A lot has been happening in Public-Private Partnerships (PPPs) in the water supply and sanitation sector over the last few years, contrary to some misperceptions. Today’s market is radically different from the 1990s (dominated by the large concession model and appetite of private investors to finance projects) or the 2000s (contract terminations and nervousness about benefits that PPP could bring in the water supply and sanitation sector).

Developing countries, facing the challenges of sustainability and financial viability due to the inescapable realities of poor water supply and sanitation services and constrained budgets, are looking at PPPs as an option worth considering to help performance or to develop new sources.  Applying lessons learned from the past, with a better understanding of what PPPs in water can and cannot bring, water PPPs are being used increasingly by public utilities in a more focused way, to manage a specific subset of activities or challenges, such as increasing energy efficiency and water availability through non-revenue water management, or development of a new water source.  The focus is on performance based contracting, with payments against outputs.

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