Publication: Scaling Up Finance for Water: A WBG Strategic Framework and Roadmap for Action
Loading...
Other Files
458 downloads
Date
2023-08-17
ISSN
Published
2023-08-17
Author(s)
Editor(s)
Abstract
Water is a critical natural resource, a global public good, and an essential service. Water security is central for countries to achieve long-term development objectives in the current context of climate change, including protecting infrastructure assets, safeguarding agricultural production, producing sustainable energy, and protecting vulnerable populations. However, water resources are under severe stress and water services delivery is deficient due to underinvestment in the sector. Current levels of global investment in water are inadequate to meet the water sustainable development goals (SDGs) and address climate impacts. Large, coordinated flows of public, concessional, and private capital are needed to compensate for decades of underinvestment in the water sector, and to meet present and future challenges. Governments have a leading role to play in establishing the enabling conditions and necessary reforms to facilitate a greater flow of public and private finance for required water sector investments. International financial institutions and multilateral development banks need to support these efforts, together with other stakeholders, at the country level. The private sector, in addition to being a key user of water resources and a beneficiary of water services, has an important role to play in providing financing, innovative approaches, and expertise, as well as absorbing risk, with aligned incentives for achieving targets and efficiency levels. The World Bank Group recognizes the water-climate-food-energy nexus and the importance of a water secure world for all. The World Bank Group’s scaling up finance for water strategic framework outlines actions and priorities for national governments, the World Bank Group, and other development partners to improve the planning and mobilization of funding and financing for water sector investments, and to promote efficiency in spending. It aims to do so by optimizing the contributions of the public and private sectors and facilitating greater engagement of the private sector in the provision of capital, innovation, and expertise.
Link to Data Set
Citation
“Khemka, Rochi; Lopez, Patricia; Jensen, Olivia. 2023. Scaling Up Finance for Water: A WBG Strategic Framework and Roadmap for Action. © World Bank. http://hdl.handle.net/10986/40225 License: CC BY-NC 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication The Handshake : Why Do Governments and Firms Sign Private Sector Participation Deals? Evidence from the Water and Sanitation Sector in Developing Countries(World Bank, Washington, DC, 2006-06)This paper uses a new dataset, "WATSAN," of private sector participation (PSP) projects for water and sanitation in developing countries to examine the determinants of the number of projects signed for each country between 1990 and 2004. The new dataset improves on existing sources, in particular in its coverage of projects with local investors, and provides adequate data for cross-country regression analysis. The authors use a negative binomial regression model to investigate the factors influencing the number of PSP projects in a sample of 60 developing countries with 460 PSP projects. The regression results provide support for the hypotheses that PSP is greater in larger markets where the ability to pay is higher and where governments are fiscally constrained. The authors test several indicators of institutional quality and find that these are generally significant in determining the number of projects signed for each country. Measures of the protection of property rights and the quality of the bureaucracy emerge as the most important institutions that encourage PSP. Rule of law and the control of corruption are significant, albeit at a lower level, while the quality of contract law and political stability are not robustly significant.Publication Mozambique Country Water Resources Assistance Strategy : Making Water Work for Sustainable Growth and Poverty Reduction(Washington, DC, 2007-08)Mozambique's continuous efforts to sustain economic growth and reduce poverty face a number of constraints including its economic and political history, and its geography and climatic conditions. It is widely accepted that future economic growth of the country will continue to rely on its natural resources base and, specifically, on sustainable use of land and water resources. Mozambique has plentiful land and water resources that provide great potential for the production of a variety of crops, livestock development and industrial growth. However, high climate variability resulting in frequent recurrent droughts and floods, limited water resources availability in the most developed southern part of the country, high dependency on international water resources and very limited water management infrastructure result in the economy being highly vulnerable to water shocks and water being a constraint on growth and poverty reduction. The development of Mozambique Country Water Resources Assistance Strategy (CWRAS) was complementary to the Bank Country Partnership Strategy (CPS) process supporting its approach and priorities. It is consistent with the country's development priorities as defined in Second Poverty Reduction Support Strategy (PARPA II) and the sector priorities identified in the national water resources management strategy. The CWRAS' recommendations build upon the Bank's specific strengths vis-a-vis other development donors and, at the same time, are expected to guide the engagement of development partners and promote donor coordination and