NWSSIP and the way forward… Coordination, harmonization and alignment in the water sector

1. NWSSIP and the way forward…Coordination, harmonization and alignment in the water sector Meeting of NWSSIP Signatories Sana’a, 27th September 2005 Royal Netherlands Embassy Ton Negenman RNE First Embassy Secretary – Water Gerhard Redecker Director KfW Office Sana’a Quo vadis?

2. NWSSIP and the way forward… Part 1: Coordination efforts in the sector

3. NWSSIP and the way forward…Relevance of the donor support declaration of Jan 2005 Honored national efforts and ownership Aligned donors to strategic elements and visions and highlighted important policy issues Called for strong sector leadership and effective partnership Contributed significantly to NWSSIP’s approval by Council of Ministers in May 2005 Opened a window of opportunity for increased sector contributions by the GoY Pointed the way to a harmonized sector support

4. NWSSIP and the way forward…Key messages of the donor support declaration of Jan 2005 • “Through the Declaration of Support the signatories wish to express the high importance they attach to a strong leadership role of the Government of Yemen in the co-ordination of the assistance to NWSSIP, and declare their readiness to assist the Government in building its capacity in thatrespect” • “The signatories seek to forge much closer donor-government and donor-donor coordination and urge the Government to set an agenda for co-ordinating, harmonizing and aligning assistance to the sector based on NWSSIP”

5. NWSSIP and the way forward…Donor structure in the water & sanitation sector

6. NWSSIP and the way forward…Arrangements for donor coordination in the water sector (1) • Donor local coordination (DLC)(proposal) • Entrusted to donor core group (WB-NL-G) • Alternates between RNE and KfW every 6 months • First round assigned to RNE, starting September 2005 • NWSSIP declaration signatories mandate DLC / DCG for sector dialogue • DLC / DCG keeps NWSSIP declaration signatories and wider donor group informed • DLC liaises with MWE, agrees with MWE on donor-government meeting agenda • DLC spearheads policy dialogue leading to SWAp in the water sector

7. NWSSIP and the way forward…Arrangements for donor coordination in the water sector (2) • Donor core group (DCG) • Enshrines the local donor coordination role • Meets monthly and on call, so far 2 times • Receives proposals for agenda from all interested parties • Distributes minutes of meeting • Liaises with MWE and related authorities • Invites resource persons for theme specific meetings • Coordinates information exchange on incoming missions • Ensures distribution of relevant documents for reference or comments (TOR, studies, proposals, strategies etc)

8. NWSSIP and the way forward…Arrangements for donor coordination in the water sector (3) • NWSSIP declaration signatories (NDS) • Meet every 6 months • DLC receives proposals for agenda from all interested parties • DLC prepares agenda and distributes invitations • DLC / DCG or invited resource persons make presentations on specific issues of interest • DLC acts as secretary and moderator • DLC prepares and distributes minutes of meeting

9. NWSSIP and the way forward…Arrangements for donor coordination in the water sector (4) • GoY - extended donor group (EDG) • Meetings every 6 months (alternating with NDS meetings) • MWE invites and sets agenda, venue MWE • Dpty. Min. W+S acts as secretary, prepares and distributes minutes of meeting • Participation of MoPIC and MoF, eventually MAI • Information exchange platform for sector developments and specific project issues • Link to overall harmonization and alignment

10. NWSSIP and the way forward…Arrangements for donor coordination in the water sector (5) • Sub-sector Working Groups • Rural Water and Sanitation (RWS) • Active since 2002 • Hosted by GARWSP or alternating venue • Chaired by GARWSP • Includes donors, public authorities, local authorities, NGOs and private sector institutions and enterprises • Clear focus on coordination and information in relation to active projects and contributions • Detailed TOR available

11. NWSSIP and the way forward…Arrangements for donor coordination in the water sector (6) • Sub-sector Working Groups • Integrated Water Resources Management Group (IWRG) • First meeting on 28th September 2005 • Hosted by GTZ, later alternating venue • Chaired by NWRA • Includes donors, public authorities, local authorities, NGOs and private sector institutions and enterprises • Clear focus on coordination and information in relation to active projects and contributions • Detailed TOR under revision

12. NWSSIP and the way forward…Arrangements for donor coordination in the water sector (7) • Sub-sector Working Groups • Urban Water and Sanitation Group (UWS) • Creation envisaged for end of 2005 • Hosted by KfW/GTZ, later alternating venue • Chaired by MWE and / or NWSA • Includes donors, public authorities, local authorities, NGOs and private sector institutions and enterprises • Clear focus on coordination and information in relation to active projects and contributions • Detailed TOR still not defined

13. NWSSIP and the way forward…Arrangements for donor coordination in the water sector (8) • Yemen Groundwater Forum (YGF) • Creation envisaged for November 2005 • Alternating venue • Rotating chair, secretary provided by NWRA • Includes donors, public authorities, local authorities, NGOs, private sector institutions and enterprises, research institutions, water resource practitioners • Focus on networking, information exchange platform, policy debate, sector observation and evaluation • Detailed TOR being elaborated; need clear distinction from IWRG

