Development of sustainable WASH financing strategy
- Background
As Water, Sanitation & Hygiene (WASH) are a priority in Rwanda’s strategic plans and vision, the government has set and reinforced the target of universal access to WASH services in all planning documents namely Vision 2050, the National Strategy for Transformation (NST1, 2018-2024) and the Water and Sanitation Sector Strategic Plan (2018-2024). Rwanda has set ambitious targets to achieve the SDG 6 targets on water and sanitation. Both the NST1 and Water and Sanitation Sector Strategic Plan (SSP) stipulate the achievement of basic services (Drinking water from an improved source which is located on premises, available when needed and free of faecal and priority chemical contamination) by 2024, and safely managed services (Drinking water from an improved source, provided collection time is not more than 30 minutes for a round trip, including queuing) by 2030. In addition, WASH activities engage multiple stakeholders from different sectors for development, namely health, education, social protection, nutrition and infrastructure development outcomes. However, it is also the least funded among other social sectors. Between 2016/17 and 2020/21, the total budget allocated to WASH hovered around 1.6% of the national budget (State Finance Law 2020/21).
The effects of climate change are already being felt everywhere. Most strikingly, they are felt through water. Increased demand for water due to low rainfall can cause water sources (including boreholes and springs) to run dry. Conversely, heavy rainfall and flooding can damage water sources and sanitation facilities, carry runoff and waste into streams and lakes, and contaminate the water supply. Water scarcity through climate change and the resulting increase in the costs of water can lead to inequitable access. This may deprive households of opportunities to collect the amount of safe water needed for proper handwashing and hygiene. Amid rapid urbanization in Rwanda, safe drinking water systems and adequate sanitation that effectively disposes of human waste will be essential to ensure cities and towns grow sustainably.
The Ministry of Infrastructure, overseeing the implementation of the National water supply and National Sanitation Policies, coordinates water and sanitation sector activities implemented by both public and non-public institutions. For the past four years, UNICEF has supported regular budget analysis of the WASH allocations, focusing on: (i) Water and Sanitation Corporation, (ii) Ministry of Infrastructure’s water and sanitation programme, (iii) Ministry of Healths’ hygiene and environmental health programme, and (iv) the Districts, under the Water and Sanitation program. Furthermore, the analysis covers four priority areas including (i) drinking water access, (ii) sanitation access, (iii) water infrastructure and sanitation for districts, and (iv) hygiene and environmental health. Unlike ‘water infrastructure and sanitation for districts’ which is implemented at the decentralized level, the other three WASH programmes are budgeted and implemented at central government level.
The budget trends for three fiscal years shows that, there was budget increase from 39,415, 663,597 RWF to 64,086, 767,574 RWF in 2018-19/20. The increase has been due to the loan secured from AfDB under Rwanda Sustainable Water supply and Sanitation Programme and additional funding to finance Water and Sanitation projects. However, there has been a decrease of 16,910,404,599 RWF equivalent to 35% of total budget allocation of 47,176,362,975 RWF for 2020/21 compared to 64,086,767,574 RWF for the last fiscal year 2019/20. The low budget allocation to the sector for the fiscal year 2020/2021 is result of the need to support the National Economic Recovery Plan against Covid-19 pandemic.
Current levels of funding are insufficient, and the available fiscal space is somehow limited to achieve the WASH sector targets because the allocations to the WASH sector continue to fall significantly below the costed WASH sector strategic Plan (2018-2024). With refence to the 2020/21, the financing needs amount to RWF 180.5 billion, of which RWF 118. 5 billion would be externally financed, and RWF 27.9 billion would be funded through domestic revenues, while RWF 34.1 billion would need to be mobilised in other sources.
- Justification
The WASH sector can benefit from moving away from a funding approach to a strategic financing approach to achieve its targets. A strategic financing approach will both increase resource mobilization as well as define a strategy to leverage and blend the three sources of WASH sector financing: Taxes (government expenditure), Tariffs (public investment) and Transfers (ODA) as well as leverage on innovative financing mechanisms.
The Ministry of Infrastructure, in partnership with UNICEF and other partners intends to conduct an in-depth analysis of the WASH sector financing landscape to appraise the adequacy or inadequacy of WASH budget invested through different sectors, to evaluate the cost of needed services to achieve ambitious SDGS and national targets, as well as to determine strategic financing approaches to cover the gaps. In addition, this exercise will also contribute to green growth agenda, fostering climate resilience of WASH sector investments in order to strengthen the sustainability of interventions in the longer term.
In this context, UNICEF plans to engage a consulting firm (hereafter referred to as consultant) to support the Ministry of Infrastructure to develop the sustainable WASH Financing strategy.
