A mission-driven approach to water finance

ABSTRACT The financing landscape in the water sector is plagued by overly short-term investment priorities, an outsized focus on de-risking private sector investments, rampant private equity financialisaton of water utilities in high-income countries, and international debt crises in low and middle-income countries, all of which detract from equitable and sustainable financing. These big problems in water financing quality can be addressed with approaches that centre public value. Aided by government institutions and public development banks, water projects can benefit from patient, long-term finance, contractual agreements that are governed by conditionalities designed to distribute risks and rewards between public and private entities, and partnerships whose goal is to promote equitable and sustainable water finance. Examples of these healthy approaches to water finance can be found around the world. The concept of Just Water Partnerships can provide a useful framework for embodying the solutions needed in water finance.