and has five principles: decentralization of the decision-making process to the municipalities, which act based on a demand-responsive approach user participation in financing, operation and maintenance including rehabilitation of the facilities and construction works research to find ways to reduce water tariffs through taking into consideration low cost technologies privatization of construction, operation, maintenance and social mediation with a particular effort to increase the professionalism of local operators in the sector reinforcement of the technical and administrative decentralization of the central administration in its role as sector regulator and establishment of functional relations between the decentralized municipal structures in may 2004, the call for a water initiative for semi-urban areas which are not covered by soneb emerged. the initiative, which has not yet been implemented in 2006 aims to reach the mdgs in these areas through the construction of rural water supply schemes in about 500 towns by 2015. urban and peri-urban areas: the 2006 to 2015 strategy for urban water supply, besides reaching the mdgs by 2015 has the objectives to facilitate the financial viability of public water supply and provide access for poorer households. the strategy is based on four principles: the involved actors play their respective parts in a coherent legal and institutional framework the achievement of the mdgs is based on a continuous and harmonious sector development the sustainability of the sector is backed by an economical and efficacious public water supply the access to water supply for people with lower incomes is a fundamental imperative of national solidarity concerning sanitation, the national hygiene and basic sanitation program covers the period from 2004 to 2008. it is divided into three sub-programs: hygiene and basic sanitation promotion in rural areas hygiene and basic sanitation promotion in urban areas institutional support for the hygiene and basic sanitation authority (dhab) under the ministry of health and its decentralized structures responsibility for water supply and sanitation policy and regulation map of benin the national ministry of energy and water sets general water sector policies and supervises their application. national sanitation policies are defined by the hygiene and basic sanitation authority (dhab) under the ministry of health. benin is currently in the process of implementing a decentralization policy, under which water supply and sanitation becomes responsibility of the 77 municipalities, which count between 25,000 and 600,000 inhabitants. each municipality is headed by an elected council and a mayor. according to law no. 97-029 of 1999 on the organization of municipalities, they have full responsibility to provide drinking water and sanitation. the law also provides for the municipalities' right to request technical assistance from the national level or the private sector. furthermore, the national government is responsible for the transfer of the necessary financial resources for the execution of the tasks to the municipalities. in rural and semi-urban areas, the general water authority (dgeau) under the ministry of energy and water is expected to implement the national policies, to coordinate water use for different purposes and to promote integrated water resources management. in addition, dgeau has the task to set up and maintain a database on water resources and their mobilization. in order to ensure that the national policies are implemented at the local level, dgeau is represented by 11 water service divisions and uses six department divisions of the ministry of energy and water. under the framework of decentralization, responsibilities were shifted from dgeau to its local divisions. there is no independent agency for economic regulation of the water and sanitation sector. the national 2007 growth strategy for poverty reduction calls for the establishment of such an authority. service provision since the decentralization process, the municipalities and their established water user associations became responsible for operation and maintenance of water supply and sanitation. in rural and semi-urban areas, they receive support by dgeau. in urban and peri-urban areas, the national water society of benin (soneb) has been assigned to assure urban water supply and waste water treatment on behalf of local authorities soneb supplied 69 urban districts in 2007. eighty percent of the urban water supply demand is concentrated in cotonou, porto novo, parakou and abomey/bohicon. like dgeau, soneb is placed under the ministry of energy and water. soneb is a public company, but autonomous in decision-making and financial administration. concerning sanitation, the hygiene and basic sanitation authority provides sanitation in public places like schools and health centers. the authority shares responsibility for sanitation with soneb, communities and departments of the ministry of environment, housing and urbanism and the ministry of public works and transportation. other functions private sector: in rural areas, private sector participation is supported under the padear strategy. for instance, the private drilling companies forag and foratech install about 1,000 new water points per year and private operators are also involved in maintenance activities. besides this, private planning offices prepare feasibility studies and supervise the construction of facilities. local artisans take over odd jobs. in urban areas, no private participation of soneb is anticipated. however, in cotonou the private company sibeau operates the only wastewater treatment plant in the country. non-governmental organizations: many non-governmental organizations (ngos) are active in benin. they usually inform, advise and support the communities concerning their water supply responsibilities. economic efficiency economic efficiency of water supply can be measured through several indicators. in benin however, access to the respective data, in the case that they exist, is difficult. however, a frame contract (contract plan) for the period 2008–2010 between soneb and the ministry in charge of water has been signed january 2008. it contains an indicator set allowing to measure achievements of objectives of the urban water strategy adopted in 2007. soneb documents these achievements in the yearly sector review. one established indicator is the share of non-revenue water (nrw), water which is produced but not billed due to several reasons like leakage and illegal connections. according to the beninese ministry of economic and financial development, nrw of soneb was 21% in 2004. although there is no