- Objectives
The overall objective of this assignment is to develop a Sustainable WASH Financing Strategy that will set out approaches on how the WASH sector will finance its overall programmatic and operations to meet the sector’s objectives in the short- and medium-term. The strategy will also highlight financial targets and the climate sensitive and strategic policy actions to be taken by the Government and other sector stakeholders including private sector, development partners, WASH users etc., to increase resources allocated to the WASH sector and maximize efficiency and effective use of public and private investments while also assessing the optimal funding mix.
- Description of the assignment/specific tasks
Below are the details of activities/tasks and deliverables to be completed in line with the objectives of the consultancy:
- Understanding the WASH sector financing landscape:
The consultant, based on review of relevant literature, will map the overall current public including donor support and private expenditures thoroughly, to understand current levels of investments. While the analysis can be done on the government expenditures around the defined budget lines, a significant amount of government resources is expended on WASH through other government agencies and budget lines, which are not part of current investment analysis in WASH. Therefore, the analysis will go beyond Ministry of Infrastructure/Water and Sanitation Corporation and consider other agencies which are also investing in WASH across all settings such as Ministry of Local Government/ Local Administrative Entities Development Agency, Ministry of Health/Rwanda Biomedical Centre, Ministry of Education/Rwanda Education Board, and Ministry of Gender and Family Promotion/National Child Development Agency, Ministry of Agriculture, Ministry of Environment, Rwanda Mining Board, Rwanda Water Resource Board. The assessment will also consider an in-depth analysis by exploring the trends in WASH sector expenditure by financing source: domestic resources, grants, loans and households’ expenditures through tariffs.
- Costing of current and desired services
Economic and/or financial modelling to cost the required WASH investments will be applied in order to estimate the cost of sustainable (climate resilient), water and sanitation services by using the UNICEF-WHO JMP level of Service[1] ( Safely managed, Basic, and Limited) and modeling by OPEX and CAPEX. The consultant will also factor in the cost of climate change around WASH services, with the aim of strengthening the resilience of services to natural shocks, as well as to define a framework to analyse climate impacts and define adaptation measures required.
- Calculate gaps
By analysing the current expenditures and costing analysis, the financing gap toward the achievement of SDG/NST1 targets will be determined taking refence to the past years (2016/17-2020/21) – particularly focused on ensuring service reliability and affordability to ensure no one is left behind. The gaps will be disaggregated by i) different levels of services (basic and safely managed services), ii) rural and urban, iii) sub-sector (water, sanitation and hygiene services), and iv) settings (households/communities, institutions, etc). The cost of the national enabling environment (monitoring, coordination, capacity building, etc.) should also be clarified.
- Assess the challenge and opportunities to mobilize resources for WASH
Conduct a thorough analysis of challenges faced by WASH sector to attract attention of private investor and development partners with reference to the current strategic documents and report related to water and sanitation sector in Rwanda including NST1, Vision 2020 and 2050, the sector strategic plan, WASH report among many others. Also outline the linkages between the WASH sector with other sectors like Health, Education, Protection, Agriculture, Energy, Mining, urbanization, for joint resource mobilization.
- Determine strategies and develop a strategic financing plan
Building a clear evidence-based understanding of the expenditures, costing and gaps; existing and new WASH financing strategies will be developed with SMART performance indicators for better monitoring in the medium term.
The strategic financing plan will be developed to serve as a roadmap to leverage more resources for the sector priorities, including Taxes, Transfers and Tariffs. The plan will also consider other innovative financing options, including public private partnerships (PPP), blended financing, guarantees and climate financing to increase the fiscal space and other financing mechanisms for WASH services. The plan will have to define a clear monitoring and evaluation (M&E) framework to track progress over time. Consultation forums will be conducted to review the financing strategy and a high-level Public Policy Dialogue will be organised to validate it.
This consultancy will provide technical assistance, ultimately aiming to strengthen the capacity of Ministry of Infrastructure and WASH stakeholders and providing them with needed evidence and strategic actions to prioritize adequate financing and increase the fiscal space for the WASH sector. The consultancy will undertake key activities required to ensure the timely availability of information and analysis in order to develop a solid Sustainable WASH Financing Strategy.
- Expected deliverables
The key deliverables under the consultancy, along with the respective timeframe, are as follows:
- Inception report including works plan, timeframe, methodology etc -within two weeks of signing of the contract
- Review of relevant literature/reports – within one months of signing of the contract
- Development of WASH sector expenditure analysis– within two month of signing of the contract: the analysis should respond to the following key questions:
- What is financial need for WASH sector for the effective implementation of NST1 (2018-2024)
- What is the total expenditure in the WASH sector for the past five years (2016-2020)?
