Introducing Commercial Finance into the Water Sector in Developing Countries
This guidance note provides an introduction to the role of commercial finance in the water and sanitation sector. Its aim is to help readers (development specialists) explore applications in their own countries. The note focuses primarily on commer...
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/423121488451451957/Introducing-commercial-finance-into-the-water-sector-in-developing-countries http://hdl.handle.net/10986/26187 |
| Summary: | This guidance note provides an
introduction to the role of commercial finance in the water
and sanitation sector. Its aim is to help readers
(development specialists) explore applications in their own
countries. The note focuses primarily on commercial bank
loans, and throughout the document the term commercial
finance refers to commercial loans from domestic banks.
However, much of the guidance could be applicable to debt
capital market financing for water. While there is some
research available on accessing international private
finance for water infrastructure, the literature on
facilitating local domestic finance (raised in local
currency from local banks or lenders) is limited. This note
aims to fill the gap and to present a process to readers who
are not financial specialists and who may be unfamiliar with
commercial banking. The target audience for this note is
development specialists and local practitioners working in
water and sanitation service delivery who want to explore
the possibility of introducing access to commercial finance
to service providers in their country. The note also
provides guidance that may be helpful to other local
stakeholders involved in or contemplating various phases of
building a commercial finance market. Readers who are less
familiar with lending and infrastructure finance may wish to
start with the appendix B on commercial finance basics. The
note takes a holistic sector approach to the introduction of
commercial finance, targeting the three key stakeholders:
borrowers, lenders, and government entities. This note
covers a four-phase framework: (i) Phase I: Scoping the
Market; (ii) Phase II: Designing and Building the Market;
(iii) Phase III: Executing the Deal; and (iv) Phase IV:
Monitoring and Evaluating Deal Success. |
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