14. NWSSIP and the way forward…Arrangements for donor coordination in the water sector (9) • Capacity Building Committee (HRD) • Creation proposed by MWE in June 2005 • Chair and venue MWE • Assessment / inventory of sector-wide capacity building / HRD / Training / staff development efforts • Development of an integrated sector HRD concept and strategy, incl. potential for a training fund • Follow-up on HRD effectiveness • Includes donors and MWE with its related authorities • First activity (assessment / inventory) entrusted to GTZ

15. NWSSIP and the way forward…Arrangements for donor coordination in the water sector (10) • Thematic Working Group – Water (TWG) • Formally attached to MoPIC Millennium Project Unit • So far limited action (MDG needs assessment for water and sanitation sector) • Otherwise poor performance and lack of systematic guidance and follow-up • Needs reorientation and redefinition of terms of reference

16. NWSSIP and the way forward…Arrangements for donor coordination in the water sector (11) • Development Partnership Group (DPG) • Initiative of AHA-Unit in MoPIC • So far no clear vision or objective • Needs harmonization with all other sector related coordination efforts to avoid duplication and redundancies • Potential complement or substitute for non-operational TWG

17. NWSSIP and the way forward… Part 2: Key issues of sector dialogue

18. NWSSIP and the way forward…Key issues of ongoing sector dialogue (1) • Water in the 3rd Development Plan for Poverty Reduction • Clarify water sector scenario in DPPR (NWSSIP or MDG needs assessment) • Need to integrate mid-term expenditure framework • Information on status of plan • Clarify links and interdependencies with country and / or sector strategy documents / plans / papers of the various donors

19. NWSSIP and the way forward…Key issues of ongoing sector dialogue (2) • Impact of economic reform measures on water sector • Impact on agricultural cropping pattern and water demand management • Need for tariff increases/adjustments in water utilities • Impact on poverty in general and access of the poor to water in particular • Activities: • PSIA in late 2005 (ready to go) • Groundwater incentive study starting 2005 (ready to go) • Household Budget Survey (ongoing) • Pro-poor tariff study (proposed) • Various water&conflict studies (need coordination)

20. NWSSIP and the way forward…Key issues of ongoing sector dialogue (3) • Water sector budget • Status of 2006 proposed budget and trend compared to 2004 and 2005 • Clarify sub-sector budget allocation incl. recurrent expenditure • Clarity on water sector budget beyond MWE and related authorities (baseline for NWSSIP compliance monitoring) • Need for MTEF from all donors • Need for some predictability of local resources based on economic scenarios • Increase local cost sharing

21. NWSSIP and the way forward…Sector Investment Budget 2006 x YR 1000

22. NWSSIP and the way forward…Key issues of ongoing sector dialogue (4) • Important sub-sector issues • Finalize rural water strategy • Need for an urban water and sanitation strategy • Process for selection of towns for urban W+S interventions • Regulatory framework for rural and urban water (what has been done and what needs to be achieved) • Regulator for urban water & sanitation utilities • How to increase private sector participation (Sana’a LC management contract, Taiz LC technical assistance, Taiz LC desalination, Aden USP, other)

23. NWSSIP and the way forward…Key issues of ongoing sector dialogue (5) • Water resource scenario • Responsibility for irrigation water resource with NWRA needs political backing • Water savings: what are the measures and what did we achieve? • Well licensing: what are the enforcement measures? • How many monitoring wells are actually functioning? • Situation of basin water management plans (what support is needed?) • Need for fast actions in water stressed basins and in utilities which have run into supply crisis

24. NWSSIP and the way forward…Key issues of ongoing sector dialogue (6) • Program aid for the water sector (PAWS) • Need to increase aid effectiveness is common understanding and cast in many international agreements • Harmonize donor visions for potential SWAp in the water sector • Clarity on role of MoU as a framework agreement similar to NWSSIP Donor Support Declaration or its natural continuation • Need for a milestones approach which defines elements and roadmap for potential entry points for all donors • NWSSIP is guiding, but needs to be a dynamic process

25. NWSSIP and the way forward…Key issues of ongoing sector dialogue (7) • Water summit • No fund pledging event • What are GoY and donor expectations? • GoY and donors to discuss key policy issues in the sector dialogue (see above) • Decision on SWAp / PAWS milestones and roadmap expected (!) • Who is the driving force in GoY (MWE; MoF; MPIC) ? • Who is driving force among donors (donor group to give a clear mandate) ? • Define place, time and financial contributions • Define content, instruments and preparation needs

