why the subsidy is provided, who is receiving it, what is being subsidised and with how much.

Linked to output
Performance-based means payment of the subsidy is linked to output; in the case of water supply, this might mean the number of new connections made to households.  

Most households in Uganda without a connected water supply obtain water by filling 20-litre jerry cans at communal taps – often a good distance from their homes – or by buying water from a connected neighbour or vendors with filled jerry cans.

Designing aid

The Global Partnership on Output-Based Aid (GPOBA), a multi-donor trust fund administered by the World Bank, awarded COWI a contract to design output-based aid for water supply in Uganda.

The aim of the project was to help fund the expansion of existing water systems in several small towns, and the creation of green-field systems in several rural growth centres, through an OBA approach.

The use of the OBA model provided improved transparency and efficiency in the delivery of aid.

Private sector operators

COWI, working closely with its subsidiary COWI Uganda, performed an assessment of 19 pre-selected small towns and rural growth centres to determine demand and priorities for water supply and identify the most prospective OBA projects.

Six small towns were earmarked for an expansion to their existing water supply, while four rural growth centres required new water supply services.

COWI subsequently designed the OBA scheme, including the design of the bidding process and the drafting of contracts between local authorities and private sector operators.

The final designs for the OBA were approved in 2006 by GPOBA, enabling the funding of implementation of water services at a local level.


LAST UPDATED: 26.04.2017