copy the linklink copied!Background and process

The European Commission and the OECD endeavoured to assess the capacity of member states to cover the investment and financing needs they face now and by 2050 related to water supply, sanitation and flood protection. The assessment will inform strategic thinking about countries’ investment planning and financing strategies as well as about the role that the European Commission can play to support its member states.

When assessing investment needs for water supply and sanitation and flood protection, three specific directives merit particular attention: the Urban Waste Water Treatment Directive (91/271/EEC); the Drinking Water Directive (98/83/EC); and the Floods Directive (2007/60/EC). Beyond these technical directives, the Water Framework Directive (2000/60/EC) provides framework legislation to facilitate the co-ordination of objectives and means of implementation for water-related policies and regulations.

Despite an overall relatively high level of compliance with the Drinking Water and Urban Waste Water Treatment Directives, lack of funding is mentioned by several countries as an – or the main – obstacle to achieve full compliance. Further, member states will have to face new challenges, which will call for additional investments in the water sector. Such challenges include emerging pollutants – which can require more stringent standards for drinking water and treated wastewater - and climate change.

Against this backdrop, the OECD collaborated with the European Commission to review future investment needs and financing capacities in the twenty eight EU member states, in order to establish a comparable overview across countries and identify those facing the most severe situations.

The review was organised along two phases. The first phase of the project assessed the EU 28 member states’ investment needs by 2050 for water supply, sanitation and flood protection, as well as their capacity to finance these needs. In the second phase of the project, investment needs as well as financing strategies and options were looked at in more depth in nine EU member states likely to face the greatest challenges in financing their future investment needs. Recommendations from this second phase, while tailored to countries facing most severe financing challenges, are likely to be relevant for all EU member states and beyond.

Likewise, lessons on challenges and sustainable financing strategies from both phases of the work are relevant far beyond the EU - and indeed OECD - member states. These will be shared and discussed in the context of OECD work on financing water, including in meetings of the OECD Working Party on Biodiversity, Water and Ecosystems, and the Roundtable on Financing Water1. The Roundtable is designed as a collaborative platform to identify and promote concrete options to improve the mobilisation of capital towards investment in sustainable, resilient water infrastructure.

This report captures the main messages from the project. It consists of five parts:

  • Part I frames the issue and sketches the drivers considered for the projections of investment needs.

  • Part II characterises the state of play and member states' current level of effort to finance water supply, sanitation and flood protection.

  • Part III presents the projections for future investment needs across member states.

  • Part IV discusses the financing capacities of member states and signals particular challenges selected countries are likely to face to finance projected investment needs.

  • Part V explores options that can help countries to minimise their financing needs for water supply, sanitation and flood protection as well as possibilities to harness additional sources of finance for flood protection. They reflect discussions that took place during seminars in nine countries facing the most severe financing challenges.

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