1. What has informed SWA engagement with finance ministries?
Clarissa Brocklehurst , Senior Advisor, SWA Secretariat

2. What is this? A room full of Finance Ministers ready to discuss WASH – a dream come true for many of us

3. Engagement with finance ministries is what sets SWA apart….
Since 2010, always finance ministers in attendance
Prep process is key: often the first time water ministers sit with their finance counterparts
How to make this work better?
Need photo here
2017: 14 ministerial-level representatives of finance and planning ministries

4. We have done research Held on March 5, 2013
Hosted by the Global Research Institute and the Water Institute of the University of North Carolina
Participants from Uganda, Nigeria, Sierra Leone, Liberia, Gambia and South Sudan
Observers from SWA Secretariat
“Chatham House Rules” observed
Supported financially by UNC, DGIS (via UNICEF), Bill and Melinda Gates Foundation

5. Role of Finance Ministers in shaping WASH investments
Finance Ministers consider themselves stewards of scarce resources
They want value for money
They are driven to grow the economy – so want to know how WASH will contribute
They need to know not only that WASH is a good investment, but which kinds of WASH investments constitute value for money
They are interested in links to other sectors
Are interested in links to other sectors – other parts of water sector, health, education – willing to act as conveners between Ministries
Complex process
Frustration with “flat” briefings from technocrats
Staff need modular briefing materials that can be tailored to Minister’s interests and concerns
On-going, supportive relationship will mean staff know where to get relevant information rapidly

6. Perceptions of the WASH Sector
Some perceived weaknesses:
Fragmentation – multiple ministries involved
Lack of data
Weak absorptive capacity
Poor record of sustainability
Finance Ministries want to see multiple ministries engaged to ensure cohesion
Finance Ministers are frustrated by WASH Sector inability to demonstrate and track progress

7. Lessons for High Level Meetings?
HLM linked to World Bank Spring Meetings works well
Finance Ministers want the HLM to be a learning opportunity
Make HLMs informative and educational for Finance Ministers (themes, keynote speakers, etc.)
Frame WASH in the context of its contribution to economic growth and a sound, value-for-money investment
Address sustainability
Start early and maintain an on-going, multi-Ministry, multi-stakeholder dialogue
Be ready to provide modular briefing materials, data and other information on short notice to respond to windows of opportunity
Make a strong case for WASH as a contributor to economic growth and a sound, value-for-money investment

8. We have focused on making the economic case
investment in water supply and sanitation makes good economic sense
failure to invest has massive costs
water supply and sanitation also offer non-monetized benefits
improvements to water supply and sanitation yield massive returns on investment
significant investment is needed
government investment is an important part of the financing of water supply and sanitation

9. We’ve explained the benefits of improving WASH
Improves quality of life
WASH-related jobs created
Environment improves
Boosts tourism
Reduces water treatment costs
WASH services improve
Economic opportunities
Efficient water use
Frees up water for production (agriculture, industry)
Sustainable growth
Improved WASH leads to direct benefits for households
Reduced mortality and morbidity
Lower prevalence of stunting, which affects cognitive development and long term prospects
Improved productivity
Reduced downtime due to illness
Time spent collecting water or finding a safe place to defecate is freed up: more time for productive, educational activities and rest
Dignity, reduced risk of sexual violence for women and girls
Improved quality of life in a clean environment
And for society at large…
Employment opportunities: in the construction and operations of WASH facilities, overall sector management, monitoring, etc.
Economic opportunities: improved availability of water for other productive uses (agriculture, industry) ; cleaner environment boosts tourism revenues and competitiveness
Environmental impacts on both land and water bodies
Diseases reduce
Mortality & morbidity drops
Stunting reduced
Better education outcomes
Productivity increases
Time freed up

10. Sustainable water sector
We’ve educated Finance Ministers on the need to improve operating efficiency
Consumers use water
More efficiently
Investments in new access expand revenue base
More satisfied customers = more willing to pay
Staff and managers rewarded for improved performance
Subsidies for new access provided in transparent and targeted manner
Staff motivation improves
Tariffs increased to cover greater portion of efficient costs
Reduced losses: reduced costs
Service quality improves
Technical efficiency improves
Service providers fully
cover operating costs
System assets adequately maintained
Sustainable water sector
Private finance mobilized to increase investment capacity
Reduce costs and free-up wasted resources
Invest in more capital-efficient solutions
Implement asset-management systems
Reduce non-revenue water
Improve collection rates
Reduce energy costs
Maximize reuse and resource recovery
Professionalize staff
Enhance governance arrangements

11. An efficient water sector frees up scarce public funds which can be reallocated to:
connecting the poor and the hardest to reach;
the sub-sectors with limited revenue sources (e.g. sanitation versus water supply)
be used in a catalytic manner to leverage private finance (“blending”)
We have spoken to Finance ministers about ways to make sure the poor are served – sustainably

12. We’ve discussed the sources of finance available to the sector
Water service provider’s finances
Costs
Funding
REPAYABLE FINANCING
Capital maintenance
Financing gap
Concessional finance
Traditionally, bulk of repayable finance for water came from concessional finance, i.e. from development finance institutions with a grant element
To meet the SDGs, commercial finance needs to be leveraged with a particular focus on domestic commercial finance
Financial costs
Commercial finance
Operation and maintenance
Transfers
Traditionally, bulk of repayable finance for water came from concessional finance, i.e. from development finance institutions with a grant element
To meet SDGs, commercial finance needs to be leveraged with a particular focus on domestic commercial finance
Investment costs
Taxes
Tariffs
Funding
PUBLIC
PRIVATE

13. We’ve encouraged Finance Ministers to have a WASH financing strategy
avoid squeezing out private finance
target efficiency improvements
build pipelines of bankable projects
put greater emphasis on blending
A financing strategy that includes commercial finance
A sector wide financing strategy would address these issues.

14. The goal: Finance Ministers work with sector ministers to support….
Efficient, affordable universal services for everyone, financed by a mix of sources including tariffs/user charges, taxes and repayable private finance, predominately from domestic sources.
Comprehensive planning for the sector includes sustainable financing strategies
…and comprehensive planning for the sector includes sustainable financing strategies

15. Thank you