Sub-DLI 3.1 is a sub-component of DLI 3 that focuses on improving the performance, efficiency, and sustainability of water supply institutions and service providers. While DLI 3 addresses the provision of infrastructure and access to services, Sub-DLI 3.1 ensures that the agencies responsible for delivering these services operate effectively and meet performance standards over time.
This sub-DLI incentivizes water agencies to develop and implement Performance Improvement Action Plans (PIAPs), which define operational baselines, identify institutional and technical challenges, and establish annual performance targets. PIAPs cover urban, rural, and small-town water supply systems and focus on critical aspects of service delivery, including operational efficiency, financial management, service reliability, customer responsiveness, and institutional accountability.
The preparation of PIAPs is carried out in consultation with the Federal Program Implementation Unit and requires formal approval before implementation. Following approval, agencies are expected to monitor and report on annual performance targets, with subsequent assessments tied to continued eligibility for incentives. This structure encourages continuous improvement and institutionalization of performance management practices rather than one-off compliance.
Key performance improvement areas include strengthening financial management systems, improving operational and maintenance practices, enhancing service monitoring, ensuring compliance with regulatory standards, and improving responsiveness to consumer feedback. The PIAPs also incorporate gender and social inclusion measures, promoting participation of women and youth within water service institutions.
Verification of performance improvements is conducted through desk reviews of documentation submitted by participating agencies, including Water Authorities, rural and small-town water agencies, and WASH regulatory bodies. The Independent Verification Agent (IVA) assesses both the quality of the PIAPs and the extent to which annual performance targets have been achieved, ensuring transparency and accountability.
Sub-DLI 3.1 complements DLI 3 by linking expanded water access with strengthened institutional capacity, guaranteeing that infrastructure investments translate into sustained service delivery. By emphasizing operational efficiency, accountability, and performance monitoring, this sub-DLI ensures that beneficiaries not only gain access to water services but also receive services that are reliable, well-managed, and resilient over time.