TERMS OF REFERENCE AND INVITATION TO SUBMIT A FULL PROPOSAL FOR UNPACKING/ANALYSIS OF RWANDA SUSTAINABLE WASH FINANCING GAP

TERMS OF REFERENCE AND INVITATION TO SUBMIT A FULL PROPOSAL FOR UNPACKING/ANALYSIS OF RWANDA SUSTAINABLE WASH FINANCING GAP

SUMMARY

Title

UNPACKING/ANALYSIS OF RWANDA SUSTAINABLE WASH FINANCING GAP

Type of consultancy

Delivery based

Location

Kigali

Duration

4 months

Start Date

5th February 2025

Reporting to

MININFRA: DG in charge of Water and Sanitation

Technical focal person

Water For People: Senior WASH Advocacy and Finance Manager

BACKGROUND AND RATIONALE

In June 2022, the government of Rwanda, through the Ministry of Infrastructure (MININFRA), developed a Sustainable WASH Finance Strategy to support the Government of Rwanda (GoR) and all the stakeholders working in the Water Sanitation and Hygiene (WASH) sector to set out approaches on how the WASH sector will finance its overall programming and operations to meet the sector’s objectives of achieving sustainable Development Goal 6 (SDG 6) 2030 and the Rwanda Vision 2050 targets.

The strategy highlighted key barriers that hinder the full achievement of WASH targets, most focusing on barriers to achieving the national targets, and others looked beyond and were projected to 2030, the due period of SDG 6. Based on all available data, assumptions, and estimates, the life-cycle costs for providing WASH services were calculated at approximately RWF 3.6 trillion for 2022-2030. This study also highlighted that the current annual budget allocation to WASH priorities was estimated at RWF 80 billion. Comparing the required estimated budget allocation annually and the estimated allocated budget annually of the period under study, it was estimated that the financial gap was RWF 320 billion per year.

Regarding funding sources – income/revenue, the data show an annual variation in the relative weight of each of the three primary sources of finance to the sector. These are the three Ts: taxes, tariffs, and transfers. In 2016 and 2017, tariffs were the main contributors, followed by taxes, while in 2018 and 2019, taxes were the main contributors. On average over the analysis of 2016/17 – 2020/21, WASH sector financing came from a mix of GoR investments through taxes (38%), citizen/user investments through the payment of tariffs (37%), and from development partners through transfers (25%).

The Sustainable WASH Finance Strategy also highlights financial targets and the climate-sensitive and strategic policy actions to be taken by the GoR and other sector stakeholders, including the private sector, development partners, consumers, and other innovations, to increase resources allocated to the WASH sector and maximize the efficiency and the effective use of public and private investments. The proposed key strategies for mobilization of additional funds for the WASH sector to reduce the finance gap for the WASH sector in Rwanda are maximizing the amount from existing public funding sources, tariffs, and efficiencies, mobilizing additional funding, including climate funding, and increasing repayable domestic finance and innovation in WASH financing and explore the least explored WASH funding sources such as climate funding opportunities.

It is against this background that Water For People, in collaboration with other key WASH Partners in Rwanda (UNICEF, AfDB, Water Aid, World Vision, USAID, and JICA ), is committed to supporting the Ministry of Infrastructure and Ministry of Finance and Economic Planning to undertake a detailed analysis of the WASH financing sources and needs in the sector ever since the finance strategy was disseminated. This will include generating evidence on the sector's investment needs, revenue, and expenditure targets, understanding the challenges of WASH financing, and modeling the required resources. The consultant will also undertake a review of the enabling environment, policies and practices, institutional setup, and opportunities to maximize the value of existing and new WASH funding to accelerate the achievement of sustainable and resilient WASH services in Rwanda by 2030.

OBJECTIVES

The general objective of this assignment is to generate an evidence-based fact sheet of the potential for each of the WASH revenues and financing sources by modeling their trajectory of growth in response to the targets set in the following national strategic documents:

Rwanda National Strategy for Transformation II (NST2).Water and Sanitation Sector Strategic Plan (SSP) 2024-2029.Integrated National Water Supply and Sanitation Master Plan and SDG 6 targets.

This will be achieved by analyzing the Rwanda WASH Sector Financing Gap based on each revenue source/income stream and suggesting how these sources could grow to fill the gaps that need to be bridged in different expenditure streams to achieve the SDGs by 2030. The intention is to use these results to support the development of a strategic program/project for the WASH Sector aimed at achieving SDG6 by 2030.

The assignment has 5 specific objectives as follows:

Review and analyze each WASH revenue source separately against their micro and macro-economic assumptions/drivers

Review each WASH Sector revenue source against their micro and macro-economic assumptions/drivers and propose other funding windows that the WASH sector can exploit.Evaluate the WASH financing gap from each WASH revenue and financing source: Based on the Sustainable WASH Financing Strategy, analyze existing funding gaps for each WASH revenue and financing source separately.Review the non-revenue water reduction strategies in place and their current level of implementation, and measure their projected benefits in terms of revenue savings as both a supplementary and complemental mechanism to bridge the existing WASH finance gap in Rwanda.Review the expenditure assumptions underlying the Sustainable WASH Finance Strategy – to suggest whether the numbers still provide an appropriate ballpark.Analyze the contribution of WASH sector interventions to Rwan…