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Finance for Water

Finance for Water - The Netherlands Water Partnership

A dazzling USD 7,500 billion dollars are needed between now and 2030 to build the water infrastructure required to reach SDG6 (Sustainable Development Goal 6). A solid and resilient water infrastructure will protect the world’s population from ‘too much, too little, and too polluted water’. Worldwide, water projects are disproportionally financed with public money and future water challenges will never be met by the public sector alone. Certainly not in upcoming markets.

In order to respond to this challenge, the Netherlands Water Partnership (NWP) works on the area of expertise of Finance for Water, which is a crosscutting theme for all the regions we work on. With Finance for Water, NWP’s goal is to bring the financial sector and the Dutch water sector closer together. By doing so, we aim to get more water projects financed and therefore to increase the impact of the Dutch water sector abroad.

About NWP Finance for Water

The Dutch water sector is globally known for its excellent water expertise, multi-stakeholder and integrated approaches, innovative technologies and capacity to address global water challenges. However, despite a myriad of technically sound propositions, innovative ideas and solutions do not always translate into tangible projects. The financial feasibility of projects is often not sufficiently considered, revealing a common mismatch between the financial world and water sector organisations. 

In line with our ‘Finance for Water’ area of expertise, NWP aims to bring the financial sector and the Dutch water sector closer together with the ambition to get more water projects to reach financial close, and eventually strengthening the international positioning of the sector while contributing to SDG6 and the NIWA. In the framework of the Dutch Government's Partners for Water Programme, we work closely together with the Taskforce Finance of the Dutch Interdepartmental Water Cluster (IWC). 

High level dinner sector consultation
Representatives of the Dutch water sector brainstorm on how to implement the recommendations of the “Expanding the horizon of the Dutch Water Sector” sector consultation report during a high-level dinner organised by NWP and FMO.

Finance for Water strategy and activities

Together with FMO, we published the report ‘Expanding the horizon of the Dutch Water Sector - A sector view on international positioning and financing challenges’, a market analysis which assessed the financial challenges of the Dutch water sector to further international growthOur Finance for Water strategy is based on the outcomes of this report. With the overarching purpose of getting more water projects financed, we focus on the following activities:

  • Create insight and share information about financial instruments.
  • Capacity building of Dutch water organisations and financiers.
  • Support consortium building and matchmaking by bringing Dutch water organisations and financiers together.
  • Support project identification and development by promoting project development facilities such as the Kenya Innovative Financing Facility for Water (KIFFWA) to ensure the involvement of financial expertise in early phases of project development.
  • Increase visibility of the Finance for Water theme and put this theme higher on the (inter)national agenda.

Create insight and share information about financial instruments

It is not always clear to Dutch water organisations which financing instruments are available to them. As was observed in the FMO-NWP market analysis, the funding landscape of the Netherlands is quite fragmented with different and often small facilities. Taken together with the international funding landscape, it is easy to lose sight of what’s out there. To provide organisations with a sense of direction, we have developed a visual overview of financial instruments that are available to the Dutch water sector. Translating that knowledge into concrete activities, we also regularly organise small-scale and interactive knowledge sessions with specific financiers and sub-sections of the Dutch water sector, covering different financial instruments, financial institutions and other topics related to water and financing.

Capacity building

As highlighted in the FMO-NWP market analysis, there is a need to strengthen capacity among the Dutch water sector to strengthen financial feasibility of propositions. Accordingly, we seek to support organisations to increase their knowledge and skills to better structure their project proposals or business propositions. Towards that end, we organised targeted knowledge sessions with financiers such as Atradius DSB and several study tours with amongst others the European Bank for Reconstruction and Development (EBRD). In collaboration with NWP member Wetsus, we are designing a water accelerating programme to offer water technology organisations masterclasses and 1-on-1 support to advance their project propositions. Furthermore, NWP signed an MoU with IHE Delft in 2020, partnering to strengthen the capacity of the water sector on the topic of water and financing. 

Support matchmaking and consortium building

To bridge the gap between the financial sector and the Dutch water sector, the Finance for Water team aims to build mutual understanding and stimulate collaboration between the two sectors. For example, we organise and contribute to several roundtable events with financiers.

The Finance for water team also designs matchmaking activities for organisations within the Dutch water sector. As a network organisation, NWP is uniquely suited to bring people together and to emphasise the importance of working together to address shared financing challenges. Instead of working in silo’s, the position of the Dutch water sector is strengthened by uniting in partnerships and consortia. 

NWP members attend a knowledge session on the opportunities for the Dutch water sector within the EU Green Deal Call. The session was organised by NWP, and included presentations from Bureau Brussel, RVO and PNO. October, 2020.
NWP members attend a knowledge session on the opportunities for the Dutch water sector within the EU Green Deal Call. The session was organised by NWP, and included presentations from Bureau Brussel, RVO and PNO. October, 2020.

Support project identification and development

Since 2017, we support our network of financiers with pipeline development and the identification and sourcing of bankable water projects. As part of the Partners for Water Programme, we support the Delta Teams with project identification in IWC countries and matchmaking between Dutch water sector companies and potential development projects. In addition, we established a pool of financial engineering experts that can deliver hands-on support on project identification and work with the Dutch water sector to increase the financial feasibility of a project or initiative.

NWP also initiated and supported several innovative finance for water initiatives. These initiatives provide financing for project development and expertise to water initiatives. The objective is to increase the financial feasibility of these initiatives and ensure that more water projects reach financial close. In doing so, new forms of private finance are being attracted, decreasing the sector’s dependence on public funding. Two concrete examples are the:

  • Water Finance Facility – focus on water utilities only.
  • Kenya Innovative Finance Facility for Water (KIFFWA) – focus on broader water sector, including water supply, wastewater treatment, sanitation, irrigation, water resources management, aquaculture, hydropower and port development.

We are exploring whether these initiatives can be scaled and/or duplicated in other countries. 

Increase visibility

In the Netherlands and abroad, attention to the topic of Finance and Water has increased significantly, as reflected by new reports and events organised around the topic. It is within our vision to put this theme even higher on the agenda. We aim to do this by disseminating thought leadership content (f.e. blogs and articles), enabling knowledge exchanges during water conferences and events and enriching our network of financiers. This network has already increased quite significantly in the last couple of years, welcoming new NWP members such as FMO, Climate Fund Managers (CFM), ING Bank and Nederlandse Waterschapsbank (NWB).

Get in touch! 

Are you interested to learn more about the work that we do for the Finance for Water area of expertise or would you like to explore possibilities for collaboration? Do you want to talk with us about the topic or do you have any ideas or struggles relating to the above content? Please do not hesitate to contact us for an introductory meeting, we are always happy to connect.

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