Overcoming risk perceptions in WASH investing - Aqua for All

Overcoming risk perceptions in WASH investing

Published: 11th December 2023

Private capital is urgently needed to bridge the financial gap that impedes progress towards achieving SDG 6. However, investments in water and sanitation are hindered by the little knowledge of the sector. We therefore have taken on the mission to share experiences, knowledge and learnings from our financial partnerships with impact investors.  

During the European Microfinance Week (EMW) 2023, we co-organised the session “Overcoming Risk Perceptions in WASH Investing” with our partners Oikocredit, Incofin Investment Management, WaterEquity, and the National Bank of Kenya 

The session featured Alvaro Ma (Oikocredit), Kapil Kanungo (Incofin), Adysti Raissa Fitri (WaterEquity) and George Otieno Odhiambo (National Bank of Kenya who shared their experiences lending to financial institutions, small and medium enterprises (SMEs) and utilities as well as providing equity. Their collective commitment to water and sanitation investments reaches €500 million approximately. The session was moderated by our colleague, Owais Shafiq, who highlighted the role of international foundations, such as Aqua for All, in overcoming risk perceptions in Water, Sanitation, and Hygiene (WASH) investing. 

‘’The real and perceived risks in water and sanitation investing are relevant and must be understood, addressed, and overcome. We need to prioritise financing businesses that ensure long-term sustainability of the sector. Our session showcased examples and explored strategies of impact investors using emphasizing blended finance structures and risk-mitigation mechanisms.’’ -Owais Shafiq, Aqua for All’s Senior Impact Finance Officer. 

Among the session’s participants, there were representatives of financial institutions, asset managers, and non-governmental organizations from around the world eager to learn more about how capital can be allocated to the crucial sector of WASH.  

Our top three takeaways: 

  1. Embedding impact in investment strategies is critical to ensure sustainable access to clean drinking water and sanitation services for low-income and vulnerable communities. 
  2. Addressing the financial gap must be aligned with the service gap. Therefore, impact investments in water and sanitation should favoured sustainable solutions, consider affordable services and improved tariff collection, improve efficiency using technology, and ensure service quality.
  3. Blended finance structures, alongside with technical assistance and risk-covering mechanisms are pivotal tools to facilitate investments in water and sanitation. 

Promoting investments in water and sanitation 

Besides this session, we co-organised a ‘’WASH Investors Sharing Session’’ on 16 November with the WASH Action Group. The session was meant for action group members to share their experiences on WASH transactions and deals.  

This year’s EMW marks the third anniversary of the WASH Action Group that we initiated in collaboration with the European Microfinance Platform. The Action Group has exciting plans for 2024, for example, to continue organising “Investors Sharing Sessions”. By sharing knowledge and showcasing successful examples, we aim to promote private investments in water and sanitation and facilitate financial partnerships to increase access to finance for local SMEs serving low-income and rural communities.  

We want to thank our partners and the European Microfinance Platform for hosting our session. We look forward to working collectively towards advancing impactful solutions and increasing access to finance for water and sanitation SMEs. 

See you next year!