AIAS PHASE II (PO35) The “Adminsitração de Infra-estruturas de Águas e Saneamento (AIAS) has been created in 2009 within the Ministry of Public Works and Water Resources (MOPH_RH). Its mandate is to develop and manage urban water (130 systems) and urban sanitation (151 sytems). The proposed activityis a continuation of the first phase and will be implemented in 35 cities, 15 of the first phase and 20 additional small cities. It is proposed that the activity will run from Septmber 2017 until December 2020. The total activity budget  is EUR 8.6 million. The overall objective of this activity is to incraese acess to suatainable water and sanitation services in small tonws in Mozambique. The project is composed by 4 main workpackages with the following specific objectives - Stable AIAS organisation at central and provincial level with capacity to guarantee sustainability of services to atract more funding from third parties; - Sutainable operation of urban drinking water and sanitation services in up to 35 towns under the mandate of AIAS - Mechanisms in place for extension of infrastructure and ind increase number of water and sanitation services; - Establishes and enabling environmnet and suport system to foster development of small domestic private operators, contributing to the sustainability of services. The activity counts with support of a consortium of dutch partners (VEI/WWn/SNV/BopInc) for technical assistance lead by Vitens Evides International. This programme was implemented by the Administração de Infraestrutuars de Água e Saneamento (AIAS) with objective to increase access to sustainable water and sanitation services in small towns in Mozambique.The programme was implemented in 35 small towns. The overall outcomes of the programme were 130.000 additional people served with safe drinking water and 47.800. additional people with access to safe sanitation by the end of 2020. By the end of the programme the expected results were achieved. The financial sustainability of both AIAS and the water and sanitation operators are the main points of concern. At end of the programme, AIAS was still waiting to receive its financial autonomy status, which allows it to directly claim the operators’ lease fees, rather than being dependent on the state budget (aside the budget support from Embassy of the Kingdom of the Netherlands in Maputo and other donors) to cover for operating costs. Most operators were also struggling to run a profitable business, although improvements have been made through the programme, for example in operators’ cost recovery ratio, collection efficiency and non-revenue water (NRW) reduction.  Nonetheless, the programme’s intervention logic (building the capacity of AIAS and of the water operators, combined with some financial support to operators in maintaining and improving their systems, and the introduction of certain ‘innovations’ also aimed at improving the viability of the operators and other private businesses makes very good sense and has proven to be very effective. This is especially true for the ‘water supply’ component of the programme.  AIAS is now having a full sanitation team with staff 100% allocated to sanitation, a massive increase in sanitation investments by AIAS including budget allocated to construction of treatment and disposal facilities. For ‘sanitation’, the successes were less visible (on the field), mainly due to unclear mandates in that sector and a poor enabling environment. There were limited progress nor a consistent approach on the management and operating modality of the public sanitation blocks although more household latrines were sold during the programme than planned. There is a need to make progress in the consolidation of more long-term strategies to close the fecal sludge management (FSM) cycle.