agreement on appropriate levels of nrw among professionals, tynan and kingdom propose a best practice target of 23% in developing countries. according to the figures of the ministry, soneb complies with that target. financial aspects tariffs and cost recovery urban and peri-urban areas a tariff reform has been adopted in july 2009, based on a tariff study conducted in 2006. a preferential connection fee has been fixed at 50.000 cfa in the tariff system. there is no distinction between the different types of consumers (residential, commercial, industrial), but two block tariffs according to the amount of water consumption. before the tariff reform, us$0.41 per m³ without additional taxes was charged for the first five m³. for consumption exceeding five m³, the tariff was us$1.03 including taxes per m³. the tariff structure had been active since 2002. in addition, a fixed tariff of us$0.99 for the maintenance of a water meter is added. according to a thesis, tariffs cover most of the capital costs and all operating costs. in 2004, the revenue generated by water sales was us$16.7 million. rural and semi-urban areas where aue operate and maintain the services, they are expected to bear the costs of these tasks. according to the danish international development agency (danida), the sale of water can be very profitable and cover operation and maintenance costs. water consumption is usually charged in the case of existing rural water supply schemes. charging tariffs is less common if wells or hand pumps are used. a 2004 world bank study assumes an average rural water tariff of us$1.04 (500 cfa) per m³ and equally concludes that this tariff usually covers operation and maintenance costs, including replacement. the study also mentions that in most cases the potable water is only used for cooking and drinking and alternate sources are used for other needs. it assumes an average consumption of only 5 l/p/d from improved sources. consequently, water tariffs are affordable for most households. investment and financing substantial investments in the country's water sector have been made since the 1980s. investments in sanitation have started much later and have been lower. despite this, there has been no review of sector investments until 2004. since 2002, the financial resources allocated to the ministry of energy and water follow a three-year program budget, focusing on a unification of all funding (operational and investment costs) and a better replicability of the expenditures and its impacts. it is difficult to draw up a comprehensive analysis of public expenditures in the water sector. the following figures derive from a 2004 world bank study, which uses several budgetary documents. since only the expenditure of the dgeau is shown, investment in urban areas is not included. executed budget of dgeau according to funding source in million us-dollar 1997 1998 1999 2000 2001 2002 domestic 1.01 0.88 0.87 0.86 0.87 2.17 external 10.86 10.34 6.32 8.59 6.08 6.40 total 11.87 11.22 7.19 9.45 6.96 8.57 the share of domestic funding increased from 9% in 1997 to 25% in 2002. however, the sector still depends strongly on external funding. overall expenditure decreased from us$11.87 million in 1997 to us$8.57 million in 2002. the share of total government spending to the sector varied between 1.2 and 3.5%. the ministry of economic and financial development reported in 2006 that there is no appropriate mechanism for the development of the urban water supply. external support is indispensable for the implementation of investment programs. in 2009, the ministry of energy and water and soneb reported that corruption is a huge threat for the sector development. financial resources often disappear into the pockets of politicians and contractors. construction contracts often include inflated costs. especially in rural areas, bribery of local officials is a common practice to ensure water supply. financing the latest national strategies rural and semi-urban areas the necessary financial resources to reach the mdgs in rural and semi-urban areas from 2006 to 2015 have been estimated to about us$396 million (189 billion cfa) or us$40 million per year. the ministry of economic and financial development concludes that the mdgs will not be achieved if the expenditures for the sector continue in the same amounts as in the years 2002 to 2005. however, if all available resources are mobilized, benin will be able to reach the mdgs concerning rural water supply. urban and peri-urban areas the required financial resources to finance the achievement of the mdgs in urban and peri-urban areas have been estimated to be about us$400 million (191 billion cfa) or us$40 million per year from 2006 to 2015. the implementation of the 2006-2015 strategy to reach the mdgs in urban areas is expected to be financed by the national state, municipalities, development partners, financial institutions and soneb. for small and medium water systems, financing will be provided by the municipalities, by the central state through public budgets, and by development partners. large systems will be financed by the national state, municipalities, development banks and development agencies through credits and loans. peri-urban areas and people with lower incomes will receive subsidies and donations with the help of development partners. soneb will finance investments for maintenance and rehabilitation of electromechanical installations with its own financial resources. therefore, it is planned to improve the self-financing of soneb through an appropriate tariff system and other measures. sanitation in order to achieve the mdgs concerning sanitation, the ministry of economic and financial development estimates that us$218 million (104 billion cfa) or us$22 million per year will be needed from 2006 to 2015. public-private partnership with small water providers in rural areas a key challenge faced by water authorities is how to manage their service delivery obligations to rural communities. even in decentralized sectors the water authorities may find it hard to provide services to remote rural communities. benin decentralized its water services in 1999 and ownership of assets and responsibility for water provision passed to the “communes” (districts). the direction generale d’eau has developed a guide for communes in developing water services for rural areas and a suite of contractual and bidding documents to be used in the different contexts discussed in this guide. the legal framework prescribes that where there is a water post with or without network connected then the communes should delegate the provision of water to a water service provider or to the water users association.