ENABLING POLICIES FOR FINANCINGWATER RELATED SUSTAINABLE
DEVELOPMENT GOALSREGIONAL DISCUSSION PAPER

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELOPMENT GOALS
United Nations publication
Copyright: 8th World Water Forum, 2018.
All rights reserved
Printed in Thailand in digital format
ST/ESCAP/2839
Disclaimer:
The data, information and recommendations included in this publication were developed andcoordinated by the ESCAP Secretariat and the Secretariat of the Asia-Pacific Water Forum (APWF),
in consultation with regional subject-matter peers and experts. ESCAP Secretariat has provided
technical assistance throughout the process.
This publication has been issued without formal editing by ESCAP. The designations employed
and the presentation of the materials in this publication do not imply expression of any opinion
whatsoever on the part of the Secretariat of the United Nations concerning the legal status ofany country, territory, city or area, or its authorities, or concerning the delimitation of its frontiers
or boundaries. The content and views expressed in this publication are those of the authors anddo not necessarily reflect the views or policies or carry the endorsement of the United Nations.
Reference to a commercial entity or product in this publication does not imply endorsement.
Trademark names and symbols are used in an editorial fashion with no intention of infringement oftrademark or copyright laws. The publishing organization does not guarantee the accuracy of thedata included in this publication and accepts no responsibility for any consequence of their use.
This publication may be reproduced in whole or in part and in any form for educational or nonprofit services without special permission from the copyright holder, provided acknowledgementof the source is made. ESCAP would appreciate receiving a copy of any publication that uses thispublication as a source.
This publication is also available online at www.unescap.org

Foreword
The Asia and the Pacific region is facing critical water and development related challenges,
including increased competition for limited freshwater across key sectors, water and sanitation
access, aging irrigation systems, and untreated wastewater discharges. The region also endures
the most number of people affected by water-related disasters of any in the world. Governmentsof the region are facing severe pressures to provide more services, to fund their continuous water
operations and maintenance, and to brace for extreme water-related events.
The 2030 Agenda for Sustainable Development and the Sustainable Development Goals (SDGs)
provide a unique opportunity for the region to stimulate progress towards health and well-being
for all, as water-related Sustainable Development Goals centre explicitly on enhancing access for
all to safe water and sanitation, and the sound management of freshwater ecosystems.
The 3rd Asia-Pacific Water Summit and the 8th World Water Forum emphasized that governments
need to mobilise public resources and expand opportunities for impactful investments to achieve
the water related SDGs. This discussion paper is an outcome of those two regional sessions
and provides an overview of existing policies and an enabling approach for financing waterrelated SDGs. The evidence shows that, at present, existing sources of funding do not match theneed for investments to meet our region’s water-related commitments with a business as usualapproach. Indeed, current financing is directed primarily towards water supply and sanitation
infrastructure schemes, while the achievement of all other water-related SDG targets by 2030
remains fragmented and project-based.
Considering the magnitude of the financial requirements to meet these challenges, and based onrecommendations of the respective sessions, this paper proposes that public policy frameworks
be enhanced to help leverage own sources of funds, creatively tap into new sources and develop
innovative financing frameworks. In this regard, the policy-makers in the region have repeatedly
shown an interest to create conducive policy environments that ensure certainty for institutions
and businesses and robust returns on investments in their water markets.
The region also needs to strengthen integrated water resources management processes to build
coherence and promote better management of its water cycles, so that investments can bemobilized to help attain the water-related SDGs. Secretariats of ESCAP and the Asia Pacific Water
Forum (APWF) network remain committed to supporting Member States and sharing solutions to
help achieve the 2030 Agenda for Sustainable Development.
We look forward to continued collaboration and accelerating action throughout the region.

2

Ravi Narayannan

Stefanos Fotiou

Chair
Governing Council of the
Asia-Pacific Water Forum

Director
Environment and Development
Division, Economic and Social
Commission for Asia and the PacificKey Messages•

Water-related issues and SDGs are integral to the advancement of the global development
agendas and there is now strong global consensus and momentum to address water
challenges to contribute to the ‘2030 Agenda for Sustainable Development’, the ‘Paris
Agreement on Climate Change’, the ‘Sendai Framework for Disaster Risk Reduction’, and the‘New Urban Agenda’.

•

Regional discussions on implementation of the global agendas have highlighted the needfor innovative and sustainable financial instruments and for a regional monitoring systemon the financing of water-related SDGs. The importance of these issues have been affirmed
through the ‘Yangon Declaration: The Pathway Forward’ adopted at the 3rd Asia-PacificWater Summit.

•

Better analysis and understanding of the needs and opportunities along water cycles canhelp identify key intervention points to plan and mobilize impactful investments.

•

The region’s experiences indicate that universal access to water and sanitation services
cannot be attained solely through large‐scale projects and mega infrastructure financing;
local, nature‐based solutions and decentralized water management systems should also be
incentivized.

•

To enhance financing sources for the water‐related SDGs, governments must identify own
sources of funds to leverage concessional finance (development finance, low‐interest loans,etc.) and commercial finance. As such,-•the capacity to grow governments’ own source funding must increase to generate moredomestic revenue to improve water‐related services;
when possible, the region’s water service managers and providers may need to explore
utilisation of commercial, and in particular, domestic finance. Public utilities in thecurrent economic climate need to establish good impactful investment points that arestable and provide good long-term returns and minimize risks.

Levers for accelerating the regional momentum in Asia‐Pacific:-

Transparency: public trust is instrumental and a multiplier of the efforts
Regional cooperation and partnerships: no organization can solve the range of issues
on their own, and incentivising collaborative partnerships are important to bring together
necessary expertise
Capacity building: to transfer and mainstream expertise and increase capacity of
governments and utilities to enhance operations and maintenance
Credit-worthiness of public utilities: enhanced credit-worthiness and financial
sustainability will facilitate greater access to financing to improve water systems.
Localizing global agendas: the most critical water-related issues intersect in cities,
which must be engaged to untap opportunities to achieve development objectives
ESCAP, as well as other regional platforms and organisations, can play a key role inconvening member states, local governments, multilateral development banks, civilsociety, NGOs, academia and others to identify regional needs, share knowledge andfoster partnerships to support water-related SDGs.

3

Executive Summary
This discussion paper is focused on exploring policies, actions, and strategies to attain the
Sustainable Development Goals (SDGs) by improving the resilience of water systems andinfrastructure. This requires strategic mobilization of public resources and augmenting theopportunities for private investment. The contents of this discussion paper were developed andrefined based on the outcomes of two regional sessions, coordinated by ESCAP at the 3rd AsiaPacific Water Summit (3rd APWS, Yangon, 2017) and the 8th World Water Forum (Brasilia, 2018).
To attract investments and make progress towards the achievement of the water‐related SDGs,
countries in the region need to focus on policy actions and define strategic frameworks to improve
the financial sustainability and resilience of water systems and infrastructure. In all presentations,shared at various intergovernmental platforms, speakers pointed out that governments should
strategically mobilize public resources and expand opportunities for private investment.
Experts also shared various regional initiatives, including the lessons learned from macroeconomic
perspectives as well as local level innovations. The World Bank proposed a step‐by‐step framework
to improve the credit‐worthiness of utilities; the Asian Development Bank shared the lessons
learned in financing of the irrigation sector (the primary water‐user of the region), which involves
institutional, structural and financial reforms.
Apart from regional and national level experiences, various experts also shared practices forpossible replication, such as: (i) the experiences of Japan and other disaster‐prone countries in
the region; (ii) the experience in developing ODA financing tools to improve water security andfinancing of water infrastructure of the Republic of Korea and the Peoples’ Republic of China incollaboration with several developing countries; (iii) the example of privatization of operations
as conducted by Manila Water; and (iv) the decentralised financing schemes for wastewater
treatment systems, as shared by Indonesia. Effective regional examples are highlighted in water
cycle management, raising attention to the multiple entry points for impactful investments withinwater cycle loops, namely in the local water cycle loop (short, such as in water recycling in acity and at the community management scale), the medium loop (in water services for food andindustrial use), or in the long cycle (such as in storage, or in using cascading effects of nature in
the wastewater treatment).
Common approaches that focus on solutions to improve the overall sustainability of the watersector were identified. And, discussions covered opportunities to increase partnerships at theregional level to identify regional needs, share knowledge and foster partnerships to support thewater‐related SDGs in Asia‐Pacific, with the following potential areas of regional interventions:4•

improving the planning and implementation processes by creating an overall strategy andscenarios to enhance sustainable business models for water infrastructure;•creating funding and oversight programs and policy frameworks to incentivize decentralized
water management financing systems and collaborative partnerships; and•leveraging the role of the private sector to help attain water‐related SDGs and to implement
impactful investments from public and private sources.

Acknowledgements
Economic and Social Commission for Asia and the Pacific (ESCAP), as a member of the Governing
Council of APWF, has provided the strategic guidance for development of this discussion paper,
led by Mr. Stefanos Fotiou, Director of Environment and Development Division (EDD), and Mr. Curt
Garrigan, Chief of Sustainable Urban Development Section (SUDS). The overall coordination of
the Asia and the Pacific regional processes at the 8th World Water Forum was conducted by Mr.
Ravi Narayanan, Chair of the Governing Council of the Asia‐Pacific Water Forum (APWF), and Ms.
Yumiko Asayama, Manager, Japan Water Forum c/o APWF Secretariat.
The conceptual framing, regional technical coordination and writing was led by Ms. Aida
Karazhanova, Economic Affairs Officer, ESCAP; with essential technical inputs provided by Ms.
Yanan Liu (Figures 2, 4‐9) and Mr. Kwok Sum Law (Figure 1), Interns of ESCAP. Ms. Ingrid Dispert(Section 2.3) and Mr. Omar Siddique, Economic Affairs Officer, ESCAP (inputs to Chapter 3) also
contributed to the discussion paper. Ms. Marisha Wojciechowska‐Shibuya, regional consultant of
the 8th World Water Forum Secretariat, consolidated peer‐reviewed inputs and took a lead in thedrafting and editing of the discussion paper.
The scope of the key messages and several of the case studies and examples herein were shaped
from presentations made at the thematic Financing Session of the 3rd Asia‐Pacific Water Summit
in Yangon, Myanmar, 12 December 2017 and 8th World Water Forum, and through additional
discussions with network partners, namely:
•
•
•
•
•
•
•

Dr. Wah Maung, Director General, Center of Statistical Organization, Ministry of Planning and
Finance, Myanmar
Mr. Tomoyuki Okada, Director for International Coordination of River Engineering River
Planning Division, Water and Disaster Management Bureau Ministry of Land, Infrastructure,
Transport and Tourism, JapanMr. Sangwoo Park, Deputy Director, Water Resources Industry Team, Ministry of Land,
Infrastructure and Transport, Republic of Korea
Mr. Hao Zhao, Division Director, Department of International Cooperation, Science andTechnology, Ministry of Water Resources, P.R. China
Professor Le Huu Ti, Danang University, Vietnam
Mr. Tom Panella, Chief of Water Sector Group, Sustainable Development and Climate Change
Department, Asian Development Bank
Mr. Greg Browder, Global Lead: Water Security & Water Resources Management, World Bank

Specific studies were organised and peer-review inputs were provided by:
•
•
•
•
•
•
•

Professor Lawrence Surendra, The Sustainability Platform (TSP Asia), India
Ms. Simar Kohli Das, Bangalore, India
Ms. Meena Bilgi, Specialist on Gender and Sustainable Solutions, India; Steering Committee
Member on Gender and Water Alliance
Ms. Rieko Kubota, National Institute for Environmental Studies, Japan
Prof. Tony Wong, Chief Executive and Mr. Ben Furmage, Chief Operating and Financial Officerof Cooperative Research Center for Water Sensitive, Australia
Mr. Wouter Lincklaen Arriens CEO, TransformationFirst.Asia Pte Ltd, Singapore (former ADB
water issues expert, Manila)
Ms. Zhanara Sultanbekova, CEO of Investment Solutions ACME Co LTD (ADB consultant)

Design and layout: Mr. Jeff Williams. Cover Artwork: Mr. Angel Gyaurov.
Funds for the regional discussion paper writer to produce this paper were provided
by the Secretariat of the 8th World Water Forum.
5

Table of Contents
Key Messages

3

Executive Summary

4

Acknowledgements

5

Abbreviations & Acronyms

8

1.

Water‐related SDGs of the 2030 Agenda and the Outcomes of the 3rd
Asia‐Pacific Water Summit

10

1.1

Introduction

10

1.2

Water Cycle Management and Planning Financing to Meet Water‐
related SDGs

11

2.

Estimated Water‐Infrastructure Investment Needs to Attain SDG 6
within a Business as Usual (BAU) Approach

17

2.1

Water Supply and Sanitation Needs

17

2.2

Irrigation Needs

20

2.3

Water‐related Disasters Risk Reduction Needs

21

3.

Financing Conditions to Support the Water‐related SDGs

24

3.1

The Role of Public Policies in the 2030 Agenda and SDGs

26

3.2

Summary of Common Governance‐related Challenges

27

3.3

Role of the Official Development Assistance (ODA)

28

3.4

Role of the Private Investment

29

3.5

Enabling Policies and the Need for the Public Reforms

32

4.

