Tools to promote financial sustainability

For many people in developing countries access to adequate water supply, sanitation and solid waste disposal is crucial to achieving improvements in their quality of life. These services also have dramatic health and environmental impacts: more than two million deaths from diarrhoea alone could be avoided each year if all people had reasonable water and sanitation services (World Bank, 1992). In order to achieve the great improvements in environmental quality, health, equity and economic returns which these services can bring, an approach is needed which recognises that it is essential for services to be provided in a financially viable and sustainable manner. There is widespread evidence that without an emphasis on appropriate levels of service, affordable charges and proper financial planning, service delivery fails and the poor are once again worst off. In the light of this, a financial modelling tool has been developed to assess the impact of investments in water and sanitation services, and the implementation of different tariff and subsidy policies, on the long term financial viability and sustainability of service agencies.