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.
The success of all these efforts depends on national action and partner activities:
- 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.
- 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.