Results-based financing for municipal solid waste

Cities worldwide generated more than 1.3 billion tons of solid waste in 2010. As drivers of economic activity and recipients of millions of rural migrants every year, cities expect to see this number to grow to 2.2 billion tons annually by 2025 –the equivalent weight of the Great Pyramid of Giza, in trash, every single day. This massive amount of waste critically affects public health, the environment, economic development and citizens’ quality of life. Proper management of solid waste is achievable: a range of tools and technologies already exist. But the critical bottleneck lies in paying for them. In many lower income countries, municipalities already spend 20% to 50% of their budgets on solid waste management, yet only manage to provide services for less than half their citizens. A related major concern lies in long-term sustainability in the sector, which requires greater efforts to reduce, reuse, recycle and overall avoid waste. A new report by the World Bank and the Global Partnership of Output-Based Aid (GPOBA) titled Results-Based Financing for Municipal Solid Waste looks at how to apply a results-based-financing (RBF) approach to the municipal solid waste sector. This is an innovative development finance tool that helps ensure that public funds are used efficiently and transparently. Under this approach, achieving and verifying a set of explicit, pre-determined performance targets is a condition to receive payment for services or certain behaviors.

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