Financial Risks and Economic Viability of Water and Sanitation Businesses in Rural Cambodia: A Rapid Review

Abstract

This paper discusses the findings from a literature review, followed by a survey and focus group discussions with 26 private sector suppliers. The top risks encountered by water services providers were water pricing, lack of management skills, and high investment costs. The most impactful risk factors for their economic viability were water losses, construction delays, and high energy costs. Sanitation services suppliers faced risks of low demand, lack of capital, and household affordability. Limited loan access and household subsidies were risk factors affecting both groups. The paper highlights that financial risks are primarily borne by suppliers serving impoverished households in rural Cambodia, despite the involvement of various stakeholders in the supply chains including donors, government, households, financial institutions, and NGOs. Assessing the financial health and viability of these businesses require consideration of multiple risk factors. The paper offers strategies to address challenges at both the supplier and government levels to ensure financial sustainability of water and sanitation businesses in order to achieve universal water and sanitation access in Cambodia.