OECD Studies on Water

ISSN :
2224-5081 (online)
ISSN :
2224-5073 (print)
DOI :
10.1787/22245081
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Water is essential for economic growth, human health, and the environment. Yet governments around the world face significant challenges in managing their water resources effectively. The problems are multiple and complex: billions of people are still without access to safe water and adequate sanitation; competition for water is increasing among the different uses and users; and major investment is required to maintain and improve water infrastructure in OECD and non-OECD countries. This OECD series on water provides policy analysis and guidance on the economic, financial and governance aspects of water resources management. These aspects generally lie at the heart of the water problem and hold the key to unlocking the policy puzzle.

Also available in: French
 
Innovative Financing Mechanisms for the Water Sector

Innovative Financing Mechanisms for the Water Sector You do not have access to this content

Authors:
OECD
Publication Date :
15 Mar 2010
Pages :
142
ISBN :
9789264083660 (PDF) ; 9789264083653 (print)
DOI :
10.1787/9789264083660-en

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This report examines innovative mechanisms that can help attract new financial resources into water and sanitation services. In particular, it focuses on mobilising market-based repayable financing (such as loans, bonds and equity) as a way of bridging the financial gap to meet the water-related Millennium Development Goals and other crucial sector objectives. The Camdessus and Gurría reports, published seven and four years ago, respectively, formulated a number of recommendations in this area. This report examines the extent to which these recommendations have been implemented. It looks at the rapidly evolving global context and to the ongoing financial and economic crisis, and considers how innovation in financing for the water sector may need to adapt.
Also available in: French
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  • Mark
  • Foreword (and Acknowledgements)
    In the context of the ongoing financial and economic crisis, mobilising sufficient financial resources to meet critical environmental and social challenges may become increasingly difficult, although no less important than during boom times.
  • Abbreviations and acronyms
  • Executive summary
    This report examines innovative financing mechanisms that can help attract new financial resources into water and sanitation services (WSS ). A particular focus is placed on mobilising market-based repayable financing (such as loans, bonds and equity) as a way of bridging the financial gap to meet the Millennium Development Goals and other crucial sector objectives. The Camdessus and Gurria reports, published in 2003 and 2006 respectively, formulated a number of recommendations in this area. This report examines the extent to which these recommendations have been implemented and how financial innovation may need to adapt to the rapidly evolving global context and to the ongoing financial and economic crisis.
  • Introduction
    This report examines innovative financing mechanisms that can help attract new financial resources into water and sanitation services (WSS ). A particular focus is placed on mobilising market-based repayable financing (such as loans, bonds and equity) as a way of bridging the financial gap to meet the Millennium Development Goals and other crucial sector objectives. The Camdessus and Gurria reports, published in 2003 and 2006 respectively, formulated a number of recommendations in this area. This report examines the extent to which these recommendations have been implemented and how financial innovation may need to adapt to the rapidly evolving global context and to the ongoing financial and economic crisis.
  • Setting the stage
    This chapter has two main objectives. It starts by defining more specifically the scope of the overall report, by providing definitions for key terms and concepts and explaining why the report is more specifically focused on mobilising market-based repayable finance for the sector. Second, it recalls the key recommendations that had been made in the Camdessus and Gurría reports in that regard. Finally, it briefly summarises the evolutions that have taken place in the water and sanitation service sector in the last six years in order to assess the current relevance of these recommendations.
  • Mobilising market-based repayable finance
    This chapter examines the potential recipients of market-based repayable finance in the water sector together with their specific needs or constraints. The chapter then looks at how sources of market-based repayable finance, such as loans, bonds and equity, have been used in the water sector before evaluating what the limitations on their use has been and identifying the needs for innovation.
  • Pushing the boundaries of innovative finance
    This chapter seeks to evaluate which innovative financial instruments have been used in the water sector to access market-based repayable financing over recent years and with which results. Each type of innovative financing instrument is examined in turn, starting with a short description of the instrument, an evaluation of its current use in the water and sanitation sector and an evaluation of the role that ODA can play in developing the use of such instruments. Indeed, as mentioned in the Camdessus report, "aid should be used to catalyse other financial flows by such means as funding initial overhead costs, providing equity for revolving funds, guarantees, and subsidies targeted to performance (such as output-based aid)".
  • Assessing the impact of the global financial crisis
    This chapter looks at the potential effects of the global financial crisis on the availability of market-based repayable finance for the water sector and at the impact of the ensuing economic crisis on overall sector financing from the 3Ts.
  • Bibliography
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