- How are funds distributed between the different WASH services and types of expenditure?
- Who pays for WASH services and how much do they pay?
- Which entities (public and private) channel funding to the WASH sector at national and decentralized levels?
- Where comes the financial resources for WASH sector Domestic vs external resources?
- What is the financial gap to reach national targets and SDG targets for WASH?
- Determination of cost of sustainable (climate resilience) WASH services-within three months of signing of the contract: The costing analysis will model the cost of WASH services under business as usual services and the cost of climate resilient services. The costing should provide clear guidance on how much investments are needed to cover the gaps in reaching the national targets, as well as the gaps to reach the SDG targets for water and sanitation.
- Development of strategies to increase fiscal space (more resources) and other financing sources for the WASH sector– within four months of signing of the contract: with the expenditure analysis, the costing of desired services and a thorough analysis of the financing landscape for WASH, financing strategies will be proposed: these may include innovative financing including blended finance as well as climate financing;
- Preparation of the draft WASH financing strategy and plan: within four months of signing of the contract: This will include strategic actions around WASH Subsectors, capital expenditures (CAPEX) vs Operating Expenditures (OPEX) investment strategies and the M&E framework to assess progress over time.
- Organisation of stakeholders’ consultations on the draft financing strategy and plan and preparation of the report of the workshop’s proceeding - within two weeks of submission of the draft strategy and plan
- Revision/finalisation of the strategy and plan in light of stakeholders’/Ministry of Infrastructure’s comments – within two weeks of
The consultant will collaborate with Ministry of Infrastructure, Ministry of Finance and Economic Planning and other government institutions as well as WASH partners to collect necessary data and information to deliver on the above listed outputs. Given the fact that there are different methodologies for WASH expenditure and costing analysis, the consulting firms would apply their experience and expertise to propose the most appropriate methodologies in their technical proposals.
It may be noted that the consultant will be required to make presentations to a “technical committee”, which will be established to oversee this assignment, as well as to the key stakeholders as per below details:
- Upon submission of the inception report;
- Upon submission of the draft financing strategy and plan; and
- Upon submission of the final financing strategy and plan.
The consultant will submit brief monthly progress updates to UNICEF/Ministry of Infrastructure along with completed deliverables listed above as per agreed timelines.
- Reporting Requirements
Please refer to section 5 “expected deliverables” for the reporting requirements.
- Project Management
The Consultant will be contracted by, and report to UNICEF Rwanda. In addition, the consultant will report to the Ministry of Infrastructure, the lead Ministry for WASH sector.
- Location and duration
Depending on the COVID-19 prevention measures put in place nationally and internationally, the consultant’s team members may opt to work remotely but will work closely with local team members to coordinate deliverables. In case COVID-19 restrictions are eased, and if deemed necessary, key technical team members will undertake travel to Rwanda for field visit, meeting with partners and workshop facilitation. For both cases, the consultant should recruit a local team to support.
- Payment Schedule
Payment will be made to the consultant following submission and approval of deliverables, as per below details:
- Submission and approval of the inception report – 10% of the contract value;
- Submission and approval of the draft financing strategy and plan – 40% of the contract value; and
- Submission and approval of the final financing strategy and plan – 50% of the contract value.
- Qualifications
The following minimum requirements are necessary for a successful bid:
- Legal entity/consortium of legal entities;
- At least 10 years of demonstrated experience in WASH sector, pubic finance, especially in carrying out similar assignments; and
- Experience of working in African countries, especially in Rwanda.
The Consultant should propose a suitable team, including team leader and relevant experts (e.g. in economic or financial analysis, WASH services costing and/or engineering). The proposed team leader should possess a Masters’ degree in Economics, Public Administration, Engineering or a related field and at least 10 years of relevant professional experience. The other team members should possess a Masters’ degree in a relevant field and at least 8 years of relevant professional experience. The Team Leader role may be assigned to one of the proposed technical experts.
- Evaluation Methodology
- Technical Proposal: The consultants should submit a Technical Proposal that should include, but not limited to:
- Firm’s registration certificate;
- Two latest audit reports;
- Financial details including annual turn-over (in US Dollars) for the past 3 years;
- Firm’s organization and experience (including title of the assignment, name of the client, year and duration, scope of the assignment, outcome of the assignment, and reference/contact persons name, email and telephone);
- Comments and suggestions on the terms of reference;
- Methodology and work plan for performing the assignment;
- Team Composition and task assignments;
- CVs for proposed professional staff (name, date of birth, years with the firm, total years of experience, nature of experience in this firm and others, education/other trainings and knowledge of local languages);
- Time schedule for professional staff;
- Activity (work schedule);
- Any dependencies or assumptions; and
- Copies of at least two reports or samples of previous tasks like these under these terms of reference undertaken by the consultancy firm.
