A Proposal to Establish the ‘Global Human Water Security Fund’

 
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(1) Overview

Some of the world’s leading water experts met in Geneva on 7 July 2017 to respond to the urgent need to ensure global water security. The Founding Signatories to the Geneva Actions on Human Water Security call for the establishment of a Global Human Water Security Fund (see https://genevaactions.org/) to support three strategic water actions:

Action One: Secure the delivery of basic water needs for people

Action Two: Secure improvements in the condition of watersheds, streams, rivers and aquifers

Action Three: Secure better water planning, management and governance

(2) Responding to a global and urgent need

In 2015 there were some 2.2 billion without access to safely managed drinking water services and 4.4 billion without access to safely managed sanitation services.

Most of the world's rivers are polluted and are not suitable for direct human use. This imposes large costs on billions of people that depend on streams and rivers for their water needs, as well as on animals and plants.

This is not just a water problem. In most dry and semi-arid locations water extractions from aquifers and rivers have been growing at unsustainable rates, which jeopardizes future food production and impedes future social and economic development.

In nearly all parts of the world water planning, management, and governance needs to be improved. The very poor incur a high cost relative to their incomes to access poor quality water. Yet many of those who can afford water do not pay a price that supports a financially sustainable model for the provision of water services.

This presents an immediate need in water, and demands a dedicated funding mechanism.  Such a fund should invest in: (1) meeting basic human water needs; (2) conserving watersheds and aquifers; and (3) improving water governance.

(3) Existing water related funds fail to meet water needs

Many funding mechanisms include investments to overcome water problems, but there is no dedicated global fund for water. Water investments that are made through existing global multilateral funding mechanisms include the Global Environment Facility (GEF) established in 1992 and the Green Climate Fund (GCF) created in 2014. For these funds, resources are mobilized from various sources, but the main contributors are the governments of developed countries. Based on proposals by a recipient country and an implementing agency, funding allocations are made by a council (in case of GEF) or a board (in case of GCF) that comprise representatives of donor and recipient countries. A Blue Fund has also been proposed by the Global High-Level Panel on Water and Peace to provide concessional and preferential funding for transboundary freshwater cooperation in developing countries.  None of the existing funds are primarily focused on water and they have made few investments related to global water problems while the proposed Blue Fund does not respond to the scale or scope of the global water needs.

Private investment funds seek to address water problems by focusing on profitable water activities with funds often directed to infrastructure or in water-related companies listed on major stock exchanges. Examples include the Allianz Global Water Fund, Calvert Global Water Fund, and Pathfinder Global Water Fund. Such funds do not invest in public good-related water problems such as river pollution and vulnerable households’ access to clean water and sanitation.

Multilateral development banks and bilateral aid agencies are another source of funding for water investments. Examples include the World Bank, the Asian Development Bank, and the Asian Infrastructure Investment Bank. Water investments are also made directly by NGOs such as the World Wildlife Fund for Nature, the Nature Conservancy, Care International, and by national aid agencies.

The estimated annual gap in global investments in water and sanitation alone is some USD 28 billion per year from 2015-2030 if the Sustainable Development Goal (SDG) 6: “Ensure availability and sustainable management of water and sanitation for all” is to be achieved. While there is insufficient funding in water, sanitation, and health there is grossly inadequate support for the conservation of watersheds and aquifers or for improved water governance.

Critical to achieving the targets under the SDG 6 is a dedicated fund that: (1) prioritizes marginalized and vulnerable households, and (2) delivers strategic investments in a whole-of-the-water-system that includes catchment and aquifer conservation and improved water governance.

(4) Responding to the global funding gap on water

The Global Human Water Security Fund (the Fund) would be designed to address the shortcomings of the existing water related funding mechanisms and respond to the global funding gaps that could be as much as USD 50 billion per year to meet SDG 6. The key objective is to provide funds in support of the Geneva Actions that, in turn, will help to achieve the goals set under SDG 6. The Fund would be supported by the 55 Founding Signatories from 23 countries who would provide strategic and pro bono advice to ensure the Fund delivers on its key objectives and actions.

The Fund would enhance the opportunities of prioritized developing countries to access water-related funding in both hard and soft infrastructure. It would focus on two types of projects: (1) those implemented via an accredited entity and (2) projects directly implemented by the recipient, with a proper monitoring mechanism.

The Fund would enhance sustainability of projects by supporting, where possible, investments that incorporate public-private partnership consistent with the Geneva Actions and that help leverage public funding in support of these actions. The Fund would assist in the development of effective public-private partnerships that balance the objective of mobilizing sufficient resources for sustainable project outcomes (basic needs, conservation, and governance) while providing public good outcomes, especially where there are appreciable market and governance failures.

Notwithstanding its primary focus on water, the Fund would promote holistic approaches in responding to water challenges. For instance, a water-health-environment focus would be needed in the delivery of basic water needs and cross-cutting projects. Such a focus would likely provide for more efficient and effective delivery of sustainable development outcomes.

(5) Architecture of the Fund

The underlying architecture of the Fund, and its operations, would be decided by the principal donors and potential recipient countries.   We propose that the fund be outside the UN/IFI framework, with more independence than an aid agency model permits. It would provide a grant-based funding approach that would leverage every investment and focus on maximizing outcomes in support of the Geneva Actions.  

The shareholders would all be donors to the fund where voting rights would be determined by the share or proportion of the contribution of each donor to the total amount in the Fund. Such a structure would allow funding from donor countries, and in due course from non-government entities and corporations, and also individuals.  A possible framework for the Fund would be to structure it as a Non-Profit Corporation Limited by Guarantee.

The shareholders would appoint the Chairman and the Board of Directors. The Board should include a minimum number of Directors from recipient countries and appropriate diversity in its membership. The Board’s role would be to establish the Governance Charter and, ultimately, be responsible to the shareholders of the Fund to ensure the successful delivery of the Geneva Actions. A professional staff would answer to a Chief Executive who would report to the Board.  

 

Founding Signatories of the Geneva Actions on Human Water Security

 

 

 
Martyn Pearce