Financing Options for the 2030 Water Agenda
The sector is in the process of repositioning itself toward the Sustainable Development Goals (SDGs). Under the Millennium Development Goals (MDGs) the international focus of the water sector was predominantly on increasing access to water supply and...
| Main Authors: | , , , , |
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| Format: | Brief |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/846161480490614367/Financing-options-for-the-2030-water-agenda http://hdl.handle.net/10986/25495 |
| Summary: | The sector is in the process of repositioning itself toward the Sustainable Development Goals (SDGs). Under the Millennium Development Goals (MDGs) the international focus of the water sector was predominantly on increasing access to water supply and sanitation (WSS). With the advent of the SDGs the agenda is much broader covering all aspects of water, water resource management, and irrigation and
theirsustainability. The water sector is not well equipped
to face these new financing challenges. The sector has
historically relied on public financing to meet its
investment needs—through domestic and development partner
concessional funds and/or lending. Institutionally many
parts of the sector are government departments where
mobilizing private finance is almost non-existent. Even when
they are established as corporate entities, such as some WSS
providers, it is rare for them to borrow from commercial
lenders due to weak incentives and/or poor creditworthiness.
Mobilizing additional concessional funds will help— but will
not be sufficient. New sources of concessional finance might
be tapped (e.g., climate finance) but the gap cannot be
filled simply by increasing the volume of concessional funds
and lending from governments or development partners. A new
sector financing paradigm is required based on four broad
themes. The sector has to realign itself around actions that
(a) improve sector governance and efficiency (i.e.,
improving creditworthiness), (b) crowd in or blend private
finance (i.e., leveraging capital ), (c) allocate sector
resources more effectively to deliver the maximum benefit for
every dollar invested (i.e., targeting capital), and (d)
improve sector capital planning to reduce unit capital costs
(i.e., minimizing capital requirements). Achieving the new
financing paradigm requires a more collaborative approach
with all stakeholders playing an active role. |
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