Financing Water and Sanitation Services:

Options and Constraints

November 10-11, 2003

1. Objectives

The overall objective of the conference is to provide an adequate framework for discussion with key stakeholders on mechanisms, options and factors that would increase investments and coverage (in accordance with the Millennium Development Goals - MDGs) in the potable water and sanitation sector in Latin America and the Caribbean.

The specific objectives are to: a) raise the awareness of central and local governmental authorities of the substantial investments required to reach the MDGs in potable water and sanitation; b) identify the major obstacles that have hindered investments in the sector and that could jeopardize compliance with the MDGs in the coming years; and c) discuss solutions that will enable countries in the region to increase service coverage while maintaining adequate fiscal discipline.

The Conference will serve as the ideal setting for launching the Bank’s renewed commitment to support the expansion in the provision of potable water and sanitation services. Likewise, the Bank is committed to assisting the countries in achieving the targets set by the Millennium Development Goals.

2. Place and Duration

The Conference will take place on November 10 and 11, 2003 at the Inter-American Development Bank’s Headquarters in Washington, D.C. (1300 New York Avenue NW).

3. Participants

The Conference will be targeted to authorities from central and municipal governments, service providers from the public and private sectors, nongovernmental organizations (NGOs) that supply potable water and sanitation services to rural communities and peri-urban areas, representatives from the major multinational firms working in the sector, and public and private financial institutions.

4. The sessions

The Conference will be organized in two roundtable sessions and four panel discussions. In the roundtable sessions, experts will provide their opinions on the main issues facing the sector and their possible solutions. The experiences and opinions of participants will be shared and gathered during the panel discussions.

The first session, titled Main Issues in the Sector, is organized as a roundtable meeting. Two world-renowned experts in the sector and two government authorities will discuss the main issues facing the sector. The presentations will emphasize investment trends and needs in Latin America and the Caribbean.

The second session, titled Institutional Constraints, is organized as a panel discussion. Governance and institutional constraints will be discussed during this session. Emphasis will be placed on discussing the widening investment gap and other issues such as: a) social resistance to tariff adjustments that reflect financial costs; b) inefficiencies in the provision of services; and c) weak and/or politicized management practices. One objective of this session is to build a consensus about the main institutional constraints confronting the sector, and to discuss the lack of capacity to generate enough financial resources to maintain and/or expand the provision of services.

The third session, titled Financial Constraints, is also as a panel session. Its objective is to discuss the main issues that have hindered the ability to raise financing in capital markets. Among the topics to be discussed are: a) national and local government debt restrictions that prohibit issuing or incurring new debt or providing the counterpart financing required by bilateral donors; b) the lack of flexible mechanisms to adjust financial obligations to revenue generation; and c) the lack of long-term financing instruments denominated in local currency.

The fourth session, titled Innovative Options in Public and Private Financing of Rural Systems, is organized as a panel discussion. This session will explore new financial instruments and mechanisms for the provision of potable water and sanitation services in rural and isolated areas. The opening presentation will describe some of the lessons learned and will discuss the role of microcredit institutions in the provision of services. The panel will then present innovative experiences and will discuss the constraints faced by financial institutions to reach rural and isolated areas.

The fifth session, titled Innovative Options in Public and Private Financing of Urban Systems, is organized as a roundtable. Four experts will present innovative financing options for new investments. Other issues to be discussed are: a) the need to make a clear distinction between the management of service provision and financial investments; and b) innovative mechanisms that will take into account financial costs due to lack of investments.

The sixth session, titled Social and Political Consensus around the Reform Process, is organized as a panel session. The panel will seek a consensus on socially acceptable options to adjust tariffs to reflect financial costs and will propose mechanisms to promote these agreements.

Last update: 10/14/03

Infrastructure and Financial Markets Division
and Environment Division
Private Enterprise and Financial Markets Subdepartment
Sustainable Development Department
Inter-American Development Bank
1300 New York Avenue NW
Washington, DC