Welcome to “What’s Up With Water,” your need-to-know news of the world’s water from Circle of Blue. I’m Eileen Wray-McCann.
In Brazil, officials have privatized the water and sewage utility in the state of Rio de Janeiro. The Associated Press reports that it is the largest privatization in the country’s sewage sector ever. The majority of the state-owned utility company’s assets were divided into four water distribution and sewer service areas. A 35-year operating concession for each area was offered at an auction, but only three sold. The fourth will be offered in a new auction. The move to privatize comes after years of broken promises to improve sewage treatment and clean up polluted Guanabara Bay. The city of Rio de Janeiro is located on the bay, and researchers estimate that only two-thirds of its sewage is properly treated.
In the United States, environmental advocates in Florida filed a lawsuit on behalf of a county’s rivers and wetlands. It is the first test in court of Orange County’s legal right for rivers to exist. Attorneys for the environmental groups say the lawsuit is also the first legal test in the United States of the rights-of-nature concept. Eighty-nine percent of Orange County voters approved the charter amendment last fall, the latest victory in a global movement to grant rights to nature. Courts in India and Colombia and governments in Ecuador and New Zealand are among those that have recognized such rights. The Orlando Sentinel reports that the Orange County lawsuit seeks to prevent the filling of 115 acres of wetlands for a mixed-use development. Two lakes, two creeks, and a marsh are named in the lawsuit.
This week, Circle of Blue reports on financing innovations that are changing the shape of water, sanitation, and hygiene access around the world.
People devoted to financing water, sanitation and hygiene in developing nations worried for much of 2020. Utility customers stopped paying their water bills. Funders altered their priorities. Heads of state turned their attention to other virus-related emergencies.
Did COVID-19 affect funding enough to slow the progress toward universal access to clean water, safe sanitation, and hygiene? And if it did, by how much?
The data did not look good. In May 2020, the United Nations reported that 400 million jobs were lost around the world. In January, the World Bank estimated that, last year, the pandemic pushed up to 124 million people into extreme poverty, the first increase in 22 years. Water utilities in developing nations reported that spring and summer revenues for 2020 declined—in some cases by 60 percent—due to business closures, job losses and government orders to provide water for free.
Yet even as the official numbers seemed to augur potential catastrophe, the actual effects of the pandemic on delivering water and sanitation to people who needed it were not nearly as dire. Michael Webster is director of Water and Sanitation in Cape Town, South Africa. He was one of a number of utility executives who said that the pandemic actually galvanized municipal investment in water, sanitation and hygiene, known collectively as WASH. Webster told reporters last summer that plans to improve hygiene and sanitation in Cape Town’s informal settlements accelerated because of the virus.
In news reports and in interviews with Circle of Blue, water and sanitation providers in Asia and Africa said their projects continued apace. The World Bank reported last June that in the short-term, capital expenditures would fall 7 percent but that “financially robust utilities are coping well.” In other words, customers received water. Water treatment plants operated. Managers of sanitation services in informal settlements performed their daily tasks of cleaning toilets and removing waste. Staffing shortages, when the virus sickened workers, were temporary.
Peter Macy is the director of RockBlue, a Cape Town-based nonprofit that provides technical assistance to water utilities in five southeast African countries. He said “One point to make is that these guys are scrappy. They know how to make do when things get tough. If there were service interruptions, I didn’t see it.” That makes sense. Over the last half-century, the WASH sector evolved into a galaxy of projects, programs, departments, idea centers, utilities, service companies, research groups and consultancies. They were all devoted to one objective—delivering clean water, sanitation and hygiene to the developing world.
At the galaxy’s center is the stellar cluster that finances the work—the development banks, philanthropies, investors and government treasuries. Since 1970, more than $400 billion has been spent on WASH in developing nations. That includes official development assistance, official development finance, government aid, loans and philanthropic grants. The WASH sector, in short, has achieved stability, durability and scale sufficient to operate through a pandemic.
Even with such a considerable sum, the common understanding of WASH financing is that it’s still not enough. According to a much-noted study by the World Bank, capital spending for WASH would need to reach $114 billion annually in order to meet the U.N. goal of providing universal access to water, sanitation and hygiene by 2030. The world is still falling short in its quest for universal access. The United Nations says that about 2 billion people do not have safely-managed drinking water, while about 4 billion go without safe sanitation services. Three billion people lack basic hand-washing facilities.
But there is also good news. That $400 billion in aid, assistance, loans and grants achieved three results that are scarcely recognized or celebrated in the WASH galaxy.
First, the funding generated a sturdy WASH delivery sector that rallied the world around the goal to provide every person on Earth with access to clean water, safe sanitation, and hygiene.
Second, the $400 billion-plus investment generated an array of WASH projects that are delivering measurable results. According to the U.N., between 2000 and 2017, about two billion people gained access to safe water supplies and better sanitation.
And third, an inventive community of finance professionals has a new message about how to achieve universal WASH. Adequate financing is important, they say. But it’s more essential to help those who receive WASH funding to become much more “creditworthy,” to open new paths for raising money and to get it faster to WASH providers.
The innovators are everywhere. Uptime is a nonprofit working in Africa. It uses “results-based” contracts with clear requirements for ensuring that pumps and other water supply equipment operate over 90 percent of the time. Duncan McNicholl, a co-founder of Uptime, said “The idea is to move from community management to professional maintenance services at scale.”
Another financing option gaining ground blends development and philanthropic funds to attract commercial investment. The tool works for donors, foundations and governments interested in environmental and social priorities. It can attract impact investors who seek social goals and will accept lower financial returns than commercial investors typically tolerate. And blended finance attracts some commercial investors who may be interested in WASH because projects operate over longer horizons.
Uptime and others represent the financing evolution in the WASH world over the last two decades. The process is slower than desired, and it faces endless challenges. But the sector is moving to more effective financing models. And that steady progress offers hope that in the not too distant future, all people will have access to clean water, safe sanitation, and hygiene.
And that’s “What’s Up With Water,” from Circle of Blue, where water speaks. More water news and analysis await you at circleofblue.org. This is Eileen Wray-McCann – thanks for being here.