Closed Compact Report: Lesotho Compact | October 2015

Water Sector Project

  • $164,028,000Original Compact Project Amount
  • $149,813,612Total Disbursed

Estimated Benefits

Estimated Benefits for the Water Sector Project
Time Estimated Economic Rate of Return (ERR) over 20 years Estimated beneficiaries over 20 years Estimated net benefits over 20 years
At compact closure 21.8 percent 361,122 $120,032,466

Estimated benefits corresponds to $131 million of project funds, where cost-benefit analysis was conducted.

Project Description

The water sector has played a significant and complex historic role in Lesotho’s economy.  While revenues from water transfers to South Africa account for approximately 5 percent of the country’s GDP, sustained drought cycles and inadequate water supply infrastructure have constrained growth and development in Lesotho’s lowlands. Increasing industrial demand, coupled with rising consumer demand for potable water put a heavy burden on both water supply and waste water services. The Water Sector Project was designed to support Lesotho’s vision to provide secure, adequate, sustainable and clean water supply and sanitation services to rural and urban consumers. It did so through the:

  • construction of a water treatment plant to support the Metolong Dam program;
  • rehabilitation of existing water supply infrastructure and expansion of the distribution network in urban and adjacent areas;
  • rehabilitation and/or construction of water supply points and latrines in rural areas; and
  • restoration of degraded wetlands in the Lesotho highlands and support for development of a National Wetlands Management Plan

By the end of the project, 13 water reservoirs were constructed and another five rehabilitated, five pumping stations had been upgraded, nearly 30,000 latrines were built, and 208 water retention structures in the wetlands activity areas were completed.

Evaluation Findings

MCC conducted an independent impact evaluation of the Rural Water Supply and Sanitation Activity that aimed to measure use of MCC-funded infrastructure and key related outcomes such as household hygiene behaviors, time spent collecting water, incidence of diarrhea, and household incomes. The evaluation, which was published in January 2018, found that households in the treatment group were more likely than those in the control group to use as their main water source an improved water source, such as a public standpipe or a protected spring, as opposed to an unimproved source, such as an unprotected spring or surface water. They are also more likely to use a toilet and spend less time collecting water. However, the evaluation did not find any impacts significant at standard levels of confidence for any of the diarrhea incidence indicators analyzed, although most of the estimated effects have the (negative) expected sign.

The evaluation also did not find any effects for any labor outcomes, or income. An important exception to this is that it found that the program had a positive and significant effect on female labor participation. The evaluation discusses the mechanisms that can explain why the effects on labor outcomes were not more apparent. In particular, it is possible that time availability did not translate into better labor outcomes in these rural communities because the latter are not restricted by time availability but by other conditions, like the labor market itself.

An independent evaluation is also ongoing for the Urban and Peri-Urban Water (UPUW) and Metolong Dam Activities. To-date, the evaluator undertook a process evaluation to assess how these Activities were implemented and managed, report on current functionality and use, derive lessons learned that can be applied to future Compacts, and help focus a summative evaluation. It included two components: an implementation fidelity assessment and a performance evaluation.

The key results of the process evaluation as presented in the summative evaluation design report, demonstrate that implementation at four sites was successful, i.e., the “site is able to deliver water as intended due almost entirely to UPUW Activity programming”; four sites were remediated, i.e., the “site is able to deliver water as intended only due to WASCO remediation of failed UPUW infrastructure”; and two sites were considered failures, i.e., “WASCO has been so far unable to remediate failed UPUW infrastructure, and the site is unable to deliver as intended.” The evaluator built on these findings to develop a summative evaluation design aimed at measuring changes in water demand, supply, use, and time savings. Data collection will proceed in late 2018 and results will be available mid-2020.

Key performance indicators and outputs at compact end date

Key performance indicators and outputs at compact end date
Activity/Outcome Key Performance Indicator Baseline End of Compact Target Quarter 1 through Quarter 20 Actuals (as of Dec 2013) Percent Compact Target Satisfied (as of Dec 2013)
Metolong Dam Ancillary Works Activity Physical completion of Metolong water treatment works contract 0 100 82 82%
Rural Water Supply and Sanitation Activity VIP Latrines built 0 27,245 29,352 108%
Water points constructed 0 250 175 70%
Urban Water Supply Activity Households with provisions to connect to water networks 0 2,454 2,312 94%
Non-revenue water (%) 34 25 27 78%
Physical completion of Urban Water supply works contracts (%) 0 100 96= 96%