Investing in water yields multiple benefits, including strengthening community resilience to climate change, supporting human and ecosystem health, and ensuring food, energy and economic security. The estimated cost of achieving SDG 6 globally is over US$1 trillion per year, however global investments fall far short of what is needed. To address this issue, a learning journey on Finance for Water Security through an IWRM approach was organised during the second half of 2022 on this Community of Practice. 120 community members and 350 additional participants were a part of this journey together with distinguished experts, exchanging and learning from each other through blog posts, online events, and discussions. The aim of the learning journey was to advance on a shared understanding around mobilising financial resources for water security. Based on this rich input, we would like to present the following four main take-aways from this learning journey:
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Whilst the water community needs to attract more funding and financing from a variety of sources, it also needs to make better use of existing resources. It is necessary to execute existing public funds more effectively, efficiently, and strategically for water. While public spending constituted around 86 percent of all spending in the water sector between 2009 and 2020, over one quarter of the budgets allocated was not used.
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The water community needs to get stronger at creating bankable water projects that can attract financing. It is important to have a broader understanding of the term 'bankability' and focus more on other returns such as the positive economic, social, and environmental externalities that these investments can provide instead of only focusing on the immediate return on investments.
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Generating formal collaboration schemes between the public and private sectors will be important to unlock additional financial resources for water security. Involving the private sector in funding water systems is increasingly a necessity in expanding the variety of investments and supplement limited government funds, since developing countries over the last two decades have only been able to cover 30-50 percent of their water investment needs through public funds.
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Positioning and connecting water better with the broader development and climate agenda will attract different funds for water-related sectors. It is necessary to emphasise the co-benefits water can create and the synergies that exist with other sectors and policy agendas, including climate adaptation and mitigation, biodiversity conservation efforts, sustainable development, health, and food and energy security, etc.
We appreciate your participation and are grateful for all the input you provided to this learning journey. To access a visual summary and find out more about the topic, go to Finance for water security through an IWRM approach - GWP.