Rwanda to adopt a new water tariff designed with UN-Habitat’s help
Nairobi 25 August 2015—Starting 1 September, Rwanda introduced a new urban water supply tariff which was designed with the help of UN-Habitat. The new tariff has been designed to move the utility towards full cost recovery. In line with the pro-poor policy of the UN-Habitat and the water policy of Rwanda, the tariff is structured to protect the urban poor from paying unaffordable prices. The new water tariff is a good demonstration of how UN-Habitat combines its normative and implementing role to guide and shape government policy. UN-Habitat is currently active in Rwanda, providing technical support in a wide array of diverse programmes and projects. One of these programmes is Lake Victoria Water and Sanitation Phase II programme. The Lake Victoria Water supply and sanitation phase II programme is delivering investments in water supply, environmental sanitation, urban drainage and capacity building. It is aimed at achieving the Millennium Development Goals for water and sanitation and contributing to the reversal of pollution of Lake Victoria. The programme, covering 15 secondary towns in the five East African Countries, is funded by a grant from the African Development Bank. The Bank allocated a portion of the grant for training and capacity building activities, which are being implemented by the Urban Basic Services Branch of UN-Habitat. Rwanda benefits from UN-Habitat’s training and capacity building programme Rwanda, being one of the beneficiary countries of the grant, has benefited from the training and capacity building programme of UN-Habitat. One of the technical supports of the branch to Rwanda is the study and review of urban water supply tariff. The current national water supply tariff has remained in operation since 2006. UN-Habitat, under the ongoing Phase II of the Lake Victoria Water and Sanitation Programme (LVWATSAN II), provided full technical support for the process leading to the study and review of the long-standing water supply tariff for eight urban centres within the country. The primary objective of the tariff study was to assist the utility to attain operational efficiency, avoid inefficiency, and achieve financial self-sufficiency. The study gave attention to the ability and willingness to pay for the urban poor and set the social tariff for the low-income groups and public stand post users. The tariff structure is progressive with increasing water consumption blocks, and the urban poor are enjoying the first block tariff, which is a lifeline tariff. To internalize the tariff reform process, UN-Habitat conducted three days (February 10-13, 2014) training on a financial model setting and water tariff estimation for more than 25 experts in Musanze, Rwanda. The trainees were drawn from the service provider- the Water and Sanitation Corporation (WASAC), the regulator- the Rwanda Utilities Regulatory Authority (RURA) and, the policy maker- the Ministry of Infrastructure (MINIFRA). The training has enabled the institutions, particularly the regulator (RURA), to undertake in-house tariff review and adjustment. In recognition of the importance of capacity building at local government level, the UN-Habitat Deputy Executive Director, Aisa Kirabo Kacyira, during the Second Urban Infrastructure Investment Forum that was held in Luanda, Angola, said “While government collaboration with the communities will guide and adopt good policy, implementation is the local government level. UN-Habitat recognizes this powerful role of local government and local government structures and supports their capacity building to enable sustainable developing especially in this fast urbanizing world” During his visit to Rwanda in February 2015, Dr Joan Clos, the UN-Habitat Executive Director, lauded the achievements in Rwanda. “Clear vision that recognizes urbanization as an opportunity for sustainable development is needed to create the cities we need for the future”. The Board of Rwanda Utilities Regulatory Authority (RURA) approved the tariff study The Board of Rwanda Utilities Regulatory Authority (RURA) approved the tariff study, which will take effect from September 1, 2015. This new tariff regime represents a big milestone in the history of the water sector of Rwanda. The tariff implementation of Rwanda takes place during the transition from Millennium Development Goals (MDGs) to a new development paradigm, the Sustainable Development Goals (SDGs). During the MDG, a remarkable progress towards increasing the financial and institutional capacity of water and sanitation service providers has been made. However, still there exist significant capacity gaps in the utilities of particularly Sub-Saharan African countries. This strategy of UN-Habitat in areas of water supply tariff reform is contributing towards strengthening the financial capability of the service providers, which is part of completing the unfinished business of the MDGs. In recognition of the support, the CEO of the Water and Sanitation Corporation (WASAC), Mr James Sano, in his message to UN-Habitat, said, “no words can express our gratitude for the support we have received from UN-Habitat Water and Sanitation division in making tariff development for WASAC a success”.