The Rural and Small Towns Water Supply and Sanitation Project, supports the first phase of the water and sanitation program in Ecuador, through investments in sustainable water, and sanitation services, focused on alleviating the poorest populations in rural communities, and small towns. Furthermore, improved policies will be developed, particularly through the implementation of sector reforms. The components call for: 1) sector reform, and institutional development, supporting a major restructuring of the Sub-Secretaria de Saneamiento Ambiental (SSA), to enable the agency formulate sector policies, and set general regulatory guidelines. Provision of technical assistance, and training to municipalities, and sector institutions, will enable SSA to define increased water, and sanitation coverage, and, set up a sector information system. Further training programs will be financed, which will allow non-governmental organizations, and private providers assume their roles in the new sector structure; 2) implementation of subprojects in rural areas, financing engineering, and infrastructure works in water and sanitation aspects, and, providing management training to the community, as well as health and hygiene education; and, 3) provision of non-refundable grants, to finance engineering studies, and civil works for water, and sanitation subprojects in municipal capitals.