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Financing Investment in Water Security

Recent Developments and Perspectives

1st Edition - May 16, 2022

Editors: Xavier Leflaive, Kathleen Dominique, Guy Alaerts

Paperback ISBN:

9 7 8 - 0 - 1 2 - 8 2 2 8 4 7 - 0

eBook ISBN:

9 7 8 - 0 - 1 2 - 8 2 2 8 4 8 - 7

Investing in Water and Growth: Recent Developments and Perspectives addresses this conundrum in a cohesive and practical way. It is a one-stop shop for understanding why the… Read more

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Investing in Water and Growth: Recent Developments and Perspectives addresses this conundrum in a cohesive and practical way. It is a one-stop shop for understanding why the financing of water-related expenditures matters, what is at stake, and the options available to ensure water-related investment needs are properly financed in ways that generate benefits for communities and contribute to sustainable growth. The book combines the perspectives of policymakers, economists and financiers in a unique, multidimensional and multidisciplinary approach. The book is structured into four distinct parts that target a specific set of questions and content development.

Each section of the book has a multidisciplinary approach that provides a robust overview of key issues. The book combines different types of knowledge – from theory to practice, providing a full view of the topics discussed.

Cover Image
Title Page
Copyright
Table of Contents
Contributors
General introduction
A new conversation on financing water
A new context for the discourse
Ambition and scope of the book
Cross-cutting messages and ways forward
References
Part I Investing in water and growth: A global perspective
Chapter 1 If not now, when? Converging needs for water security, systemic change, and finance and investment
1.1 Water in the economy: multiple objectives and competing needs
1.2 Priorities: evolving global and national water agendas
1.3 Foundations: the investment case for water
1.4 Transitions: failing assumptions of plenty
1.5 New imperatives: adapting to climate change and the new systemic mission
1.6 Way forward: toward a new financing and investment agenda for water
References
Chapter 2 Water, physically connected yet institutionally fragmented—Investing in its strategies, asset classes, and organizations
2.1 Introduction
2.2 Water and land: Investing productively, recognizing limits, seeking efficiencies
2.3 Water-related assets, operational practices, and institutional architectures
2.4 Value, cost, and price—sometimes aligned, often not
2.5 Conclusions
References
Chapter 3 Financial structuring: key tool for water sector investments
3.1 Introduction
3.2 Financial structuring
3.3 The project cycle
3.4 Comparison with other sectors
3.5 Conclusions
References
Chapter 4 Financing instruments and the ecology of the financial system
4.1 Introduction
4.2 The ecology of the financial system: macroaspects
4.3 The ecology of the financial system: microaspects
4.4 Constraints on the financing of water investments in advanced economies
4.5 Constraints on the financing of water investments in emerging economies
4.6 Perspectives offered by the development of sustainable finance
4.7 Conclusions
References
Chapter 5 Critical disconnections between donor and domestic realities
5.1 Introduction
5.2 Project definition
5.3 Financing considerations
5.4 Domestic issues
5.5 Conclusions
Reference
Part II Investment Needs and Financing Challenges
Chapter 6 Characterizing financing needs and financing capacities in different regions: a global perspective on water-related financing flows and drivers for investment needs
6.1 Introduction
6.2 The need for water supply and sanitation assets and trends in investment
6.3 Current investment and financing flows for WASH
6.4 Drivers for and scale of future investment needs
6.5 Conclusions
References
Chapter 7 SDG 6 global financing needs and capacities to ensure access to water and sanitation for all
7.1 Introduction
7.2 Studies assessing financing needs to cover the capital costs of achieving SDG6
7.3 Methodologies used by costing studies
7.4 Global spending needs
7.5 Regional spending needs
7.6 Estimated financing gaps
7.7 Affordability
7.8 Conclusions
References
Chapter 8 Financing water for growth and development in Africa
8.1 Africa's water finance challenge
8.2 Transforming Africa's water finance and investment outlook
8.3 Opportunities to narrow the finance gap
References
Chapter 9 Financing water security in Asia
9.1 Background and rationale
9.2 Financing water security in the Asia Pacific region. Needs, capacities, and gaps
9.3 Market-based mechanisms and valuation tools to finance water-related investments in South-East Asia and China
9.4 Conclusions
References
Chapter 10 Financing mechanisms for water treatment projects in China
10.1 Introduction
10.2 Background on China water situation and relevant government entities
10.3 Various types of water projects
10.4 Development of sewage treatment in China
10.5 Funding for projects
10.6 Water conservancy projects using build-transfer modes
10.7 Emergence of public–private partnerships
10.8 Rooting out low-quality projects
10.9 Equity market for funding water projects
10.10 REITs to fund infrastructure projects
Chapter 11 Financing needs and capacities for the water supply and sanitation sector in the European Union
11.1 Introduction
11.2 The EU water sector—contextualizing investments in the EU
11.3 Assessing investment needs in the EU—methodological and data issues
11.4 Financing water supply and sanitation in Europe—the state of play
11.5 Financing water supply and sanitation in Europe—Projections to 2030
11.6 Options to close the financing gap for water supply and sanitation in Europe
11.7 Looking ahead: renewed ambition for water supply and sanitation in Europe
11.8 Conclusions
References
Part III Financing models in practice: Case studies
Chapter 12 Introduction to the water financing landscape: Select proven and emerging approaches
12.1 The water financing landscape: a brief introduction
12.2 Select proven models and emerging approaches: insights on prerequisites for replication
12.3 Reflections on future developments: a role for decision-ready data to inform financing
References
Chapter 13 Water infrastructure financing: the experience of the United States
13.1 Introduction
13.2 Federal policy support for local water infrastructure improvements
13.3 State revolving fund models: capabilities and designs
13.4 Water Infrastructure Finance Innovation Act (“WIFIA”) National Direct Lending Model
13.5 Context for the successful adoption of US water finance models
13.6 International context
13.7 A US water model adoption checklist
References
Chapter 14 Mobilizing private capital for large-scale ecological restoration and conservation: Insights from the US Experience
14.1 Introduction
14.2 The history of mitigation banking policy development
14.3 What is an ecological credit?
14.4 How credits incentivize investment: alignment of interests
14.5 Case studies
14.6 Lessons learned
References
Chapter 15 Tapping local capital markets for water and sanitation: the case of the Kenya Pooled Water Fund
15.1 Introduction
15.2 Background
15.3 KPWF structure
15.4 Challenges to establishing a revenue-based long-tenor debt financing facility in Kenya
15.5 WFF/KPWF business approach to successfully accessing private-sector financing
15.6 KPWF's comparative advantage
15.7 Further development of local capital market financing
Annex Detailed steps in transaction-related activities to support issuing the first pool bond
References
Chapter 16 Investing in catchment protection: The Water Fund model
16.1 Introduction
16.2 Principles and rationale
16.3 Application to catchment protection
16.4 Economic benefits and return on investment
16.5 Trends: cobenefits, water funds beyond source water protection?
16.6 Conclusions
References
Chapter 17 Leveraging private finance for landscape-level impact: the growing role for bankable nature solutions
17.1 Introduction
17.2 Support for bankable water solutions
17.3 Bankable projects case studies
17.4 Case study: Büyük Menderes river basin
17.5 The roles of the stakeholders in financing partnerships
17.6 Conclusions
References
Index