Achieving sustainable development depends on incremental investments in six priority transformations: building human capacities (health, education, new job skills); decarbonising energy; promoting sustainable agriculture and biodiversity; building smarter cities; implementing the circular economy; and harnessing the digital revolution. As such, sustainable development and the 17 Sustainable Development Goals (SDGs) in particular pose a financing challenge. There are three distinct financing conundrums to solve: financing complex infrastructure, financing public services and amenities, and shifting investments from unsustainable to sustainable technologies. I discuss these in turn.
Perhaps one of the most exciting developments coming out of the SIWI World Water Week in Stockholm at the end of August was the large number of sessions and debates around the financing issue. In essence, the discussion on how we will collectively raise enough funds to close the financing gap was prominent in many discussions.
It is worth noting that some progress has been made. The issue is now prominent in all the major policy discussions with stakeholders. There is an acknowledgement that domestic finance, rather than international resources, are key to addressing the issue.
The latest news about the finance world usually involves stories of blockchain technology, acquisitions and mergers, and stock market fluctuations. But the world of finance is also central to the Sustainable Development Goals and particularly the objective of universal access in the water and sanitation sector.
That’s why scaling-up finance for water is crucial if we are to reach the Sustainable Development Goals (SDGs) in the water sector. The SDGs call upon the world to achieve universal WSS access that is safe, affordable, and available to all by 2030. In addition, the SDGs include targets for increasing efficiency of water use across all sectors, protecting and restoring water-related ecosystems, and improving water quality. And water is a fundamental prerequisite to the achievement of all 17 of the goals – water flows through and connects all the other SDGs.
However, many people still live in areas where WSS systems are inadequate or even unavailable. Although drinking water is essential to life, across the world today 2.1 billion people lack reliable access to safely managed drinking water services and 4.5 billion lack safely managed sanitation services. In Sub-Saharan Africa alone, 42 percent of people lack improved water sources within a 30-minute roundtrip.
The World Bank Group’s Global Water Security and Sanitation Partnership (GWSP) understands that additional finance for water infrastructure is absolutely critical to achieve the SDGs. The WSS sector alone requires six times more financing than governments, the private sector, and donors are currently funding.
Like many, we were relieved to hear from the Government of Madagascar and WHO in November last year that the pulmonary plague outbreak in Madagascar had been contained. Plague is a disease caused by bacteria called Yersinia pestis that are typically transmitted by rodents through their fleas but can also be transmitted from human to human. Since the onset of the outbreak in early August 2017, there had been 2,300 human cases of plague reported, leading to 207 deaths (WHO update). WHO called for continued vigilance until the end of the plague season at the end of April, as more cases of bubonic plague should be expected and could lead to a resurgence of pulmonary plague. The President of Madagascar also committed to establishing a permanent “plague unit” at the level of the Prime Minister’s office to work on the eradication of plague―rightly so, as experience tells us that addressing risks at the interface of human, animal and environmental health is challenging.
Photo: GotCredit| Flickr Creative Commons
Whether an infrastructure project should be pursued through government funding, official development assistance (ODA), a Public-Private Partnership (PPP), or a hybrid, is a matter of finding the solution that best meets a government’s objective given a set of constraints and the risks presented by each option.
To meet the Sustainable Development Goals, governments will need to better target their investments and leverage more financing from private sources, including from households that can afford it (via more realistic and fair tariff policies and incentives to invest in things like toilets) and from commercial finance providers, including microfinance institutions, commercial banks, bond investors or venture capitalists.
A this year’s Stockholm World Water Week, the World Bank is releasing a report which provides guidance to governments and private financiers on “Easing the Transition to Commercial Finance for Sustainable Water and Sanitation”. This report brings together strands of analysis and key messages that were developed for the High Level Panel on Water and for the Sanitation and Water for All Partnership in the run-up to the 2017 High Level Ministerial Meetings hosted by the World Bank.
I’m pleased to announce that applications are now open for the second round of a new data innovation fund which was announced last month at the UN’s High Level Political Forum.
The fund will invest up to $2.5 million in Collaborative Data Innovations for Sustainable Development - ideas to improve the production, management and use of data in poor countries. This year the fund’s thematic areas are “Leave No One Behind” and the environment.
Details on eligibility, criteria and how to apply are here: bit.ly/wb-gpsdd-innovationfund-2017
The initiative is supported by the World Bank’s Trust Fund for Statistical Capacity Building (TFSCB) with financing from the United Kingdom’s Department for International Development (DFID), the Government of Korea and the Department of Foreign Affairs and Trade of Ireland. DFID is the largest contributor to the TFSCB.
Supporting statistics for development
Here in the World Bank’s Development Data group, we’re looking forward to working with the Global Partnership for Sustainable Development Data (GPSDD) again following a successful pilot round of innovation funding last year. But you might be asking - why is the World Bank’s Data team helping to run a data innovation fund?
Last week, on April 20th, Matt Damon, co-founder of Water.org, addressed ministers of finance, water, and sanitation from across the world at the Sanitation and Water for All (SWA) Finance Ministers’ High Level Meeting at the 2017 World Bank-IMF Spring Meetings. The meeting focused on finding ways to fill the enormous financing gap via innovative financial solutions. Mr. Damon urged ministers to consider the full breadth of financing options to achieve the goal of providing safe, affordable, and sustainable water and sanitation for all.
We cannot talk about water and Sustainable Development Goal (SDG) 6 without also looking at everything that depends on it: from climate, food and electricity to families, farms and ecosystems. It is thus quite simple, either.
Water and climate change are also intertwined, with some regions at risk of losing up to 6 percent of GDP by 2050 if the growing challenge of water scarcity is not properly addressed.
One of the biggest hurdles is the lack of sufficient sources of finance. Financing the SDG sub-targets for water supply and sanitation alone will cost triple historic financing levels - an estimated $114 billion per year between now and 2030. The shortfall for financing irrigation and water resource management sub-targets will likely be as large, if not larger.
Saturday’s Global Infrastructure Forum was full of firsts: this unprecedented daylong gathering in Washington, DC brought together the leaders of the multilateral development banks (MDBs), as well as development partners and representatives of the G20, G-24, and G-77, the OECD, the Global Infrastructure Hub and the United Nations. All shared the goal of enhancing multilateral collaboration to improve infrastructure delivery globally.