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RESULTS BRIEFS APRIL 29, 2020

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

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The joy of a child in Quang Ninh Province playing around with water. (Photo: PforR Coordination Office / Directorate of Water
Resources / Vietnam Ministry of Agriculture and Rural Development)

Vietnam has delivered sustainable water supply and sanitation services to nearly 2.2 million
rural residents in eight provinces in the Red River Delta since 2013. With support from the
International Development Association (IDA), a new and performance-based investment model
was deployed to accelerate access to sustainable water and sanitation systems.
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.

1.8 million+ More than 1.8 million people gained access to improved
water resources and more than 1.4 million people gained

people access to improved sanitation services.

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)

RELATED

Results-Based Rural Water Supply and Sanitation Under The National Target Program

Results-based Financing Provides Sustainable Water Supply in Rural Vietnam

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