Water and Sanitation in Africa

Success in Senegal

The World Bank is keen to promote Senegal as an example of how publicprivate partnerships (PPPs) can improve access to clean water in a sustainable manner. 

The World Bank’s International Development Association (IDA) and the government of Senegal developed a comprehensive plan to improve water and waste-water services inSenegal’s towns and cities. 

The project sought to learn from past mistakes by focusing on the creation of a commercially viable utility company that would be able to generate sufficient income to maintain services, pay for repairs and extend both storage capacity and distribution grids when required. Crucially, it sought to ensure that the water company operated without government subsidy. In addition, more effort was to be put into providing services to poorer areas.

In 1995, before the IDA began its programme, 42% of the Senegalese population had no access to safe, clean drinking water, including 60% in urban areas. Colonial-era water supply infrastructure in most towns had become dilapidated and had not been extended into many of the new suburbs that had grown up, including the many informal settlements in Dakar. 

A tender for a 10-year contract to operate water services in the country was held. It attracted bids from four companies, all French, and Saur was eventually selected based on its financial and technical bids.

However, waste-water services were spun off and put under the responsibility of the Office National de l’Assainissement du Sénégal (ONAS). That company charges a tariff per cubic metre of waste water processed. The IDA invested $100m in the initial project and a further $125m under its Long Term Water Sector Project, while other donors and commercial banks provided another $190m. These included the African Development Bank, European Investment Bank, the French and German governments, the Nordic Development Fund, the West African Development Bank (WADB) and Senegalese commercial banks,

An IDA spokesperson commented: “IDA played a convening role and served as a catalyst for the adoption of innovative practices and policies. Technical assistance made it possible to shift to a public-private partnership, with a state holding company running the water and sanitation service, while contracting out operational responsibility to a private firm in which government held a stake. Bank support helped to ensure fulfilment of contractual and regulatory obligations. Close monitoring of procurement decisions helped keep costs down, and contributed to affordable tariffs.”

The chosen PPP structure is similar to the landlord model that is common in the port sector, where the state or a state-owned company retains ownership of the physical infrastructure, but it is operated under a long-term concession by a private company. 

Saur took a 51% stake in operating company Senegalaise des Eaux (SDE), with 39% held by private Senegalese investors, 5% by the government of Senegal and 5% by SDE employees. 

However, Saur later sold its stake to Finagestion, which is mainly owned by a US investment fund called Emerging Capital Partners. Interestingly, the same landlord model was applied in Senegal for the decade after independence, until the sector was fully nationalised in 1971. Three tariffs are now applied to water supplies: a low rate for consumption of less than 20 cu m per two months; a standard rate for consumption between 20 and 40 cu m per two months; and a high rate for any consumption in excess of 40 cu m per two months.  This structure is designed to ensure that everyone has access to water for basic requirements at a low cost, but high-volume users are deterred from using too much in order to conserve supplies. 

Those supplied with water from standpipes buy water by the bucket, although they also pay the highest rate by volume. This is certainly a problem but the government and SDE both intend the standpipes to be a temporary solution in poor areas that will be phased out when all homes are supplied with piped water.