The submission should be clearly labelled/written "Request for Proposal – Development of sustainable WASH financing strategy - Technical Proposal”.
- Financial proposal
The Financial bid should comprise an indication of the full cost of delivering the task. The Financial Bid should include breakdown of professional fees/remuneration, reimbursables and miscellaneous expense etc (see Annex-1 for the suggested template). The submission should be clearly labelled/written “Request for Proposal – Development of sustainable WASH financing strategy - Financial Proposal”. The currency of the bid shall be in USD or RWF.
- Assessment processes of submitted proposals:
After the opening, each proposal will be assessed first on its technical merits and subsequently on its price. Responses deemed not to meet all of the requirements listed above will be considered non-compliant and rejected at this stage without further consideration. Failure to comply with any of the terms and conditions contained in this ToR, including provision of all required information, may result in a response or proposal being disqualified from further consideration. Final decision on the evaluation/proposal assessment will rest with UNICEF.
- Evaluation of technical proposals
The technical proposals will be evaluated as per the below evaluation criteria:
Technical Proposal
No.
Criteria
Max. Points
1.0
Overall response
5
- Overall clarity and completeness of the proposal.
2
- Overall concord between the RFP requirements and the proposal
3
2.0
Proposed Approach, Methodology and Workplan
30
- Adequacy of the proposed implementation approach/ methodology
15
- Structure of the team to be deployed for the assignment
5
- Workplan
5
- Monitoring and coordination mechanism
5
3.0
Organizational Capacity
35
- Organizational expertise and experience in works of similar nature and complexity completed over a minimum of five (5) years
5
- Qualifications and competence of the key staff
30
Total
70
Only proposals which receive a minimum of 49 points under the technical evaluation will be considered technically compliant and be eligible for the second phase (financial review).
- Evaluation of financial proposals
The total amount of points allocated for the price component is thirty [30]. The maximum number of points will be allotted to the lowest price proposal that is opened and compared among those invited firms/institutions which obtain the threshold points in the evaluation of the technical component. All other price proposals will receive points in inverse proportion to the lowest price e.g.:
Max. Score for price proposal * Price of lowest priced proposal
Score for price proposal X = -----------------------------------------------------------------------
Price of proposal X
- Final computing of proposal score
Total proposal scores will be consolidated as follows:
Evaluation of proposal
Maximum points
Technical evaluation of proposals
70
Cost / Financial proposal
30
Total
100
The proposal with the best overall scoring, composed of technical responsiveness, merit and price, will be recommended for approval. UNICEF will notify the selected firm/institution by email when the evaluation and award process is completed.
- Supervision
The consultancy firm will work under the joint supervision of the UNICEF Rwanda WASH Section and the Ministry of Infrastructure’s Directorate of Water and Sanitation.
- Confidentiality
Unless otherwise specified, the consultant shall keep confidential all information and documentation being shared by MININFRA, UNICEF and other WASH partners.
- Contract management and administrative matters
UNICEF will issue the contract and pay the consultants, based on the terms agreed in the contract and after the approval of the deliverables by MININFRA.
The consultant will be responsible for all logistical arrangements associated with this contract. UNICEF /MININFRA will provide a letter of support to facilitate obtaining visa and for the purpose of field visits where needed (for quality assurance). Other expenses such as international and local travels, visas, banking/cash services, or office space and equipment (including computers and photocopiers) shall be under the responsibility of the consultant.
- Policy issues
- No contract may commence unless the contract is signed by both UNICEF and the consultant;
- Consultants will not have supervisory responsibilities or authority on UNICEF budget; and
- UNICEF will conduct reference checks (persons/institutions) for feedback on services provided by the bidder.
Annex-1 – Suggested template for financial proposal
Deliverable
Number of person days
Delivery date
Costs
Total:
- How to Apply
Please send your offer by 4th October 2021 to rwasupply@unicef.org
Any request for clarification related to this tender should be directed to mumalik@unicef.org
copying dmupenzi@unicef.org by 30th September 2022
Kindly note that we shall have a PRE-bid meeting on Tuesday 28th September 2021 at 4pm Kigali time. If you are interested in taking part kindly send an email to dmupenzi@unicef.org by 28th September 10am.
[1] https://washdata.org/monitoring/drinking-water