What Do Private Companies Look for in a Performance-based Non-revenue Water Project?
6. July 2018
Recent estimates place global annual non-revenue water (NRW), i.e. water produced but not billed because of commercial or physical losses, at 126 billion cubic meters. This translates to nearly $40 billion in annual losses on waste and foregone revenues—a sum, that even if a fraction could be recovered, would underpin a compelling market opportunity for private service companies and a boost to public water utilities’ sustainability. A new joint initiative is aiming to drive declines in NRW faster, cheaper, and more sustainably by assisting water utilities to engage private companies in performance-based contracts (PBCs). The World Bank’s Public-Private Infrastructure Advisory Facility (PPIAF) and the Bank’s Water Global Practice, in partnership with the International Water Association, analyzed 43 projects and determined that NRW initiatives supported by PBCs are 68 percent more effective compared to those undertaken by utilities alone, (see for example, Using Performance Based Contracts to Reduce NRW) and are systematically faster at reducing the rate of loss.