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Module 3 - 13 Financing (Cost Recovery)

13.1 What are the objectives of cost recovery?
13.2 What are the key processes?
13.3 Who is involved?
13.4 What are the key steps?
13.5 What are the key issues?
13.6 What are the key issues relating pro-poor PPPs?
Further guidance

Key Questions:


Related Tools:

12 Financing (investment)

PPP Development Stage – Financing (Cost Recovery)

13.3 Who is involved?

Public, private and non-governmental sectors are involved in the cost recovery stage. Each sector typically enters a partnership with a different set of strengths and weaknesses [Tool 13-2]:

1. The public sector…

…is traditionally responsible for providing and administering services for the poor. It often lacks the necessary capital for the large investments water systems require. When government partners with the private sector, financial and technical burdens are delegated. With the involvement of the private sector, the government role often shifts to a regulatory one, to set or approve tariffs, monitor operations and ensure that political goals, such as a reliable service for the poor, are achieved.

2. The private sector…

…is proficient at maintaining both good consumer relations and functioning systems. When the public and private sector work together more realistic, responsive and flexible tariff structures can be established.

3. Civil society organisations…

…are considered to have an advantage over both the government and the private sector in working with the community and incorporating the community’s needs and preferences into a project. Such organisations are represented by:

  • Non-government organisations (NGOs) which promote fairness in allocating costs, service sustainability and determining what is affordable. Frequently, an NGO is the most appropriate actor to work with communities to develop a culture of willingness to pay for a service to ensure sustainability.
  • Community-based organisations (CBOs) which provide an increasing focus on payment from the poor for services, as well as the decision making about how the poor can and do pay for their services; CBOs also influence cost-recovery approaches and promote a livelihoods agenda.



  S T A R T P A G E  
  Module 1 - Before PPPs  
  01-Starting Out  
  02-Strategic Planning  
  Module 2 - Preparation Stage  
  03-Planning & Organising  
  04-Collecting Information  
  Module 3 - PPP Development Stage  
  05-Identifying Constraints  
  06-Defining Objectives  
  07-Defing Parameters (Scope)  
  08-Establishing Principles  
  09-Identifying Partners  
  10-Establishing Partnership  
  11-Selecting Options  
  12-Financing (Investment)  
  13-Financing (Cost Recovery)  
  14-Preparing Business Plans  
  15-Regulating the PPP  
  Module 4 - Implementation  
  16-Tendering & Procurement  
  17-Negotiating & Contracting  
  18-Managing PPPs  
  19-Monitoring & Evaluation  
  20-Managing Conflict  
  21-Capacity Development  
  Contact Information