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Glossary
Banks: “Banks” as used here, includes commercial banks, non-bank financial companies and national development banks/institutions.
Capitalization: The mix of company/entity equity, loan, any seed grants etc.
Capital Market: The equity capital market is usually found in the national Stock Exchange. The debt capital market consists primarily of institutional investors.
Capital Market Institutions: These typically include public or private pension funds, life insurance companies, or mutual funds that invest in long term debt securities such as bonds.
Capital Reserve: Bank reserve requirements impose a limit on the lowest level of reserves a bank must own relative to the demand deposits of its customers. Often such reserves may be held as investments in federal instruments.
Champion for change: An institution or individual who devotes energy to introducing one or more changes that help to promote sustainable financing for pro-poor WSH service expansion.
Collateral: Underlying security against which lending is provided, including assets such as property, etc.
Collateral Substitute: Lending to poor often involves the use of a collateral substitute such as: community or personal guarantee, mortgage of movable asset or household goods, etc.
Commercial Banks: Bank engaged in savings and credit activities with individuals and businesses.
Conditional Fund Allocation: Funds distribution that is contingent upon the beneficiary meeting certain conditions (such as instituting certain rules and regulations, instituting service charges etc.)
Corporate Bond: Corporate bonds are issued by private utilities, transportation companies, industrial enterprises, or banks and finance companies. These corporate bonds can be divided into two additional categories: mortgage bonds, which are secured by the issuer's assets, and debentures, which are backed only by the issuer's credit.
Corporatization: Defining the constituting charter of a public service provider as a corporate with the objective that it operates on sound commercial principles.
Credit Guarantee: Insurance against losses due to loan defaults, e.g. USAID’s DCA guarantee.
Credit Rating: A formal assessment of a government or company’s creditworthiness, and of its capacity to meet payment schedules on time.
DCA Guarantees for Investment: These are partial risk guarantees that are used to share the risk of innovations and new types of lending/investment with private sector financial institutions.
Debt Funding: Money lent with expectation of collection of repayment with interest.
Debt Issuers in Capital Markets: Government, Corporations and other organizations that issue for sale, through public or private placement, interest bearing debt instruments.
Decentralized Solutions: On-site solutions that treat wastewater to acceptable disposal levels, such as: septic tanks. Typically effluent and sludge are the end products for further disposal.
Development Bank/Institution: Finance institutions set-up with the objective of providing long term funding for development purposes: e.g. agriculture, infrastructure, etc.
Directed Credit Rules: Rules requiring banks to provide credit – often on relaxed terms -to certain sectors (generally sectors where investment risk is too high, or there is a huge discrepancy between private and social benefit, or for sectors deemed to be in the infancy stage).
Discretionary Fund Allocation: Grant funds that are distributed upon the distributing agency/person’s discretion.
Donors: International multilateral or bilateral development banks and agencies.
Equity: Owners' interest in the assets of the enterprise after deducting all its liabilities
Expansion Costs: Capital costs necessary to construct WSS infrastructure.
Farm and Enterprise Loan: MFI loans provided for farm related (example: loans to buy material such as seed, etc) or enterprise related activities (example: loans for entrepreneurial activities such as purchase of raw material, etc).
Financial Institutions: These are the financial institutions identified in the Context section of the assessment.
Financial Regulators: These are the financial regulatory institutions identified in the Context section of the assessment.
Foreign Direct Investment: Investment made to acquire interest and control in enterprise operating outside of the investor’s economy.
Formal Utility: Service provider accountable and responsible for sanitation service. This may be a local/regional/national public or private entity or a public-private partnership arrangement.
Formal Sanitation Utility: Service provider accountable and responsible for sanitation services; may be a local/regional/national public or private entity or a public-private partnership arrangement.
Formal Water Utility: Service provider accountable and responsible for water supply; may be a local/regional/national public or private entity or a public-private partnership arrangement.
Formulaic Fund Allocation: Funds distribution that is based upon underlying formulae (such as population, measure of poverty level, infrastructure index, etc).
Foundations: Privately held foundations that finance WSH or microfinance initiatives, for example: Michael and Susan Dell foundation, Rockefeller foundation, Ashoka foundation, and so on.
