Abstract
The water sector is broad and diverse, and the principle of Integrated Water Resource Management requires that all its components should be properly financed if they are to be mutually reinforcing. The scale of current water financing and its main sources are presented, prior to a discussion of basic financing principles. Moreover, trends in water financing are outlined, focusing specifically on the current interest in sub-sovereign entities. Future needs, opportunities and prospects are then discussed specifically in relation to four sectors: water resource management, hydropower, household water services, and agriculture. The chapter concludes by examining three potential impacts of globalization on water financing, namely: water footprints, virtual water and international trade; the globalization of water services; and international and local capital markets.
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Notes
- 1.
Unofficial estimates by the Water Supply and Sanitation Collaborative Council (WSSCC). This figure is broadly confirmed by Smets (2003).
- 2.
World Bank PPI project database.
- 3.
Something of clear public benefit that effectively has to be provided by governments because private individuals or firms would not be able to recover sufficient revenue from it. In the present context, flood control and environmental conservation are examples.
- 4.
A benefit that does not wholly or partly accrue to the party undertaking the action, but which affects others. This can also apply to a cost which affects third parties, which in such a case can be corrected by a tax or levy on the instigator.
- 5.
These and other examples are drawn from the article, “Are you being served?” The Economist (April 23, 2005).
- 6.
Following the classification used by the World Bank.
- 7.
This chapter was prepared for a Workshop in Costa Rica in April 2005. It may not reflect more recent events, particularly the repercussions of the international financial turbulence since 2008.
- 8.
The data records total investment in these projects, not just the contribution of the private partners. Definitions, and a full exposition of results, are contained in (World Bank/PPIAF 2003).
- 9.
A convention brokered by the Bank for International Settlements requiring banks to provide adequate capital coverage for their lending.
- 10.
Under Instruction 113 of the Superintendencia da Moeda e do Credito. The background to this, and further references, are contained in Winpenny (1972).
- 11.
This has the incidental effect of reducing the guarantor’s exposure to the project in the event of devaluation.
- 12.
Whether trade should take place, and in which goods, will depend on broader considerations of comparative advantage. Water is only one aspect of resource endowment, and technology and opportunity costs of all factors will influence trade (Wichelns 2004).
- 13.
I am indebted to Prof. Ernst Ulrich von Weizsacker for this striking phrase.
- 14.
Presentation by World Bank/MIGA at Bonn Water Conference (December 2001).
- 15.
David Lloyd Owen, presentation on “International water markets”.
- 16.
Typified by the conclusions and report of the joint conference of the OECD and World Bank Private sector participation in municipal water services in Central and Eastern Europe and Central Asia: facing a crisis of confidence in private sector participation in the water sector. Vienna, 2003.
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Winpenny, J. (2010). Global Trends in Financing Water. In: Ringler, C., Biswas, A., Cline, S. (eds) Global Change: Impacts on Water and food Security. Water Resources Development and Management. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-04615-5_8
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