Setting up local ‘Water Financing Facilities’ in 10 countries
| Type | Government announcement |
|---|---|
| Country | Netherlands |
| Government type | Central government |
| Scope | Global |
| Themes | Addressing systemic issues; Domestic and international private business and finance; Domestic public resources; Infrastructure; International public finance |
Description
The Netherlands will contribute to the financing of SDG#6 (“Ensure availability and sustainable management of water and sanitation for all”) with a new initiative that aims to make more effective use of ODA and ensure sustainable development of the water sector in the long term. In this initiative, the Netherlands intends to set up local currency denominated ‘Water Financing Facilities’ (or ‘Water Banks’) in 10 countries. These so-called ‘Water Banks’ can offer ‘pooled’ investment opportunities to private institutional investors, which reduces risks and transaction costs for lenders and increases the creditworthiness of water utilities, provided that they demonstrate discipline to repay the loans and pay the interest through regulated tariffs and increased revenue collection. This would make the water sector an appealing partner for financing by the local domestic capital market. The ‘Water Banks’ are an example of how ODA can leverage local private financing. In many countries, pension funds and insurance companies are interested in such opportunities.
Targets
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Indicators
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Resources
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Timeframe
2016-2020