This presentation by Steven van Rossum (World Waternet) and Prtha Hariram (FMO) describes how a blend of public and concessional financing is being used to attract larger investments for public water supply company SOMAGEP-SA in Mali. It was presented at the IRC WASH Debate "Blended finance: Is it all in a mix?" jointly organised with NWP on 4 December 2018 in The Hague, the Netherlands. Dutch development aid supports technical assistance through a Water Operator Partnership between Netherlands-based World Waternet and SOMAGEP-SA. Small investments from Dutch Development Bank FMO are used to improve energy efficiency and the reduction of non-revenue water, which will hopefully improve the performance and credit rating of SOMAGEP-SA.

1. Mobilizing infrastructural investments
through Water Operators' Partnerships
An example from Mali, IRC Wash Debate 3 December 2018
Steven van Rossum (Word Waternet) & Pritha Hariram (FMO)

2. Mobilizing infrastructural investments through Water Operators'
Partnerships
Our story today
• What’s the problem
• Demand for finance in Mali/Somagep
• Stage 1: Dutch public finance
• Stage 2: small investments
• Stage 3: pitching for additional/larger investments
• Conclusions

3. Mobilizing infrastructural investments through Water Operators'
Partnerships
What’s the problem?
• Big loans by IFI’s (>30 million),
mostly for CAPEX investments
• Utilities not able to absorb (usually
low operational capacity incl.
financial)
→ Water Operators’ Partnerships (WOP) as catalyst

4. Mobilizing infrastructural investments through Water Operators'
Partnerships
Demand for finance in Mali/Somagep
• Bamako population 2017: 2.5 million 2030: 5.0 million
• Current 56% of population access to improved drinking water 2030: SDG goal 100%
• WWX budget capacity building: €1.5 million (4 years)
• Small investments budget: €5 million (2 years)
• Large infrastructural investment needs Mali: €764 million (till 2030):
• Doubling production capacity Bamako: €350 million
• 17 secondary cities: €194 million
• 72 areas: € 220 million

5. Mobilizing infrastructural investments through Water Operators'
Partnerships
0
20000
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2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
year
amount of funds mobilizedx1000
Stage1
Stage3
Stage2
Case: Mali

6. Mobilizing infrastructural investments through Water Operators'
Partnerships
FMO NL Business
develops Société Malienne de Gestion de l'Eau Potable
Utility Performance Improvement in Mali “Decreasing NRW and improving energy efficiency”
Potential
Project EUR 5 mln
Size
Contributes to improving performance of Mali’s water utility
 Reducing non-revenue water by improving commercial and physical losses in the
water supply system
 Lowering utility operating costs by increasing energy efficiency
Strengthening the balance sheet to improve access to finance
 This relatively small loan could improve the balance sheet of SOMAGEP
significantly, which would open the door to financing larger projects
 Creative financing structure that allows for replication is under development
Collaboration with expert partner institutions to maximize impact
 World Waternet is working with SOMAGEP to build their capacity under a Water
Operator Partnership.
 Dutch consultant involved in providing a cost-benefit-analysis for SOMAGEP
Reducing NRW to <20%
and reducing energy use
by >50%
Improving performance accelerates utility
creditworthiness and universal access to
safe and clean drinking water

7. Mobilizing infrastructural investments through Water Operators'
Partnerships
Stage 1: Dutch public finance
• WaterWorX program/BuZa involvement
• WaterWorX SDG ambition: drinking water for 10 million people. This is not possible without
investments.
• Performance improvement
• Where do we see needs?
• How do we evaluate and validate these needs for performance improvement?

8. Mobilizing infrastructural investments through Water Operators'
Partnerships
Stage 2: small
investments
• Involvement FMO
• Pre-feasibility, business case
• “Low-hanging fruit”
• Energy efficiency
• NRW management

9. Mobilizing infrastructural investments through Water Operators'
Partnerships
Stage 3: Pitching for Additional/Larger
Investments
• What’s the size?
• Who to approach? – Bilateral, IFIs
• What type of financing? – ODA, Private Finance etc.

10. Mobilizing infrastructural investments through Water Operators'
Partnerships
Discussion
• This model only for drinking water?
• What role do we see for WOP’s?
• Is there potential for scaling up?
• Need for commercial loans?