Filling the Water Access Funding Gap

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More than two billion people still live without access to safe drinking water, and the global funding required to meet that need is estimated at $37.6 billion per year — which far exceeds available philanthropic and government funding.

This shortfall highlights the need for innovative finance mechanisms to fill the gap, but the water sector performs below other sectors in securing blended financing transactions. This may be partially due to market characteristics in the small water enterprise (SWE) sector, which lower the probability of sufficient financial returns and pose investment risks. For example, water systems require significant up-front investment and ongoing maintenance costs. Additionally, safe water production faces challenges with pricing regulations, power inefficiency and environmental hazards. Finally, affordability is critical when it comes to essential services like water and sanitation, which means the price for these services should not exceed 5% of household income. As a result of these factors, SWEs japan whatsapp number data sustain low margins and slow growth and remain vulnerable to regulatory shifts and environmental risks.

The challenges of the SWE market highlight the need for experimentation with innovative finance to understand best practices. As part of our efforts to develop and demonstrate affordable, economically viable solutions to the global water challenge, Safe Water Network is exploring innovative financing approaches to meet the long-term needs of the water enterprises we work with, which operate locally owned water stations in Ghana and India. To that end, Safe Water Network Ghana launched loan financing pilots in 2014 and 2019, lending to SWEs in our network in partnership with individual and institutional donors. The 2014 loan financed a capital expenditure investment in the Kwabre District, while the 2019 loan funded capital upgrades to nine of our water stations spread across Ghana. The pilots allowed us to test whether water stations in peri-urban communities were capable of repaying financing for the initial capital investment and future upgrades of water infrastructure.