Peru - Modernization of Water Supply and Sanitation Services Project

Overview & Synopsis

Ratings of the Modernization of Water Supply and Sanitation Services for Peru were as follows: outcome was moderately satisfactory; Bank performance was moderately satisfactory; M&E quality was modest. Lessons learned and recommendations are as follows. First, combining infrastructure investments with policy, regulations and institutions reforms can deliver meaningful results across access, service quality, and institutional capacity, but future operations should narrow scope, either geographically or by focusing on utilities or national entities, and simplify implementation arrangements; where multiple implementation units are needed, clear reporting lines and decision-making authority should be established from the outset to reduce coordination bottlenecks. Second, for projects with significant works, implementation readiness is critical; robust feasibility studies or detailed engineering designs for all planned investments should be completed and quality-assured before approval, with realistic cost estimates and early identification of land, social safeguards, and rights-of-way needs, making use of trust funds or project preparation grants to finance this preparatory work. Third, when objectives include substantial improvements in utility and sector institutional performance that are influenced by broader, long-term factors, consider using financing instruments better suited to systemic reform, such as Program for Results or Development Policy Operation, and align with government-led sector strategies or compacts to set a sequenced reform pathway and use indicators that more directly capture results attributable to the operation.