Recommendations for the Way Forward with Policy Implications

41

4.1

Integrated Pathways for Implementing Water‐Related SDGs

41

4.2

Policy Actions and Measures for Achieving Water Related SDGs

44

4.3

Roles of Partners

45

Appendix 1: Yangon Declaration: The Pathway Forward

47

Appendix 2: Dataset of ODA for Water in Asia-Pacific, in Million US$,2010-2015

50

References

51

Figures and Boxes
Figure 1:

Planning efficiency of financing through water cycle and SDG target
investment points

13

Costs of Extending WASH Access under SDGs (2016-2030) Relative
to MDGs (2000-15)

18

Sufficiency of Financial Resources to Meet National Targets on
Drinking-Water

19

Investments in agriculture water markets across countries in Asia
(billion USD)

20

Figure 5:

Sources of finance for water supply and sanitation

25

Figure 6:

ODA flows to water sectors from 2010 to 2015 in Asia and Pacific region

28

Figure 7:

Private investment projects vs. amount of total investment in waterand sanitation (2000-16) in ESCAP

30

Trends of sanitation and water supply investments from private sourcesin ESCAP (2000-16)

31

Distribution of 548 private-invested projects in 21 ESCAP member
states (2000-16)

32

Figure 10: Stepwise process to full credit-worthy utilities by The World Bank

39

Figure 11: Key Factors Enabling Implementation of Water-Related SDGs

42

Figure 12: CoEvolve Northern Star-Green Building Live Performance Metrics
in Bangalore44

Box 1:SDG 6 Targets

11

Box 2:

Wastewater Innovation in Asia-Pacific15

Box 3:

Financing of Water-Related Disaster Risk Reduction in Japan21

Box 4:

Profile of Water Investment and Financing in China

25

Box 5:

Water Security Assistance by the Republic of Korea

29

Box 6:

Boost Local Economy by Wastewater Treatment through Subsidies
and Private Finance Initiative33

Box 7:

Toolbox of Financing Instruments and Policies for Water and Sanitation33

Box 8:

Tamil Nadu State, India, Empowering Municipal Decisions

35

Box 9:

Community Managed Water Supply Schemes in Gujarat, India

36

Box 10:Innovation Led Gradual Shift from Cross-Subsidy in Agriculture Sector37

Box 11:

Innovative Technologies and Financial Models

39

Box 12:

Crafting Communities for Change in a Megacity

43

Figure 2:
Figure 3:
Figure 4:

Figure 8:
Figure 9:Abbreviations & Acronyms
AF

Adaptation FundADB

Asian Development Bank

APWF

Asia Pacific Water Forum

APWS

Asia‐Pacific Water Summit

BAU

Business as Usual

BF

Borrowing Framework

CIF

Climate Investment Funds

DEWATS

Decentralised Wastewater Treatment Systems

DRR

Disaster Risk Reduction

ESCAP

Economic and Social Commission for Asia and the Pacific

GCF

Green Climate FundGDP

Gross domestic product

GIS

Geographic Information Systems

GIZ

Deutsche Gesellschaft für Internationale Zusammenarbeit

GLAAS

Global Analysis and Assessment of Sanitation and Drinking‐water

IGFR

Intergovernmental Fiscal Rules

IWRM

Integrated Water Resources Management

LLDC

Landlocked Development Countries

LDC

Least Developed Countries

MDG

Millennium Development Goals

MOU

Memorandum of Understanding

MDB

Multilateral Development Bank

NBS

Nature Based Solutions

ODF

Official Development Finance

ODA

Official Development AssistanceOSR

Own Source Revenue

PES

Payments for Ecosystem Services

PUP

Public‐Public Partnership

PPP

Public‐Private Partnership

RoI

Return on Investment

SDG

Sustainable Development Goal

SME

Small and medium‐sized enterprises

WASH

Water, Sanitation and Hygiene89ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

1. Water-related SDGs of the 2030 Agenda andthe Outcomes of the 3rd Asia-Pacific Water
Summit1.1 Introduction
Following the adoption of the far‐reaching and ambitious 2030 Agenda for Sustainable
Development in 2015, including the 17 Sustainable Development Goals (SDGs), countries
in all regions are aligning their growth and development needs with the SDGs, and identifying
strategies to accelerate implementation. The 2030 Agenda, and more specifically SDG 6, whichseeks to ‘Ensure availability and sustainable management of water and sanitation for all’, can serve
as a catalyst and help guide countries in their future policy developments and to meet criticalinfrastructure needs.
The Asia-Pacific grapples with substantial needs related to safe water and sanitation, wastewater
treatment, ecosystem health and water-related disasters. To meet the growing demand from anincreasing population, as well as to tackle the pressing reality of ensuring the resilience of water
infrastructure to the impacts of climate change, countries must tap into existing and new sourcesof finance. Long-standing obstacles have prevented optimal investment in the water sector
throughout the region, among others: inadequate pricing and incentives; weak credit-worthinessof water utilities; poor tariff structures; and a host of governance-related issues that weaken
the ability of water agencies and municipalities to seek recourse to market lending. Countries
with special needs, including the Landlocked countries (LLDCs), and Least Developed Countries(LDCs), for example, in Central Asia and Mongolia, also lack stable revenue sources to cover
operation and maintenance of the declining water infrastructure, further limiting their ability to
attract future investment.
The purpose of this discussion paper is to provide an overview and analysis of the issues offinancing water infrastructure needs in the Asia Pacific region to achieve water-related SDGs
and contributes to attaining SDG 6, SDG11.5, SDG 13, SDG 17. The special session on ‘Financing
Implementation of the Water-Related SDGs in Asia-Pacific’ during the 3rd Asia-Pacific Water
Summit (APWS) in Yangon, in December 2017, allowed experts and policy makers to discuss
efforts and to build on regional initiatives, as well as to identify priority areas of action. The
resulting ‘Yangon Declaration’ (Appendix 1) specifically calls for the region to:10•

Support the development of innovative and sustainable financial instruments that generate
low‐interest lending mechanisms, long‐ term cash‐flow and attractive returns for high‐impact water‐related investment at multiple levels and scales;•

Adopt innovative financial solutions such as reforming public finance, advancing Public‐
Public Partnerships, Public‐Private Partnerships, structuring blended finance, applying
Environment, Governance and Society investment and developing financial tools for long‐term investment;•

Focus on ex‐ante investment for infrastructure and community‐based efforts, including
disaster preparedness and risk reduction, in addition to post‐disaster recovery;

REGIONAL DISCUSSION PAPER•

Develop a regional monitoring system on the financing of water‐related Sustainable
Development Goals and targets, aiming at harmonizing and complementing national andinternational initiatives and incentivizing collaborative partnerships.

The combination of the management of water resources and urban, regional and national use
planning could be organized through integrated financing schemes and investment strategies.
As Asia and the Pacific is experiencing unprecedented urbanization, cities now become central
targets for action, not only due to the magnification of the issues in urban settings, but also interms of the untapped opportunities they provide to accelerate and expand progress.
The vast challenges to the achievement of water‐related SDGs by 2030 were highlighted by a recent
publication of the Asian Development Bank (ADB), which pointed out that the Asia and Pacificregion would require $800 billion, or $53 billion annually, in investment over the period 2016–2030
to meet water and sanitation infrastructure needs1 (which includes the costs of climate proofing
to ensure that infrastructure is resilient to the projected impacts of climate change). The paperbuilds on the lessons and case studies presented at the 3rd APWS, and served to guide discussion
at the 8th World Water Forum in Brasilia, Brazil, 19‐23 March 2018.
The paper is structured to focus on the following key areas:•

Estimated water infrastructure needs in the Asia Pacific region to attain water‐related SDGs;•

Investment points along the water cycles, where water‐related investments can be made toenhance the effectiveness of public financial resources, as well as opportunities at which toleverage private capital to support the water cycle management at national and local levels;•

The financing architecture available to countries to fund infrastructure improvements, withemphasis on Official Development Assistance and Private Investment.

On the basis of consultations at the 3rd APWS, it was considered instrumental to further strengthen
collaboration in undertaking research on the development of policy and decision-making tools so
as to support more participation of top-level policy makers in the region. As this paper identifies
investment points along the water cycles, these are also points at which collaborative multistakeholder partnerships (both centralized and decentralized) can be incentivized to improvewater infrastructure and management processes and to contribute to the attainment of the waterrelated SDGs in Asia and the Pacific and beyond.

1.2 Water Cycle Management to Understand Investments to Meetthe Water-related SDGs
Box 1: SDG 6 Targets
SDG 6.1. By 2030, achieve universal and equitable access to safe and affordable drinking
water for all.
SDG 6.2. By 2030, achieve access to adequate and equitable sanitation and hygiene for all
and end open defecation, paying special attention to the needs of women and girls in thosein vulnerable situations.

11ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

SDG 6.3. By 2030, improve water quality by reducing pollution, eliminating dumping
and minimizing release of hazardous chemicals and materials, halving the proportion of
untreated wastewater and substantially increasing recycling and safe reuse globally.
SDG 6.4 target is aiming by 2030 to substantially increase water-use efficiency acrossall sectors and ensure sustainable withdrawals and supply freshwater to address water
scarcity and substantially reduce the number of people suffering from water scarcity.
The SDG 6.5 by 2030: to implement IWRM at all levels, including through transboundary
cooperation as appropriate.
SDG 6.6 by 2030: to protect and restore water-related ecosystems, including mountains,forests, wetlands, rivers, aquifers and lakes.
SDG 6.a is aiming by 2030: to expand international cooperation and capacity-building
support to developing countries in water- and sanitation-related activities and programmes,
including water harvesting, desalination, water efficiency, wastewater treatment, recycling
and reuse technologies.
SDG 6.b by 2030: to support and strengthen the participation of local communities in
improving water and sanitation management.
The length of time freshwater takes to complete one revolution of the water cycle varies dependingon the area of the world, based on the frequency and quantity of precipitation events. In someplaces, it can take decades for the natural water cycle to regenerate2. As such, water must be
accounted for and managed to meet the year‐round needs of public and private users alike.
The Yangon Declaration from the 3rd Asia‐Pacific Water Summit (3rd APWS) calls on the region
to ensure sound water cycle managementi (See Appendix 1). In this regard, the policy makers of
the region have already shared interesting experiences to eliminate pollution of ecosystems at
the source, through effective water policy measures. For example, Japan has enacted a Water
Cycle law in 2014 to promote water cycle measures comprehensively and consistently. Australianpolicy makers started to apply the concept of Water Sensitive Cities in 2012 in city planning tostrengthen resilience of cities, by focusing on designing, building, managing cities through waterflows of its urban water cycle3.
To better manage water services in the urban and peri‐urban areas of the region, a package of
new policies and advanced technologies, which should consider the processes of the natural
water cycle and the dynamics of the natural ecosystems within the planning cycles, needs tobe developed and operationalized. This entails putting special emphasis on water recycling,
wastewater treatment, reuse and efficient water use, among others.
The current planning and management of the urban water cycle in the region usually relies onlong-term water recovery streams, where river basin management is based on the cascading
effects of water infiltration into the soil and ground. But medium and short-term water-recovery
streams, managed through deliberate interventions, could also be established within infrastructure
planning, to enable quicker water recovery loops.

iYangon Declaration at http://apwf.org/apwf_wp/wp-content/uploads/2017/12/Yangon-Declaration.pdf

12

REGIONAL DISCUSSION PAPER

This section illustrates the water cycle for policy makers to better understand and plan waterrelated investments and related SDGs by considering the processes of the water cycle. The longterm, medium-term and short-term water recovery loops of water cycles should inform planningof infrastructure and financing of water systems. This conceptual approach opens up key points
for interventions or investments, enabling multiple social and environmental benefits (including
enhanced resilience of infrastructure), which contribute to SDG targets. Direct and indirect Returns
on Investments (RoI) can be estimated at the intervention points to justify the strategic need for
impactful investments.
Financial planning within water cycles can also pinpoint where to augment value-based
opportunities for private investment and hence, strategically guide the mobilization of private
resources. By planning water-related interventions in sync with water cycles (See Figure 1), thecapacities of the water ecosystems would be maintained while benefitting from short-term as
well as medium- and long-term gains.
Figure 1: Planning efficiency of financing through water cycle and SDG target investment pointsii(source: ESCAP, 2018)ii

Note: the resilience to water hazards like flood and scarcity could be considered as extreme factors andconsidered within investment entry points.
13

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

Examples of planning investments, and hence weighing costs and benefits, through the water
cycle (or sustainability loops) lens:•Water‐use efficiency and water recycling generates smaller water‐feedback loops anddecreases regeneration time within the overall water cycle. Yet, the focus of policy makers
is often on the acquisition of additional freshwater resources, especially in water‐scarceareas – whereas the objective should be to only remove sustainable water quantities fromthe environment.

•

A water cycle investment framework would help identify the financial benefits of freshwater
storage within healthy ecosystems and water infrastructure during times of abundance, fortimes of water shortages.

•

Investing in wastewater treatment, in turn reduces contamination impacts of future
freshwater sources. Some innovative wastewater treatment initiatives stemming from theregion are listed in Box 2.

Examples of financing opportunities, as planning interventions, to support the water cycle (SeeFigure 1) could be grouped in three water‐recovery loops:iii•

Long-term water recovery loop (sustainability loop): follows the long-term planning andrelies on long-term recovery of water resources. The principles of nature-based solutions
within circular economy approaches can be applied to support water and green growthconceptual frameworks and are illustrated in the 2018 World Water Development Report on
Nature-Based Solutions to Wateriii. The investment points identified within this loop in thewater cycle could leverage actions towards relevant SDGs (SDG 6.1-6, 6.a-b), and could bebetter organized to control recovery, using project-based approaches.

•

Medium-term water cycle loop (sustainability loop): brings treated wastewater back into
the loop, linking with freshwater storage and infrastructure. Investments along this loop
can address issues such as leakage and the efficiency of wastewater treatment, while
contributing to freshwater savings. This cycle encompasses the on-going efforts of thegovernments of the region to enhance water productivity in irrigation and drainage toachieve food security and sustainable agriculture (mainly through attaining the SDG 6.4).
The development institutions, banks and governments have documented achievementsfrom such project in the region (SDG 6.b).