26. NWSSIP and the way forward… Part 3: Preparing for program aid

27. NWSSIP and the way forward…Key components of an effective SWAp… and progress so far DCG PIIS NWSSIP M&E Unit participatory strategy formulation donor sup-port decla-ration donor coordinationmechanism NSG Staff & TA EDG Ind. Project targets benchmarks donor-GoY coordin. at sector level Perform-ance mo- nitoring system Stake-holder involve-ment Development Partnership Group NWSSIP Action Plans Mid-term Results Framework MoPIC Aid Harmon. & Alignmt Hub = NWSSIP (Sector Policy) Sector MTRF & MTEF Process f. dialogue & consul- tation Thematic Working Group NWSSIP Inv. Program MoPIC MP / MDG Unit Mid-term Expenditure Framework German MTEF Harmo-nized systems Funding arrange-ments MoPIC PRS Unit MP / MDG Needs Ass. RWS procurement system Sub-sector working groups IWRG All donors MTEF YGF transparent budget UWS MoU Framework Effective PFM system PAWS agree- ment Milestone concept

28. NWSSIP and the way forward…Existing funding arrangements • Investment budget NWRA 2005, • Spending categories; • NWRA’s 2005 activities; • Local and external funds; • Where is the money and the accountability? • Consequences of present funding arrangements; • Program Aid approach.

29. Investment Budget NWRA 2005 Acquisition of fixed capital assets 2.1.9. Wages and General Expenses 2.1.1. Buildings 2.1.8. Construction 2.1.2. Furniture & Office Equipment 2.1.7.Maintenance 2.1.3. Transport 2.1.4. Equipment 2.1.5. Other acquisitions 2.1.6. Studies, project design

30. Mixed bag of own and project activities Activity Studies of water basins Sadah, Rada, Tihama Capacity Building project - UNDP Geo-Environmental Info project IWRM – BGR National Strategy for Water Legislation National Hydrometeorological Network Sadah Water management - KfW Groundwater and Soil Conservation – World Bank Support and Organizing NWRA

31. Aid and cost sharing Local Foreign Total

32. Where is the money and where is the accountability? GoY: 100 m YR Wages and general expenses 90% of budget Donors: 316 m YR GoY accounts only for 52 m YR which is 12.5% of total investment budget

33. Consequences of the project approach: • Projects dominate over authentic program lines of NWRA that therefore cannot become visible; • Distorted planning and budgeting; • Limited accountability • Limited ownership • COCA only audits GoY contribution • MoF cannot oversee investment budget and only sees lots of Wages and General expenses • MoF therefore ties recurrent budget NWRA

34. PAWS-NWRA-2005 Capacity and Institution Building: Component 1 Strategic Planning: Component 2 Basin Level Water Governance and Co-management: Component 3 Audits: Component 4

35. NWSSIP and the way forward…NWRA Annual Plan new style Component 1: Capacity and Institution Building 1.1 Fully functional NWRA with professional image; 1.2 Strengthened mechanisms for improved sector coordination; 1.3 Improved capacities in water resource planning; Component 2: Strategic Planning 2.1 Functional water monitoring network; 2.2 Occasional studies program; 2.3 National Water Resources Information System; 2.4 Water quality monitoring, assessment and control; Component 3: Basin Level water Governance and Co-Management 3.1 Participatory finalization of BMWPs; 3.2 Implementation of currently prepared BWMPs; 3.3 Preparation of by-laws and water rights structure; 3.4 Enforcement of water legislation; 3.5 Strengthened community based structure/basin committees; 3.6 National Public Awareness Campaign; Component 4: Audits 4.1 Financial Audit 4.2 Value for Money Audit

36. NWSSIP and the way forward…Discussions and advances on PAWS MoU Framework (1) • Drive for change of RNE interventions in the sector discussed with MWE in February 2005; • Feed back from other donors that their possibilities for earmarked sub-sector budget support (Virtual Fund) were limited; • Elements of new approach worked out in March/April; • First version of Program Aid Water Sector (PAWS MoU) in May 2005;

37. NWSSIP and the way forward…Discussions and advances on PAWS MoU Framework(2) • Discussion of MoU with MWE, MPIC and MoF in May/June; stalled in July for several reasons; • 2005 Contribution to NWRA and GARWSP (€ 4 m) approved in June in the modality as proposed in PAWS MoU (with some restrictions); • Germany and Netherlands discuss and introduce milestone approach in PAWS MoU in September 2005; • World Bank develops T.O.R for SWAp approach study in September 2005.

38. NWSSIP and the way forward……to Joint Programs and Joint Financing Arrangements in the sector • Understand the PAWS MoU framework and the milestone process approach; • Agreement on the process that describes clearly the steps, responsibilities, and a timeframe leading to: 1) the signing of the PAWS MoU by all; 2) the satisfaction of the donor requirements to join sector budget support.

39. NWSSIP and the way forward…Guidance from the meeting on: • Sub-sector financing and priorities 2006; • Donor coordination mechanisms • Coordinated WB CAS with Water as the lead issue; • SWAp/PAWS MoU process; • Water Summit