Water Security Improvement Toolkit #4 – Funding Water Security

Funding Water Security: This is the fourth in a series of six toolkits that present topics and strategies for addressing issues of water security.

Funding is essential to translate the WSI process into activities that provide tangible benefits to water users. Funding must be identified and secured early to:

• Cover the costs of the assessment and planning steps
• Be the “reality check for action planning (only funded activities will be implemented)

Financing can come from government taxes, user tariffs, international aid transfers and private sector investments. The type of water security activity often determines the type of financing that will be most readily available.

Engaging potential financers early in the WSI process is essential because:

• The clarification of financial capacity focuses the WSI process accordingly to develop affordable water security activities.
• Many financers articulate the types of actions (e.g., gray and green infrastructure, social or institutional improvements) they are willing to support. –
• Most financers require specific analyses and justifications to provide funding, and these elements must be part of the design, review and selection of water security activities.

Furthermore, as water stakeholders realize the expected benefits of water security activities, they may be able to attract or set up additional financing sources. Charging for water services—even water management services such as monitoring—allocates water costs to water users. It also changes perceptions such as “water is or should be free” and behaviors leading to waste and pollution.