Water Papers
183 items available
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Water Papers are produced by the Water Global Practice, taking up the work of the predecessor Water Unit, Transport, Water and ICT Department, Sustainable Development Vice Presidency.
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Publication
Fintech for the Water Sector: Advancing Financial Inclusion for More Equitable Access to Water
(World Bank, Washington, DC, 2019-03)For many low-income households in the developing world, incomes are highly variable and uncertain. High up-front costs combined with irregular incomes result in unequal access to water, sanitation, and irrigation. Households typically can, and should, cover the costs of accessing water resources, but they cannot do this without help. Financial inclusion can help households access water resources. Financial inclusion focuses on ensuring everyone has access to useful and affordable financial products and services, including transactions, payments, savings, credit, and insurance. The emerging field of financial technology (fintech) can help address barriers to financial inclusion in the water sector while potentially reducing or eliminating the need for subsidy. Fintech solutions already address some of the needs of developing-nation households—applications include payments and mobile money, pay-as-you-go (PAYG) models, insurance technology (insurtech), and virtual banks. This paper explores how fintech can support expansion of market-based solutions for water, sanitation, and irrigation, identifying several use cases where fintech is already being used to address financial inclusion and access to water. In addition to ways that fintech can help households access water supply and sanitation services, the paper also examines how fintech can help water utilities serve low-income customers more effectively and assist small-scale service providers in growing their businesses. -
Publication
Easing the Transition to Commercial Finance for Sustainable Water and Sanitation
(World Bank, Washington, DC, 2017-08)Providing sustainable water supply and sanitation (WSS) services in developing countries remains an immense, and increasingly urgent, challenge. Chapter two sets out how the sector is currently funded and why business as usual is insufficient for meeting WSS-related goals, covering the size of the investment gap, and the challenges presented by the status quo. Chapter three proposes a financing framework toward more effective use of existing funds to enable the mobilization of new sources of finance, and explains the benefits and costs of commercial finance. Chapters four to six detail the three components of the financing framework, providing practical advice and global experiences that demonstrate how countries can begin to make progress. Chapter seven summarizes how stakeholders can bring the three components together to mobilize commercial finance, and provides the main conclusions and recommendations of the report. -
Publication
Introducing Commercial Finance into the Water Sector in Developing Countries
(World Bank, Washington, DC, 2017-02)This guidance note provides an introduction to the role of commercial finance in the water and sanitation sector. Its aim is to help readers (development specialists) explore applications in their own countries. The note focuses primarily on commercial bank loans, and throughout the document the term commercial finance refers to commercial loans from domestic banks. However, much of the guidance could be applicable to debt capital market financing for water. While there is some research available on accessing international private finance for water infrastructure, the literature on facilitating local domestic finance (raised in local currency from local banks or lenders) is limited. This note aims to fill the gap and to present a process to readers who are not financial specialists and who may be unfamiliar with commercial banking. The target audience for this note is development specialists and local practitioners working in water and sanitation service delivery who want to explore the possibility of introducing access to commercial finance to service providers in their country. The note also provides guidance that may be helpful to other local stakeholders involved in or contemplating various phases of building a commercial finance market. Readers who are less familiar with lending and infrastructure finance may wish to start with the appendix B on commercial finance basics. The note takes a holistic sector approach to the introduction of commercial finance, targeting the three key stakeholders: borrowers, lenders, and government entities. This note covers a four-phase framework: (i) Phase I: Scoping the Market; (ii) Phase II: Designing and Building the Market; (iii) Phase III: Executing the Deal; and (iv) Phase IV: Monitoring and Evaluating Deal Success. -
Publication
Aid Flows to the Water Sector: Overview and Recommendations
(World Bank, Washington, DC, 2016-11)This report provides data and insights on the role of grant funding and concessional financing in meeting the Sustainable Development Goal for water (SDG 6, known as the water SDG). These sources of funding are collectively referred to in this report as aid flows to the water sector. This report was prepared as an input into the High-Level Panel on Water. Data analysis was conducted using two main databases on aid to the water sector. The Organisation for Economic Cooperation and Development Assistance Committee (OECD/ DAC) database is the most comprehensive, while the WASHfunders.org database provides complementary data on aid from philanthropic organizations. These databases were complemented by an inventory of the main institutions providing aid to the water sector, as well as interviews with selected providers of aid to the water sector, including leading multilateral development banks (MDBs), bilateral donor agencies, and international nongovernmental organizations (NGOs). This analysis provides the basis for recommendations on how to improve the aid architecture to the water sector and mobilize financing to achieve the water SDG. -
