All countries face a growing funding gap as they try to keep up with the rehabilitation, operation, and maintenance of ageing water infrastructures. New water systems must also be built to cope with growing populations, shifting consumption patterns, and a changing climate. In developing countries, public and private investment has not kept up with the demand for water infrastructure, which increases costs in the long-run. The financial crisis threatens to bring even more uncertainty to an already underfunded sector with inherently low capacity to attract investment. This paper provides background information for development practitioners in the water and other infrastructure sectors. It outlines the major challenges related to financing the gap in global water infrastructure, including those systems that provide urban and rural water supply, and sanitation and irrigation services. Water infrastructure finance includes costs for capital works as well as the operations and maintenance costs that motivate sustainable service delivery.

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