Catalyzing a Sustainable Water and Sanitation Economy
Summary
In 2023, Aqua for All committed to scaling the Making Water Count (MWC) program and expanding it to new geographies in Africa, Asia, and Latin America. MwC is a 5-year initiative funded by the Netherlands Ministry of Foreign Affairs to improve access to water and sanitation by addressing finance and service gaps in the sector, By successfully raising $32.7 million for this commitment, Aqua for All can reach an additional 3 million people with access to clean water and sanitation and an additional $107.8 million mobilized towards water and sanitation by 2030. MWC will also accelerate the embedding of our renewed approach to tackle climate change, as laid out in Aqua for All’s Climate Policy 2022 and will ensure investments are achieving the expected impact as sustainably as possible. MWC uses an innovative approach to scaling water and sanitation services by working on both market development and increasing financial access.
Approach
Aqua for All commits to scaling its Making Water Count (MWC) program to new geographies in Africa, Asia, and Latin America. MWC is a 5-year initiative funded by the Netherlands Ministry of Foreign Affairs to improve access to water and sanitation by addressing finance and service gaps in the sector. MWC uses an innovative approach to scaling water and sanitation services by developing the market and increasing financial access. It has achieved an overall financial leverage of almost 1:5, has reached 3.1 million people directly with access to clean water and good sanitation, and is well on track to reach the targeted 4 million people by 2024. By raising $32.7 million, Aqua for All can reach an additional 3 million people with access to clean water and sanitation and an additional $107.8 million would be mobilized towards water and sanitation by 2030.
Aqua for All will support water and sanitation enterprises to innovate, scale, and become investment ready by providing financial support (grants, results-based incentives) , acceleration opportunities, and technical assistance, while catalyzing private investments in water and sanitation through the development of tailored blended finance mechanisms and de-risking investments. Aqua for All will increase the program’s impact by leveraging as much private capital as possible for every dollar grant money while keeping an “impact first” focus, which keeps low-income, harder to reach communities and environmental protection at the center of all initiatives. MWC will also provide training for 400,000 people and contribute to creating 15,000 full-time permanent jobs in the sector. Aqua for All will accelerate the embedding of its renewed approach to tackle climate change, as laid out in its Climate Policy 2022, and will ensure investments achieve impact as sustainably as possible.
Action Plan
2023: Launch new funding phase, developing/sourcing of projects with partners, development of climate specific solutions and finalizing product development.
2024: Receive project proposals, screening, and developing projects, developing partnerships for ecosystem building, expanding the geographical scope of work. Contract USD 5.5 million of grant funding, reaching 200,000 people
2025: Contract USD 8.2 million of grant funding, reaching 300,000 people
2026: Contract USD 10.9 million of grant funding, reaching 400,000 people
2027 to 2030: Continued monitoring and support of contracted partners. Reaching 3 million people with water / sanitation services and USD 143 million in private capital invested in WASH.
Aqua for All will be able to define quarterly planning milestones while reporting on progress on a yearly basis as the efforts develop.
Background
Access to safe drinking water and sanitation services is a basic human right. However, in 2020, 2 billion people still lacked access to safe drinking water and 3.6 billion people lacked access to safe sanitation services (WHO & UNICEF, 2021) . If the current trend continues, by 2030, an estimated 4.4 billion people will be without access to these basic services, disproportionately affecting vulnerable communities in low-income countries (UN, 2019) .
Water and sanitation services are primarily financed by the public sector but to achieve universal access by 2030, an additional investment of US $1.7 trillion is needed – three times the current investment levels, according to the World Bank. Moreover, the climate crisis exacerbates the issue with increased risks of floods, drought, and cyclones, necessitating adaptation measures for sustainable service delivery. The need for climate adaptation and mitigation measures increases the existing financing gap. In addition, enterprises that have a significant role in reaching underserved communities face unfavorable enabling environments and require targeted support to become investment ready, particularly within regulatory and financial scopes. Therefore, there is an urgent need for catalyzing private investment and dedicated enterprise support to bridge the finance and service gap and achieve SDG 6.
Financial inclusion for sustainable water and sanitation enterprises creates an opportunity for private investment to complement public efforts. Access to investments and working capital stimulates growth, professionalization, and sustainability of the sector. However, limited knowledge of the water and sanitation sector and a lack of successful examples of investment hinder many private financiers. To increase water and sanitation allocations, investors must understand the risk-return profiles and the opportunities and impacts gained. Additional allocations can ensure that water and sanitation services are climate-resilient, sustainable, and affordable for all.
Progress Update
Partnership Opportunities
Financial resources: To achieve the targets of this Commitment to Action another €20M (USD 21.8M) is needed, for which access to philanthropists and donors is sought beyond Aqua for All’s current network.
Best practices information: Aqua for All continues to look for innovative ideas, both for climate-smart WASH service delivery as well as in the access to finance domain, and for additional WASH service/ technology and TA providers in the planned countries of operations. Especially in countries where Aqua for All is not currently active, the network among relevant stakeholders will need to be built
Financial resources, including de-risking: mechanisms that support the creation of blended finance structures that can catalyze investment in water and sanitation; results-based funding: incentivize financial institutions in developing water and sanitation-based lending; Technical assistance: to financial institutions or impact investors for developing water and sanitation products, impact strategies, and knowledge; and impact linked funding: offering better terms for improving impact measures for enterprises.
Best practice information: direct grant support to SMEs from early stage to scaling maturity to improve operations and business model, test innovations, and overcome barriers to scaling and investment readiness.
Technical assistance: local experts to target specific business development challenges and to financial institutions or impact investors for developing water and sanitation products, impact strategies, and knowledge; incubation and acceleration programs to support the entrepreneurial ecosystem and nurture enterprises.
Implementing partners: ecosystem building, through support of marketplace and networking events for ecosystem actors (government, private sector, NGO, financial actors, support organizations) .