Results-Based Funding for Safe Drinking Water Services

How a standard contract design with payment for results can accelerate safe drinking water services at scale

Working Paper | September 2023

Katrina Charles, Saskia Nowicki, Andrew Armstrong, Rob Hope, Duncan McNicholl and Kristina Nilsson

University of Oxford, REACH Programme and Uptime Global

Access to reliable drinking water infrastructure does not necessarily guarantee safe drinking water. Across rural areas, contamination from faecal bacteria and hazardous chemicals remains widespread, even where improved water infrastructure is available.

Published in September 2023, Results-based funding for safe drinking water services presents a standardised framework for incorporating water safety into results-based contracts for professional rural drinking water services.

Developed by the University of Oxford and Uptime Global, the research demonstrates how financial incentives can encourage service providers to assess contamination risks, report water quality results and take corrective action.

The approach builds on Uptime's existing results-based funding model, extending performance incentives beyond infrastructure reliability to support the active management of drinking water safety.

Why Water Safety Requires Ongoing Management

Historically, investment in rural drinking water has focused heavily on constructing infrastructure, including boreholes, handpumps and piped water schemes.

However, infrastructure that is operational may still deliver contaminated water. Water quality can change due to seasonal rainfall, environmental conditions, damaged infrastructure and inadequate maintenance.

The paper highlights research across Bangladesh, Nepal and Tanzania showing that although 94% of improved water sources provided water free from E. coli during at least one sampling round, only 10% remained free from contamination across all sampling rounds.

This demonstrates why occasional testing or assumptions based on infrastructure type cannot provide sufficient assurance of drinking water safety.

Professional service providers offer an opportunity to address these challenges by combining routine maintenance with water quality monitoring, sanitary inspections and targeted management actions.

A Results-Based Framework for Water Safety

The paper proposes integrating water safety into standardised results-based contracts through three connected activities.

1. Assessed: Identifying Water Safety Risks

Professional service providers undertake regular sanitary inspections and water quality testing to identify potential contamination risks.

Sanitary inspections use standardised checklists to assess hazards such as damaged infrastructure, poor drainage, inadequate source protection and unsanitary conditions around water collection points.

Water quality testing complements these inspections by identifying microbial and chemical contamination.

The framework prioritises:

E. coli testing to identify faecal contamination and immediate health risks.
Chemical water quality monitoring to identify longer-term risks, including contaminants such as arsenic and fluoride.
Routine inspections to identify hazards and support preventative action.

Testing requirements vary according to infrastructure type, with monitoring designed to capture changes in water quality over time.

2. Reported: Sharing Water Safety Information

Water safety results are reported to relevant government authorities and community leadership.

This ensures that water quality information reaches those responsible for public health, service management and local decision-making.

Reporting supports transparency, helps communities understand potential risks and provides governments with evidence to identify areas requiring additional investment or intervention.

The framework emphasises timely communication when E. coli contamination is detected, alongside appropriate explanations of the risks and available management responses.

3. Managed: Responding to Contamination

Service providers are incentivised to take action when water safety risks are identified.

Management responses may include repairing damaged infrastructure, improving source protection, cleaning water systems, chlorination or other appropriate treatment measures.

Where microbial contamination is detected, corrective action and follow-up testing provide evidence that the risks have been addressed.

This approach encourages continuous improvement in water safety management, rewarding service providers for actively responding to contamination rather than relying solely on water quality test results.

Structuring Results-Based Payments for Water Safety

The paper proposes a two-tiered incentive structure that links payments to water safety activities and outcomes.

Assessment and reporting incentive

The first payment rewards service providers for completing required sanitary inspections, undertaking water quality testing and reporting results to the appropriate authorities and community representatives.

This incentive helps cover the recurring costs of monitoring and reporting, even when water quality testing identifies contamination that requires further action.

Management incentive

An additional payment rewards service providers for achieving and maintaining good water safety status.

This includes demonstrating low sanitary risk and meeting the microbiological standard of no detectable E. coli per 100 mL of drinking water.

Where contamination is identified, service providers can qualify through appropriate corrective action followed by satisfactory retesting within the required timeframe.

The two-tiered model is designed to encourage consistent monitoring, transparent reporting and effective responses to contamination.

Applying the Framework in Practice

The research draws on practical experience from professional water service providers operating across different rural contexts.

SafePani, Bangladesh

The SafePani programme demonstrates how professional maintenance and water safety management can improve drinking water services in schools and healthcare facilities.

During the 2021–2023 pilot in Khulna district, the programme achieved substantial improvements in both infrastructure reliability and water safety.

By January 2023:

96% of reported breakdowns were repaired within 48 hours.
98% of waterpoints achieved low-risk sanitary inspection results, increasing from 70% at baseline.
100% of monitored water systems were free from E. coli, increasing from 60% at baseline.

The programme combined routine inspections, water quality testing, chlorination and follow-up monitoring to identify and manage contamination risks.

These results helped demonstrate the feasibility of professional water safety management for public institutions in rural Bangladesh.

FundiFix, Kenya

The paper also draws on FundiFix's experience in rural Kenya, where professional maintenance services have improved infrastructure reliability and supported the development of water safety activities.

Water quality monitoring helped identify contamination risks and informed the introduction of chlorination to improve drinking water safety.

This experience demonstrates how existing professional maintenance services can provide a foundation for expanding water safety management.

Key Findings

Water safety requires continuous monitoring and management

Drinking water quality can vary significantly over time, particularly in response to weather, environmental conditions and changes in infrastructure.

Regular sanitary inspections, water quality testing and corrective actions are therefore essential for protecting drinking water services.

Financial incentives can encourage proactive water safety management

Results-based payments can help address the ongoing costs of water quality monitoring and risk management, activities that are frequently underfunded in rural water services.

By rewarding both assessment activities and effective management, the framework encourages service providers to identify and address contamination risks.

Professional service providers offer a scalable approach

Professional service providers can manage portfolios of waterpoints and piped schemes, creating opportunities to share equipment, laboratory services, technical expertise and monitoring systems.

This can reduce the cost of water safety activities and support consistent practices across larger service areas.

Better data can improve government decision-making

Standardised reporting provides governments and water service providers with a clearer understanding of contamination risks and the effectiveness of different management responses.

Over time, these data can inform public health priorities, infrastructure improvements and investment decisions.

Implications for Scaling Safe Drinking Water Services

The paper demonstrates how results-based contracts can create stronger incentives for the ongoing management of drinking water safety.

For governments and development banks, the framework offers a standardised approach to financing and monitoring water safety activities across large portfolios of rural water infrastructure.

For professional service providers, it provides financial support and clear performance expectations for activities that are essential to safe drinking water delivery.

For funders, the approach offers independently verifiable evidence of water safety assessment, reporting and management.

The framework complements national drinking water regulations and is intended to support continuous improvement in rural water safety management.

Conclusion

Results-based funding for safe drinking water services provides a practical framework for incorporating drinking water safety into performance-based contracts.

By linking payments to sanitary inspections, water quality monitoring, transparent reporting and corrective action, the approach supports professional service providers in delivering safer and more reliable rural drinking water services.

The research demonstrates how standardised incentives can help address persistent gaps in water safety management, strengthen accountability and provide governments and funders with evidence to support wider adoption.

This framework contributes to Uptime's broader ambition to scale sustainable, safe and reliable drinking water services through results-based funding.