Six key solutions for pro-poor WASH financing

Financing water and sanitation improvements for the very poor remains a major challenge over large areas of the globe. In the lead-up to World Water Forum 2012, sector specialists throughout the world have been asked to report specific solutions for addressing this challenge. Based on these concrete examples, IRC and WSUP today propose six key solutions for pro-poor WASH finance. We urge financing institutions, governments and service providers worldwide to put these key solutions into practice:

1) Use life-cycle costing approaches to ensure that all life-cycle costs of infrastructure and services are fully taken into account, and that maintenance is financed.

2) Maximise local small-scale private-sector involvement in water and sanitation service provision for the poorest.

3) Introduce innovative water tariff systems that ensure financial sustainability and affordability for the poorest.

4) Use water revenues to cross-subsidise sanitation: incorporating sanitation charges into water bills is a key approach for financing sanitation services (including for people who could not otherwise afford them).

5) Use output-based financing approaches: by making disbursements dependent on demonstrated delivery of services to the poorest, there is an incentive for funds to be spent more efficiently.

6) Use progress-linked finance (PLF) approaches: the funder commits to provide concessional finance at a specified time in the future, on condition that the service provider has by that time demonstrated capacity for commercially viable service delivery to low-income areas.

For more details and specific case studies, see the Discussion Paper “Financing water and sanitation for the poor: six key solutions“, available from the WSUP website .

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