Consider the need for sustainability of infrastructure grant facilities in project design and early on in implementation. During the compact, the Fundo de Água e Saneamento (FASA) infrastructure grant facility funded capital investments for WASH utilities. In this context, the grant facility plugged the gap for funding but it was not a permanent solution to meeting utilities’ needs in this area. The interim evaluation report noted that without a successor to the FASA, there is no sustainable solution to how capital investments in the WASH sector will be financed. Not until well into the compact was it decided that establishment of a mechanism to sustain the FASA (the WASH Revolving Fund) should be a “stretch goal.” Near the end of the compact, the WASH Revolving Fund was established as a successor to the FASA to continue making funds available to water utilities. However, at the time of the interim evaluation, the WASH Revolving Fund was not operational—promised seed funding was no longer available, the fund had been merged into the government’s Environmental Fund, and no projects had been funded. In some settings, it might be enough for a compact grant facility to fill a funding gap, but in this case, a continuation mechanism for the grant facility can serve ongoing need for funds. Given the need, sustainability of infrastructure grant facilities should be considered early on. It may be challenging to establish the sustainability mechanisms in an opportune time to garner the needed buy-in and financial support from the Government and other donors to sustain the mechanism after the compact, so early planning is important.
Lesson Learned