IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i3p821-d203548.html
   My bibliography  Save this article

Financing for Water—Water for Financing: A Global Review of Policy and Practice

Author

Listed:
  • Guy J. Alaerts

    (IHE-Delft Institute for Water Education, 2282XS Delft, The Netherlands
    Global Center on Adaptation, 3072AP Rotterdam/9747AG Groningen, The Netherlands)

Abstract

The relationship between the water and financial sectors is explored through a review of past and current policies and practices, and new needs driven by growing water insecurity (i.e., drought and floods) and climate change. This paper focuses on emerging markets and developing economies. The “conventional” agenda of providing safe drinking water supply and sanitation has met with growing success. The newer water resources agenda covering flood, drought and irrigation, in contrast, has to address rapid alterations in the landscape due to destruction of catchments, and rapid water use growth. By approximately 2045 the world will transition from a predominantly water-abundant place to a predominantly water-scarce one. Though this masks large regional differences, pressure will grow to improve water management and broaden adoption of technologies and policies for recycling, desalination and water efficiency. Climate change will exacerbate these trends. Finance for the water agenda has been dominated by public budgets. To meet the SDGs, the need for finance in emerging markets and developing economies is 2–4 times larger than current practice. National budgets have grown significantly while international development assistance has grown modestly. Commercial finance holds promise but is constrained by high-risk profiles of many water investments: deals are small or risky and creditworthiness of water utilities and municipalities is weak. Access to commercial finance can be enhanced through blended finance, intermediary institutions and, increasingly, local capital markets. However, though the capacity to access finance is constrained in many developing economies, the capacity to absorb finance and prepare “bankable” proposals proves even more constraining. Climate change is emerging as a systemic threat to corporate and financial assets. Water insecurity undercuts the financial viability of production assets, services and real estate. It is argued that the longer-term interests of the water and financial sectors will converge.

