Financing the Water Sector

Financing the Water Sector

• Question of Water Pricing:

- Currently too low Tariffs, not covering even Maintainance & Operation (M&O);

- In South Africa, first 30 L / capita / day are free of charge --> idea of a progressive tariff structure.

• But WHO calculated that the social return in investment into the water sector is 13:1 (if externalities are internalized).

• Need for small local banks (for investments in rural areas) -> through NGOs?

• Soviet Legacy: Over-sized systems, heavy metal, huge losses

• Subsidizing should go to output (connection), not the input (pipes)

• Needed Water Sector reform is not only about tariffs

• Blending funds (loans and grants); criteria needs to be adjusted that this works (Vanessa Celosse)