Water

Water is not only a declared human right, necessary for life and health, but is also a key input into the global economy, powering manufacturing, turning energy turbines, and nourishing crops and livestock. With population growth the demand for water is accelerating and with climate change rainfall has become more erratic. Solutions to managing water variability and scarcity remain elusive, despite vast investments in infrastructure and generous funding for research (World Bank, 2017). 

The challenge lies in finding a way to use the world’s water more efficiently and make it available to all at a reasonable cost, while leaving sufficient quantities to sustain the environment. Green growth policies in the water sector can address issues of both quantity and quality by encouraging water-related innovation and investment in green infrastructure, and through integration with policies in other relevant sectors (World Water Council, 2012). 

Relevance to SDGs

Sustainable Development Goal (SDG) 6 addresses the sustainable management of water and includes the preservation of water-related ecosystems, including wetlands, rivers, aquifers and lakes.

Explore green growth resources relate to SDG 6:

SDG 6.2
          Quality          
   SDG 6.4
     use efficiency     
    SDG 6.5
     management     

Water-related investments cover a wide range of sectors, such as utilities, water storage and conveyance, irrigation, flood protection, urban drainage and water resource management. The investment needed to achieve universal and equitable access to safe and affordable drinking water for all in 2030 (SDG 6.1) is about three times the current investment levels, while companies also require substantial finance to reduce the risk of water scarcity to their business.

Climate change and global population growth means that water resources will be even more scarce in the years to come, with the World Bank estimating a 40% shortage between the available supply of water and the predicted demand by 2030. Addressing this imbalance is a pre-requisite for sustainable development and inclusive growth.

Historically, public finance has played a principal role in financing water investments. Yet, in light of the constraints on public finance and substantial investment needs, leveraging contributions from other sources of finance with different risk appetites can help to scale up investment. Blended finance is an important tool to improve the risk-return profile of water-related investments for commercial financiers: it can draw private sector financing into these projects, while leveraging and maximizing scarce public funds. The Water Finance Facility mobilises large-scale private investment from domestic institutional investors by issuing local currency bonds in the capital market in support of their own country’s national priority actions on water and sanitation service delivery. The Water Financing Program has been driving the Asian Development Bank’s water investments in the Asia and Pacific region and is supported by the Water Financing Partnership Facility with financial resources and technical support for components of investment projects.