In Morocco, many people who move to cities in search of a better life end up living in informal settlements without access to basic services such as clean water and sanitation. This has a negative effect on their health and well-being, especially for women and children who must spend several hours a day fetching water from public fountains or wells.

In 2005, Morocco made it a priority to extend service to these poor peri-urban neighborhoods and encouraged operators and local governments to reduce connection fees for water and sanitation services. The government and the operators of water utilities in three cities subsequently requested a grant from The Global Partnership on Output-Based Aid (GPOBA), a World Bank-administered program, for a pilot project to expand services using an innovative output-based aid (OBA) approach. The pilot is being implemented by two private operators, LYDEC in Casablanca and Amendis in Tangiers, and a public utility, RADEM, in Meknès.

“Under the OBA approach, the operators receive the subsidy payment only after an independent agent has verified that they have delivered working connections to the targeted households,” explains Adriana de Aguinaga, acting program manager of GPOBA. “This increases transparency and ensures that the funding benefits the people who need it most.”

“The OBA subsidy fills the gap between the affordable level that these households can pay and the real cost of extending services to these households,” says Xavier Chauvot de Beauchêne, World Bank task team leader for the project.

So far, more than 50,000 residents of informal settlements have benefited from water and sanitation connections provided via the OBA pilot. The impact on their lives has been dramatic.

“Before, without water, it was difficult to plan or do things. I felt doors were closed but they are now finally open. Everything became possible,” said Hassana Jaatouti, a project beneficiary in Meknès.

The World Bank is now working with the government of Morocco to plan a scale-up program to bring water and sanitation services to other disadvantaged communities in urban areas, using the OBA method.