Water: Unclogging the finance
How to improve water systems is one challenge; financing them is another. Public authorities in most countries play the main role in implementing and funding water infrastructure, but it is a model that is under increasing pressure, with government budgets 16.________ and banks still prudent about issuing credit.
There is no generic funding model that can be applied to every need; the sheer diversity of water infrastructures and sources of financing 17.________ to be identified, scanned and tapped in line with particular investment types and needs.
There may be small-scale projects initiated by local entrepreneurs, or large infrastructures that serve multiple 18. ________, such as energy and heavy manufacturing. Some investments may involve green ecosystems to supply, store or filter water.
Not only will these infrastructures have different financing needs, but will access funds in different ways, for instance through capital markets, loans, funds, public expenditures, etc.
Take large dams and large reservoirs. These are costly, long-term affairs. The Three Gorges Dam project in China, for instance, could cost over US$22 billion, according to government 19.________, including construction, relocation of residents and financing costs.
Moreover, cost recovery is not expected to occur for 10 years after full operation starts.
Such major projects tend to be financed 20.________ major development banks such as the Asian Development Bank and World Bank, and institutional investors such as pension funds. The sources for long-term financing are expanding, with the emergence of sovereign funds and philanthropists, 21.________ of new groups like the Chinese-led Asian Infrastructure Investment Bank, 22.________ opened in March 2015.
But before leaping into major 23._________ such as dams, policymakers must answer several questions. Will the construction lock them in and still be valuable in 25, 50 or 100 years’ time? After all, there are several cases of investments that have fallen into disuse or underuse, such as a desalination 24. ________ in Sydney that was built during a severe but temporary drought, and dams in France’s Loire Valley that are now being decommissioned at some cost. Had a more forwardprobing “value options” approach been used in planning them, they 25._________ in the first place. ( . . . )
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