Public-Private Partnerships: A Proven Path to Better Water Services for African Cities

In many African cities, water services are getting worse. The water utility can’t keep up with urban growth. Changing rainfall patterns increase water insecurity.

When what we’re doing isn’t working, it makes sense to look at what others have done that has worked. Africa has a long history of public-private partnerships in water that stabilized finances and enabled investment in new water sources and network expansion. Cities seeking better water services can draw on those examples.

Business-as-usual is not delivering the water services African cities need

Africa’s urban population is growing rapidly; water and sanitation services are not keeping pace. Many utilities are unable to recover operating costs. These utilities depend on the government to fund their operating deficits and capital investments. Governments, however, don’t have the funding needed.

Across the continent, about US$50 billion is needed annually to achieve universal access, but only US$10–19 billion is invested[1]. Traditional public-sector (donor-supported) funding has proven insufficient to replace aging infrastructure, expand coverage, and build climate resilience.

Public-private partnerships offer a viable alternative

Public-private partnerships (PPPs) can enhance water services by leveraging skills and systems from firms specializing in water utility management, while offering powerful incentives for improved services and financial performance. The table below gives examples of successful PPPs in Africa.

One secret of success has been increasing cash inflows to the utility. PPPs have reduced non-revenue water and improved collection efficiency, generating positive operating cashflows which can service loans taken out to develop new resources and expand distribution networks.

Some Successful Water PPPs in Africa

Country (Utility)	Contract Type	Impact
Abidjan, Côte d’Ivoire (SODECI)	affermage (1959–ongoing)	Collection efficiency rose to 92 percent[2]
		Non-revenue water (NRW) reduced to 17 percent[3]
Dakar, Senegal (SONES)	affermage (1996–2019)	Transitioned from losses to full cost recovery[4]
		Piped water coverage extended to 98 percent of the population[5]
Ouagadougou, Burkina Faso (ONEA)	Incentivized service contract (2001–2007)	Collection efficiency improved from 85 percent to 98 percent[6]
		Grew the number of connections from 74,000 to 127,300[7]
Johannesburg, South Africa (JW)	Management contract (2001–2006)	Collection efficiency increased from 74 percent to 90 percent
		Financial losses turned into profit[8]

Countries that want to improve urban water services can adapt these models to their circumstances

Governments can collaborate with international financial institutions and development partners to develop projects, integrate funding sources, and enhance capacity to manage partnerships effectively.

Castalia is also able to provide advice in this area. In 1987, Castalia helped Guinea develop the first water PPP in an independent sub-Saharan African country: the affermage for Conakry. Since then, we have contributed to successful PPPs around the world, including the concessions for Bucharest (Romania), Sofia (Bulgaria), Brno (Czech Republic), and Manila (Philippines), and bulk water supply to Cebu (Philippines) and Kigali (Rwanda).

Castalia contributed to the World Bank’s Private Participation in Water Services Toolkit[9], a guide on structuring effective PPPs, and the Operational Manual on Performance-Based Contracts for Non-Revenue Water Reduction[10], which provides practical approaches to tackling water losses.

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[1] African Union Commission (2023) ‘Leaders commit to Mind the Gap – Invest in Water as the race to achieve SDG 6 in Africa accelerates’, 18 October. Available at: https://au.int/en/pressreleases/20231018/leaders-commit-mind-gap-invest-water-race-achieve-sdg-6-africa-accelerates

[2] van den Berg, C. & Danilenko, A. (2017) Performance of Water Utilities in Africa. Washington, DC: World Bank. p.100. Available at: https://documents1.worldbank.org/curated/en/731141488368322337/pdf/113075-Revised-PUBLIC-W16010-eBook.pdf

[3] van den Berg, C. & Danilenko, A. (2017) Performance of Water Utilities in Africa. Washington, DC: World Bank. p.150.

[4] World Bank (2004) Innovative Contracts, Sound Relationships: Urban Water Sector Reform in Senegal. Water Supply & Sanitation Sector Board Discussion Paper No. 1. Washington, DC: World Bank. p. 22

[5] van den Berg C. & Danilenko A. (2017) Performance of Water Utilities in Africa. Washington, DC: World Bank. p. 137

[6] World Bank (2012) “Burkina Faso’s Infrastructure: A Continental Perspective” (WPS5818). Washington, DC: World Bank. p. 23. Available at: https://documents1.worldbank.org/curated/en/231191468236065618/pdf/WPS5818.pdf

[7] Briceño-Garmendia, C., Smits, K. & Foster, V. (2009) “The 2009 Africa Infrastructure Country Diagnostic (AICD) — Case Study: Burkina Faso, ONEA”, Background Paper for the World Bank. Washington, DC: World Bank. Figure 26, p. 35. Available at: https://documents1.worldbank.org/curated/en/125961468015557297/pdf/487300NWP00v201P131PPPWestAfrica1v2.pdf

[8] World Bank (2006) The Management Contract for Johannesburg Water. Washington, DC: World Bank. p. 4. Available at: https://documents1.worldbank.org/curated/en/943711468164379240/pdf/489070WP0Box331C10WN201Johannesburg.pdf

[9] Approaches to Private Participation Water Services: A Toolkit | Public-Private Partnership

[10] Non-revenue Water Performance-Based Contracts – Castalia