# **Executive Summary**

This document summarizes the key findings and conclusions of a literature review of small-scale private service providers of water supply and electricity (SPSPs) conducted over a six-month period in 2003. It draws on more than 400 documents - including journals, articles, reports, case studies and project reports - which have been disaggregated and referenced in a publicly available database.<sup>3</sup> It defines key terms and proposes a common typology for classifying the different kinds of SPSPs according to two key parameters: (i) relationship to source of water or electricity (whether dependent or independent), and (ii) type of technology employed. Parallel categorization systems are developed for water and electricity<sup>4</sup> .

The information obtained through the literature review is partial as it reflects only those countries, locations or cases for which documented evidence of SPSPs has been prepared (and found, as much of the work is unpublished and therefore difficult to access). Despite the limitations in consistency and comprehensiveness of the information available, approximately 7000 electricity SPSPs (not including battery recharging businesses) were found to be operating in 32 countries and 10,000 water SPSPs were identified in 49 countries. Given the scarcity of documented information on SPSPs, this sample is likely to represent a portion of the total population of SPSPs.

SPSPs appear most prevalent in countries with low coverage levels, ineffective public utilities that provide inadequate or partial services and remote, difficult-to-access regions. SPSPs are especially prevalent in post-conflict countries, and others with weak or failed states. Of the countries for which evidence of SPSPs was available, at least half fall into this category. SPSP provision of networked services appears to be significantly higher for electricity than for water supply **.** Most SPSPs identified through the literature are single-purpose entities established for the express purpose of delivering water supply or electricity. SPSPs take a variety of organizational forms, both for-profit and non-profit. As such, they are established for a variety of reasons including: to meet consumer demand, respond to crises or as part of larger business ventures. The technology employed may extend upstream from distribution services to the means for producing or generating water supply or electricity, so capital needs vary accordingly. The vast majority of SPSPs have fewer than 50 employees and usually fewer than 10. A lack of affordable financing is a constraint for most SPSPs, who fund investments mainly through their own earnings and savings, loans from friends and family, and money borrowed from formal and informal lenders.

> 3 This database is currently under design and will be available through the World Banks Rapid Response Unit (www.rru.worldbank.org)

> 4 This document addresses other key characteristics such as legality, formality and organizational form. However, from the literature review it was evident that there was a lot of overlap among these characteristics and the relevance of organizational type was often not elaborated on.  The authors therefore opted to treat these aspects qualitatively.

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