Friday, August 21, 2009

USAID Water Finance Website - launched

If one subscribes to the theory that true sustainability happens when development meets capitalism, then finance is clearly an important part of the solution to the global water and sanitation challenge, at many levels (e.g. capex, social entrepreneurs, microcredit/microfinance, etc.)

I do subscribe to that theory - with the 'poorest of the poor' caveat (grantmaking will likely never totally disappear) - so it's good to see USAID's Development Credit Authority launching their USAID Water Finance Website at Stockholm's World Water Week.

In USAID's words:
The Water Finance Website is designed to help you integrate finance into your broader WSH [Water, Sanitation, Hygiene] strategy. Financing is especially crucial to the development of WSH services because those services are very capital intensive. Just as WSH services need to be technically sound and sustainable from an environmental perspective, they also need to be financially sustainable in order to develop adequately. By including financing in the development of a strategy to promote pro-poor WSH services, you will be helping to assure that technical, environmental and health results achieved will continue beyond the end of funding any one individual activity.
Curious as to their definition of financial sustainability, I logged in and found this: "Financial sustainability is achieved when sufficient funding is available so that service providers can continuously reduce the number of poor and marginalized people who lack adequate access to WSH services."

One way or another, these services have to be paid for, by the government through public sector finance, or by private citizens, farmers, businesses. Those without such services are paying for that in time, healthcare costs, lost wages and other opportunities.

Note that most of the developed world does not of course meet this "financial sustainability" criterion for water and wastewater resources management or else we would not have a half trillion dollar financing infrastructure gap in the US alone. Stay tuned for more on water pricing.

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