Financial analysis of water and sewer infrastructure alternatives – islands of Dhidhdhoo and Hinnavaru, the Maldives

Abstract

The Enhance Climate Resiliency and Water Security in the Maldives project, or Maldives Global Climate Change (GCC), is intended to demonstrate the process and outcomes needed to allow island communities to maximize their opportunity to overcome impacts from global climate change. The program is providing assistance to the Government of the Maldives (GOM); island councils; regional utilities; the private sector; and residents of two islands (Hinnavaru and Dhidhdhoo) in the northern part of the country designated to become “climate resilient islands” with USAID assistance. The project’s focus is based on climate-related risk-reduction associated with the development, use, and conservation of water resources in ways that are responsive to the environmental, social, cultural, economic, and governance context of the atolls. Maldives GCC is providing assistance for provision of water supply, sewerage, and solid waste services, and associated infrastructure. The overall objective and intended outcome of the project is to develop the knowledge, skills, and attitudes that island residents need to become stewards of their island environment and to make rational and informed decisions related to climate change adaptation. A climate vulnerability assessment was conducted and documented in a separate report entitled Climate Vulnerability Assessment – Islands of Dhidhdhoo And Hinnavaru, The Maldives (CH2M HILL, 2012) using available climate data to assess the vulnerability of key services (e.g., water, sanitation, solid waste management) to the impacts of climate change. A second report entitled Utility Service Delivery and Institutional Capacity Assessment – Islands of Dhidhdhoo and Hinnavaru, The Maldives (CH2M HILL, 2012) documented the Utility Service Delivery Assessments and the associated institutional assessments for the islands of Dhidhdhoo and Hinnavaru. The Utility Service Delivery Assessment offered recommendations and action plans for the islands of Dhidhdhoo and Hinnavaru, with some qualitative assessment of the long-term affordability and financial sustainability of the proposed infrastructure alternatives. The objectives of this assignment were: • To analyze the financial viability of operating and maintaining Maldives GCC project-financed water supply and sewerage system infrastructure development and rehabilitation activities on the islands of Hinnavaru and Dhidhdhoo. • To compare desired improvements in water supply and sewerage with the financial capacity to operate them.