Ex-Post Evaluation: Environmental Services Program (ESP)
The Indonesia Environmental Services Program (ESP), implemented between 2004 and 2010, worked with the government, private sector, NGOs, community groups, and other stakeholders to improve the management of water resources and expand access to safe water by strengthening watershed management and delivery of key environmental services, including clean water supply, wastewater collection and treatment, and solid waste management.
The sustainability of municipal water utility capacity building efforts is critical to the provision of safe, piped water to urban populations, yet the WASH sector lacks substantial research on the subject. This evaluation helps fill that knowledge gap by examining the sustainability of water utility capacity building, microcredit, and financial outcomes associated ESP. Specifically it looked at:
- Water Utilities: The number of people served by piped water connections from eight Indonesian water utilities across West and Central Java. We examined access provided by these ESP-targeted utilities in 2015 as compared to 2010
- Finance: The degree to which improvements in financial and management capacity of the water utilities was sustained after the end of the project
- Microcredit: The status of the microcredit program introduced by ESP to increase low-income household connections to piped water.
The evaluation team took a primarily qualitative approach to data collection, conducting 37 semi-structured interviews and 12 focus group discussions with water utility staff, water utility customers, government representatives and participants in ESP’s microcredit program. These interviews were conducted in April 2017.
The team also used data from government-collected water utility performance reports to compare the proportion of a utility’s catchment area population that has a piped connection and the number of household connections between 2010 and 2015. The team updated and applied the water utility performance index tool, which was developed and used annually by ESP to monitor utilities’ management and financial capacity.
Water access improved in most areas since project close, and management tools remain in use, such as standard operating procedures. In comparison to 2010:
- Capacity Builiding: The management of utilities has improved in terms of having a corporate plan, tariff structure, and human resource policy.
- Finance: Utilities were unable to maintain progress in improving financial management, as measured by operating ratios and levels of debt. Furthermore, most customers preferred alternative water sources such as household wells and complained of inconsistent utility service provision and poor water quality, which further threatens financial performance as some customers disconnect.
- Microcredit: ESP’s microcredit program ended in the three water utilities in our sample where it was formerly active, in part due to challenging bank vetting procedures. These three water utilities have replaced ESP’s microcredit program with discount or installment plans for lower income families to pay for new household connections.
Results from this evaluation demonstrate how tools such as standard operating procedures or regular performance benchmarking processes can help sustain continued operational improvements over time.
However, financing for water utilities remains a critical issue to resolve, particularly in Indonesia, where many water utilities amassed tremendous debt to the central government in the 2000s. Understanding this challenge helps inform the design of future water utility capacity building efforts, as well as current programs such as the IUWASH PLUS Program (the second follow-on activity to ESP), which is currently being implemented in Indonesia.
About The Ex-Post Evaluation Series
The USAID Water Office is conducting a series of independent ex-post evaluations of the Agency’s water, sanitation, and hygiene (WASH) activities to inform future USAID investments in the sector and to better understand the long-term impact and sustainability of its interventions several years after projects close.
This evaluation series will help USAID understand whether and how its activity results have been sustained. All activities included in the series must have been closed for a minimum of three years and could not be recipients of Office of U.S. Foreign Disaster Assistance or Food for Peace funding. Preference is given to USAID missions that are at a point in their design cycle to incorporate learnings into upcoming WASH programs.
This evaluation series builds upon USAID and Rotary International’s WASH Sustainability Index Tool, a framework to assess a WASH activity’s likelihood to be sustainable according to the following factors: availability of finance for sanitation; local capacity for construction and maintenance of latrines; the influence of social norms; and governance.