cooperation in the Mozambique's water resources sector. The main objective of this CWRAS is to assist the Government of Mozambique in prioritizing water resources interventions based on an analysis of Mozambique's changing socio-economic circumstances, and the areas of possible Bank engagement over the next 3-5 years.Publication Climate Change Impacts on Water Resources and Adaptation in the Rural Water Supply and Sanitation Sector in Nicaragua(2013-01)Climate change is at the top of the development agenda in Central America. This region, together with the Caribbean, is highly vulnerable to the effects of climate change in Latin America. Climate change is manifesting itself through higher average temperatures and more frequent droughts that result in higher water stress, and through the rising frequency of extreme weather events such as tropical storms, hurricanes, floods and landslides, all of which pose significant challenges in the rural water supply and sanitation sector. The paper starts with a review of the historic data on temperature and precipitation trends in Central America and particularly at the regional level in Nicaragua. The data reveal a clear trend of the growing climate variability, increased water stress for crops, and greater frequency of extreme weather events. The rising intensity and frequency of ex-treme weather events is among the most critical risks to the region's development agenda, and they translate into high economic losses. This paper examines the impacts and implications of potential climate change on water resources in Nicaragua and makes key recommendations to integrate climate change and rural water supply and sanitation policies and programs in a way that increase resilience to current and future climate conditions.Publication A Primer on Energy Efficiency for Municipal Water and Wastewater Utilities(World Bank, Washington, DC, 2012-02)This primer is concerned with energy use and efficiency of network-based water supply and wastewater treatment in urban areas. It focuses on the supply side of the municipal water cycle, including the extraction, treatment, and distribution of water, and collection and treatment of wastewater-activities which are directly managed by Water and Wastewater Utilities (WWUs). The main challenges to scaling up Energy Efficiency (EE) in municipal water and wastewater services stem from sector governance issues, knowledge gaps, and financing hurdles. Utility governance affects the overall performance of individual WWUs and influences decision making, incentives and actions for energy management. This is likely the most significant barrier to WWU EE in many developing countries. Addressing knowledge gaps requires efforts to systematize data collection, training, and capacity building at utilities, supported by local and national governments. Financing hurdles can be reduced by introducing dedicated EE funds to address large but disaggregated investment needs and by promoting third-party financing through energy/water savings performance contracts. This primer is part of Energy Efficient Cities Initiative's (EECI's) knowledge clearinghouse function to inform World Bank (WB) staff working in urban water supply and wastewater management, as well as in energy, about the opportunities and good practices for improving EE and reducing energy cost in municipal WWUs.Publication Financing Small Piped Water Systems in Rural and Peri-Urban Kenya(Washington, DC, 2011-09)In Kenya, community run small-scale water systems play a critical role in supplying and improving access to water services in peri-urban and rural areas. This is largely because municipally-owned water services providers currently supply only 25 per cent of the country's population and 39 per cent of the population within their service areas. Historically, under a centralized institutional structure, a large number of communities were tasked with managing and recovering the operating costs of small piped water supply systems installed by government. The importance of these community providers has been recognized in recent reforms of the sector. These provide for a legal and regulatory framework for community based organizations to engage in water service provision outside major towns and cities. However, a host of problems complicate efforts to support these community organizations to become reliable service providers, including their limited management capacity, low operating revenues and lack of access to finance. Efforts to license and regulate the operations of community water projects have been hampered by the slow implementation of policies aimed at decentralizing water service delivery to communities in areas not covered by municipal water services providers. In spite of considerable liquidity within the Kenyan financial sector, domestic banks do not typically finance investments in water infrastructure because of the long term nature of infrastructure finance and the perceived lack of creditworthiness of rural and peri-urban small scale water providers. Efforts to license and regulate the operations of community water projects (CWPs) have been hampered by the slow implementation of policies aimed at decentralizing water service delivery to communities in areas not covered by municipal water services providers. With the considerable public financial resources available in the water sector, the size of the market for a loan linked product is likely to be limited over the medium term. However, public funds are not sufficient to build the infrastructure required to effectively meet the demand for water services: hence the increasing focus on cost recovery tariffs and the considerable initiatives underway to access supplementary financial resources from the private sector.
