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Financial sustainability

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This chapter reviews how the water and sanitation sector in EECCA countries has been financed over the last decade, examining each source of finance in turn. As set out by OECD (2009), there are three main sources of finance to cover the costs of delivering water and sanitation services: tariffs, taxes, and transfers from other countries in the form of official development assistance (ODA). These are referred to collectively as "the 3Ts". In addition, repayable financing, from either public or private sources, may help close the financing gap during an intermediary period although ultimately they need to be repaid from revenues generated by the 3Ts. The chapter then stresses the importance of evaluating where financing is going to come from if the current situation of deteriorating assets and service quality is going to be reversed. Doing so will require conducting strategic financial planning at national level, as some countries in the region have done.

Document Type: Review Article

Publication date: August 1, 2011


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