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Christopher Walsh

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Water Supply Overview

Water is at the center of economic and social development; it is vital to maintain health, grow food, manage the environment, and create jobs. Despite water’s importance, over 783 million people in the world are still without access to improved water sources, and even more are without access to consistently safe drinking water.  

Population and economic growth are pushing the limits of the world’s finite water resources.  In some cases water scarcity is already constraining economic growth. Lack of access to improved water supply and sanitation services impose huge costs on society, and especially for the poor.  Even where access exists, services have been characterized for decades by poor management, inadequate financing and low levels of investment.  Very few water or wastewater utilities in the developing world recover adequate O&M costs from customers and only a handful recovers O&M, debt service and depreciation. Despite the importance of water for development, in a recent sample of 15 countries from sub-Saharan Africa less than 2% of government expenditures annually go to water supply and sanitation and a third of this annual budget was often not spent. The uncertainties brought about by political economy and climate change only add to this sector’s already considerable challenges. Not surprisingly, world leaders now rank water as one of their top critical issues. 

Water supply and sanitation is a major priority for the World Bank. The World Bank is the largest external source of financing for water supply and sanitation projects. In FY11 this support was almost US$4 billion and represented 1 in 4 of all World Bank operations. In a typical year, there is more than US$14 billion under implementation for water supply and sanitation. There are more water and wastewater professionals in the World Bank (over 250) than in any other international development institution.  

The WSS sector is an increasing complex environment and there is now a growing recognition that there are decreasing returns to old approaches.  Fortunately, this growing awareness brings new thinking and opportunities.  The new Water Vision for the World Bank (“Water helps people, economics and ecosystems thrive: a Water vision for the World Bank”, forthcoming 2013) outlines our own updated emphasis.  For example, the norm in World Bank water supply and sanitation projects is now to take a multi-sector and integrated approach to managing water resources.  This also means that integrated urban water management approaches are increasingly found in research and pilot projects, and particularly in areas where water is a constraint to economic growth.  World Bank supported private sector operations for water supply and sanitation are now more demand driven, modest in scale and locally financed than previous large international interventions.  The recognition of water as a human right is widely accepted, and the World Bank is working with its clients through a variety of pilots and approaches on how to implement that principle.  New tools to map, target, serve the poor and women and girls are also being developed. The Vision also outlines the importance of water in non-water projects, such as in agriculture and energy, and encourages that there be an explicit consideration of water resource availability and water related trade-offs in the development agenda. 

The results under our projects in FY11 are typical for most years: the 27 projects approved in this year directly benefit 5.1 million, of which 3.5 million and 1.6 million beneficiaries are in urban and rural areas, respectively. Furthermore, 1,307 improved community water points are being constructed or rehabilitated under these projects. About 364,000 new piped water house connections and 499,000 rehabilitated connections are expected. In FY11, 20 water supply and sanitation utilities are being supported -- five are in the Latin America and Caribbean and the remaining 15 are in sub-Saharan Africa.

Responding to the demand from our clients, World Bank water supply and sanitation projects support: i) infrastructure to expand service coverage; ii) improved service quality and financial sustainability; iii) measures to meet the needs of the poor and unserved; and iv) initiatives to build responsive utilities and strengthen local institutions. In addition, and through non-project efforts, the Bank provides no cost assistance for client countries to help them design appropriate policies and suitable legal frameworks that provide incentives to both invest and operate efficiently. 

However, with such massive challenges in the water supply and sanitation sector, financing from the public sector and development aid is not enough. Therefore, the World Bank consistently seeks to leverage financing from external partners, governments and the domestic private sector. As an example, the World Bank Water and Sanitation Program recently provided a small amount of funding that allowed some 70 small and medium local private water supply and sanitation enterprises to leverage more than US$10 million. The initiative brought new access to sanitation for 50,000 people and new access to water to nearly 200,000 people.  

The World Bank is also a leader in knowledge creation and sharing for water supply and sanitation.  Besides the many publications, blogs, speaking engagements and learning events it produces annually, the World Bank regularly partners in a variety of forums at the global, regional and country levels with key agencies (UN Water, UNICEF, WHO, etc). The World Bank is also an active partner in a number of water supply and sanitation networks – such as the International Water Association, Water Supply and Sanitation Collaborative Council, Sanitation and Water for All, Stockholm International Water Institute, AMCOW, and others.