| The GOZ is in compliance with the LWSC Sustainability Agreement prior to each disbursement, including payment of outstanding arrears to LWSC. |
Deferred multiple times over the course of the compact. |
The GOZ demonstrated its commitment to satisfying outstanding arrears. As a condition to Entry into Force, the GOZ paid approximately $11 million in arrears to LWSC, and during implementation the GOZ paid an additional $11 million in arrears to LWSC. LWSC had approximately $5.1 million in outstanding government arrears as of the compact’s end. In 2017, MCC and the GOZ changed the condition precedent from requiring the payment of arrears by the Ministry of Finance to put the onus on LWSC and each government institution to resolve the problems causing arrears, as a more sustainable approach that could be carried out post-compact. This approach involves steps to reduce reoccurring arrears that are addressed in the following condition precedent. |
| CP added in 2015: Each of the pre-paid meters installed for LWSC’s government institutional customers remain operational and the GOZ has paid any outstanding payment obligations.Revised language in 2017: LWSC will submit a status report on measures acceptable to MCC that are being taken to reduce or eliminate reoccurring arrears at each government institution. LWSC may also seek NWASCO—the water utility regulator approval for an extra-ordinary rate increase based on non-payment of water bills and sanitation fees by each government institution. |
Deferred multiple times over the course of the compact. |
This condition precedent was added in March 2015 to memorialize the understanding between the GOZ and MCC that, for the sustainability of the compact, all bulk prepaid meters installed in connection with the initial disbursement must remain operational and that the GOZ must pay arrears to LWSC in a timely manner. |
| Original language: The Government has satisfied all of its payment obligations, including any insurance, indemnification, tax payments or other obligations, and contributed all resources required from it, under the Compact, this Agreement and any other Supplemental Agreement.Revised language in 2017: The Government has satisfied all of its payment obligations required under the Compact, PIA or any other Supplemental Agreement; including any insurance, indemnification, tax payments or other obligations, and contributed all resources required from it; however, MCC will only recognize any government arrears payments as satisfying this section if LWSC implements transparent and quantifiable measures that reduce or eliminate reoccurring arrears at each government institution. |
Met on time |
While the GOZ showed a strong commitment to making its arrears payment obligations, MCC repeatedly engaged with the GOZ to ensure that they were paid in a timely manner. The premise of the original CP was that the installation of bulk pre-paid water meters at individual government institutions would eliminate arrears. However, the underlying problem was more complex than originally envisioned. Intermittent water supply, low network pressure, poor water quality problems, and many cases involving institutional internal network problems with significant water leaks, do not facilitate the use of pre-paid meters. A high number of pre-paid meters were not operational due to technical problems, bypassing of the system, government institutions operating their own boreholes, and problems with internal infrastructure in government institutions. One of the biggest challenges was that government institutions did not have funding to repair internal network infrastructure. In order to resolve major problems causing arrears, the GOZ and LWSC, with support from MCA, worked to improve internal networks through infrastructure improvement and working to ensure that pre-paid meters are functioning and repaired in a timely manner. Thus, in December 2017 MCC revised the language of this CP and the CP above to ensure LWSC and the Government’s mutual engagement to ensure that pre-paid meters are functioning and repaired in a timely manner, and that the utility proactively engages with the GOZ to recover outstanding arrears until all meters are installed and functioning. |
