World Water Council and OECD call for global action on financing water infrastructure
Today during the High Level Panel ‘Infrastructure Financing for a Water-Secure World’, the World Water Council and The Organisation for Economic Co-operation and Development (OECD) are calling on policy makers and business leaders to address financing water infrastructure to provide water security for the demands of the global population and global economy.
Financing and infrastructure are key themes at the 7th World Water Forum, the largest water-related event in the world which takes place in Daegu-Gyeongbuk (Republic of Korea) from April 12-17, 2015.
Financing infrastructure for a water-secure world
In ‘Water: Fit to Finance?’ - a report launched at the 7th World Water Forum – the World Water Council and OECD set out the increasing need for public and private partnerships to drive the construction of major water infrastructure schemes. They point towards a ‘risk and reward’ rationality among financiers as a barrier, which has resulted in water infrastructure projects being marginalized compared to other branches of infrastructure investment.
With the increasing use of water for all kinds of activities – agriculture, industry, energy – water infrastructure needs to be multi-purpose. But multi-purpose water infrastructure presents specific financing problems, in addition to those generic to water. The sums involved are typically large, some components are not financially profitable, many different stakeholders are affected and conflicts over priorities often arise between them.
However, evidence shows that existing financial sources are available alongside newer sources of funds, such as pension funds, insurance companies, water funds and Sovereign Wealth Funds, climate funds and Green bonds to finance the full range of products, services and functions needed for global water security. The investment is necessary today, since water supply and sanitation alone are expected to require USD 6.7 trillion by 2050.
“In the last decade water has has gained increased attention in the global political agenda. Yet despite the fact that financing for the water sector can easily be justified by the pressing need to adapt to global changes including climate, population growth and urbanization, investment in water infrastructure is underdeveloped.
Globally we are simply not doing enough”, says Mr. Benedito Braga, President of the World Water Council. “We must grasp the big picture connected to water and bring together investors, bankers, economic players and public officials to tackle the infrastructure deficit in new and creative ways.”
“It's important that we get water infrastructure right”, said OECD Secretary-General Angel Gurría.
“Governments need to think harder about coordinating the timing of different water investments, maximising their efficiency and being ready to exploit new sources of financing.” The report sets out seven proposals for action all convened around achieving water security for human needs, water security for economic development and water security for environmental sustainability, among governments and financial regulators, water regulators, international financing institutions, banks, commercial financing and investment institutions, industry and individual water users, water utilities, international and regional agencies.