The role of intermediaries to facilitate water-related investment
A wide range of organisations operate at the interface between the demand for (e.g.
water agencies or service providers) and the supply of finance (e.g. financing institutions
and financiers at large) with the aim of bridging the substantial financing gap for
water-related investments. These entities, referred to in this analysis as “intermediaries”,
include those working upstream on the enabling environment for finance facilitation;
transaction advisory supporting partnership development (of which financing is one
component), private sector lending windows of donors and international financial institutions,
and dedicated financing facilities. These intermediaries play multiple roles along
the investment value chain, in various geographies and at various scales (international,
national, regional, local). However a systematic assessment of these intermediaries,
their role and the key functions performed has been lacking to date along with an
assessment of the gaps, overlaps and misalignments compared with the existing bottlenecks
to mobilise financing. The analysis presented in this Working Paper aims to fill this
gap.
This paper identifies and analyses a sample of 52 diverse intermediaries active in
deploying one or more key functions across the investment value chain for 3 specific
sub-sectors: utilities, small scale water and sanitation service providers and nature-based
solutions. The analysis assesses the extent to which the activities of these intermediaries
is aligned with the critical functions needed to mobilise finance across the sub-sectors.
It identifies gaps, reduncies and misalignments and calls for a shift from the current
opportunistic approach to a more strategic approach in the design and activities of
intermediaries, supported by governments and financial institutions.
The paper contributes to a forthcoming OECD report Financing a Water Secure Future
that distils key insights from the past several years of engagement via the Roundtable
on Financing Water and related analytical work. It was jointly developed by the OECD
and The World Bank Global Water Practice, in the context of our cooperation on the
Roundtable on Financing Water.
Published on September 14, 2021
In series:OECD Environment Working Papersview more titles