Rapid urbanisation over the past few decades has created one of the greatest demographic shifts humanity has ever experienced. This in turn is creating huge impact on cities, especially those in developing and emerging economies.
The enormous challenges that these cities are facing due to the unprecedented speed of these changes is putting strain on cities and water utilities to respond speedily but also to ensure that they do so in a way that ensures that the cities are low-carbon and build resilience to climate change.
Nationally Determined Contributions (NDCs) are being utilised under the Paris Agreement to reduce Green House Gas (GHG) emissions. In 93% of NDCs, water has been identified as being critical in adaptation and is therefore being prioritised, with the accent on reliable access to water resources.
A recent McKinsey report estimates that the total investment needed in our cities, in transport, energy, water and telecommunications infrastructure, between now and 2030 is $57 trillion, of which water accounts for $10 trillion.
The problem is that climate finance is not flowing to the water sector; a significant barrier to financing sustainable infrastructure is the fact that, according to research from the World Bank, a mere 4% of cities in the largest developing countries have an international credit rating. This despite the fact that money spent on improving city creditworthiness has the potential to unlock around one hundred times as much in private sector infrastructure financing.
There are, however, various financing options open to cities and water utilities for climate-related infrastructure projects, but there is no clarity on which is the most appropriate financing. Practical information to help cities and water companies understand the conditions and requirements of financing options for climate-related projects is critically important.
Cities and water utilities must be more ambitious in their thinking and acting, and must develop bankable projects that can increase the flow of climate finance for important adaptation and mitigation investments in water before billions of people are exposed to even more climate change risk.
