Frequently Asked Questions
Q1: What is the period of 3i’s contract? Can you make it longer?
3i contract is valid for 1.5 years in general. PWSP can extend the contract longer as long as the size of investment is huge. In exceptional cases 3i can consider extending it to 2 years.
Q2: Do we have to install everything in before getting all payment from 3i?
In general a contract between 3i and PWSP is milestone-based. When the PWSP finishes a milestone and the specification complies with what is stated in the contract, 3i will disburse the grant.
3i includes all investment in order to calculate a grant. But, 3i checks only big components in an output-based contract in order to disburse a grant, i.e. a treatment plant, storage tank, and main pipes. 3i’s last payment can be used to finish the investment.
Q3: How is the output based contract developed? How is the sequence determined?
An output-based contract is developed in accordance with the construction stage, and 3i grant is disbursed to a PWSP based on the finished outputs in each stage. During contracting, 3i will discuss with the PWSP which outputs will be finished first and next in order to disburse a grant.
If the service area that requests for a grant does not have a treatment plant, 3i will require the PWSP to construct a treatment plant first before installing pipe network. This is to ensure that 3i grant will not be used to support the untreated water.
Q4: How does 3i determine how much an operator get?
3i conducted a market assessment in order to determine construction costing and operational costing. Based on this study, 3i developed a model to calculate the needed investment and revenues. For this round of funding, 3i will calculate the grant to reduce the payback period of the investment to 6 years.
Q5: What if we build things differently from the output specified in the contract?
The operator is always allowed to construct larger or better.
If the PWSP constructs bigger and better infrastructure, 3i will disburse the grant. If smaller, 3i will check the degree of acceptance. There will be a discussion if this happens. If the PWSP constructs things differently from what is stated in contract, the PWSP needs to inform 3i in advance.
Q6: How does 3i provide connection subsidy?
3i provides connection subsidy to any villages that do not access pipe network yet and this subsidy is provided to ID poor families only. One ID poor is for only one connection. The subsidy will be disbursed to the PWSP not directly to ID poor families.
Q7: How long does it take for a project to sign contract?
Duration varies from one PWSP to another. The factors that cause the delay in process include:
- The PWSP is not clear of his service area.
- The PWSP does not define the location of a treatment plant yet.
- The PWSP has problem with his shareholders.
- Water source is not sufficient and requires an additional study.
Q8: Can I apply more than one location?
Q9: When will you provide grant to other provinces?
After 3i has finished the majority of the projects this round, 3i will procced with the next round.
Questions raised during the briefing session
Q1. I have a question on the criteria of supplying water but need approval letter from commune chief, so I want to ask if my project is a green field site, can I apply for grant?
A1. You can apply for grant if the greenfield site got the approval letter from commune chief before 26 September 2017.
Q2. Is 3i open for the grant receivers to get the capital from different sources?
A2. 3i would only discuss to confirm if you have enough capital to cover your share of the investment.
Q3. Can 3i grant be the pressure to negotiate tariff with MIH?
A3. Tariff negotiation is the responsibility between you and MIH. 3i is not involved in this.
Q4. We have applied for the 20 years permit. We have got the permission to do the feasibility study and already submitted the feasibility study report to MIH for a while but still haven’t got the permit. Can 3i push MIH to approve the permit?
A4. No. We will just help to prepare documents to apply for permit. 3i cannot push MIH.
Q5. I already submitted a FS and received the permit but no infrastructure is in place?
A5. In the case that you have got the license for the proposed site before 26 September 2017, you are ineligible for this funding round.
Q6. I have got the 20 year permit, can I tick the criteria in the application form?
A6. If you have got the 20 year permit for the service area that you want to apply for grant from 3i, you cannot. If the area that you want to apply for the grant haven’t got the 20-year permit, you are eligible to apply.
Q7. I have applied for the 20 year permit but haven’t got the permit yet. I have constructed the treatment plant and laid the pipe to 2 communes already but haven’t laid the pipe to another commune. Can I apply for grant?
A7. You can apply for grant for the commune that you have not done anything and have not got permit yet.
Q8. I have got 3-year permit but have not replaced with 20-year permit, can I apply for grant?
A8. Both 3-year and 20-year permits are counted as permit, so you are ineligible.
Q9. The contract is valid for 1.5 years but if the operator haven’t operated well after 1.5 years, can we negotiate to extend the contract?
A9. Presently we do not have an answer for you but it depends. We can negotiate to extend the contract to 2 years in very special cases or we have the right not to extend because when we sign a contract with a company, we will freeze some amount of money for you. The length of our project is only 5 years, so we cannot block the money for one operator for too long.
Q10. Will 3i help co-share the maintenance fee?
A10. 3i will not be responsible for the maintenance fee. The operator will be responsible for any damage to his/her infrastructure.
Q11. The deadline is 16 October. I want to know when we will work together to proceed and how long will the funding round lasts.
A11. After receiving the application form, we will issue an IO for you within 10 weeks. Then you can decide whether to accept the IO. If you agree to receive, we can proceed further. The period might be varied depending on each operator. Delay might happen depending on various things. Some operators have problems with the service area boundaries. 3i will not proceed the study if the operators are not clear themselves. Based on experience, the location of treatment plant is a reason to delay too. If the location of the treatment plant is not determined yet, we don’t study the details to avoid a waste of time. If water source is not enough, we will need time to do an in-depth study. Partnership can also be a problem to delay a project.
In general, it takes about 3-5 months per FS. It depends on the number of applications too. We will count the 1.5 years after the contract is signed.
Q12. I have got a permit to cover 4 communes and I have already built a treatment plant and laid some pipe network in the 4 communes. I want to apply for grant from 3i to cover other 3 communes that haven’t got permit. Can I supply water from the existing treatment plant to the 3 communes?
A12. Yes. We will study the marginal investment to make sure all households in the non-licensed get clean water with proper pressure.
Q13. I have covered 2 communes and 1 remote commune is still not covered. Can I apply grant for that?
A13. Yes, you can if that commune fits the criteria.