Event Report: Domestic resource mobilization and innovative finance (FFD)

4 Aug, 2015

The Government of the Netherlands and a strong group of co-sponsors (1) convened a well-attended side-event at the Third International Conference on Financing for Development to highlight perspectives on how the planned Sustainable Development Goal 6 on water and sanitation could be financed to reach the target by 2030.

The session showcased the successful scale-up in financing in two country case studies presented by ministers from Ethiopia and Kenya and hosted a panel discussion from a wide range of agencies involved in finance mobilization, moderated by Catarina de Albuquerque, the Executive Director of the global partnership, Sanitation and Water for All; and the session concluded with a significant statement of commitment by H.E. Mrs. Lilianne Ploumen (Minister for Foreign Trade and Development Cooperation of the Kingdom of the Netherlands).

The session highlighted how domestic resource mobilization was critical to achievement of goal 6 and to fill the substantial gap between current levels of finance and that required to meet the goal. Taxes (and higher budgetary allocations to water) and user tariffs are likely to remain the primary source of additional finance, but strategies and new ideas will be needed to leverage resources from all sources. Development assistance still plays a critical catalytic role to target resources to the neediest and build local systems and to help countries prepare “bankable” investments. Private sector water investments lag well behind other sectors: the perceived risks of private sector finance remains high for water and considerable effort by both governments and lenders is needed to improve the enabling environment to attract higher levels of private sector investment. Blended finance provides considerable potential to reduce the risks and encourage larger flows of private capital. At root, improving the governance of water service providers remains the keys to service growth and sustainability.

The meeting came out with: 11 core ideas on how to address financing SDG number 6; leading donor agencies announced significant new sector financing initiatives including increased aid, the development of up to 10 country water banks, and a a multi-donor trust fund; and a private agency announced an intention to develop a large global water fund, leveraging finance from the bottled water industry.

Read the full summary of the side-event

More photos on SWA’s Facebook page.

(1) Co-hosted by DFID, EIB, IRC, Government of the Republic of Kenya, OECD, SWA, UNSGAB, UNICEF, UN-Water, USAID, WaterAid, Water.org, The World Bank Group, and the WSSCC/Global Sanitation Fund.