Faculty: Dinesh Mehta

Exploring climate finance for WASH

The Sustainable Development Goal (SDG) 6 aims to ensure access to water and sanitation for all. Though global progress has been made on WASH, it is estimated that 3 billion people worldwide lack adequate facilities to safely wash their hands at home and more than 2 billion people worldwide do not have access to basic sanitation. Climate change has exacerbated this crisis as heavier storms have created sewage waste overflows and contaminated water sources. Additionally, due to longer droughts, people often have no choice but to drink unsafe water. Climate change has a tremendous negative impact on WASH services. The links between the two sectors, considers how both can benefit from closer integration, and highlights why an increased focus on climate-resilient water, sanitation and hygiene is a critical element of taking action on climate. Despite some positive examples of integrating WASH in climate policy, more work is needed to consistently bring the WASH and climate policy objectives together. The low level of climate financing directed at ensuring basic access to water sanitation and hygiene is an indicator of concern, as it is estimated to be only a tenth of climate finance for water-related projects, accounting for 0.3% of total global climate finance. At the same time, the incremental cost of ensuring new water and sanitation assets are climate-resilient is estimated to be between $0.9 billion and $2.3 billion a year. While not negligible, these investments represent around 1 per cent of baseline infrastructure investment needs and would reduce the risk of damage to new infrastructure by 50 per cent. The urgent need to address this gap presents a unique opportunity in the coming years to move the climate and development agendas forward and develop WASH infrastructure systems that deliver better services while also achieving climate and development goals. Climate finance is coming from a wide range of public and private funding sources, development banks, aid agencies, multi-lateral institutions which are supporting innovative climate action initiatives at a local, national or transnational level. A variety of financial instruments are used from green bonds to direct project-based loans to direct investments in WASH sector. National and bilateral climate finance initiatives are also emerging sources of funding. India has received a total 1,418 million USD for climate adaptation, mitigation/ cross-cutting projects from multilateral banks which only accounts for 47% of disbursed amount from total approved. However, highest investments are in energy sector followed by transport, building adaptive communities, agriculture, market readiness, gender etc. with only 13% disbursed in WASH sector out of the total disbursements. Mobilising finance for WASH investments and to reduce the impact of climate change on WASH is the need of the hour to align with The Paris Agreement and meet the SDGs target 2030.