The Corporate Philanthropist: The Global Water Crisis - Page 8
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Water Needs Public-Private Partnerships
Traditionally, the international conversation on water has seen limited private sector participation. However, the public sector by itself cannot be the solution. Public-private partnerships (PPPs) are needed both on the supply and the demand side. On the supply side, there is simply not enough public finance for the development and upgrade of national and regional water grids. On the demand side, agriculture is responsible for nearly 70% of the water used throughout the world, and water demand management is inevitably linked with water efficiency in agribusiness. PPPs are often confused with simple privatization because of past situations in which public protections were not built in or the processes around partnerships lacked transparency. This history also becomes entangled with a sentiment that a human right should be a free good. This debate should be enjoined but, in brief, this is not the reality today. It is the poor who pay either by the opportunity cost of walking for hours to and from the well, in sickness and disease, or in cash to water trucks that tour their neighborhoods.
Today’s business leaders must realize that water is no longer exclusively a concern for governments. With significant increases in global demand impacting availability, quality and efficiency for their operations, the private sector has a vested interest in supporting technologies and initiatives that protect future water supplies and access.
Water, a $450 billion market, presents tremendous opportunities, and business forces are key to ensuring that water is distributed efficiently and reaches all, including the bottom of the pyramid.
International Finance Corporation’s experience with water is hands-on. Because our work consists of investing in private company projects in developing countries and supporting these companies with advice, water at IFC is identified either as a business risk or a business opportunity. In addition to our regular water infrastructure investments and water efficiency advising, we have been looking at investments in clean-tech, and we have been participating in the creation of standards and benchmarks for the measurement of water uses, also called “water footprinting”. Our clean-tech investment targets are With IFC’s help, Manila Water Company has transformed the public utility into a world-class provider — showing that water privatization can succeed economically and deliver for poor people. point-of-use water technologies and other breakthrough technologies which find markets where reliable utility provision is not available. On water footprinting, we are co-sponsoring work on a water curve, based on the ideas and methodologies of the carbon abatement curve. The point is to see what we can learn by breaking down into bite size policy pieces where intervention and investment could have an effect, and where returns lie.
Tools such as the water curve, which enable us to understand water investment opportunities and to measure water use in a portfolio, will hopefully help to move the debate forward towards a more inclusive conversation in which the private sector figures as part of the solution. IFC intends to continue leveraging its position as an honest broker, as a convener, to create tools which will allow the private and the public sector to make the most efficient resource allocation decisions.
IFC (International Finance Corporation), a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments.
