New report on financing water infrastructure launched at World Water Week
A new Smith School report on financing water infrastructure has been published by the World Water Council (WWC) and launched at the Stockholm World Water Week last month.
Written by the Smith School's Dr Alex Money, the report proposes that changes in how private corporations engage with the challenge of inadequate water infrastructure, coupled with recent financial innovations can contribute to improved project returns and reduced risks.
There is a long known association between low returns and high-risk associated with financing water infrastructure. This finance challenge has contributed to the under-provision of water infrastructure in both the developed and developing world.
The new report 'Hybridity and Blended Finance' suggests a new framework comprising six suggestions for rethinking infrastructure finance as a first step towards piloting and implementing more effective financing - in what is one of the world's largest emerging markets.
In the report, Alex Money proposes the following suggestions for the market:
- Stakeholder collaboration to create entities for new sources of infrastructure finance.
- New and expanding roles for investors in financing infrastructure.
- Innovations in blended finance - the strategic use of development finance for the mobilisation of additional finance towards sustainable development.
- Movement towards new infrastructure projects that offer combined economic, financial, social and environmental returns.
- Disclosure of financial and non-financial returns to meet investor expectations.
- Mechanisms necessary to ensure sustainability and resilience of the model.
By rethinking how we engage with the challenge of inadequate water infrastructure, this report aims to be a first step towards improving the risks and low returns associated with water infrastructure projects.
The report was launched at the 2018 Stockholm World Water Week, the annual focal point for the globe's water issues which attracts over 3,300 participants from more than 300 convening organisations representing 135 countries.
Money, A. (2018) Hybridity and Blended Finance. World Water Council Report
More on blended finance in our Innovative Infrastructure Investment Programme