One year ago, Aqua for All launched an open Call for Applications for fund managers targeting the water and sanitation sector in partnership with the Swiss Agency for Development and Cooperation (SDC) under their programme ‘Catalysing Impact with Innovative Financing’
In total, Aqua for All received 45 applications from a diversity of organisations seeking catalytic investment and/or results-based financing. The applicant pool included both first-time and experienced fund managers operating across developed and emerging markets, largely focused on priority regions such as Sub‑Saharan Africa and Asia, and pursuing blended finance strategies that combine water and sanitation with adjacent sectors to mobilise private capital.
Following a competitive selection process, Aqua for All selected 4 investment opportunities to pursue, all of which are currently in advanced stages and progressing toward final commitment:
- A blended finance fund providing debt and equity to early‑ and growth‑stage enterprises addressing water, sanitation, and circular economy challenges in the Global South.
- A private debt fund in emerging markets offering an innovative KPI-linked product to water enterprises and financial institutions in Africa and Asia.
- A private debt infrastructure fund investing in climate-resilient infrastructure, including water and sanitation systems, with a core focus on Sub-Saharan Africa.
- A results-based finance facility embedded in a child-lens investing debt fund, designed to incentivise WASH improvements in low-income private schools.
Collectively, these opportunities have the potential to channel significant capital to the water and sanitation sector across Africa and Asia. Keep an eye on our LinkedIn page for more updates on these impactful initiatives.
The strong response to the call for applications underlines both the need and the momentum for investment vehicles focused on water and sanitation. That is why we are launching a new open Call for Applications for fund managers mobilising private capital for water and sanitation soon.
What we learned
- Role of catalytic capital. First-time fund managers face a fundamental fundraising paradox: institutional investors seek proven track records before committing capital, but building a track record requires initial capital. Catalytic capital, a form of patient, flexible, and risk-tolerant investment intended to generate positive social and/or environmental impact that would otherwise not be possible, is uniquely positioned to break this cycle. By providing early-stage support, catalytic capital enables fund managers to validate their investment strategy, demonstrate performance, and establish robust governance processes and reporting systems, thereby paving the way for larger-scale institutional investment.
- Financing gap. Broader shifts in global capital flows are reducing the availability of private capital, particularly for emerging markets and high-impact sectors such as water and sanitation. Global foreign direct investment has declined for two consecutive years1, while private market fundraising remains challenging amid higher interest rates, macroeconomic uncertainty, and geopolitical fragmentation. Capital is increasingly concentrated in larger, established funds and lower-risk geographies2, leaving smaller and first-time fund managers and underserved markets with greater barriers to access funding. As a result, the role of catalytic investors such as Aqua for All becomes even more critical, but also more challenging, as mobilising private capital requires stronger risk mitigation and deeper engagement to crowd in investment where it is needed most.
- Multi-sector investment. A mixed sectorial investment strategy may support the risk-return-impact vision of asset allocators, however, in practice, this may dilute the exposure to smaller, thematic sectors like water and sanitation. To ensure that water and sanitation remain a meaningful and measurable priority, clear allocation thresholds and impact targets are needed. This helps safeguard intentionality and accountability while ensuring that investments deliver tangible contributions to SDG 6 while remaining attractive within diversified impact strategies.
- Blended finance. Local investment professionals have the intricate market knowledge, networks, and proximity needed to identify and support high-potential enterprises. However, many remain underserved by capital due to perceived risk, misaligned return expectations, and structural constraints that limit LP participation in subscale or emerging-market funds. Blended finance can help bridge this gap by strategically deploying concessional capital from public or philanthropic sources to de-risk investments and improve their risk-return profile. By absorbing early-stage or perceived risks, blended finance can mobilize additional private investment at scale and enable financing solutions in markets and sectors that would otherwise remain underserved.
About Aqua for All
Aqua for All is an international foundation driving universal access to safe, inclusive, and affordable water and sanitation.
We mobilise private capital and strengthen local enterprises throughout Africa and Asia.
We invest in private funds to catalyse additional capital into the water and sanitation sector, de-risk financial institutions, and support SMEs through smart grants to achieve lasting system-level impact.
Together with fund managers, financial institutions and entrepreneurs, we transform the water and sanitation sector.