•

Short-term water recovery/cycle loop (sustainability loop): regeneration and recycling ofwater resources at the local and community scale; localized districts with inter-relationships
local scale solutions are being addressed historically and revisited to address the problems
with different parts of the water cycle holistically. Thus the issues could be better managed
at the community level (this is the focus of the targets of 6.5, 6.6, 6.b of SDG 6), for example,
within localized districts with internal infrastructure such as hotels/condominiums andcompact residential or commercial developments (See target 5 of SDG 11).

WWAP (United Nations World Water Assessment Programme)/UN-Water. 2018. The United Nations World
Water Development Report 2018: Nature-Based Solutions for Water. Paris, UNESCO.
14

REGIONAL DISCUSSION PAPER

Box 2: Wastewater Innovation in Asia-Pacific
The concept of wastewaters as a resource has been advanced in a few countries andpromotes water reuse, nutrient reuse and energy production:•

Republic of Korea plans to increase water reuse as part of their Green Growth Initiative,
where water is called the “Blue Gold”.

•

The NEWater in Singapore currently supplies about 30 percent of the national water
demand, especially for manufacturing utilization.

•

Operations and maintenance of the communal wastewater treatment system in Indonesia
is self‐sufficient and sustainable and plays a significant role in improving urban sanitaryconditions.

Shifting to water-hazard resilient infrastructure can improve the effectiveness and efficiency ofwater systems through a focus on the smaller and medium cycle loops. Introducing appropriate
infrastructure at these intervention points is ideal as they allow the cycle to mimic the natural
water cycle.
In addition, identified intervention points are also optimal entry- and exit- points at which to:•••obtain feedback on effectiveness of the operations and management, technological inputs;
inform on the socio‐economic and environmental impacts through respective data support,
andinform on the volume of the facilitation needed through financing, trade and investments.

As there are now more people living in cities than there are rural inhabitants in the region, cities areon the frontlines of the need to progress forward in the region. Furthermore, as half of the urban
population actually lives in secondary cities, which arguably face the most acute of the service
delivery, capacity and financing challenges, these cities provide particularly enticing opportunities
to implement innovative solutions.

15

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS16

REGIONAL DISCUSSION PAPER

2. Estimated Water-Infrastructure Investment
Needs to Attain SDG 6 within a Business as
Usual (BAU) Approach
In numbers:
6% of Asia-Pacific’s population is without access to improved water sources
1.5 billion people in the region still need to gain access to improved sanitation facilities toreach the SDG target.4

2.1 Water Supply and Sanitation Needs
The investment necessary to meet water supply and sanitation needs globally is estimated to be
US$ 1.7 trillion, which is three times the amount historically invested in the sector5. Over recent
decades, countries in the region, along with banks and financial institutions, have repeated theneed to increase investments in water and sanitation6. According to the Asian Development
Bank’s recent estimate, the Asia and the Pacific region will need $800 billion in investment overthe period 2016–2030 in water and sanitation infrastructure to meet the SDG targets, or $53
billion annually. This includes climate-adjusted investment needs.
Several ESCAP analytical reports7 present the available regional statistics on SDG6 and review
the baseline status, as summarised below:•

In 2015, 94 percent of the population in Asia‐Pacific had access to improved drinking water8,
yet 300 million people still lacked access to improved drinking water sources, mainly incountries of South and South‐East Asia;•

In 2015, only 65 percent of the population had access to improved sanitation facilities9
and about 1.5 billion people lacked access to safely managed sanitation services. Open
defecation practices in Asia and Pacific have dropped substantially over time, though it
is still a prevalent practice for 15.9 percent of the total population, mainly in rural areas ofSouth and South‐East Asia;•

According to estimates of ADB and reports of ESCAP, 80 to 90 percent of all wastewaterproduced in the Asia and Pacific region is released untreated10, with alarming situations incoastal zones of South and South‐East Asia. In 2011, only 21.3 percent of total produced
wastewater was treated in South and South‐West Asia; 82 percent and 84 percent of waste‐waters went back into ecosystems untreated respectively in Pakistan and Armenia; in 2012,
it was 77 percent and 81 percent for Thailand and Viet Nam, respectively. Singapore isreported in 2015 as the only country that achieves 100 percent of treated wastewater11;•

The investments for wastewater and drinking water in Asia reached over US$ 50 billion in2015, Japan dominating with a total market share of about 33 percent12.

A number of reports have estimated the significant increase in water and sanitation investment
required to ensure Water, Sanitation and Hygiene (WASH) access:•

The World Bank estimate of costs to extend the WASH access under SDGs relative to the
MDGs to be USD 112 billion (Figure 2);

17

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS•

The 2017 Global Analysis and Assessment of Sanitation and Drinking-water (GLAAS) annual
report by the World Health Organization (Figure 3), wherein globally 80 percent of countries
report insufficient financing to meet national WASH targets (and many countries in Asia andthe Pacific are lagging significantly in this regard);•

The global capital financing for the physical service infrastructure excluding operation andmaintenance costs, would need to triple to achieve the targets of the water‐related SDGs by
203013.

Figure 2: Costs of Extending WASH Access under SDGs (2016-2030) Relative to MDGs
(2000-15)14

As one possible means to tap into and engage large‐scale capital pools, the global sanitation
issue could be addressed at the local and decentralised level. For instance, through:18•

identifying impactful investments: at the 2nd Asia‐Pacific Water Summit (Chiang Mai, 2013),
ESCAP submitted proposals to implement impactful investments and financing schemes
for sanitation16;•

organizing local financing schemes and determining RoI from decentralized wastewater
treatment systems (DEWATS). There are a number of pilot examples of DEWATS in theregion (although still at the project level in South‐East and South Asia). ESCAP, UN‐Habitat
and AIT have outlined the Policy Guidance Manual on Wastewater Management with a Special
Emphasis on DEWATS17;•

incentivising the outcome based models of financing water and sanitation services, usinga system-thinking approach would allow to mix centralised and decentralised solutions
and optimise the individual components through integrated approaches, as in Australia’s
Cooperative Research Center for Water Sensitive Cities.

REGIONAL DISCUSSION PAPER

Figure 3: Sufficiency of Financial Resources to Meet National Targets on Drinking Water15

Note: Survey reported by GLAAS (2017) on sufficiency of financing to reach national targets in drinking‐waterin urban and rural area: countries in red represent those in need of the largest amount of financial resources tomeet their national targets on drinking‐water; in green are those that need fewest financial resources to meettheir national targets on drinking‐water.

A state policy framework and investments that enable small-scale projects (like DEWATS, thatturn wastewater into resources, ensure flood prevention and drinking water protection measures,
serving 1000 households) could be combined with financing schemes. These policies could
center on subsidising service providers and declining operational subsidies of PUP, building up
appropriate tariff and fee-based system, and should further secure service providers’ jobs while
ensuring better returns on investments (RoI). Further RoI could be achieved by diversification
measures that would be accountable and contribute to the state revenue incomes. These SMEs
could take on the functions of the service providers and would contribute to better use of thewater and sanitation service lines in different sectors, such as in servicing the food supply andenergy needs.

19

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

2.2 Irrigation Needs
Overall, 71 percent of the freshwater withdrawals in the region are used for agriculture, and inSouth Asia agricultural water withdrawals are up to 91 percent (2014)18. By 2050, agriculture
will need to produce 100 percent more food in developing countries, using diminishing water
resources in the face of climate change impact and rapid population growth, which will increase
the need for irrigation. The most reliable estimates for the Asian region, though these still needdata refinement, place the annual investment required for irrigation management, operation andmaintenance, between 2005 and 2030 at $12.31 billion, according to ADB (2017).
Figure 4: Investments in agriculture water markets across countries in Asia (billion USD)19

Irrigation relies almost entirely on public financing, and irrigation investments have been on an
upward trend throughout the region (See Figure 4). Official Development Assistance (ODA) andinternational financing support has also contributed substantially. ADB’s irrigation lending, whichin 2016 comprised 14 percent of its overall water sector lending (as compared to 40 percent
in 1990) is set to increase again over the next few years, with over US$ 15 billion of proposed
lending in the pipeline.
The region’s irrigation and drainage infrastructure suffer from neglect and decline, resulting inpoor service, low charges, meagre revenue collection, underfunded operation and maintenance,
delayed essential maintenance, and system failures. Inadequate funding of management,
operation, and especially maintenance, is a vital factor in the widespread deterioration of surface
irrigation systems across Asia. With land in short supply, there is little scope for creating major
new schemes, and the core challenge is ensuring adequate financing for the recurrent spending
and rehabilitation investment needs of existing large publicly owned and managed surface
irrigation and drainage schemes.
Compounding the complexity of the issue, some countries in the region are facing water resourcesthat are under stress with significant consequences on livelihoods. The latest data (2012),
available for 11 countries in the region, indicates that the water resources of two countries areunder stress and one is even under severe stress20.
20

REGIONAL DISCUSSION PAPER

2.3 Water-related Disasters Risk Reduction Needs
Policies to achieve the targets of SDG 6 should also enable measures to achieve the targets of
SDG 13 by 2030, by Taking Urgent Action to Combat Climate Change and its Impacts.
In numbers:Though the Asia-Pacific region is the world’s most disaster-prone region, only 18 out of 58
countries are known to have legislative or regulatory provisions for reducing disaster risk.21
While the needs to support water‐infrastructure in both developing and developed Asia are known,
natural disasters, such as droughts, tsunamis and floods are still difficult to predict and forecast.
Asia‐Pacific is highly exposed to water‐related disasters with more than 4,000 events reported
since 1970, resulting in more than two million casualties. During the same period, 6.5 billion
people from the region were affected, and around US$ 1.3 trillion in assets were lost to disasters,
impacting housing, transport, agriculture, energy and water and sanitation infrastructure22.
The increased climate variability and extreme weather conditions are expected to severely affectthe region, with floods and droughts predicted to increase in both magnitude and frequency.
Climate change could also cause huge economic losses. For South‐East Asia, it has been
estimated that climate change may reduce the region’s gross domestic product (GDP) by up to
11 percent by 210023.
The High‐level Experts and Leaders Panel on Water and Disasters (HELP), established in 2007 by
the UN Secretary General’s Advisory Board on Water and Sanitation, has set out the goal to double
the financing and investment for water‐related disaster risk reduction. The 3rd Asia‐Pacific Water
Summit’s Yangon Declaration24 also calls for doubling the region’s investments in infrastructure
and community‐based efforts to address water‐related disasters. Japan’s experience in this regard
attests to the fact that pre‐disaster prevention measures save lives and property and should beconsidered as investments in the future, not as costs (See Box 3).

Box 3: Financing of Water-Related Disaster Risk Reduction in Japan(MLIT, Japan) Excerpts from a presentation of Mr. Tomoyuki Okada, delivered at 3rd Asia‐
Pacific Water Summit, Yangon, Myanmar, 12 December 2017
The goal that the High‐Level Experts and Leaders Panel on Water and Disasters (HELP) has
set out is to double the financing and investment for water‐related disaster risk reduction.
•

Principle 1: Water‐related disaster risk reduction is indispensable for socio‐economic
development. Counter‐measures implemented in advance against water‐related disasters
are not a cost, but an investment in the future.
Tokai storm in Japan, 2000:
Actual damage of the storm = Yen 670 billion / almost USD 6 billion
Preventive measures implemented after the disaster for a cost of = Yen 71 billion
If they had been implemented before the disaster it could have saved Yen 550 billion, with
7.7 effectiveness ratio•

Principle 2: Pre‐disaster prevention measures should be prioritized. Investment for the
maintenance and management of infrastructure should be secured to cope with its aging
issues and the loss of functionality.

21

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALSJapan: The ratio of river facilities that are over 40 years old: 2011‐ 40 percent, 2021‐ 60
percent, 2031‐ 80 percent. As the number of aging infrastructure is rapidly increasing, therisks of disasters are growing.
•

Principle 3: Governments should improve their fiscal systems and secure sufficientbudget.
Japan: the number of fatalities has decreased rapidly over the years, as a function of
investment in disaster management.

•

Principle 4: Various funding sources should be explored and mobilized.

Despite more frequent disasters and economic losses on the rise, funding to reduce disaster risk
has only marginally increased. Funding levels for Disaster Risk Reduction (DRR) are not meetingthe current needs and the gap is only widening with newly generated risk. The region is therefore
exploring new regional financing mechanisms and investment funds. The ESCAP Multi‐Donor
Trust Fund for Tsunami, Disaster and Climate Preparedness25, for example, has contributed
significantly to the progress made in building regional and national early warning systems forwater‐related hazards. Since its establishment following the 2004 Indian Ocean Tsunami it has
supported 26 projects with a total budget of approximately US$ 15.5 million, directly benefitting 19
countries. Projects cover mostly aspects of early warning, including but not limited to: monitoring
and warning services that provide support to lower capacity countries; risk maps for community
preparedness planning; development and testing of Standard Operating Procedures (SOPs);
education and public awareness raising activities; strengthening of warning dissemination; and,emergency drills.
Disaster risk reduction investment priorities should reflect the value of diversification of water
sources, and no regrets infrastructure investment. The potential role of communities in mitigating
the risk of, responding to, and recovering from disasters, as well as the scope for a more active
partnership between authorities and local communities are other streams of intervention toadvance throughout the region.

