The team from FEI Consulting has extensive experience in advising governments on the design and implementation of reform programs that will lead selected utilities to become more creditworthy and gaining access to domestic sources of commercial financing.
The FEI team excels at:
- Assessing the institutional and financial capacity of utilities
- Conducting cost and tariff adequacy analyses
- Viability gap financing
- Improving financial and operational systems and procedures
- Negotiating with domestic commercial financial institutions to begin/expand lending to creditworthy utilities.
The preponderance of utilities in developing countries perform poorly and operate at very low levels of financial sustainability. Most are constrained by both insufficient operating cash flows as well as by low levels of profitability – two important barometers of financial sustainability. These problems can be attributed to many causes but they all result in poor operational and managerial performance. Furthermore, most of these poorly performing utilities cannot break out of this vicious performance cycle without a comprehensive program of sector reform and institutional strengthening at the utility level.
With regard to the water supply and sanitation sector, there is no one correct sector reform program to improve the creditworthiness of a given utility, but there is conclusive evidence on the need for a comprehensive program of sector and institutional reform and capacity building. Since no two situations are the same, it is important for governments, utilities, and their development partners to work with experienced professionals who understand the unique challenges of delivering sustainable water supply and sanitation services in developing countries. It is also important to make use of professionals who have a track-record of success in helping governments design and implement programs to strengthen the operational performance of their utilities and increase their ability to attract commercial financing by improving their creditworthiness.
FEI Consulting is proud of its unique capabilities in assessing the capacity of utilities to provide sustainable services and to assist in strengthening their operational performance to make them more creditworthy.
FEI and its associated consultants have extensive experience with international lending agencies and the private sector and have been on the forefront in helping governments address the issues of water supply and sanitation sector reform and institutional strengthening for many years. The FEI team has extensive experience throughout the developing world on issues including financial engineering, operational and financial strengthening, and the development of performance improvement plans, water PPPs, and improving the creditworthiness of utilities to enable them to access commercial sources of finance.
FEI has experience in blending the financing that can be provided by governments and development agencies to attract commercial financing and to design the financing so that it is affordable by the utility.
International development agencies estimate that the financing needed by the water supply and sanitation sector to provide the services demanded by customers and to achieve the SDGs far exceeds the resources available to governments and their development partners. Further, these same agencies estimate that domestic commercial financial institutions have the financial resources that are needed and in most cases these same commercial financiers lack viable investment opportunities. The team from FEI has experience in blending the financing that can be provided by governments and development agencies to attract commercial financing and to design the financing so that it is affordable by the utility.