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Innovative Financing Mechanisms for the Water Sector

image of Innovative Financing Mechanisms for the Water Sector

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.

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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.

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