Background and objectives

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.

The Action Group activities are co-financed by Aqua for All.

Activities

During 2021, the AG implemented a research study on WASH and financial Inclusion 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 (see research publications in the resources below).

Following the completion of the research, consultant Jeroen Trimpe Burger from the Rebel Group worked with AG members and external stakeholders to identify WASH indicators that can be used by social investors in their decisions. The initial list of indicators is shared in the working document published in March 2023 (see resources below). The work around useful indicators for WASH will continue in the next year.

In addition, to foster its work towards reducing the information gap in the sector, the AG will develop during 2023 and 2024 a webinar series on Climate and WASH open to all interested in the topic and Investors Sharing Sessions, a series of closed sessions thought for investors aiming to promote exchange experiences and learning from the projects being implemented by the AG members and other stakeholders. The recordings and key takeaways of the webinars and the summary of learnings from the investors sessions will be shared in the resources below.

Resources

  • Investors Sharing Sessions

# 1 Investor Meeting with Incofin Investment Management, 16 November 2023 (summary)

  • Climate and WASH Webinar Series 2023-24

# 1 ‘Climate and the WASH sector: Introduction to Financial Service Providers’, 5 October 2023 (SummaryRecordingPresentation)

# 2 ‘COP28 in Context: Insights on WASH Financing’, 20 February 2024 (Recording, Presentation)

  • Publications

A Brief Introduction to WASH for Impact Investors, September 2022

A Handbook on WASH for Impact Investors - Part I, September 2022

A Handbook on WASH for Impact Investors - Part II, September 2022

  • Working Documents

WASH and Financial Inclusion: A Set of Indicators to Guide the Activities of Impact Investors in the WASH Sector, March 2023

  • European Microfinance Week Sessions

EMW 2022 Panel session: Thinking out of the box: Blended finance solutions to promote WASH lending in Cambodia (presentation), November 2022

EMW 2021 Workshop session: WASH and financial inclusion (summary and recording), November 2021

EMW 2021 Case study session: Progress on WASH lending (summary and recording), November 2021

EMW 2020 Panel session: Investing in Water and Sanitation (summary and recording) November 2020

EMW 2020 Working session:  Developing Indicators for water and Sanitationn (summary and recording) November 2020

Action Group Head

Owais Shafiq is the Senior Impact Finance Officer at Aqua for All. Prior to joining Aqua for All, Owais worked for several years in positive impact sectors regarding energy access, public health, sustainable finance, and inclusive business principles with international organisations, such as the OECD, NGOs, social enterprises, and impact advisors.

Owais holds a MSc in International Management and Sustainability from Sciences Po, Paris, and a Bachelor of Engineering from Bangalore, India.

Contact

Joana Afonso
email: jafonso@e-mfp.eu

Photo: Liz Martin via Unsplash