22

REGIONAL DISCUSSION PAPER

23

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

3. Financing Conditions to Support theWater-related SDGs
In most developing countries, city governments face challenges of creating infrastructure/local
public goods in the context of globalization (that increasingly demands quality infrastructure), andcontinued migration of people (often the poor) into cities. These drivers of change have impacts
on sustainable development. The effects of these public goods, for example, improved roads andtransport on higher growth trajectories, cleaner water and sanitation on lowering morbidity, andgreen spaces that improve sustainability are well understood and reflected in most development
strategies. There is also ample evidence that these huge infrastructure gaps in Asia‐Pacific cities
are holding back opportunities to reduce poverty and decrease environmental degradation.
The water sector in the region has historically relied on non-repayable public funding to meet
its investment needs – through taxes, transfers and tariff systems. But there are issues related
to lack of prioritization of water by national and local authorities, poor management, and someresistance to cost-recovery tariffs. Cost recovery below operating and maintenance costs has
proven to be a key factor for maintaining the current system and credit worthiness of projects tomeet future needs. Achieving adequate tariff structures needs to go hand in hand with improved
metering and billing information, if they are to be used to drive more efficient water demand,rather than just act as a tax.
For example, the water tariffs currently in use in most cities in South Asia are not accomplishing
their principal objective, which is: to support the operational costs and generate surplus forinvestment. They are not generating sufficient revenues to ensure utilities can recover theirfinancial costs. They are not sending the correct economic signals to households, i.e., that wateris scarce and must be treated as a valuable commodity. To address this, metering and wateraccounting could be promoted as a priorities for improving systems operations and investments.
To further compound the problems, many poor households are not connected to the piped
distribution system26. The current financing architecture relies mainly on public investments, andcost‐recovery and fiscal management of these existing investment flows are fundamental to thediscussion on mobilizing private and ODA investments for water – all of which could be viewed
through the lens of the SDG framework. Though not covered here, mention ought to be made thatclimate funds (CIF, AF, GCF)27 are being created to support the water infrastructure needs.
For water supply and sanitation specifically, sources of finance stem from four sectors, including
domestic public sector, domestic private sector, international donors, and international private
sector (See Figure 5). The bulk of water supply and sanitation funding hails from the domestic
public sector, accounting for 65 percent to 70 percent of total finance sources. Globally,
international donors and the international private sector compose 10 percent to 15 percent of
total finance sources respectively. The domestic private sector accounts for 5 percent of financesources for water supply and sanitation28. As a case in point, the specific investment and financing
profile in China is presented (see in Box 4) with the breakdown of the blending of public funds,
loans, corporate bonds and private funds in a split of 45:42:13 percent.

24

REGIONAL DISCUSSION PAPER

Figure 5: Regional sources of finance for water supply and sanitation29

Box 4: Profile of Water Investment and Financing in China
Ministry of Water Resources Government of China. Excerpts from a presentation of Mr. Hao
Zhao, delivered at 3rd APWS, Yangon, Myanmar, 12 December 2017
Between 2011 and 2015, China invested more than 2 trillion RMB in water projects, which
is close to three times that which was spent in the period of the “11th Five Year Plan”(2006‐2010).
Funding for the development of water infrastructure in China originates from the following
three sources:•

44.7 percent from fiscal funds: budgetary appropriations, water infrastructure construction
funds, water resources fees, and gains from land transfer used for development offarmland water infrastructure;•

42.5 percent from domestic and international loans and corporate bonds, etc.;•12.8 percent from social funds: investments from enterprises and individuals.

25

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

3.1 Recent Trends in Public Policies to support the 2030 Agenda
and SDGs
In numbers:
31 out of 32 Asia-Pacific countries with reported data have been developing water management
plans, though only a few have reached the stage of advanced implementation.30
Since the 1990’s, there is an increased emphasis in most countries, on local empowerment,
reflected through national legislation. Decentralization laws typically embody the principle that
local public goods, such as water, are best produced and financed locally, based on demand‐
driven needs that are articulated through community processes. This agenda appears to be anear universal trend, across countries of varying levels of economic development and requires
city governments to have the authority to plan, design, finance and pay for the public goods thatthey produce. (See the French decentralization laws 1983, India ‐74th Constitutional Amendment
in 1992, South Africa‐Municipal Finance Management Act, Philippines‐Local Government Code
1991, etc.).
However, the implementation of this decentralization agenda has been unbalanced in many
countries, with the responsibilities transferred from national to local levels usually unmatched by
the transfer of necessary powers and resources, often leading to functional (who does what in thecity?) and geographical fragmentation-governance boundaries are slow to catch up with the urban
and often dense settlements outside city jurisdictions (i.e.: which governance unit is responsible
for water services?). This is obvious in most metro cities and often affects water infrastructure
creation and service delivery in small and medium cities. Governance reform to reduce both typesof fragmentation (by introducing accountability of parastatals to local governments and flexible
municipalization criteria to handle the physical expansion), are necessary and underway in mostcountries.
To meet the water‐related SDG needs, the region must focus on policy and actions with multiple
positive impacts, which improve both the financial sustainability and resilience of water systems
and infrastructure. The reality is that mega water projects are capital intensive with high up‐
front costs and long payback periods, which necessitate financing in long‐term maturities andwith sufficient grace periods to accommodate long construction schedules especially for major
network expansion. Government‐owned systems often do not have significant capacities tomanage large‐scale projects or to mobilize capital financing. In addition, private investment will
not flow to systems that cannot demonstrate proper fiscal governance, efficient operations andreturns on investments.
In most countries, government‐owned systems or organizations are responsible for drinking
water supply, wastewater treatment and irrigation. Hence, the region needs to strategicallymobilize its public resources and enhance its fiscal management of water systems to increase
service providers’ cost‐recovery of their water services, which in turn will also facilitate expanded
opportunities for private investment.
The financing for water‐related infrastructure to attain the SDGs should rely increasingly oncommercial and domestic finance. Public utilities in most developed countries have reliedprimarily on commercial and domestic finance for over 100 years, and many emerging markets
are starting to tap into this as well, particularly in the energy and transport sectors, as reported by
The World Bank at the 3rd Asia‐Pacific Water Summit (3rd APWS, Yangon, December 2017). While
it may result in immediate higher costs, these costs can be offset by risk mitigation instruments
and by the appropriate blending of public and concessional funds with domestic commercial
finance.
26

REGIONAL DISCUSSION PAPER

According to the World Bank (as per the presentation delivered at the 3rd APWS), capital andcommercial financing is currently in search of long‐term investments and moderate but risk‐
free returns, which the water sector has the potential to offer. In the current low interest rateenvironment, infrastructure investments are a pretty good option for financiers. The water sector
has not been very successful in mobilizing commercial finance to date. However, public financing
needs to be used more specifically with the aim of increasing the cost‐recovery of services (i.e.:
own‐source revenue), through enhanced fiscal management and building local capacities ofmunicipalities and water service providers.
Water-related interventions do not necessarily all require additional financial resources. Many
initiatives, such as nature-based solutions, can involve redirecting and making more effective useof existing financing. A comprehensive package of interventions includes tested enabling policies
to enhance governance, local capacities, technological innovation and creative partnerships.
Finally, by looking at where investments can yield the best returns, a water cycle overview mustremain at the core of the decision-making – so that by solving one water-related issue upstream,
we are not creating another or bigger problem downstream. A water cycle overview steers towards
specific entry and exit investment points that yield multiple benefits.

3.2 Summary of Common Governance-related Challenges
The current assessment of investment trends, and opportunities of water and sanitation markets
in the Asia‐Pacific region was documented in an ESCAP discussion paper on water markets
in 201631. The study demonstrates that increased investments in regional water infrastructure
depend on main drivers such as, regulatory and legislative conditions, and environmental
protection initiatives.
Obstacles that have prevented optimal investment for the water sector in Asia and the Pacificinclude key governance-related issues32:•

Inadequate pricing (tariffs and fees) and incentive structures and ineffective cost recovery
models.

•Uncoordinated policy responses to competing sectoral water demands.

•

Poor management of scarce water resources.

•

Lack of innovative approaches to financing water and sanitation infrastructure, such as
public‐private partnerships and the absence of community and private sector involvementin the development of water and sanitation services.

•

Lack of commercialization and privatization models, resulting in continuation of inefficientpublic‐sector monopolies.

•

Unsustainable financial models in municipal or water agencies, limiting recourse to market
lending33.

•

Property rights need to be well defined and enforced and supported by good information
systems based on the projected flows of future benefits and costs.

27

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS•

As governance‐related issues, especially poor cost‐recovery models, can significantly
limit opportunities for financing the water sector, the leadership of governments and theempowerment of municipalities to strengthen governance and fiscal management are
central to attract more investment for water and sanitation infrastructure.

3.3 Role of Oﬃcial Development Assistance (ODA)
International collaboration in terms of exchange of knowledge and technology dealing withflood control, water quality, urban drainage, disaster prevention and mitigation, and the aquatic
environment can bring tremendous assets to the water sector workforce. ODA often closes thegaps particularly in funding of educational programs to effectively train water professionals indeveloping Asian countries. The total amount of ODA into water sectors in Asia and the Pacific
was about US $4.5 billion per year, from 2010 to 2015 (See Figure 6). Water supply and sanitation
attracted the bulk of the ODA flows in the water sector, though flows to water supply andsanitation - large systems shrunk by half, from US $1,066.8 million in 2010 to US $581.2 million
in 2015. Among all the water sectors in Asia and Pacific region, ODA flows into the categories
of water supply, sanitation, basic drinking water and sanitation, water resource policy, show an
upward trend line from 2010 to 2015. Flows to basic sanitation, which were US $50 million in2014, approximately doubled to US $91 million in 2015.
Together with many Western countries, Japan and Korea are major players in the water andsanitation market of the region due to their significant investments in the sector in the form ofODA (See example in Box 5 for ODA by RoK).
Figure 6. ODA flows to water sectors from 2010 to 2015 in Asia and Pacific region34

Note: the data used for this figure is detailed in Appendix 2.

28

REGIONAL DISCUSSION PAPER

Box 5: Water Security Assistance by the Republic of Korea
Ministry of Land, Infrastructure and Transport (MOLIT), Republic of Korea. Excerpts froma presentation of Dr. Sangwoo Park, delivered at 3rd Asia-Pacific Water Summit, Yangon,
Myanmar, 12 December 2017
The financing tools dispensed by the Government of Korea, through the MOLIT, for water
security for international cooperation are:
1. Official Development Assistance (ODA): Grant Government of Korea has disbursed ODA
funds for drawing up master plans (USD 1M/year). Based on the outcomes of that initial
Master Plan phase, specific projects have been selected and funding disbursed for
Feasibility Studies (USD 0.4M/y)
2. Economic Development Cooperation Fund (EDCF): Loan (ODA base). This is a concessionalloan with very low interest rate. If the project is deemed feasible (based on the Feasibility
Study above), a project can be financed through the EDCF.
3. Development Financing: Loan. Higher interest rate than the EDCF (but much lower interest
rate compared to a private loan).
4. Direct Investment: Equity (by K-water). K-water, a specialized company of the Governmentof Korea invests in overseas water security projects as equity, in co-financing with MDBs.
Aside from providing financing, the government of Korea also supports countries in:•project implementation – through K-Water•

education, research and networking – through the International Centre for Water Security
and Sustainable Management•

providing a platform to link between government and private sector – through Korea
Water Forum (i.e.: Water Business Forums to help match technology & financing needs)

3.4. Role of Private Investment
SDG 17.1 is aiming by 2030: to strengthen domestic resource mobilization, including throughinternational support to developing countries, to improve domestic capacity for tax and otherrevenue collection, and
SDG 17.3 is aiming by 2030: to mobilize additional financial resources for developing countries
from multiple sources
In numbers:
Between 2000 and 2012, all subregions in Asia and the Pacific managed to significantly reduce
their debt service as a proportion of export incomes.
In low-income countries, policy measures can help reduce debt distress and improve financial
sustainability including debt relief, efficient debt management and access to international
capital markets with more attractive borrowing options.35

29

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALSAt present, existing sources of funding do not come close to covering the needs associatedwith existing demand or achieving the comprehensive 2030 Agenda and the other water-related
SDGs. Reaching universal access will require large increases in investments as compared to
the requirements of the Millennium Development Goals (MDGs) era. Countries will need to tap
into new sources of finance to meet the growing demand, not just for more services for more
people, food and industries, but also to fund adequate operations and maintenance as well as thesupervision required for more sustainable services.
Both private investment projects and total private investment of water and sanitation in the region
increased from 2000 to 2007. However, both of them dropped dramatically until 2010, with only
15 private projects and $128.7 Million investment. Since then, both projects and investment
amount show an upward trend, but remain modest, as they are around half of the 2007 amounts(See Figure 7).
Figure 7. Private investment projects vs. amount of total investment in water and sanitation(2000-16) in ESCAP36

30

REGIONAL DISCUSSION PAPER

Both sanitation‐ and water supply‐related investment from private sources increased from 2000
to 2007 in the region, but has decreased since. There are more sanitation‐related projects withprivate investments than water supply ones (See Figure 8).
Figure 8: Trends of sanitation and water supply investments from private sources in ESCAP
region (2000-16)37

Figure 9 reveals the distribution of 548 projects with private investment across 21 ESCAP member
states. The bulk of private investment projects, some 81 percent, are in China. Russia, India,
Thailand and Malaysia have a combined share of about 10 percent of private‐invested projects.
The balance of ESCAP countries accounts for only 7 percent of total private‐invested projects.

31ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

Figure 9: Distribution of 548 private investment projects in 21 ESCAP member states (2000-16)38

China, for example, has funded its water infrastructure through a blend of public funds, loans andcorporate bonds and private funds (See earlier, Box 4).
As the region needs to enhance private sector involvementiv to secure further contributions toattainment of the SDG 6 targets, this can be accomplished through targeted investment points
outlined further (See earlier Section 1.2 on financing to support the water cycle, see in Figure 1)
and by ensuring smart budget appraisals. Creating smart budget appraisals39 that support thewater cycle in urban infrastructure would catalyse the efficient delivery of water and sanitation
services, especially in municipal and local government’s water and sanitation projects, which
experience the financial leakages.

3.5 Enabling Policies and the Need for the Public Reforms
Infrastructure can be financed using different capital channels and involve different financial
structures and instruments, ranging from subsidies (See Boxes 6 and 7) to public‐public (PUP)and private‐public partnerships (PPP), or even payments for ecosystem services.

iv

It is to note that access to private finance is not equivalent to the privatization of services. The source offinance (i.e.: where the investment originates) is separate from the implementation model (i.e.: who owns andmanages the system). For instance, in many high-income countries such as in the United States, while publicly
owned water service providers have leveraged commercial finance, they have not relinquished ownership andcontrol of the management of their services.
32

REGIONAL DISCUSSION PAPER

Box 6: Boost Local Economy by Wastewater Treatment through Subsidies and Private FinanceInitiative
Case Study From Japan on Subsidies and PFI Framework for Dissemination of “Johkasou”
System: Ministry of Environment (MOEJ), Japan. By Ms. Rieko Kubota, National Institute forEnvironmental Studies, Japan
The private financing mechanisms are provided by the Government of Japan, through the
MOEJ, and local government to disseminate the decentralized domestic wastewater treatment
system. One of the major purposes is to make the decentralized domestic wastewater
treatment project bankable, and therefore, to boost local economy and to engage local SMEs.
1. Subsidies to cover the cost of Johkasou installation
To increase the rate of dissemination of “Johkasou” system, national subsidies system
has started to assist local government covering the cost of Johkasou installation. Cost
bearing by resident has reduced to down to maximum 10% of the total cost and otherpercentages are covered by national government and local government tax.
2. Private Finance Initiative (PFI) mechanism
To avoid the overloading amount of work and financial burden for the capacity of medium
to small-scale local government, PFI mechanism has been introduced to local governmentand had some successful cases in the last years. With PFI mechanism, installation ofJohkasou is promoted by sales promotion by service providers. Service providers canensure the bigger lot of Johkasou installation in local city compare to individual contract.
Direct operation by local government (LG)PFI by service provider (SP)Johkasouinstallation

Johkasouinstallation

Operation&
MaintenanceRegistrationLG

Field survey and design LG

Registration

SP

Field survey and design SP

Request of installation

LG

Request of installation

SP

Tendering and contract

LG

Tendering and contractSP

O&M contractLG

O&M contract

SP

Inspection

LG

Inspection

SP

RecordingLG

RecordingSP

Billing

LG

Billing

LG

Accounting admin

LG

Accounting admin

LG

Operation&
MaintenanceBox 7: Toolbox of Financing Instruments and Policies for Water and Sanitation
The following are descriptions of financing tools quoted from various authors and institutions,
per the references provided accordingly:
Equitable Share: The equitable share is constitutionally provided and is local government’s
part of revenue raised nationally. The transfer to the municipality is unconditional.40
Subsidy: design of policy for household subsidies to provide appropriate incentives may
consider timing of subsidies to ensure demand responsiveness as well as community
mobilization for community decided targeting of subsidies.41 Declining operational subsidies

33

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

as an instrumental tool, can support the service providers (perhaps in wastewater management),
facilitate development of the sustainable business to ensure return of investment and open
opportunities for local economic diversification with international benefits. (See Box 7 and 8)
Taxes: funds originating from domestic taxes that are channeled to the sector by central,regional and local governments, and repayable finance borrowed by governments other thanODA.42
Water pricing: water pricing embraces a range of distinct policy instruments that affect thescale and/or the pattern of production and resource‐ exploitation costs. Economic costs ofwater and water services, that should ideally be reflected in the price users pay for them, isa combination of financial costs of service delivering water infrastructure, environmental
costs arising from harm induced to ecosystems and ecosystem services, and resource costs
attendant to social welfare losses from not using the water for the most socially beneficial
purpose.43
Tariffs: Tariffs lie at the core of water sector financing. Tariffs are essentially set at threelevels: at the formal administration of water resource management and for the use of national
infrastructure; at the water boards for purification and distribution and at the municipalities
for the final water service delivery.44 Water tariffs must balance economic efficiency, social
equity and financial viability. Water tariffs must be raised to meet the costs of water supply,
which continue to increase because of more advanced treatment, greater distances to be
traveled, lower groundwater tables and more costly distribution in densely populated areas.
Tariffs must be high enough to induce people to manage their water use better and reduce
nonrevenue water (NRW). However, there is little attempt to use higher tariffs to restrict
demand and realize the true value of water.45
Loans and Bonds: Debt instruments can take the form of direct loans held on the balance
sheets of financial institutions or may be structured for resale to investors or distribution inmarkets, be it private markets or public markets through registered corporate and government
bonds.46 Debt instruments have historically comprised 70 percent to 90 percent of the total
capitalization of infrastructure projects. Infrastructure’s capital‐intensive nature, generally
low‐to‐manageable operating risk, and the long‐term importance of infrastructure services
can help to support higher levels of leverage than similarly rated non‐financial corporations.47
Transfers (external sources): funds from international donors and charitable foundations.
Transfers include grants and concessional loans, which include a grant element in the formof subsidized interest rate or grace period.48
Public-public partnership (PUP): a collaboration between two or more public authorities ororganizations, based on solidarity, to improve the capacity and effectiveness of one partnerin providing public water or sanitation services. Far more countries have hosted PUPs thanhost PPPs in water, and these PUPs cover a period of over 20 years, which have been usedin all regions in the world. In general, the objectives of PUPs are to improve the capacity of
the assisted partner, including training and developing human resources, providing technicalsupport on a wide range of issues, improving efficiency and building institutional capacity,
financing water services and improving participation.49
Public-private partnership (PPP): a long‐term contract between a private party and agovernment entity, for providing a public asset or service, in which the private party bears

34

REGIONAL DISCUSSION PAPER

significant risk and management responsibility and remuneration is linked to performance.50
Private sector complements public sector financing and allows projects to go forward that
otherwise would have been discarded due to fiscal constraints. Besides, involvement of theprivate sector has the potential to improve efficiency as well as asset and service quality.
Payments for Ecosystem Services (PES): PES involves a series of payments to land or othernatural resource owners in return for a guaranteed flow of ecosystem services or certain
actions likely to enhance their provision over‐an‐above what would otherwise be provided in
the absence of payment. The narrow definition of PES as a voluntary transaction negotiatedamong private contractors has been surpassed by the implementation of conceptually alikebut broader schemes characterized by the intermediation of the Government between those
who benefit and those preserve the ecosystems’ functioning. PES can thus support theconservation and expansion the ecosystems when the latter generate services that can bevalued in economic and financial terms.51
To date, far more countries in all regions of the world have relied on PUP, rather than PPPs, forwater‐related projects. In PUP schemes, which typically cover a period of over 20 years andcomprise collaboration between two or more public authorities or organizations, neither partner
expects a commercial profit, directly or indirectly. PUPs involve low risk to municipalities, non‐commercial relationships, low transaction costs, and administrative costs at around two percent
of projects.
The Indian national level reforms were undertaken in the Tamil Nadu state (see in Box 8),
suggesting political, financial, legal and administrative reforms, focusing on IGFR, OSR and BF,
with the leverage to be substantial and sustainable and empowering the municipal decisions.

Box 8: Tamil Nadu State- India, Empowering Municipal Decisions
Source: Rajivan Krishnaswamy (2005)
Recognizing the need to free up municipal decisions, and position municipalities as proactive
creators of infrastructure, major political, legal, administrative and financial reforms were
undertaken in the Indian state of Tamil Nadu in mid 1990’s. These reforms included thelinking of fiscal transfers to state taxes (rule based rather than on patronage), strengthening
own sources (including powers to set rates) and setting up a supply side intermediary.
Based on the needs in the WASH sector and recognizing the need to lower costs for theseprojects, the state government set up Water and Sanitation Pooled Fund (WSPF) in 2003, asa trust with limited equity, and eliminating dividend expectations. WSPF, with little recourse to
the capital, relied on credit enhancements of a debt service reserve fund and repayment fromborrower’s taxes and fees. The average size of projects was USD 1 million (drinking water
connections, pumping stations, etc.) and by pooling these demands, WSPF raised USD 30
million through a bond issue (rated as AA with a spread of about 70 bps over state government
borrowing cost). A study of the bond issue of WSP demonstrated that domestic private debt
can finance municipal infrastructure at low costs, if sufficient attention is given to the designof the intermediaries’ capital structure, and security structures. This case is particularly

35

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

relevant for market access for small and medium cities, demonstrating the advantages ofpooling in overcoming small size of issues and ensuing high transaction costs. This also
shows the efficacy of market making intermediation.
The initial investors in the bond were commercial banks and the project size (less than USD
10 million individually) shows the efficacy of intermediation. The secondary investors in thebonds were private pension funds - evidence of the maturing of the debt market, and theability to sell municipal obligations to long-term private funds, seeking fixed income returns.
As the SDGs call for expanding the scope of water‐related outcomes, traditional approaches need
to be upgraded and policies that will enhance sound water management need to be pursued, suchas:Integrated water resources management (IWRM), which opens research and development
opportunities in searching for sustainable solutions and in organizing integrated policy
frameworks. Asia and the Pacific has made substantial progress: 31 out of 32 countries with
reported data have been developing water management plans, though only a few have reached
the stage of advanced implementation.52 Substantial progress has been made by 31 out of 32
countries (with reported data) that have been developing water management plans, though only a
few have reached the stage of advanced implementation as per ESCAP statistical data from 2017.
Empowerment of regional and local governments to develop policies and norms for financial
frameworks and investments in decentralized projects is also required, as water and sanitation‐
related SDGs cannot be attained solely through large‐scale projects and mega infrastructural
financing. (See examples of policies presented in Section 4.1).
While between 2000 and 2015, the proportion of people without access to safe drinking waterin the Asia‐Pacific region declined from 17.8 percent to 6.3 percent, there is lack of knowledge
and practice of empowerment of the local communities in improvement of water and sanitation
managements. The State of Gujarat in India provides an example of empowering local communities
for the delivery of water services (See Box 9).
Box 9: Community Managed Water Supply Schemes in Gujarat, India
Meena Bilgi, Specialist on Gender and Sustainable Solutions, India; Steering Committee
Member on Gender and Water Alliance, www.wasmo.org
Pursuant to the 73rd amendment of the Constitution of India, the roles of Government, in 1993,
had a paradigm shift in drinking water sector from service provider to facilitator. This enabled
the community to act as planner and implementer of village water supply schemes. There
was also a shift from the supply-driven government-owned systems to decentralized demanddriven, community-owned water supply systems with emphasis on empowerment and capacity
building of local communities. The Panchayati Raj Institutions (PRIs) were given a constitutional
status granting them greater power in managing local resources and community affairs.
Water and Sanitation Management Organisation (WASMO), created in 2002 in Gujarat,
built strong partnerships with non-governmental organisations to create community-based
institutions called Pani Samitis or ‘water committees’ and capacity building through36

REGIONAL DISCUSSION PAPER

support and guidance. WASMO is closely associated with UNICEF and other International
Organizations.
The water committees empower communities through a process driven approach, involving
formation of Pani Samitis. The committees consist of 10-12 members within Gram Sabha(i.e.: village meeting). Their role is to plan, implement, manage, own, operate and maintainthe village water supply system. It is a democratically elected standing committee of Gram
Panchayat comprising of all sections of the society whereby it is essential for womenconstitute a third of the membership at minimum and ideally up to 50 percent of women
members.
WASMO has created a unique system through the Atmarpan ceremony (dedication to self)
for commissioning completed works to communities. It is an elaborate ceremony where all
Pani Samiti members take an oath in front of their village communities to operate, maintainand manage the schemes. The WASMO experiment in Gujarat proves that the government
can move from being a service provider to be a facilitator of services, provided it can makesignificant investments in creating the necessary infrastructure, developing technical,
managerial and administrative skills, and transferring decision-making to the communities.
A greater diversification of the revenue streams through further engagement of local SMEs
and communities can help ensure greater returns on investment at local level through enabling
policies (such us declining operational subsidies). A favourable policy environment could further
support a service-oriented economy whereby service-providers operate as SMEs. This may also
support implementation of the bankable projects and respective capacity building. There is ahuge opportunity for governments to report the best practices and enable them by providing
targeted subsidies and incentives that generate and report on greater social, environmental andfinancial returns (See Box 10).
Box 10. Innovation Led Gradual Shift from Cross-Subsidy in Agriculture Sector
Karan Chouksey, ADB Clean Energy Finance (Consultant)An agriculture developing economy like India, is heavily dependent on ground water ofirrigation purposes. Government of India had been cross-subsidizing electricity for agriculture
sector for decades. The agriculture sector power tariffs are cross-subsidized by the industrial
tariffs for providing cheap power to Indian farmers.
Rapidly diminishing ground water levels in almost all parts of the country has become apressing issue. At the same time, farmers are moving extensively towards water-intensive
cash crops like cotton and sugarcane. Coupled with the availability of exploitatively cheap
electricity, intense ground water is pumped out. This has resulted in over- exploitation ofground water even during normal monsoon seasons in India. This is however changing in thelast few years. Since 2007, the electricity tariffs in agriculture sector has seen a huge jump ofabout 138%.53 In addition, the Ministry of New and Renewable Energy (MNRE, India) has also
introduced credit scheme and subsidies for efficient irrigation technologies like Solar Water
Pumps. In 2015, the State Government of Maharashtra, has announced to take the burden offof the industries by reducing their cross-subsidized power tariff share and instead, has set up
scheme to give solar water pumps to farmers and reduce their dependence on conventional

