Results-Based Financing and Its Potential Role in Advancing the Nexus Approach - Governing the Nexus: Water, Soil and Waste Resources Considering Global Change - page 98

The funds that the national government would receive through the COD scheme
could be cascaded down to the lower levels of government through an ODB or
other RBF scheme. This funding could be complemented with funding provided by
other development institutions or with government funds disbursed using RBF
mechanisms as has been done in some countries, including a broad programme for
improving the availability and quality of water resources in Brazil.
An OBD scheme could make disbursement from the national government to
provincial ones, conditional on the delivery of certain results. These payments may
represent a portion of agreed budget allocations or additional funds to serve as
incentives to be spent at the provincial government

s discretion. However, payment
will be linked to the achievement of certain goals agreed between the parties.
These goals could also be discreet outputs, like the construction of a wastewater
treatment plant or an adequate land

'

ll for solid waste or, ideally, it would be linked
to the proper operation and maintenance of those assets to ensure that the intended
effect of building them is materialized. Usually a combination of payments is used
to incentivize completion of the infrastructure and its proper operation.
In certain cases it would also be possible, and even necessary, to pay the
incentives linked to the increase in the volume of wastewater reaching the plant and
properly treated or to the volume of solid waste disposed in the land ll, for instance.

Depending on the circumstances, achieving these increases in volumes would
require further use of other interventions that may require the use of other RBF tools.
In certain cases, some sectors of the population may not have the resources to
connect their sanitation facilities to the network, even if the utility builds the
collection networks in front of their houses. Switching from onsite sanitation to a
sewerage system may require some onerous modi cations to internal plumbing and

investment in other appurtenances that would pose an insurmountable barrier to
such sectors of the population. In these cases, a targeted subsidy scheme imple-
mented using an Output-Based Aid approach could be ideal to cater to those that
cannot afford to pay the cost of connecting to the network and ensure that all
wastewater in the catchment reaches the treatment plant.
In the case of the land

ll operation that would also be linked to the obstruction
and pollution of creeks and streams, a Conditional Cash Transfers (CCTs) scheme
after an adequate awareness and sensitization campaign, could contribute to
changing the behaviour of those sectors of the population that dispose of their
garbage in creeks and streams. To fund this scheme, the land ll operator could use

part of the funds received from the government through the OBD scheme.
In the same way some insurance companies reduce premiums if a location
device is installed in someone

flooding recurrence and severity
could trigger discounts in premiums to those in the catchment participating in a
scheme like the one described above. Instead of passing to the customers the
potential discount in full, a partial discount could be made while the difference
would be used to fund the scheme until the new habits have taken root.
If the land

' is car, reducing

ll operator is not responsible for garbage collection, another scheme
may be needed to ensure proper collection and transport of the garbage to the
land

ll, which may or may not use an RBF approach to support its implementation.