© Virridy
Inter-American Development Bank
Millennium Water Alliance
Virridy
COVA - Safe Drinking Water for Central America

Project Details

SIRWASH Phase II — IDB RG-T4843 — 5 months — Latin America & Caribbean

Background & Justification

Within the framework of the SIRWASH initiative, the Inter-American Development Bank (IDB) has been supporting efforts to strengthen the sustainability of rural water and sanitation services across Latin America and the Caribbean.

Despite progress in expanding infrastructure, rural water services face structural challenges: limited financial resources, weak cost-recovery mechanisms, and institutional constraints affecting reliable operations and maintenance (O&M).

Phase I of SIRWASH identified carbon finance as a promising mechanism to generate additional revenue streams. Safe drinking water interventions that reduce household water boiling can yield measurable GHG emission reductions—potentially certifiable under voluntary carbon market standards (Gold Standard, Verra).

Key insight: Carbon finance for water interventions remains incipient in LAC. This consultancy will assess the conditions under which these mechanisms are viable and could strengthen rural water service sustainability.

Objectives

Overall objective: Assess the potential viability of carbon finance mechanisms linked to safe drinking water interventions as a complementary instrument to strengthen the financial sustainability of rural water and sanitation investments, with a particular focus on supporting long-term O&M.

1

Feasibility Assessment

Assess the feasibility of carbon finance linked to safe drinking water interventions as a complementary financing mechanism, including its potential contribution to O&M financing.

2

Country-Level Analysis

Analyze rural water service interventions in selected countries to identify where carbon finance could apply, considering service delivery models, population scales, and operational contexts.

3

Regional Assessment

Conduct a structured feasibility assessment focused on four priority SIRWASH countries while extending analysis to up to twelve countries for a regional overview.

4

Decision-Support Framework

Develop a practical screening and decision-support framework to help governments and project teams assess opportunities to integrate carbon finance into rural water programs.

Scope of Services

The consultancy will evaluate the potential applicability of carbon finance mechanisms linked to safe drinking water interventions in rural water services across LAC, with primary focus on four SIRWASH countries.

Key Areas of Examination

Technical Conditions

  • Baseline household water treatment practices
  • Dependence on non-renewable biomass for boiling
  • Population density and scale

Institutional Factors

  • Institutional arrangements for service delivery
  • Regulatory and policy frameworks
  • Service delivery models

Operational & Market

  • MRV system availability
  • Voluntary carbon market standards
  • Biophysical conditions

Key Activities & Phases

1

Inception & Analytical Framework

Month 1 — 30 days after contract signature
  • Review existing analytical work on carbon finance linked to safe drinking water and rural water services
  • Define analytical framework and methodological approach
  • Confirm scope of country-level assessments and regional screening
  • Prepare and present inception report and work plan
2

Country-Level Feasibility Assessments

Months 1–3 — 90 days after contract signature
  • Analyze selected rural water interventions in Bolivia, Brazil, Haiti, and Peru
  • Assess key enabling conditions (contextual, institutional, operational)
  • Examine factors for carbon credit generation linked to safe drinking water
  • Identify opportunities and constraints
  • Prepare country notes for each priority country
3

Regional Screening of Carbon Finance Potential

Month 4 — 120 days after contract signature
  • Rapid screening across up to twelve LAC countries
  • Identify key contextual factors across national contexts and service delivery models
  • Compare opportunities and constraints to identify regional patterns
4

Decision-Support Tool & Final Synthesis

Month 5 — 150 days after contract signature
  • Consolidate and synthesize all findings
  • Identify key opportunities, constraints, and risks
  • Develop practical screening and decision-support framework
  • Prepare final synthesis report with strategic considerations

Periodic knowledge-sharing sessions will be organized throughout to present findings and facilitate feedback with stakeholders across the region.

Deliverables & Payment Schedule

20%
35%
20%
25%
D1 — Inception D2 — Country Assessments D3 — Regional Screening D4 — Final Report & Tool
DeliverableDescriptionTimelinePayment
D1. Inception Report & Analytical Framework Work plan, analytical framework, methodological approach, and confirmed scope of country-level assessments and regional screening. 30 days
(Month 1)
20%
D2. Country-Level Feasibility Assessments Analysis of rural water interventions in Bolivia, Brazil, Haiti, and Peru. Assessment of enabling conditions, opportunities, and constraints. Country notes for each. 90 days
(Month 3)
35%
D3. Regional Screening Rapid screening of carbon finance potential across up to twelve LAC countries. Comparative analysis of opportunities and constraints. 120 days
(Month 4)
20%
D4. Decision-Support Tool & Final Synthesis Report Consolidated synthesis, practical screening tool, strategic recommendations for integrating carbon finance into rural water programs. 150 days
(Month 5)
25%

Geographic Focus

Priority SIRWASH Countries (in-depth assessment)

🇧🇴 Bolivia
🇧🇷 Brazil
🇭🇹 Haiti
🇵🇪 Peru

Regional Screening (up to 12 additional LAC countries)

A rapid preliminary screening will provide a comparative regional overview, considering regulatory frameworks, service delivery models, and biophysical conditions across a broader set of LAC countries.