37

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

energy. Innovative schemes and policy tools are being designed, tested and adopted by theGovernment at federal, state and community levels to address the challenges of Food-WaterEnergy nexus, either directly or indirectly. Optimization of ground water use for irrigation
and agroforestry are few policy action and tools promoted by the Ministry of Environment,
Forestry and Climate Change in India. However, there is still huge need for innovation.
To further enable investments, local water utilities need to improve financial viability and credit
worthiness. Worldwide, a recent World Bank study found that only 15% of water utilities indeveloping countries are currently commercially viable, i.e.: meaning they can cover theiroperation cost and generate a 20% surplus that can be used for other financial needs. The
World Bank provides an incremental step‐by‐step global model to achieve this through marginal
improvements (see Figure 10), namely: Step 1: improve collection rates; Step 2: reduce non‐labourcosts; Step 3: reduce the water losses; Step 4: increase the utility’s revenues.
ADB has identified three categories of institutional, financial and efficiency reforms, which
contribute to the twin aims of greater efficiency and financial sustainability, in particular for
irrigation:
1.
•
•
•
•
•

Structural and Institutional Reforms:
Independent status for irrigation authority
Financial autonomy for irrigation authority
Vertical restructuring
Third‐party operator
Irrigation management transfer and water user association

2.
•
•
•
•
•

Financial Reforms:
Budget for irrigation and drainage
New investment
Tariffs
New sources
Better use of existing sources (results based financing)

3.
•
•
•
•

Efficiency Reforms
Managerial reforms in irrigation authority
External support and capacity building for irrigation authorities and water user associations
Public‐private partnerships and improved private sector and community engagement.
In addition, enforced property rights and water resources planning and allocation systems
could be considered within structural and institutional reforms. Similarly, the transparent
financial and performance reporting/benchmarking could be added within the financial
reforms.

Finally, for private investors, investing in water supply and sanitation infrastructure is attractive
when technology is relatively well known and accessible, and when there is a strong demand
for the services and willingness to pay by end‐users. The region has in fact a host of various
technological innovations of water services in different sectors (See Box 11 and along various
intervention points of the water cycles in Figure 1).

38

REGIONAL DISCUSSION PAPER

Figure 10: Stepwise process to full credit-worthy utilities by The World Bank

Box 11: Innovative Technologies and Financial Models
Since water is an essential component for manufacturing and economic development,
investing in the appropriate technology creates a positive cycle for sustainable development.
Examples of the countries documenting the progress:•

Bangladesh has a technological focus on solar water heaters, solar water pumping,biomass gasifier, water pumping wind mill/irrigation and micro-hydro.

•

China and Indonesia are also using the solar water heaters and geothermal heat pumptechnologies.

•

Small hydro power projects are well used in Fiji, Nepal, Kyrgyzstan, Philippines, Thailand
and other countries.

•

Philippines promotes micro-hydro batteries, solar water heaters, mini-, micro- and picohydropower plants.

•

In addition to micro-hydro turbine, Sri Lanka focuses on solar water heaters and distillers•

Government of China taxes industrial waste water•

Japan is subsidizing the annual operation and maintenance per capita at the municipal
level (USD 50 per person per year).

•

In Thailand the Board of Investment provides investment incentives to water based
renewable energy projects.

•

China is retrofitting some secondary cities into sponge cities with reconstructed wetlands,
green areas below road levels and underground retention ponds for rainwater harvesting,and rooftop gardens.

39

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS40

REGIONAL DISCUSSION PAPER

4. Recommendations for the Way Forward with
Policy Implications
Water-related SDGs cannot be attained solely through mega projects and by the search formega-infrastructure financing. Progress will require the empowerment of local governments andleadership to develop policies and norms for financial frameworks and decentralized financing
systems where appropriate. For example, policies enabling decentralized wastewater management
practices in Thailand, Indonesia, Vietnam and the Waste Management and the Public Cleaning
Law in Japan, mandate local governments and municipalities to participate in the managementof water and sanitation services.
Cities, especially the region’s secondary cities, provide particularly promising avenues to makeprogress due to the magnification of the issues at this level, as much of the growth they will
experience offers untapped potential within their cities. The medium and short-term loops within
the water cycle (Figure 1) present possibilities for planning interventions for more efficient water
management, expanded services, and enhanced ecosystem service potentials both upstream
and downstream.
Financing services are also needed for data collection and monitoring, especially using modern
smart technologies, taking advantage of what GIS mapping technologies and Earth Observations
technologies offer. Decentralized applications of enterprise blockchain solutions and various
developer tools are also being explored. For example, Water ATM machines that are supportedby The World Bank, can detect water leakages and ensure water security of the system within the
Smart City Concept, as in India.
By creating both smart budget appraisals and the efficient delivery of water and sanitation
services, governments can avoid inefficiencies and misallocations in the management of funds,
especially in water and sanitation projects of municipal and local governments, which can bevulnerable to financial leakages. Better public fiscal management across water boards is criticalto prevent revenues collected from being re-appropriated or re-allocated away from needed water
infrastructure. Proportions of specific service taxes collected for different purposes at the centrallevel should be allocated for water and sanitation provision in the local governments with clear
programmes and implementation codes.
The SDG framework simultaneously highlights the governance, technical and environmental
angles that could support a more attractive financial and investment climate from government,
donors and entrepreneurs. Agenda 2030 and the SDGs are opening opportunities for national
authorities across the region to apply holistic and integrated approaches in policies and planning.

4.1 Integrated Pathways for Implementing Water-Related SDGs
Facilitating investments in water and sanitation infrastructure will allow countries to meet local(See Box 12) and national needs, while contributing to the achievement of the SDG 6. The baseline
status of SDG 6 and other water‐ related SDGs has been documented in ESCAP’s statistics reportsof 2015‐1754 and the Asia‐Pacific Sustainable Development Goals55 report. Figure 11 visuallypresents a conceptual approach towards integrated policy frameworks, which are instrumental
for attainment of water‐dependent SDGs. The funding sources from the public sector and private
sector, including the utilization of micro‐financing schemes, could complement innovative56
sources of financing in the most population‐condensed settlements, such as in urbanised areas,
41

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

which are responsible for over 70 percent of GDP in the region. ADB has analysed the impacts ofurbanization, through five key dimensions of urban water security, and documented this in its Asia
Water Development Outlooks of 2013 and 2016. To follow‐up, ESCAP has elaborated an integrated
policy framework, which defines potential water sector solutions for a shift towards resilience ofwater infrastructure. In this regard, the investment points specific to the water‐related SDGs arefurther explored and presented earlier in Section 1.2 on water cycle framework. The framework,measuring progress of SDG‐readiness is illustrated through best practices, policy briefs, holistic
strategies and approaches of good urban governance in the interactive ESCAP e‐learning coursev.
Water‐resilient and sustainable cities are cities that achieve safe and adequate water supply andsanitation services based on sound water‐related ecosystems, high‐level of water use efficiency,
and a greater urban resilience to water‐related disasters.
Figure 11: Key Factors Enabling Implementation of Water-Related SDGs

(source: ESCAP, 2017)v

ESCAP. 2017. Interactive e-learning course on Shifting Towards Water-resilient Cities for Sustainable
Development. The course assists the regional policy makers and practitioners with a proactive policy measuresto achieve SDG-readiness through lenses of Water-Resilient Cities, providing an environment with a sense oflarger social well-being and happiness. https://sdghelpdesk-elearning.unescap.org/thematicarea/detail?id=942

REGIONAL DISCUSSION PAPER

Box 12: Crafting Communities for Change in a Megacity
Case Study from Bangalore on Interventions for Sustainability in Water and Sanitation
Infrastructure: The Case of CoEvolve and ECOSTP Technologies. Simar Kohli Das.
In the last 40 years, Bangalore has shown 525 per cent growth of built up area, 78 per centdecline of vegetation and 79 per cent loss of its water bodies. A very recent report by BBC57
listed the city amongst the 11 globally to potentially run out of water. When Bangalore decides
to reuse its wastewater, it can easily meet half the city’s water demands. (See Figure 12))ECO-STP (Eco-Sewage Treatment Plant) is a Patent Pending sewage treatment technology
based on gravity and natural processes and works independent from power supply anddaily surveillance while complying to the stringent Pollution Control Board norms. Drought
resistant plants are also being used to reduce water consumption in irrigation. Additionally,
there are water -efficient fixtures and fittings in all toilets to reduce water consumption (SeeTable A). The commodes used are dual flushing mode of 3 l and 5 l whereas all faucets are
fitted with water aerators that reduce water flow without compromising on user experience.
Table A: CoEvolve Northern Star’s annual savings per apartment
RESOURCE
Electricity
Water
Organic Compost
DieselQuantity
2953.7
160.5
77
45.3

Unit
Kwh/y
KLD
Kgs
Lts

Rate
6
10
10
60

Savings
17,722
1605
768
2721

This project intends to be a zero-water discharge facility where the community can create
a self-sustainable local hydrological cycle utilising all water to the maximum via rainwater
harvesting (a water softener plant will treat all incoming water from bore wells or tankers).
All rainwater runoff is directed to Deep Recharge Pits via a network of storm water drains,replenishing the groundwater (See Table B)
Table B: Water Efficiency
Potable Water Savings:
Water efficient landscape:98 percent
60 percent

Rainwater harvested:
Wastewater treated:
Wastewater reused:

113 percent
100 percent
93 percent

The ECO-STP treats about 80 kilo litres of water every day and has completely removed thedependency on power and a trained team to run the treatment plant. It has also resulted inzero space used for the STP as the unit will be built below the ramp and car parking with nooperators involved. This will allow the targeted community to use biological processes torecycle sewage for flushing, gardening and car washing. The intention is to take the treatedgrey water and further treat it including filtration and ozonisation bringing it up to drinking
quality.

43

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

Figure 12: CoEvolve Northern Star-Green Building Live Performance Metrics in Bangalore (seeBox 12)

4.2 Policy Actions and Measures for Achieving Water-Related
SDGs
Rapidly increasing urbanisation, industrialisation and progress towards achieving universal accessare resulting in more demand for limited water supplies. According to the world’s urbanisation
prospects of 2018, the urban population is expected to grow to 68 per cent by 2050. Many urban
areas face increasing water stress and water scarcity, as well as inadequate infrastructure
and poor water resource management. Diminishing water resources could pose risks to urban
development, continued economic wealth and prosperity, and social development, and threaten
progress towards the SDGs. Regional cooperation can be instrumental in the establishment of
the economic/financial paradigm proposed in this paper, to support investments for meeting thewater SDGs.
ESCAP and the Asia Pacific Water Forum, as thematic leaders of the session on Financing
Implementation of Water-Related SDGs at the 8th World Water Forum and through this discussion
paper, aimed to inform on the financial challenges, as well as on opportunities that would assist
relevant government agencies in the mobilization of funding for country-based water and sanitation
projects through fostering public-public and public-private partnerships. In addition, ESCAP could
help to facilitate dialogues on the development of sub-regional/regional financing mechanisms
to support sound water cycle management, for example, through preparation of policy briefs forenabling water markets, water bonds, national water pricing schemes and reforms, payments
for ecosystems services, and by proposing sustainable approaches for corporate river basin
management.

44

REGIONAL DISCUSSION PAPER

Key Policy Actions to achieve water‐related SDGs:•••

improve the planning and implementation processes by creating an overall sector andsubsector strategy to address inter‐sectoral thematic interventions in support of the efficiencyof the water cycle loops;
increase the cost‐recovery of water service providers;
crowd in commercial lenders and, where possible, the private sector as key participants inattaining water‐related SDGs and in implementing impact investment approaches from public
and private sources;

Sub‐Actions:••correct/enhance the sustainable business model of water service providers;select financial instruments and arrangements that make sense with the current environment,using ecosystem based approaches and link banks of developed countries with countries of
special needs;

Measures (optional): creating funding and oversight programs and policy frameworks at theregional level to incentivize collaborative partnerships in application of the decentralized (local)
financing systems for water management in urban and peri‐urban areas.

4.3 Roles of Partners
As the population has shifted and economic growth concentrates in urban areas, changing ratiosof water resource use across rural and urban areas have significant implications for agriculture
and food production and commercial, industrial and residential activities. Water services would
enable the achievement of related SDGs only if all stakeholders, namely governments, development
partners and private sector, play their part through enhanced or incentivised collaboration, withjoint policy actions and measures to attain the SDGs. In this regard, partnerships can be developed,
capitalizing on the following respective roles:
Governments:
•
•
•
•
•
•

Address the pricing of water‐related services coherently through framework strategy
Facilitate mobilization of domestic finance
Mobilize and target additional volumes of public and concessional funds
Encourage greater capital efficiency by setting an adequate tariff and fee‐based water system
Incentivize the collaborative partnerships through regulated market and water services trading
Build the capacity of municipal officials, particularly in secondary cities to apply urban water
cycle management

Development Partners:•••

Orient support and mobilize domestic finance
Crowd commercial finance using guarantees and other instruments
Provide the monitoring reports on efficiency of the financing frameworks

Private Sector:•

Improve capital and operating efficiency
45

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS•••

Explore potential financing relationships and transactions
Returns on investment should be reported at multidimensional level
Organise the sustainable business models to support the water infrastructure to attain thewater SDGs

Financing water and sanitation needs of the region is currently a part of global, national and local
plans. Regional think-tanks, and financing institutions need to jointly review their current strategies
and to map out the sustainable sources for the growing water services needs and opportunities,
and to further complement each others’ inputs, using outcome-based approach and scenario
planning tools. This collaboration should shift the focus of attention from “supply only” towards
water-efficient infrastructure to reduce losses and wastes, manage water use across all sectors
and enable sustainability of water withdrawals. Financing the upgrade and expansion of water
infrastructure will be a critical issue, especially in the secondary cities of the region where muchof the future growth will occur. Better planning for water-related disasters requires an integrated
approach that addresses water supply and management, planned growth and the development ofresilient infrastructure, factored to short-, medium-, long-term planning.

