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Published on: 16/10/2017

Ahmadou Abdoulaye Dicko, president of the Water Users Association of Gorgadji community (Burkina Faso), is collecting and noting down water user payments. Photo:IRC

The World Bank estimates that achieving the Sustainable Development Goal for WASH is going to cost something like US$ 114 billion per year, an order of magnitude up from current levels of investment. This number can seem frightening, but we should embrace it as a sign of the sector starting to grow up.

I like the big picture thinking behind these numbers. One of my greatest frustrations over the years has been the tendency for the WASH sector (I'm sure it's true for other sectors too) to run for cover in the face of numbers like these. For decades we have avoided the unpalatable truth that providing safe water and sanitation to everyone is (relatively) expensive, taking cover behind convenient fables like "community management" or more recently "social enterprise".

Taking a systems approach

Yet looking at WASH as a system; understanding the need for all the different elements of the WASH system to be working for a WASH service to be delivered; and, understanding that all those different elements of the WASH system (infrastructure, but also regulation or monitoring) need to be financed means that there is no escaping from the big numbers. What's more, taking a systems perspective can also, help to make them less frightening. Because while isolated attempts to make individual "communities" or "social enterprises" deliver lasting WASH services have not been entirely successful, they have also not comprehensively failed. People are willing to pay for services, and small private sector operators and local utilities do provide them. Put another way, user's own spending can and does pay for the bulk of WASH service delivery. It's just that often those services aren't very good and in particular not very equitable.

By looking at the costs of providing WASH services to an entire district, city or country, putting the big numbers on the table, and then matching them against the potential revenues available within the district, city or country - from taxes, tariffs or transfers - it's possible to identify the financing gap.  And, this done, to start thinking about the potential sources to fill it.  Importantly, this gap is often temporal in nature – we need a lot of money now for investment, while income from payment for services (and Government subsidy) is going to trickle in steadily for years.

Blended finance

This is the insight behind the Bank's new push for blended finance. That Governments' and users' payments for WASH services can, if bundled properly, provide the sort of long-term guaranteed financial flows that can tempt local private finance (everything from micro-credit to bonds) to make the big up-front investments. It's not without risk, and there's no escaping the reality that universal access to services does and will continue to require subsidy. But by looking at the big picture, at the whole system, and its costs, it may be possible to begin addressing these in a less piecemeal and ultimately more effective way.


At IRC we have strong opinions and we value honest and frank discussion, so you won't be surprised to hear that not all the opinions on this site represent our official policy.

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