Built to Last – Upgrading Rural Water Supply and Sanitation Through Results-Based Financing: The Vietnam Experience

Challenge

As in most rural areas in Vietnam, access to safe water and sanitation services in eight provinces in the Red River Delta was a significant challenge. In 2012, only 36% of households had access to ‘clean’ water, defined as meeting the national quality standards. Groundwater, which generations of local people used for cooking and drinking, was becoming increasingly contaminated by toxic hazards. Piped water networks were either broken or failing to reach households. At the same time, only 56% of rural households had hygienic latrines and less than 20% of people washed their hands with soap at key moments. 

Approach

Vietnam rolled out an ambitious National Target Program for Rural Water Supply and Sanitation - Phase 3 (NTP3) in 2013. This project used the World Bank’s Program-for-Results (PforR) lending instrument, which for the first time linked the disbursement of IDA financing to results achieved on the ground. The PforR framework created powerful incentives to drive results and achieve the sustainability of water and sanitation services. For example, a commune was deemed qualifying to receive funding only if it had met all criteria for the ‘Community-Wide Sanitation’ (CWS) status: 100% of public schools and health centers have clean water and hygienic sanitation facilities; at least 70% of households have hygienic sanitation meeting government standards; 100% of households use latrines of some kind; and the commune is open-defecation free.

Results

The Vietnam Results-based Rural Water Supply and Sanitation under the National Target Program aimed to increase sustained access to water supply and sanitation services and improve sector planning, monitoring and evaluation in eight geographically clustered provinces. From 2013 to 2018 the project achieved the following results:

• More than 1.8 million people gained access to improved water resources and more than 1.4 million people gained access to improved sanitation services.
• The average coverage for water supply and sanitation services in participating communes reached 72% and 88% respectively in 2018, up from the baseline of 36% and 56% in 2012.
• The construction time of water and sanitation infrastructure was cut by 58% and construction costs by unit were cut by 63%. The size of water schemes in terms of average number of household connections increased by 353%.
• Water supply schemes supported under the program were incentivized to meet all of the robust sustainability criteria for a minimum of two years—operating under recognized management models, with low water losses, a high ratio of household connections billed, and a positive cost recovery ratio.
• 191 communes achieved Commune-Wide Station (CWS) status, benefiting 1.4 million people; of which 184 communes also achieved the Sustainable CWS status. In these communes, 100% of facilities in schools and health centers were in proper maintenance, which previously was a challenge.
• The rural water supply and sanitation planning, monitoring and evaluation process at both national and local levels was streamlined to follow a highly structured and scientific approach, and elements of the PforR approach were incorporated into broader national programs.

World Bank Group Contribution

The International Development Association (IDA) provided a US$200 million credit for the program in 2013. The PforR was also supported by a parallel Technical Assistance program financed through an A$8 million trust fund from the Government of Australia.

New water facilities sprung up in many communes across the Red River Delta as a result of this PforR. (Photo: PforR Coordination Office / Directorate of Water Resources / Vietnam Ministry of Agriculture and Rural Development)

Partners

The Ministry of Agriculture and Rural Development was the lead agency on the water supply component, working in close co-ordination with their provincial level counterparts.  The Vietnam Health Environment Management Agency, under the Ministry of Health, assumed the similar role for sanitation. The State Audit of Vietnam conducted results verification. The Ministry of Education supported water and sanitation activities in schools. Particularly on sanitation, the community-wide station approach incentivized the Water, Sanitation and Education sectors to work jointly to achieve integrated water and sanitation services solutions commune-wide.

As the PforR was new to Vietnam, the World Bank, Australia’s Department of Foreign Affairs and Trade (DFAT) and the Government of Vietnam worked hand in hand throughout the ‘results-based’ learning process. The capacity building and technical assistance support provided by DFAT in the early program years was vital to lay the groundwork for solid results.

Moving Forward

The PforR experience was instrumental to introduce a more demand-driven, result-based approach for planning, investment and operations of water and sanitation schemes in rural Vietnam. This approach showed an effective way to address the sector’s long-lasting conundrum – how to ensure operational and financial sustainability of water and sanitation schemes in the long run? The success of this program led to another IDA-financed PfoR project that began in 2016 and works on a larger scale in 21 provinces – Results-Based Scaling Up Rural Sanitation and Water Supply Program.

Beneficiaries

A resident from Xuan Lai Commune, Vinh Phuc Province: “Once I knew the piped water supply was available, I signed up immediately because my family is thirsty for clean water. The cost is quite the same as before, it is the water quality that makes all the difference. We used to rely on a well to supply water for every household activity. The well water was usually loaded with sediment which stained our laundry and corroded our things. It sometimes smelled bad and looked dirty. Now I just turn on the tap, and a stream of fresh, sediment-free water flows from it–I feel like we are living in the city.”

School with upgraded handwashing facilities supported by the Program. (Photo: Le Tuyen Hong Hai / World Bank)