46

REGIONAL DISCUSSION PAPER

Appendix 1:
Yangon Declaration: The Pathway Forward
The Asia-Pacific region, with the largest and most dynamic economies in the world, is experiencing
vigorous growth accompanied by a rapid reduction of poverty. However, approximately 1.1 billion
people in Asia alone live in areas currently experiencing severe water stress and, unless significant
action is taken, the number of affected population is expected to increase by more than 40% by 2050.
Water security is a key component of sustainable development and faces enormous challenges.
Achieving the 2030 Agenda for Sustainable Development and its Sustainable Development Goals(SDGs) can only be materialized if water is valued and if water resources are effectively protected
and managed for the enhancement of water security in all the countries of the region.
The Third Asia-Pacific Water Summit (3rd APWS) was convened in Yangon, Republic of the Unionof Myanmar, on 11-12 December 2017, with the aim of promoting cooperation and partnership,
as well as sharing knowledge and experiences to enhance water security in the region towards
concrete actions and solutions for sustainable development. This marks the beginning of aregional endeavor to take a leading role in the implementation of the International Decade for
Action, “Water for Sustainable Development”, 2018-2028.
We, the Leaders of the Asia-Pacific region,
Celebrating the significant progress made in the past ten years since the First Asia-Pacific Water
Summit held in Beppu, Japan, in 2007, and the Second Summit in Chiang Mai, Thailand, in 2013,
in which period there have been large contributions to the achievement and improvement of thewater-related targets of the Millennium Development Goals across the region, particularly instrengthening water supply to fulfill basic human needs,
Expressing continued concern over the remaining gaps between the ambition to deliverinternationally agreed post-2015 water- related goals contained in the 2030 Agenda for Sustainable
Development and the increasing threats to water security, such as climate change, particularlyin the lowest income countries, countries with mountain areas and Pacific Island Countries, aswell as the impacts on vulnerable groups, such as women, children and the elderly, in rural areas
alongside emerging and rapidly growing urban areas,
Reaffirming shared commitments to achieving the water-related Sustainable Development Goals
and targets, the Sendai Framework for Disaster Risk Reduction and the Paris Agreement on
Climate Change to enhance resilience and the quality of socio-economic growth,Being aware that the abovementioned threats will continue to intensify as the world population
is expected to reach 10 billion inhabitants in 2050, in which over half of them will be living in the
Asia-Pacific region, meaning that the sustainability of the region becomes a key component ofour global future,
Hereby express our determination to achieve water security for sustainable development in the
Asia-Pacific region and declare to:Provide safe and affordable drinking water and basic sanitation for all in the region by 2025, five
years in advance compared to the 2030 Agenda for Sustainable Development, as agreed at theFirst Asia-Pacific Water Summit, both in fast-growing urban areas, as well as in rural areas;

47

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

Double investment at the regional level in infrastructure and community-based efforts to address
water-related disasters and significantly increase water security;
Advance research and development, as well as education and training, to generate innovative
solutions, particularly in water use efficiency and productivity, recycling, risk assessment andreduction, policy and governance, meet growing water demand, reduce disaster damage andimprove sanitation and wastewater management;
Recognize that there is no one-size-fits-all solution and apply measures tailored at local conditionsof countries and communities through regional knowledge management;
Facilitate the implementation of integrated water resources management at all levels, including
through transboundary cooperation, as appropriate, and partnerships.
We envision the Pathway Forward to upscale innovation for water security in the Asia-Pacificregion and are determined to:Sound water cycle management
Integrate rainwater, rivers, groundwater, glaciers, oceans and ecosystems, where relevant, into
water cycle analysis and related policies at the river basin level;
Undertake efforts to conserve and restore water-related ecosystems, including deltas andestuaries, and promote the inclusion in the development agenda of wastewater management,
green infrastructure and nature-based solutions for disaster risk reduction;
Take actions to increase water productivity in irrigation and drainage to achieve food security andsustainable agriculture; Combine the management of water resources and urban, regional andnational land use planning;
Governance and inclusive development
Establish sound regulatory mechanisms and planning at the local and national level to supply
safe and sustainable drinking water and to extend and improve sanitation and wastewater
management services;
Ensure the protection of vulnerable groups from water-related disasters and engage them indisaster management;
Promote the integration of scientific and engineering approaches with sociologic and economic
perspectives, along with local and traditional knowledge, in water-related assessments andactivities;
Take measures to build the capacity of all stakeholders, particularly women, youth, disabled andthe poor, and create mechanisms for involving them in water-related decision-making processes
and multi-stakeholder partnerships at the different levels of govern- ance;
Urge all parties to end open defecation by 2025, as agreed at the First Asia-Pacific Water Summit,
ensuring the availability of sanitation facilities, as well as promoting hygiene education forbehavioral change;

48

REGIONAL DISCUSSION PAPER

Financing the implementation of water-related Sustainable Development Goals
Support the development of innovative and sustainable financial instruments that generate lowinterest lending mechanisms, long- term cash-flow and attractive returns for high-impact waterrelated investment at multiple levels and scales;
Adopt innovative financial solutions such as reforming public finance, advancing Public-Public
Partnerships, Public-Private Partnerships, structuring blended finance, applying Environment,
Governance and Society investment and developing financial tools for long-term investment;
Focus on ex-ante investment for infrastructure and community-based efforts, including disaster
preparedness and risk reduction, in addition to post-disaster recovery;
Develop a regional monitoring system on the financing of water-related Sustainable Development
Goals and targets, aiming at harmonizing and complementing national and international initiatives
and incentivizing collaborative partnerships.
We request the Asia-Pacific Water Forum (APWF), as a leading coordination and facilitation
platform for water security solutions in the region to:
Water cooperation at all levels
Present this Yangon Declaration “The Pathway Forward”, accompanied by a supporting document
to Call for Action, to relevant regional and global fora;
Provide region-specific inputs to the outcomes of the High-Level Panel on Water (HLPW);
Contribute to the Asian Water Development Outlook as an ongoing analysis to support the
improvement of the water security situation in the Asia-Pacific region;
Lead the regional contribution to the Eighth World Water Forum, to be held in March 2018 in
Brasilia, Brazil; Advocate innovation and lead through action at the Singapore International Water
Week, to be held in July 2018;
Keep playing its coordination role for the contributions of the Asia-Pacific region to the Stockholm
World Water Week.
We collectively express our sincere appreciation to the Government of the Republic of the Unionof Myanmar for successfully hosting the Third Asia-Pacific Water Summit and for the warm
welcome and generous hospitality extended to all participants.

Yangon Declaration:
http://apwf.org/apwf_wp/wp-content/uploads/2017/12/Yangon-Declaration.pdf

49ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

Appendix 2:
Dataset of ODA for Water in Asia-Pacific, in Million US$,2010-2015
Series

2010

2011

2012

2013

2014

2015

ODA: Water supply and sanitation

2,178

2,408

2,321

2,259

2,353

2,137

1,066.8

967.7

869.7

662.1

607.9

581.2

ODA: Water supply

100

146

196

197

182

201

ODA: Sanitation

60

94

118

180

274

179

ODA: Basic drinking water and sanitation

261

330

299

367

418

325

ODA: Basic drinking water

90

97

124

223

248

186

ODA: Basic sanitation

32

30

49

36

50

91

ODA: River basin

160

247

278

212

159

134

ODA: Waste management

107

145

132

105

100

146

ODA: Water resource policy

192

220

143

153

226

225

ODA: Water resource protection

104

128

111

121

86

64

ODA: Education in water supply

5

4

1

3

2

3

ODA: Water supply and sanitation (large
system)Data source: ESCAP-ADB-UNDP. Asia-Pacific SDG Partnership Data Portal. Available from: http://data.unescap.
org/sdg/ Accessed on 10/01/2018.

50

REGIONAL DISCUSSION PAPER

REFERENCES
1

Asian Development Bank. 2017. Meeting Asia’s Infrastructure Needs. Publication Stock No.
FLS168388-2. Available from: https://www.adb.org/sites/default/files/publication/227496/
special-report-infrastructure.pdf

2

United Nations Economic and Social Commission for Asia and the Pacific backdrop
presentation on Financing Implementation of Water-Related SDGs at the 3rd Asia PacificWater Summit by A. Karazhanova. Available on-line from: http://www.unescap.org/sites/
default/files/1_backdrop.pdf

3

Cooperative Research Centre for Water Sensitive Cities (2018). What is a Water Sensitive
City? Available form https://watersensitivecities.org.au/what‐is‐a‐water‐sensitive‐city/.
Accessed on April 24, 2017.

4

United Nations Economic and Social Commission for Asia and the Pacific. 2011. Are webuilding competitive and liveable cities? Guidelines for developing eco-efficient and socially
inclusive infrastructure.

5

Ibid. United Nations Economic and Social Commission for Asia and the Pacific. 2017. 2016
SDG Baseline Report.

6

Hutton, G., and M. Varughese. 2016. The Costs of Meeting the 2030 Sustainable
Development Goal Targets on Drinking Water, Sanitation, and Hygiene. Water and Sanitation
Program Technical Paper, World Bank, Washington, DC. Available from http://documents.
worldbank.org/curated/en/415441467988938343/The-costs-of-meeting-the-2030sustainable-development-goal-targets-on-drinking-water-sanitation-and-hygiene

7Statement of Dr. Akhtar, Executive Secretary of ESCAP at the side event on “Investment in
Water-Efficient Infrastructure”, at the seventh Ministerial Conference on Environment andDevelopment (MCED-7, 7 September 2017), accessed at the http://www.unescap.org/
publications/regional-road-map-implementing- 2030-agenda-sustainable-developmentasia-and-pacific8

Available regional statistics on SDG6 could be found in the following ESCAP publications:- United Nations Economic and Social Commission for Asia and the Pacific. 2017. 2016
SDG Baseline Report.
- United Nations Economic and Social Commission for Asia and the PacificUNESCAP. 2017.
Statistical Yearbook for Asia and the Pacific 2017: Measuring SDG progress in Asia andthe Pacific: Is there enough data? Available from: http://www.unescap.org/publications/
statistical-yearbook-asia-and-pacific-2017- United Nations Economic and Social Commission for Asia and the Pacific. 2017. Asia andthe Pacific Progress Report 2017. Available from: http://www.unescap.org/publications/asia-and-pacific-sdg-progress- report-2017- United Nations Economic and Social Commission for Asia and the Pacific. 2017.
Integrated Approaches for Sustainable Development Goals Planning: The Case of Goal 6
on Water and Sanitation. Available from: http://www.unescap.org/publications/integratedapproaches-sustainable-development-goals-planning-case- goal-6-water-and

9

United Nations Economic and Social Commission for Asia and the Pacific-AsianDevelopment Bank- United Nations Development Programme. 2018. Asia-Pacific SDG
Partnership Data Portal. Available from: http://data.unescap.org/sdg/ accessed on
10/01/2018.
51

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

10World Health Organization. 2017. UN-Water Global Analysis and Assessment of Sanitation
and Drinking- Water (GLAAS) 2017 Report: Financing Universal Water, Sanitation and Hygiene
under the Sustainable Development Goals. Geneva. Available from: http://apps.who.int/iris/
bitstream/10665/254999/1/9789241512190-eng.pdf?ua=1

11

United Nations Economic and Social Commission for Asia and the Pacific. 2010. Statistical
Yearbook 2009. UNESCAP, Bangkok

12

United Nations Economic and Social Commission for Asia and the Pacific. 2015. Ecoefficient infrastructure development towards green and resilient urban future. Brochure.
Available from: http://www.unescap.org/resources/brochure-eco-efficient-infrastructuredevelopment-towards- greenand-resilient-urban-future

13

United Nations Economic and Social Commission for Asia and the Pacific. 2016. Water
Markets in Asia and the Pacific: An Overview of Trends, Opportunities, Risks and Policies.
Working Paper. United Nations Publication, Bangkok. Available from: https://sustdev.
unescap.org/Files/resource/b1aa511f760b5c4afb6782f1c32acbf9.pdf

14Ibid.Hutton, G., and M. Varughese. 2016. The Costs of Meeting the 2030 Sustainable
Development Goal Targets on Drinking Water, Sanitation, and Hygiene.

15

Goksu, A., S. Tr molet, J. Kolker, and B. Kingdom. 2017. Easing the Transition to Commercial
Finance for Sustainable Water and Sanitation. 2017 International Bank for Reconstruction
and Development, The World Bank. Washington, D.C. Available from: https://
openknowledge.worldbank.org/bitstream/handle/10986/27948/119048- WP-P159188PUBLIC.pdf?sequence=5&isAllowed=y16World Health Organization. 2017. UN-Water Global Analysis and Assessment of Sanitation
and Drinking- water (GLAAS) 2017 Report Annex Data Tables. Available from: http://www.
who.int/water_sanitation_health/monitoring/investments/glaas-2016-2017-cycle/en/.
Accessed on 08/02/2018.