Publication
Achieving Universal Access to Water and Sanitation by 2030: The Role of Blended Finance
(World Bank, Washington, DC, 2016-08)A substantial increase in sector financing will be necessary to achieve Sustainable Development Goal 6 calling for universal access to safe water and sanitation while addressing issues of water quality and scarcity to balance the needs of households, agriculture, industry, energy, and the environment over the next 15 years. Recent estimates by the World Bank’s Water and Sanitation Program (WSP) indicate that the present value of the additional investment in WSS alone needed through 2030 will exceed US$1.7 trillion (Hutton & Varughese 2016). Existing funding falls far short of this amount; countries may have to increase their investment in the water and sanitation sectors by up to four times in order to meet the SDGs. Where is Financing for the Water SDG Going to Come From? -
Publication
Evaluation of Water Services Public Private Partnership Options for Mid-sized Cities in India
(World Bank, Washington, DC, 2015-06)Successful mid-sized cities will be vital to India’s growth and prosperity in the coming decades. Indian cities are home to over 375 million people now, and their population is likely to double by 2035. Yet water supply in most mid-sized cities falls short of Government of India benchmarks for service, efficiency and cost recovery. In many of them water flows in the pipes for 2 hours a day or less, its quality is poor, and it is provided by utilities that cannot even cover their operating costs. Following a brief introduction to the three city case studies (section two), the report lays out the Indian water sector’s unique challenges, and using case examples to substantiate findings (section three). The challenges include day-to-day operational issues associated with running a utility, as well as policy and planning issues that affect the utility’s governance and investment planning to meet current and future demand. The results of a financial viability gap analysis, applied to Bhubaneswar and Coimbatore reveal the magnitude of improvements required, and the key drivers that affect the utilities’ financial performance (section four). These complex challenges make traditional PPP models, Management Contracts, Concessions and Leases, less amenable for use in mid-size Indian cities. As section five describes, this is because the traditional models are too risky for the operator or government or too limited in scope to create lasting improvements. The remaining sections focus on explaining the design and procurement strategy for the two innovative PPP models, the phased performance based contract and the Joint Venture (JV) Partnership (section six and seven). These models have the potential to deliver better results than the traditional PPPs and business as usual scenarios. This is because in addition to reforming dysfunctional utilities into focused and accountable organizations, they are able to respond to information uncertainty, include strong incentives, have clear sources of funding, and promote capital efficiency. -
Publication
Institutional Agenda and PPP Options for Water Supply and Sewage in Ludhiana
(World Bank, Washington, DC, 2014-10)Water supply and sewage (WSS) operations in Ludhiana resemble that of many Indian cities; service levels are poor when compared to benchmarks; cost recovery is low; the municipal corporation subsidises operating deficits; the Government finances capital expenditure; assets are created through a State owned entity; internal capacity, systems and procedures are weak. The State Government has taken a decision to make key municipal corporations (including Ludhiana) responsible for future asset creation and also expects them to share capital expenditure. To improve the quality of service, the city needs immediate capital investments and change in management practices. Key institutional actions to achieve this are a) WSS operations focusing on higher cost recovery, b) increased contribution from the municipal corporation to WSS capital expenditure financing as opposed to O & M financing and c) modern governance structure for WSS operations. -
Publication
Achieving Financial Sustainability and Recovering Costs in Bank Financed Water Supply and Sanitation and Irrigation Projects
(World Bank, Washington, DC, 2012-06)This note is a partial response to the above mentioned 2010 Independent Evaluation Group (IEG) evaluation. It covers the specific issues to be addressed in the Water supply and Sanitation (WSS) sector and in the irrigation sector in two distinct parts, because if WSS and irrigation have some common features, there are many distinctions to be made. Among the various water-using sectors, that include navigation, fisheries, hydropower, rain fed agriculture, irrigated agriculture, WSS, and more generally 'the environment', cost recovery issues are of primary concern, and are the focus for this note, in the WSS and irrigation sectors. This preliminary background Note is divided in four parts: a 'history' of the call for financial sustainability and cost recovery and the parallel documenting of the lack of progress. This section ends with what this Note hopes to achieve in the face of what is clearly a deeply rooted problem; an outline of options to be considered for achieving financial sustainability of WSS service providers and recovering the costs of the WSS service through tariffs, i.e., from users and through subsidies; a discussion on what makes financial sustainability of irrigation projects different from WSS projects; and a summary of recommendations to teams involved in the identification, preparation, appraisal and supervision of water projects and of practical measures and actions that both the water sector board and the water anchor could take to help improve the Bank's track record in achieving and financial sustainability of the water projects it finances.