Around the developing world, the water sector is chronically under-funded and inefficient. In this context, Public-private partnerships (PPP) can be a mechanism (among others) to help governments fund much needed investment and bring technology and efficiency that can improve the performance and financial sustainability of the water sector.

Governments turn to PPP to introduce new technology and innovation where traditional sources are being scarce, such as in desalination and water reuse. Utilities are drawing on specific expertise, such as non-revenue water reduction and pressure management, to bring efficiencies and service improvements. Private investors and providers are increasingly local and regional, increasing competition and bringing down prices.

A key challenge in sustainability of the sector is customer tariffs. Water utilities have difficulty investing in infrastructure and maintaining it when they cannot rely on revenue streams that cover the costs of operation and investment. Whilst subsidies and grants from government continue to play an important role in financing water and wastewater infrastructure, a stable revenue stream is more dependable and allows utilities to carry out business and asset planning.

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