17

United Nations Economic and Social Commission for Asia and the Pacific. 2013.
Development Financing for Tangible Results: A Paradigm Shift to Impact Investing andOutcome Models: The Case of Sanitation Asia, was discussed at the technical workshop
during 2nd Asia-Pacific Water Summit (Chiang Mai, Thailand).

18

Ibid. United Nations Economic and Social Commission for Asia and the Pacific, United
Nations-Habitat, Asian Institute of Technology. 2015. Policy Guidance Manual on
Wastewater Management with a Special Emphasis on DEWATS.

19

The World Bank-International Bank for Reconstruction and Development International
Development Association. World Bank Open Data. Available from: http://wdi.worldbank.org/
table/3.5, Accessed on 18/01/018.

20

Helmut Kaiser Consultancy. 2015. Asia Water – 21 Countries Water Markets, Technologies
and Applications in Asia 2014-2025 with Focus on Leading Countries (including China andJapan). Germany.
Ibid. United Nations Economic and Social Commission for Asia and the Pacific. 2017. 2016
SDG Baseline Report, Clean Water and Sanitation.

21

Ibid. United Nations Economic and Social Commission for Asia and the Pacific. 2017. 2016
SDG Baseline Report.

52

REGIONAL DISCUSSION PAPER

22

2018. Asia-Pacific Disaster Report 2017: Leave No One Behind. Available from:http://www.unescap.org/publications/asia-pacific-disaster-report-2017-leave-no-onebehind

23

United Nations, Educational, Scientific and Cultural Organization. 2012. Water resourcesin the Asia- Pacific region are increasingly threatened by pollution and vulnerable to natural
disasters. Available from:http://www.unesco.org/new/en/media-services/single-view/news/water_resources_in_
the_asia_pacific_region_are_increasingly/

24

Asia-Pacific Water Forum. 2017. Yangon Declaration. Available from: http://apwf.org/apwf_
wp/wp- content/uploads/2017/12/Y angon-Declaration.pdf

25

ESCAP Tsunami Trust Fund. Available from http://www.unescap.org/disasterpreparedness-fund

26

Whittington. D. 2003. Municipal Water Pricing and Tariff Design: A Reform Agenda for South
Asia. Water Policy 5(1): 61-76.

27

ESCAP-ADB-UNDP. 2017. Asia-Pacific Sustainable Development Goals Outlook. Ref: SDG 13

28

United Nations Economic and Social Commission for Asia and the Pacific. 2017. Innovative
Financing for Development in Asia and Pacific: Government Policies on Impact Investment
and Public Finance for Innovation. United Nations Publication, Sales No. E.17.II.F.23

29

Hahm, H. J. 2017. Power Point Presentation. Mobilizing Private Capital in Water Supply andSanitation: Encouraging Universal Coverage through Private Sector Financing. The World
Bank, IBRD, IDA. For internal discussions.

30

Ibid. United Nations Economic and Social Commission for Asia and the Pacific. 2017. 2016
SDG Baseline Report.

31

Goksu, A., S. Tr molet, J. Kolker, and B. Kingdom. 2017. Easing the Transition to Commercial
Finance for Sustainable Water and Sanitation.

32

Ibid. United Nations Economic and Social Commission for Asia and the Pacific. 2016.
Water Markets in Asia and the Pacific: An Overview of Trends, Opportunities, Risks andPolicies.

33

Ibid. Presentations of Panel Speakers in the 3rd Asia-Pacific Water Summit. 2017.
Financing Implementation of Water-Related SDGs.

34

Ibid. United Nations Economic and Social Commission for Asia and the Pacific-AsianDevelopment Bank-United Nations Development Programme. 2018. Asia-Pacific SDG
Partnership Data Portal. Available from: http://data.unescap.org/sdg/ accessed on
10/01/2018.
Ibid. United Nations Economic and Social Commission for Asia and the Pacific. 2017. 2016
SDG Baseline Report.

35

The data used for Figure 7 stems from a series of sources:- Tedagua. 2016. Urban Waste Water and Recycled Water Treatment Plants References.
Available from:53

ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

http://www.tedagua.com/uploads/1308748830_2-depuracion-y-reutilizacion-de-aguasresiduales-urbanas-eng.pdf- Tedagua.2014. Comprehensive Solutions for Water Treatments. Available from: http://
www.tedagua.com/uploads/1298289164_tedagua_presentation.pdf- Water Technology. Atotonilco Wastewater Treatment Project, Mexico. Available from:http://www.water-technology.net/projects/atotonilcowastewater/- BNamericas. Ibarra Wastewater Treatment Plant. Available from: https://www.bnamericas.
com/project-profile/en/treatment-plant-wastewater-ibarra-planta-de-tratamiento-de-aguasresiduales-de-ibarra- Acciona. Australia. Available from:http://www.acciona.com.au/projects/water/wastewater-treatment-plants/#projectList- Morales, P. 2011. Acciona Agua awarded US$25mn Escalerilla wastewater treatment
plant. Available from:https://www.bnamericas.com/en/news/privatization/acciona-agua-awarded-us25mnescalerilla-wastewater-treatment-plant- Abengoa. Water and Environment Statement Qualifications. Available from: http://www.
abengoa.com/export/sites/abengoa_corp/resources/pdf/noticias_y_publicaciones/presentaciones/water_environment_statement_qualificati ons_en.pdf- Hyflux. Potable Water Treatment. Available from: https://www.hyflux.com/solutions/potable-water-treatment/- Environmental XPRT. 2011. Zunyi Wastewater Treatment Plant Development. Available
from: https://www.environmental-expert.com/news/zunyi-wastewater-treatment-plantdevelopment-225784- Hyflux. Desalination. Available from:https://www.hyflux.com/solutions/desalination/- Metito. 2015. Boo Desalination Project for Maxus Oil Co. at Pabelokan Island in Sumatra
Sea, Indonesia.
Available from:http://www.metito.com/wp-content/uploads/2015/02/BOO-Desalination-ProjectPabelokan-Island-Indonesia.pdf- Water Technology. Projects by region: Asia. Available from:http://www.water-technology.net/projects/region/asia/- Central Intelligence Agency. The World Factbook. Available fromhttps://www.cia.gov/library/publications/the-world-factbook/rankorder/2119rank.html- International Monetary Fund. 2017. World Economic Outlook Database. Available fromhttp://www.imf.org/external/pubs/ft/weo/2017/01/weodata, Accessed on 01/12/2017.
- WHO and UNICEF. JMP Global Database. Available from http://www.wssinfo.org/dataestimates/tables/. Accessed on 01/12/2017
36

Ibid. The data used for Figure 8 stems from a series of sources same as Figure 7.

37

Ibid. The data used for Figure 9 stems from a series of sources same as Figure 7&8.

38

Ibid. Presentations of Panel Speakers in the 3rd Asia-Pacific Water Summit.2017

39

Mclntosh, C. 2014. Urban Water Supply and Sanitation in Southeast Asia: A Guide to Good
Practice. Asian Development Bank. Available from: https://www.adb.org/sites/default/
files/publication/42583/urban- water-supply-sanitation-southeast-asia.pdf

54

REGIONAL DISCUSSION PAPER

40

Hollingworth, B., P. Koch, S. Chimuti, and D. Malzbender. 2011. An Investigation into theWater Infrastructure Development Financial Allocation Pathways in Municipalities.
Available from:http://www.wrc.org.za/Knowledge%20Hub%20Documents/Research%20Reports/TT%20
476-11.pdf

41World Health Organization. 2017. UN-Water Global Analysis and Assessment of Sanitation
and Drinking-Water (GLAAS) 2017 Report: Financing Universal Water, Sanitation and Hygiene
under the Sustainable Development Goals. Geneva. Available from:http://apps.who.int/iris/bitstream/10665/254999/1/9789241512190-eng.pdf?ua=1

42

Ibid. World Health Organization. 2017.

43

Mysiak, J., and C. M. Gomez. 2015. Chapter 2: Water Pricing and Taxes: An Introduction.

44

Ibid. Hollingworth, B., P. Koch, S. Chimuti, and D. Malzbender. 2011.

45

Goksu, A., S. Trmolet, J. Kolker, and B. Kingdom. 2017. Easing the Transition to Commercial
Finance for Sustainable Water and Sanitation. 2017 International Bank for Reconstruction
and Development, The World Bank. Washington, D.C. Available from:https://openknowledge.worldbank.org/bitstream/handle/10986/27948/119048-WPP159188-PUBLIC.pdf?sequence=5&amp;isAllowed=y46

Organization for Economic Cooperation and Development. 2015. Infrastructure Financing
Instruments and Incentives. Available from: http://www.oecd.org/g20/topics/financing-forinvestment/Infrastructure-Financing-Instruments-and-Incentives.pdf

47

Moody’s. 2015. Infrastructure Default and Recovery Rates, 1983-2014. Moody’s Investor
Services.
Available from: https://www.moodys.com/Pages/GuideToDefaultResearch.aspx

48

Ibid. World Health Organization. 2017.

49

Hall, D., E. Lobina, V. Corral. O. Hoedeman, P. Terhorst, M. Pigeon, and S. Kishimoto. 2009.
Public-Public Partnerships (PUPs) in water. PSI, TNI, PSIRU.
Available from: https://www.tni.org/en/publication/public-public-partnerships-pups-inwater

50

The World Bank Group. PPP Reference Guide: PPP Knowledge Lab. Available
from: https://pppknowledgelab.org/guide/sections/1-introduction

51

UNDP. Financing Solutions for Sustainable Development: Payments for Ecosystem Services.
Available from: http://www.undp.org/content/sdfinance/en/home/solutions/payments-forecosystem-services.html

52

Ibid. United Nations Economic and Social Commission for Asia and the Pacific. 2017. 2016
SDG Baseline Report.

53

Bhattacharyya, R. and A. Ganguly. ‘Cross Subsidy Removal in Electricity Pricing inIndia’. Energy Policy 100 (2017) 181-190. Available from: https://ac.els-cdn.com/
S0301421516305699/1-s2.0-S0301421516305699-main.pdf?_tid=e415dde5-79b4-4c74aa63- 1979275e4269&acdnat=1520397874_63e0794bef8d91d2b704d4e0023d333d

55ENABLING POLICIES FOR FINANCING WATER-RELATED SUSTAINABLE DEVELPMENTS GOALS

54

United Nations Economic and Social Commission for Asia and the Pacific. 2015. Statistical
Yearbook for Asia and the Pacific 2015. Bangkok. Available from: www.unescap.org/
resources/statistical-yearbook-asia- and-pacific-2015

55

United Nations Economic and Social Commission for Asia and the Pacific-AsianDevelopment Bank- United Nations Development Programme. 2016. Asia-PacificSustainable Development Goals. Available at: http://www.unescap.org/publications/asiapacific-sustainable-development-goals-outlook

56

United Nations Economic and Social Commission for Asia and the Pacific. 2017. Innovative
Financing for Development in Asia and Pacific: Government Policies on Impact Investment
and Public Finance for Innovation. United Nations Publication, Sales No. E.17.II.F.23c

57

BBC report. Dated 11th February 2018. Available from http://www.bbc.com/news/
world-42982959. Accessed on 27 February 2018.

56

The World Water Forum is the world’s biggest water-related event and is organized by the World
Water Council (WWC), an international organization that brings together all those interested in thetheme of water. Its mission is “to promote awareness, build political commitment and trigger action
on critical water issues at all levels, to facilitate the efficient conservation, protection, development,planning, management and use of water in all its dimensions on an environmentally sustainablebasis for the benefit of all life on Earth”. The World Water Council organizes the Forum every three
years together with the respective host country and city. To date, there have been seven editionsof the World Water Forum, in different countries, on four different continents. In 2014, Brazil’s
candidature to host the event was successful and Brasilia was selected as the host-city for the
event. Accordingly, in 2018, Brazil hosted the 8th edition of the World Water Forum. It was the firsttime the event was held in the Southern Hemisphere.

Asia Pacific Water Forum (APWF, apwf.org) is an independent and not for-profit networkorganisation launched in September 2006 by the water Ministers of the Asia-Pacific Region during
the Fourth World Water Forum (Mexico City, March 21, 2006). The on-going efforts of the APWF are
aimed to strengthen mechanisms of more collaborative efforts on water resources management,such as those on safe drinking water and basic sanitation, and to accelerate the process ofeffective integration of water resources management at the national level into the socio-economic
development process of countries in the Asia-Pacific region. Regional APWF experts work
collaboratively with a wide variety of water-related organisations to build capacity and enhancecooperation, and to boost investments at the regional level and beyond. ESCAP and the ADB are
the Governing Council members of the APWF, among others, while Japan Water Forum is acting
as a secretariat of the APWF, since its inception. APWF is carrying the functions of a regional
coordinator of the Asia-Pacific Water Summit.

The Economic and Social Commission for Asia and the Pacific (ESCAP) serves as the United
Nations’ regional hub promoting cooperation among countries to achieve inclusive and sustainable
development. The largest regional intergovernmental platform with 53 Member States and 9
associate members, ESCAP has emerged as a strong regional think-tank offering countries
sound analytical products that shed insight into the evolving economic, social and environmental
dynamics of the region. The Commission’s strategic focus is to deliver on the 2030 Agenda for
Sustainable Development, which is reinforced and deepened by promoting regional cooperationand integration. ESCAP’s research and analysis coupled with its policy advisory services, capacity
building and technical assistance to governments aims to support countries’ sustainable andinclusive development ambitions.