MDG's , 2nd half

enhancement MDG-commitment, from solidarity to trade

In the period 2000-2018 the emphasis on access to water as a product changed into water and sanitation as a service, while WASH was more and more accepted as an economic good (for which payment is acceptable to maintain the services) and social good (giving priorities to SDG6 as basic intervention to support other MDG’s-SDG’s) . The number game introduced by MDG-targets on access to water and sanitation, by halving the number of people without access turned into a more adequate approach by ladders of improvement in both water and sanitation services. The recent developments around circular economy thinking has turned the sanitation economy today into a threefold economy of sanitary services, circular economy waste processes (with value creation in new resources) and data economy on access, service level, health and other SDGs impact areas.

Policy developments

In 2008 the International Year of Sanitation was declared and on 28 July 2010 the human right to water and sanitation was explicitly recognized by the United Nations General Assembly through Resolution 64/292, marking a turning point in the rights based approach. During this period PPP thinking evolved in public authorities considering outsourcing their operational service responsibilities to private players and accepting private investors under concession-contracts and PPP acts.

Actors and instruments

In this period, sanitation became more and more important. International corporations and institutions launch the Toilet Board Coalition (Geneva). Sanitation economies around services, circular economy and data economy emerge with involvement of large corporations and finance institutes. The WEF - Davos annual World Economic Forum starts publishing an annual global economic disaster report with the top 5 disasters all water and sanitation related (natural disasters, migration and conflicts, climate changem food security and environmental degradation and pollution of resources). The WBCSD launched its water program in 2008. In 2013 World Toilet Day was installed by the UN (annually on the 19th November). This was lobbied for by the World Toilet Organization, specifically its founder Jack Sim. 

In 2014 the nation-wide Swachh Bharat Mission was launched by the Prime Minister of India, to eradicate open defecation and achieve universal sanitation coverage in India. In 2009, DGIS kick-started an Indian-Dutch partnership through WASTE’s Financial Inclusion Improves Sanitation & Health (FINISH) programme, with a grant to work with microfinance institutions (MFIs), making the investment case for sanitation and improving sanitation for households. Over €55 M in microfinance was leveraged locally for sustainable sanitation, contributing significantly to India’s catalyzing decade towards announcing the milestone of an open defecation free (ODF) country in 2019 and the foundation for the scaled-up 6-country programme, FINISH Mondial.

The second half of the MDG period reflected numerous financial innovations driven by trust funds, thematic funds (like climate funds, innovation funds) and platforms like GIIN, OECD, WBCSD, WEF and impact investment funds, derived from charity and philanthropy foundations. Micro finance in WASH gets an impulse from water.org (and later watercredit.org) and commercial banks with a development foundation branch. Start-ups from the early 2000s started growing into promising scalable social enterprises, in both drinking water and sanitation services (Sanergy, Safi sana, Sanivation, Clean Team, Tiger Toilets, Banka toilet, Garv, Nazava, BWN, Aqua Clara, WasteTransformers …and many more).

In 2009 the Sankalp forum was initiated "to create a thriving ecosystem for business-led inclusive development". One of their major themes is Health, Water and Sanitation. 

Developments and lessons learned

Venture Capital (VC) and Private Equity (PE) capital is invited to participate in operational investments around water, sanitation and their link with the circular economy. Blended finance of all kinds including social and green bond-structures bring aid and trade sector and their financial means  together (i.e. donor money-ODA-WB-budget support-investments-impact investments-bonds). Green-blue bond structures are developed, carbon credit structures are designed for safe water and for energy products from sanitation. DRFLC (de-risking first loss capital) structures come up between NGO’s, donor’s and investment funds. 

Sustainability 
In WASH, the awareness grew around sustainability, when being confronted with extreme short life cyclus of donated infrastructural aid like handpumps, toilets, treatment systems and pumping stations. Cost recovery of OPEX (operational expenditures) including money for maintenance and repair/replacement was not established. You can read here  which effects this had on Dutch policy choices and implementation.

The second half of the MDG period reflects numerous financial innovations driven by trust funds, thematic funds (like climate funds, innovation funds) and platforms like GIIN, OECD, WBCSD, WEF and impact investment funds, derived from charity and philanthropy foundations. Micro finance in WASH gets an impulse from water.org (and later watercredit.org) and commercial banks with a development foundation branche. Green-blue bond structures are developed, carbon credit structures are designed for safe water and for energy products from sanitation. DRFLC structures come up between NGO’s, donor’s and investment funds.

 

Further Information

Presentation by Hans Rosling about WASH (minutes 35 - 45)