What should a global Observatory on Financing Water look like?

The Organisation for Economic Co-operation and Development is developing a new global Observatory on Financing Water Supply, Sanitation and Water Security, and while its core functions are still up for discussion, some have doubts about its sustainability and potential duplication.

The idea of the observatory is to create “a unique repository of good practice, peer-to-peer learning, and horizon scanning for new developments related to financing water,” Kathleen Dominique, OECD’s lead for financing water, said at a World Water Week panel convened by OECD on the topic.

The annual cost to meet Sustainable Development Goal 6 on clean water and sanitation for all is estimated to be $114 billion, yet the current investment is less than a third of that.

“Depending on how it develops, I can see the Observatory playing an important role in making efforts to meet the SDG 6 financing gap more actionable, as opposed to another static PDF or website that will rarely be consulted,” John Oldfield, former principal of Global Water 2020, told Devex in an email.

While still scoping the type of content the observatory will collect, Dominique said they expect it to include case examples of financing approaches for water-related investments, tools and guidance on the enabling environment for investment, and horizon scanning for new developments and perspectives from financiers.

WASH expert Jon Lane explained how the sector currently lacks a single source of information and data about financing water. “OECD is a respected entity that would be a good host for such an observatory,” he said.

But others question if it’s even needed at all.

The platform assumes a lack of information is a key obstacle to getting more water investments in low- and middle-income countries when that may not be the case, one session attendee noted. 

“I think the commercial finance sector has a pretty good understanding of what it means to fund large water projects in tough environments,” the person, who wished to remain anonymous, wrote. They suggested that OECD conduct in-depth market studies to learn exactly what users would like to see and figure out if the platform can provide that.

There could also be some overlap, Lane said, with UN-Water’s Global Analysis and Assessment of Sanitation and Drinking-Water, which offers analysis of WASH investments every two years.

The SDG 6 Data Portal also collates data and provides visualizations on SDG 6 global indicators and other social, economic, and environmental parameters.

Andrew Sawyers, office director at the U.S. Environmental Protection Agency, called the concept of the observatory unique and said the diversity of systems and funding in the sector require thought around such a central repository. Leadership, user buy-in, and political support should be big parts of its development to avoid duplication and identify sources of information, he said.

EPA’s Water Finance Clearinghouse — a web‐based portal that provides U.S. decision-makers with information on funding and research related to drinking water, wastewater, and stormwater infrastructure needs — as well as OECD's Observatory of Public Sector Innovation and World Observatory on Subnational Government Finance and Investment, are sources of inspiration for the observatory, Dominique said.

Ensuring platform use over time

While the U.S. government will support the platform’s establishment, there also remains a question mark over sustainable funding to ensure the observatory stays up-to-date and relevant. In the session, suggestions were made around models of sponsorship, subscription, membership, and voluntary contributions.

Yet multiple attendees highlighted that a pay-for-service model would make the tool inaccessible for some, especially those in LMICs. “For people to be really willing to pay to access, the information [or] data accessed has to be such that it is incredibly useful but also unavailable elsewhere or too hard to access individually,” said Lesley Pories, sector strategy manager at Water.org.

“We want to make the observatory open and accessible to all,” Dominique said in response, adding that the OECD is still exploring how to ensure a sustainable source of funding to ensure maintenance and relevance over time.

Lane flagged the amount of work it will take to populate the observatory with data, but Oldfield said he was “less concerned about the ‘perfect’ content and functionality of the website” and more concerned with the content reaching the right people.

Advocating for a more proactive model, Oldfield said that “once a potential user expresses interest in the observatory, OECD should provide technical assistance pro bono to that individual, and then make an effort to connect that individual to investors or other stakeholders as appropriate.”

“I think the key ingredient will be staff at OECD who can market the Observatory to the right audiences, including governments from national to local, public and private utilities, many types of investors, and providers of official and private development assistance,” he said, adding that it should also be available in multiple languages.

Dominique said the next step is for OECD to develop a more detailed proposal for the observatory, consulting with member countries and key stakeholders before a launch in 2022.

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