UN Sustainable Development Goal (SDG) 6 is fully dedicated to ensuring access to water and sanitation for all. Globally, 2.1 billion people lack access to safe drinking water, while 4.5 billion people lack access to adequate sanitation. Besides a large negative impact on health, inadequate water supply results in large economic losses estimated at USD260 billion annually. Investing in WASH (Water, Sanitation and Hygiene) can also have important environmental impacts, reducing water pollution and waste production and, by improving access to clean water and providing better sanitation and hygiene for poor and marginalised populations, the projects can contribute to strengthen these populations' resilience to the adverse effects of climate change.

Despite opportunities for financial, social, and environmental return, the sector is still mainly supported by public funds, which are insufficient to meet its high and increasing demand. According to research of the Global Impact Investing Network (GIIN), only 7% of the USD 239 billion impact assets under management globally in 2020 were allocated to the WASH sector.

Many investors find it difficult to grow their WASH portfolio, because they lack clarity about the sector, how it works, and what they can get out of it. The e-MFP WASH Action Group was created in May 2021 to address key information/knowledge gaps in the water and sanitation sector, and to map and define water and sanitation indicators that can be widely used by different stakeholders in the financial inclusion sector, particularly by the investors in their decisions.

During 2021, the AG implemented a research study led by consultant Sachin Kumar aiming to build a shared understanding of water and sanitation value chains, terminology and best practices, to identify different types of WASH SME's and respective business models, and also identify pre-conceptions and barriers around water investments and counterarguments to tackle them. The results of the research were discussed during EMW 2021 session 'WASH and Financial Inclusion' and will be published by e-MFP in February 2022.

Resources

AG preparatory sessions:

EMW 2020 Panel session “Investing in Water and Sanitation”, November 2020

EMW 2020 Working session “Developing Indicators for water and Sanitation”, November 2020

Action Group Head

Alvaro Ma is the Impact Finance Manager at Aqua for All. He previously worked as Head of Credit Analysis at Oikocredit between 2016 and 2019, and as a Credit Officer and then Head of Planning at Prymera, a microfinance institution in Lima, Peru.

Alvaro is a Peruvian/Dutch national. He holds an MBA & MSc in Financial Management from the Rotterdam School of Management, Erasmus University.

Contact

Joana Afonso
email: jafonso@e-mfp.eu

Photo: Liz Martin via Unsplash