Financing water and sanitation services : the old and new challenges

The water supply and sanitation sector faces two great challenges in developing countries. The first challenge is to complete the old agenda of providing household services. Although considerable progress has been made, much remains to be done. A billion people still lack access to an adequate supply of water, and 1.7 billion do not have adequate sanitation facilities. The second challenge is the new agenda of environmentally sustainable development. In some respects high costs and limited resources - the situation confronting developing countries is similar to that faced by industrialized countries. But in other respects the task for developing countries is considerably more difficult: water in developing countries is much more seriously degraded and is deteriorating rapidly; far fewer financial resources are available for environmental protection; and institutional capacity is weaker. Completing the old agenda and addressing the new agenda constitute a daunting challenge for developing countries. This paper describes some of the more imaginative and promising approaches to addressing these challenges at different levels, ranging from self-financed sewers in an informal settlement in Karachi, Pakistan, to the emergence of participatory river basin management in Brazil. From such promising experiences, two central elements can be discerned.