Foundations and Funds: These include endowment funds, pension funds, private equity and venture funds, and so on.
Government institutions: Specialized development banks, infrastructure development funds, specialized government agencies, and ministries.
Grants: Financing provided free of any repayment obligation; though a grant may be for a pre-defined purpose.
Grants for Investment: This includes the provision or purchase of WSH hardware such as pumps, pipes, buildings and the related engineering and construction services needed to put them in place. It also includes the provision of capital to government or financial institutions to support specific kinds of lending or challenge grant programs. It also includes the provision or purchase of commodities needed to provide WSH services.
Governance Structure: The legal personality of the entity with defined responsibilities of ownership and control.
Housing Microfinance: MFI loans provided for housing related activities (example: for house construction, upgradation, etc).
Hygiene: Facilities to promote hygiene safeguards including: addressing healthcare education and service related to WSS diseases; household water treatment and safe storage; hygienic sanitation practices; and training.
Generally government/regulatory authorities are responsible for sample testing consumer taps.
Incentives: These include incentives such as: tax credits, transfer of development rights, income tax exemptions, etc.
Incorporation/governance structure: Legal structure of the entity, for example the entity could be incorporated as a: not-for-profit, trust, foundation, federation etc.
Investors in Capital Markets: Individuals, corporations and institutions (such as insurance company, pension fund or investment trust) who invest in the long-term financial instruments trading in the capital market.
Lending Rules: Such rules would include any requirements regarding: the use of collateral and/or collateral substitute, reserves, internal controls, training etc.
Lending Products: Term (as used here) to identify the kind of loans that the bank specializes in providing, such as: WSH loans (this includes loans to contractors, service providers, manufacturers, consultants), utility loans, MFI loans, etc.
Life Insurance Companies: Life insurance companies insure their customers (i.e. in the event of the customers death, agree to reimburse their designated beneficiary) in return for a premium. Typically life insurance companies invest a portion of the collected premiums, in the long-term debt market.
Line of Credit: Credit facility typically extended by a bank or financial institution. This may take the form of cash credit, term loan, export credit, etc.
Loan: Money lent to a borrower for a certain use, to be repaid with interest.
Local Governments: City government (and other administrative offices smaller that a state), and its agencies. The term is used to contrast with offices at nation-state level. Local governments usually have fewer powers than national-state governments.
Long-term Debt Market: Market dealing in long-term (more than one year) debt instruments.
Microfinance Institution (MFI): Institutions engaged in the provision of financial services to poor or low-income clients, including consumers and the self-employed.
Mutual Funds: An open-ended investment trust that continually issues new shares as it receives new capital, and redeems the shares of the owners who want to sell.
Non-Bank Financial Company (NBFC): Institutions that may provide banking and/or other financial such as specialized credit facilities, contractual savings etc. without a banking license. The regulatory requirements for NBFCs vary across countries.
Non Governmental Organization (NGO): A legally constituted organization created by private persons or organizations with no participation or representation of any government. Where NGOs are funded totally or partially by governments, the organization maintains its non-governmental status insofar as it excludes government representatives from membership in the organization.
Operating and Maintenance Costs: Operation and Maintenance costs such as electricity bills, salaries, chemicals etc. incurred in the delivery of service provision.
Pension Funds: A fund set up by a company or other organization to manage the savings of the employees and to pay pension benefits to which those savings entitle them. Pension funds typically invest a part of the collected savings, in long-term debt instruments.
Private Informal Service Providers: Private service provider of sanitation services to the poor (or un-serviced) population, such as: mobile toilets, community pay-and-use toilets, private sludge handlers, etc.
Private Informal (Small) Service Providers: Private service provider addressing the water supply needs of the poor (or un-serviced) population, such as: water vendors, water landlords, water tanker operators; etc.
Polluter Pay Principle: Principle under which the polluting party pays for the damage it has done.
Rate: The percentage of the principal that is paid as a fee (the interest), over a certain period of time, is called the interest rate.
Sanitation: a). Sanitary disposal of human excreta.
