ABSTRACT
This chapter describes some emerging-market water and sewer-funding initiatives, what makes them important financial role models for other developing countries, and lessons learned about what should be either encouraged or avoided. In developing countries, public- and private-sector financial resources for essential water and sewer infrastructure have traditionally lagged behind other essential infrastructure sectors, such as electricity and roads. Water services in many countries have devolved to the local government level. Funded water projects also tended to concentrate in two regions: East Asia and the Pacific and Latin America. The potential for debt financing of water projects in emerging markets is a factor of the nascent stage of debt capital market development in these countries. Infrastructure finance relies on securing project cash flows, since the actual project assets continue to be either owned or heavily regulated by the host government. Governments can have the public policy goal of making utility services self-supporting from user fees.