Users also downloaded
Showing related downloaded files
Publication Global Economic Prospects, January 2025(Washington, DC: World Bank, 2025-01-16)Global growth is expected to hold steady at 2.7 percent in 2025-26. However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters. Against this backdrop, emerging market and developing economies are set to enter the second quarter of the twenty-first century with per capita incomes on a trajectory that implies substantially slower catch-up toward advanced-economy living standards than they previously experienced. Without course corrections, most low-income countries are unlikely to graduate to middle-income status by the middle of the century. Policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication World Bank Annual Report 2024(Washington, DC: World Bank, 2024-10-25)This annual report, which covers the period from July 1, 2023, to June 30, 2024, has been prepared by the Executive Directors of both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)—collectively known as the World Bank—in accordance with the respective bylaws of the two institutions. Ajay Banga, President of the World Bank Group and Chairman of the Board of Executive Directors, has submitted this report, together with the accompanying administrative budgets and audited financial statements, to the Board of Governors.Publication World Development Report 2024(Washington, DC: World Bank, 2024-08-01)Middle-income countries are in a race against time. Many of them have done well since the 1990s to escape low-income levels and eradicate extreme poverty, leading to the perception that the last three decades have been great for development. But the ambition of the more than 100 economies with incomes per capita between US$1,100 and US$14,000 is to reach high-income status within the next generation. When assessed against this goal, their record is discouraging. Since the 1970s, income per capita in the median middle-income country has stagnated at less than a tenth of the US level. With aging populations, growing protectionism, and escalating pressures to speed up the energy transition, today’s middle-income economies face ever more daunting odds. To become advanced economies despite the growing headwinds, they will have to make miracles. Drawing on the development experience and advances in economic analysis since the 1950s, World Development Report 2024 identifies pathways for developing economies to avoid the “middle-income trap.” It points to the need for not one but two transitions for those at the middle-income level: the first from investment to infusion and the second from infusion to innovation. Governments in lower-middle-income countries must drop the habit of repeating the same investment-driven strategies and work instead to infuse modern technologies and successful business processes from around the world into their economies. This requires reshaping large swaths of those economies into globally competitive suppliers of goods and services. Upper-middle-income countries that have mastered infusion can accelerate the shift to innovation—not just borrowing ideas from the global frontiers of technology but also beginning to push the frontiers outward. This requires restructuring enterprise, work, and energy use once again, with an even greater emphasis on economic freedom, social mobility, and political contestability. Neither transition is automatic. The handful of economies that made speedy transitions from middle- to high-income status have encouraged enterprise by disciplining powerful incumbents, developed talent by rewarding merit, and capitalized on crises to alter policies and institutions that no longer suit the purposes they were once designed to serve. Today’s middle-income countries will have to do the same.Publication The Impact of Climate Change on Education and What to Do about It(Washington, DC: World Bank, 2024-05-02)Education can be the key to ending poverty in a livable planet, but governments must act now to protect it. Climate change is increasing the frequency and intensity of extreme weather events such as cyclones, floods, droughts, heatwaves and wildfires. These extreme weather events are in turn disrupting schooling; precipitating learning losses, dropouts, and long-term impacts. Even if the most drastic climate mitigation strategies were implemented, extreme weather events will continue to have detrimental impacts on education outcomes.