Sanitation: b). Collection, treatment and safe-disposal of domestic, commercial and permitted industrial wastewater. The discussion included here covers both off-site and on-site (decentralized) sanitation treatment measures.
Service Revenues: Revenues available from relevant service charges and fees, and taxes. These may often be augmented by inter-governmental transfers, grants, and subsidies.
Sewage Charge: Generally sewage charge is linked to water consumption and posted on the same bill. Alternately the charge may be a fixed rate determined based upon property area. Sewage charge is expected to vary across consumer groups, i.e. domestic, commercial, and industrial.
Sewage Tax: Generally sewage tax is linked to property tax and posted on the same bill.
Shared House Connection: Tap connection shared between a few (3 – 4) houses
WSH related activities – This includes providing technical assistance and/or direct investment in WSH service provision projects. The assistance may be to either public sector or private sector organizations. The assistance may be to WSH service regulators, providers or their sources of financing.
Standpipe Supply: Supply of water through a shared public tap.
State Intermediary: State level agency, such as an infrastructure fund or a development authority, whose mandate includes the carrying out of public works.
Subsidy: Direct or indirect financing mechanism typically instituted to align market and social costs and benefits.
Tanker Water Supply: Supply of water to communities using tankers; generally in the absence of water distribution infrastructure.
Target of opportunity : This is an unanticipated chance to achieve a worthwhile development objective that is related to (but not the same as) a previously planned objective. It usually arises from a change of circumstances in the country or in a specific institution.
Tariff structures:
- Flat rate tariffs: fixed charge; billed periodically
- Consumption based tariffs: volumetric charge (metered); measured and billed periodically
- Increasing block tariff: volumetric charge (metered), with increasing rates for increasing slab of volumetric consumption; measured and billed periodically
- Cross subsidies in tariffs: different rates across user group categories, such as: industrial, commercial, domestic
- Supply subsidies (examples: water vouchers for subsidized/free lifeline supply; low tariffs for lifeline consumption level; free taps, etc.)
Taxes: Payment to government, exacted under legislative authority, typically for the provision of ‘public’ goods and services (i.e. where direct beneficiary is not identifiable).
Technical Assistance: This includes the provision of: specific studies; short term technical/policy advisors; long term technical/policy advisors; local and international training; assistance to local and international workshops and conferences; and monitoring/evaluation of the impact of the assistance.
Tenor: The number of years for the repayment of a loan.
Transfer: Inter-governmental cash transfers made to a government fund or entity (ULB/city water board/utility) from other government funds or entities.
User Charges: Payment to a service provider for the delivery of goods and services.
Utility: Organization that maintains infrastructure for a public service (these may be publicly or privately owned).
Water Supply: Provision of acceptable quantity and quality of water supply.
Water Supply, Sanitation, Hygiene (WSH) services include the provision of: acceptable quality and quantity of water supply; sanitary disposal of sewage; and, facilities to promote hygiene safeguards.
WSH Finance Activities: This includes activities in the areas of WSH tariff reform, improving the financial performance of WSH service providers, WSH capital investment planning, and developing local lending programs for WSH service providers or household consumers.
WSH Loans: As included here, include WSH related lending to contractors, service providers, manufactures, consultants.
WSH Regulations: (i) environmental/health regulations such as water abstraction, water quality, wastewater disposal standards, etc (ii) service quality regulations such as standards for minimum per capita water supply, materials, etc.; and, (iii) economic regulations regarding setting of tariffs, including safeguards for the vulnerable.
WSH Service Regulators: These are the WSH regulatory institutions identified in the Context section of the assessment.
WSH Regulators Responsibilities: (i) environmental/health regulations such as water quality, waste disposal standards, etc (ii) service quality regulations such as standards for minimum per capita water supply etc.; and, (iii) economic regulations regarding setting of tariffs, including safeguarding the vulnerable.
WSH Service Providers: These are the WSH service provision institutions identified in the Context section of the assessment.
WSH Service Providers: These may range from large formal service providers, such as: municipal utilities, private companies etc. to informal (small) service providers, such as: water supply vendors/tankers, community toilets etc.
WSS Bonds: Bond issued by municipal governments, local government and its agencies, utilities (public and private) for financing WSS infrastructure.
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