PROJECTS / Developing an Action Plan to Strengthen SEDAPAL’s Financial Management

Developing an Action Plan to Strengthen SEDAPAL’s Financial Management

Latin America and the Caribbean

October 7, 2022

The World Bank, as part of an ongoing program to support SEDAPAL in improving its operational and commercial performance, hired K&M to provide support in strengthening SEDAPAL’s financial performance. As part of their assignment, K&M supported SEDAPAL through workshops aimed at developing an action plan to enhance the organization’s financial management. This action plan had been formulated as terms of reference for contracting services financed by a World Bank loan and had constituted one of the components of Component 2 of the Program.

K&M’s scope of work included the following:

  1. K&M conducted a desk review of at least three years of SEDAPAL’s financial statements. This review involved analyzing the financial performance and trends over the specified period.
  2. An analysis of key financial indicators and their benchmarking across other water utilities in Latin America had been carried out by K&M. This analysis allowed for a comparison of SEDAPAL’s financial performance with similar entities in the region.
  3. K&M conducted an analysis of the current tariff structure employed by SEDAPAL. This assessment aimed to identify any areas for improvement in terms of revenue generation and cost recovery.
  4. Recommendations for the enhancement of SEDAPAL’s financial management had been developed by K&M. These recommendations included strategies and measures to improve financial planning, budgeting, and reporting.
  5. Materials and analysis results had been prepared by K&M for the client through virtual workshops. These workshops facilitated discussions and knowledge sharing to support the implementation of the action plan.
  6. Additionally, K&M contributed to the creation of part of the project appraisal document (PAD). Their input had been included either in the main text or as an annex, describing SEDAPAL’s areas of financial improvement and the corresponding recommendations.
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