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Leveraging commercial finance for water: will it hurt the poor?

Sophie Trémolet's picture
Water investments are lumpy and costly: financing is essential to spread the costs of these investments out over time. For water, development finance institutions still provide the bulk of such financing. It can no longer be the only one, however. The costs of extending universal access to safe water and sanitation has been estimated at US$ 114bn per year, which is a substantial increase compared to what was invested to reach the Millenium Development Goals. In contrast, in 2014 total official development finance for water, including grants and loans with varying degrees of concessionality, reached a mere US$18 bn per year, three times more than in 2003 but still woefully insufficient to meet all investment needs.

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.
Download Easing the Transition to Commercial Finance
for Sustainable Water and Sanitation

Learn more about the session Private Finance and
Equitable Delivery of WASH services
 at World Water Week.