Suggested Citation

  • Guy J. Alaerts, 2019. "Financing for Water—Water for Financing: A Global Review of Policy and Practice," Sustainability, MDPI, vol. 11(3), pages 1-25, February.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:3:p:821-:d:203548
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/3/821/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/3/821/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. United Nations Educational, Scientific and Cultura UNESCO, 2018. "Nature-Based Solutions For Water," Working Papers id:12643, eSocialSciences.
    2. Inderst, Georg & Stewart, Fiona, 2014. "Institutional investment in infrastructure in developing countries : introduction to potential models," Policy Research Working Paper Series 6780, The World Bank.
    3. Ho, Thomas S. Y. & Lee, Sang Bin, 2004. "The Oxford Guide to Financial Modeling: Applications for Capital Markets, Corporate Finance, Risk Management and Financial Institutions," OUP Catalogue, Oxford University Press, number 9780195169621.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christine Mawia Julius & Timothy C. Okech, 2021. "Moderation Effect of Government Regulation on the Joint Influence of Water Pricing, Infrastructure Financing, Utility Efficiency and Subsidies on Financial Sustainability of Water Service Providers in," International Journal of Economics and Financial Issues, Econjournals, vol. 11(3), pages 72-80.
    2. Di Vaio, Assunta & Trujillo, Lourdes & D'Amore, Gabriella & Palladino, Rosa, 2021. "Water governance models for meeting sustainable development Goals:A structured literature review," Utilities Policy, Elsevier, vol. 72(C).
    3. Narzetti, Daniel Antonio & Marques, Rui Cunha, 2021. "Isomorphic mimicry and the effectiveness of water-sector reforms in Brazil," Utilities Policy, Elsevier, vol. 70(C).
    4. Martin Roestamy & Mohamad Ali Fulazzaky, 2022. "A review of the water resources management for the Brantas River basin: challenges in the transition to an integrated water resources management," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(10), pages 11514-11529, October.
    5. Venis, Robbie A. & Taylor, Virginia & Sumayani, Paulina & Laizer, Marie & Anderson, Troy & Basu, Onita D., 2022. "Towards a participatory framework for improving water & health outcomes: A case study with Maasai women in rural Tanzania," Social Science & Medicine, Elsevier, vol. 301(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gordon L Clark & Ashby H B Monk, 2013. "Financial Institutions, Information, and Investing-At-A-Distance," Environment and Planning A, , vol. 45(6), pages 1318-1336, June.
    2. Torsten Ehlers, 2014. "Understanding the challenges for infrastructure finance," BIS Working Papers 454, Bank for International Settlements.
    3. Fay, Marianne & Martimort, David & Straub, Stéphane, 2021. "Funding and financing infrastructure: The joint-use of public and private finance," Journal of Development Economics, Elsevier, vol. 150(C).
    4. Talukder, Byomkesh & Hipel, Keith W., 2020. "Diagnosis of sustainability of trans-boundary water governance in the Great Lakes basin," World Development, Elsevier, vol. 129(C).
    5. Li, Zhi & Fang, Gonghuan & Chen, Yaning & Duan, Weili & Mukanov, Yerbolat, 2020. "Agricultural water demands in Central Asia under 1.5 °C and 2.0 °C global warming," Agricultural Water Management, Elsevier, vol. 231(C).
    6. Panagopoulos, Argyris, 2020. "A comparative study on minimum and actual energy consumption for the treatment of desalination brine," Energy, Elsevier, vol. 212(C).
    7. Yuan-Chien Lin & En-Dian Kuo & Wan-Ju Chi, 2021. "Analysis of Meteorological Drought Resilience and Risk Assessment of Groundwater Using Signal Analysis Method," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 35(1), pages 179-197, January.
    8. Yuan Zhi & Paul B. Hamilton & Xiufeng Wang & Zundong Zhang & Longyue Liang, 2018. "Game Theory Analysis of the Virtual Water Strategy," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 32(14), pages 4747-4761, November.
    9. World Bank, 2020. "Managing Groundwater for Drought Resilience in South Asia," World Bank Publications - Reports 33332, The World Bank Group.
    10. Hossein Mikhak & Mehdi Rahimian & Saeed Gholamrezai, 2022. "Implications of changing cropping pattern to low water demand plants due to climate change: evidence from Iran," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(8), pages 9833-9850, August.
    11. Guangming Yang & Guofang Gong & Qingqing Gui, 2022. "Exploring the Spatial Network Structure of Agricultural Water Use Efficiency in China: A Social Network Perspective," Sustainability, MDPI, vol. 14(5), pages 1-22, February.
    12. Purkayastha Dhruba, 2018. "Managing Credit Risk and Improving Access to Finance in Green Energy Projects," Working Papers id:12890, eSocialSciences.
    13. Cécile Hérivaux & Philippe Le Coent, 2021. "Introducing Nature into Cities or Preserving Existing Peri-Urban Ecosystems? Analysis of Preferences in a Rapidly Urbanizing Catchment," Sustainability, MDPI, vol. 13(2), pages 1-34, January.
    14. Paula Beceiro & Ana Galvão & Rita Salgado Brito, 2020. "Resilience Assessment Framework for Nature Based Solutions in Stormwater Management and Control: Application to Cities with Different Resilience Maturity," Sustainability, MDPI, vol. 12(23), pages 1-19, December.
    15. Gerd Lupp & Aude Zingraff-Hamed, 2021. "Nature-Based Solutions—Concept, Evaluation, and Governance," Sustainability, MDPI, vol. 13(6), pages 1-5, March.
    16. Gurara, Daniel & Presbitero, Andrea & Sarmiento, Miguel, 2020. "Borrowing costs and the role of multilateral development banks: Evidence from cross-border syndicated bank lending," Journal of International Money and Finance, Elsevier, vol. 100(C).
    17. Fatemeh Asghari & Farzad Piadeh & Daniel Egyir & Hossein Yousefi & Joseph P. Rizzuto & Luiza C. Campos & Kourosh Behzadian, 2023. "Resilience Assessment in Urban Water Infrastructure: A Critical Review of Approaches, Strategies and Applications," Sustainability, MDPI, vol. 15(14), pages 1-24, July.
    18. Daniel Sklarew & Jennifer Sklarew, 2018. "Integrated Water-Energy Policy for Sustainable Development," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 12(4), pages 10-19.
    19. Brennan, Michael & Rondón-Sulbarán, Janeet, 2019. "Transdisciplinary research: Exploring impact, knowledge and quality in the early stages of a sustainable development project," World Development, Elsevier, vol. 122(C), pages 481-491.
    20. Belén López-Felices & José A. Aznar-Sánchez & Juan F. Velasco-Muñoz & María Piquer-Rodríguez, 2020. "Contribution of Irrigation Ponds to the Sustainability of Agriculture. A Review of Worldwide Research," Sustainability, MDPI, vol. 12(13), pages 1-18, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:3:p:821-:d:203548. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.