Securing sustainable finance to the water and sanitation sector
Financing water supply and sanitation is one of the most important challenges facing governments. Despite providing a large range of economic and social benefits, current levels of spending are far below the investments required to achieve the MDG water and sanitation targets. Achieving the current MDG targets on water and sanitation, maintaining that progress in the future and realizing the human right to safe drinking water and sanitation, as well as managing wastewater requires mobilizing "sustainable" financing for the sector. Even if funding derived from the 3 Ts (taxes, tariffs and transfers) were delivered at scale, it would be insufficient to cover the huge capital investment costs required in developing countries. The Board argues that there is a need to supplement such funding by leveraging it, using methods to access the longterm local-currency capital markets for water utilities - a proven strategy in developed countries - to bridge the financing gap. The Board encourages the use of a range of innovative financing mechanisms that can help attract private investors, such as mechanisms that blend concessional finance with commercial finance or pooled financing facilities that support borrowing by relatively small operators at reasonable costs.

UNSGAB commits to:

  • Increasing financial and budgetary resources across the water sector:
    • Advocate whenever possible for increased political prioritization of the water and sanitation sectors, including wastewater and water resources management, to secure additional financial resources of all kinds, including from public budgets and user fees. Special emphasis will be given to cooperation with governments and partners such as AMCOW, Sanitation and Water for All Partnership (SWA) and Water and Sanitation for Africa (WSA).
    • Collaborate with governments, the World Bank, Regional Development Banks and other partners to identify solutions to overcome country-level obstacles to local financing. Then, disseminate findings to decision-makers and practitioners worldwide.
  • Increasing the impact and leverage of Official Development Assistance (ODA) funding across the water sector:
    • Continue to advocate for bilateral ODA and other concessional finance to be used as a catalyst to leverage non-ODA funds and provide technical assistance for project preparation. This includes proposing a joint UNSGAB - Office for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) event to share best practices and lessons learned.
  • Increasing the availability of data and information - and where possible, monitoring of all forms of financing across the water sector.
    • Continue strong and close collaboration with OECD as a major source of water financing information.
    • Support the World Bank in developing a repository of knowledge on how to leverage private financing and to access local markets for the sector. Extend the same support to interested regional and sub-regional banks.
    • Encourage better knowledge of country-wide expenditures for water through the Global Annual Assessment of Sanitation and Drinking Water (GLAAS) and other relevant initiatives.
    • Encourage donors to report also on technical assistance in the context of GLAAS.
  • The success of all these efforts depends on national action and partner activities:

    • Countries increase their political commitment and financial resources to the water sector.
    • Governments identify and remove the barriers that impede local water and sanitation utilities from accessing local capital markets.
    • Governments and municipalities increase efforts in collecting taxes and user fees related to the water sector and develop and enforce objective water tariff systems so as to ensure the viability and sustainability of water facilities.
United Nations