Financing Water: Investing in Sustainable Growth
Achieving the Sustainable Development Goals will require a historic scaling up of investment in water. OECD Policy Paper Financing Water: Investing in Sustainable Growth makes the economic case for water-related investment and charts a series of actions to better value water and ultimately facilitate investment.
The paper provides an overview of existing barriers to filling the finance gap, including undervaluation, high up-front investment costs, and lack of appropriate analytical tools and data to assess complex water-related investments. It discusses how various policy instruments can stimulate innovation in water-related technologies and, in turn, lower the costs of minimising water risks, enhance water-related services, and generate investment opportunities. It includes a map of water-related financial flows with a taxonomy of instruments and vehicles for infrastructure financing that illustrates the wide range of financing channels for infrastructure investment (both direct and market-based) as well as a discussion on long-term strategic planning of investment pathways that reduce water risks at least cost and can be adapted over time in response to developments. Finally, it spotlights blended finance – the strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries – as a promising approach to scale-up financing flows for water.
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