Discover the challenges, successes, and lessons learned in crafting this impactful strategy in partnership with the government of Cambodia and UNICEF Cambodia
Published on: 16/12/2024
In this interview, Ruchika Shiva, Director of the Asia Regional Programme at IRC, and James Wicken, IRC associate, share their insights into the development of Cambodia's Sanitation Finance Strategy.
Why was it important for Cambodia to develop a sanitation finance strategy?
James: Cambodia had sanitation policies and strategies in place. But in recent years, the government took a step further by developing detailed action plans—even costed action plans. They could outline what they wanted to do and how much it would cost, but there was one issue: no one talked about where that money would actually come from. It was just a number on paper. To bridge this gap, we created a finance strategy. This strategy not only calculates the costs but also identifies financing options and looks at the broader enabling environment needed to attract the necessary funding.
Ruchika: A sanitation finance strategy is key to understanding the full life cycle costs of safely managed sanitation and spotting the funding gaps that need to be filled to achieve national targets. It gives a clear picture of where the money is coming from—be it households, public funding, or other sources—and highlights where the shortfalls are. This kind of information is critical for having meaningful discussions with stakeholders and, ultimately, securing dedicated budget lines to make the plans a reality.
What role did IRC play in helping shape this strategy?
Ruchika: IRC has been working on finance for water and sanitation in other contexts like India and Bangladesh in Asia, and countries in Africa, so we were able to bring that experience to support the process in Cambodia. We had a team of both international and national experts to ensure the strategy was grounded in the local realities. Our role was to guide the overall methodology, drawing from the SWA finance strategy guide. This guide was developed in 2022 to support governments and development partners in promoting and facilitating the development of WASH finance strategies.
Can you walk us through the main steps you took to develop the finance strategy? How long did it take from start to finish?
Ruchika: The overall process took almost a year to complete, with about six months spent just getting all the relevant ministries engaged and aligned. The following six months were spent completing these six steps:
What approach or methodology did you use to identify the costs associated with sanitation systems?
Ruchika: We relied heavily on our local consultants who understood the government processes and institutional architecture and dynamics much better than we did. They helped facilitate the engagement with different ministries and worked to get data from various secondary sources when primary data was not readily available. We also made sure to validate the findings through multiple workshops, which allowed us to get buy-in from the stakeholders and fill in the remaining data gaps.
James: We also used the SWA SDG costing tool. We chose to use that tool as it's relatively simple, and we think that the government stakeholders will be able to continue using the tool to update the estimates of those costs as new data become available.
James: Our biggest challenge when it came to costing was urban sanitation. There just wasn't enough data on unit costs for certain technologies or infrastructure. Take faecal sludge treatment plants, for example—there are only a few in the country, so we didn't have much information on how much they cost to construct, operate and maintain. While the SWA costing tool gave us some generic estimates, we were able to refine these figures during workshops with stakeholders, incorporating their insights and local context.
Ruchika: Also the lack of devolution of funds and functions from the national to sub-national level made it difficult to get accurate data from the provinces. Cambodia is still quite centralized, so we focused on national-level data from different sources.
What financial options did you identify to cover the life-cycle costs?
James: We identified about 15 options for financing, focusing on making better use of existing funds and mobilising more—not on increasing repayable finance. Our top four solutions were:
What would you consider the biggest success or most significant milestone achieved during this process?
Ruchika: Engagement. While it took nearly six months to bring key stakeholders on board and get them to share data, this process was absolutely essential to our success. UNICEF played a key role in facilitating this engagement, which allowed us to involve crucial players like the Ministry of Rural Development, the Ministry of Public Works and Transport, and other relevant ministries. More importantly, we fostered collaboration among them, ensuring they were actively communicating and aligning on a common goal. This level of coordination was a significant achievement and a critical step forward. If there is no engagement, there is no ownership of the process by government, and the strategy will add little value to the sector.
What are the key lessons learned from developing the sanitation finance strategy that could benefit other governments and development partners?
James: I'd advise them to start by working with the Ministry of Economy and Finance. It may not be easy at first—with lots of formalities—but collecting data with the ministry is a crucial step in the process. I'd also stress the importance of validation workshops. These workshops gave us the chance to get valuable feedback, refine cost estimates, and ensure government buy-in.
For sustainability, I'd recommend using a costing tool and training key stakeholders on how to use it, so they're equipped to make updates over time. Finally, I'd suggest focusing on the foundations needed to attract additional finance. We conducted a bottleneck analysis that examined 10 elements of the enabling environment. This helped us understand the landscape, identify challenges, and spot opportunities to address those bottlenecks effectively.
Ruchika: A few key lessons stand out. Firstly, it's critical to have a lead ministry that truly owns the process and can galvanise participation from other relevant ministries. Secondly, involving the Ministry of Finance early on is crucial, as they hold much of the data and information needed. Thirdly, building a team with both international expertise and strong local knowledge is invaluable for navigating the complexities of the country context. And finally, budgeting sufficient time - at least a year - for the full process is essential, as it takes time to get all the stakeholders aligned and the data collected.
Now that the finance strategy has been developed, what are the next steps in terms of implementation and follow-up?
Ruchika: The Government of Cambodia has officially launched the National Sanitation Finance Strategy this week with support from UNICEF Cambodia, which is great news. As IRC, we don't have any formal follow-up activities planned at the moment. However, we are committed to informally tracking any changes or impacts that result from this process. The true test will be whether the strategy leads to tangible improvements, such as the creation of dedicated budget lines or better coordination between the different ministries involved in sanitation. We hope to see these kinds of outcomes in the months and years ahead.
James: The government is continuing discussions on tariffs, but a key next step will be for them to develop some kind of action plan to determine which of the financial options proposed in the financial strategy will be implemented.
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there was one issue: no one talked about where that money would actually come from. It was just a number on paper. To bridge this gap, we created a finance strategy.
James Wicken, IRC Associate
