The third objective focuses on the demonstration of water and sanitation service improvements to test both the cooperative partnerships developed and the outcome of stronger community and service provider capacity. Testing the delivery mechanism at a smaller scale will ensure lessons learned are fed back into the planning and design of scale up plans and budgets and allow for appropriate adjustments to institutional arrangements or additional support requirements. It also provides evidence to define a realistic cost recovery model and, for sanitation, the need for targeted investment subsidies. Projects target communities of up to 20,000 people for implementation of demonstration scale service improvements.
Achieving service delivery improvements demonstrates to local and national government and to consumers that sustainable service delivery to the poor is achievable and affordable. At the same time, data is collected on revenues and costs to refine scale up plans and help define national investment budgets. Demonstration projects can thus have a much wider impact on the sector.