This 8-page learning brief introduces the key concept of lifecycle costs, that is the various kinds of expenditures at different stages in a facility’s life. It also introduces the 4Ts of sustainable cost recovery: tariffs, taxes, transfers, and trade. It argues that the mismatch in timing of expenses and availability of funds can be met through repayable finance if a plan for sustainable cost recovery can be demonstrated to lenders. However, support from higher governments and aid organisations to mitigate risks is necessary for small towns to access market-based repayable financing instruments be it bonds, loans, or equity.
Who is this for and why?
The brief will be most useful for sanitation planners and finance personnel within the local governments as well as the consulting firms supporting them. It covers the fundamentals of expenditures, revenue streams, and risk mitigating measures that need to be considered while preparing a business case for accessing repayable finance. It will encourage them to seek timely support from higher governments or aid organisations and even allow time for negotiations.
This learning brief draws on the Learning paper: Financing sanitation for cities and towns