To complement the ADB-funded District Capitals Water Supply Project, Timor-Leste’s National Directorate of Basic Sanitation proposed a PDA on designing a scheme that will use performance-based subsidies to attract donors and investors in supporting sanitation projects for low-income communities in the urban area of Manatuto, a district in the central part of the country. This design will go beyond just toilets, and instead improve sanitation using a proposed system that includes collecting both human excreta and greywater through underground pipes that lead to safe treatment and disposal away from households, thereby enhancing wastewater management and basic sanitation as well as reducing health risks due to exposure to water-borne diseases.


Project site Timor-Leste
Cost $50,000
Status Completed
Approval date July 2016
Completion date June 2017
ADB officer Allison Woodruff


The main goal of the PDA was to design an urban sanitation project using simplified, decentralized, low-cost piped networks equipped with decentralized wastewater treatment systems (DEWATS) – a first in the country – through an output-based aid (OBA) scheme. This OBA approach would reduce financial barriers for prospective donors and provide some subsidies for the construction of the network and/or repair or replacement of toilets, septic tanks, among others. Under this PDA, an output represents a collection of components provided to a beneficiary, whether a household or institution.


The PDA put forward an OBA design that can be considered for pilot implementation in Manatuto, which caters to poor and vulnerable households in the urban areas. Along with the proposed design, socioeconomic data was reviewed and baseline surveys were conducted to assess the sanitation situation in Manatuto and a criteria to select project participants was developed. The design of the OBA pilot also included projected costs. It also considered scalability and replication for other towns.

Read the final report.