The ongoing pandemic situation will confront utilities in many nations with the need for a financial lifeline. Fully aware of the monetary impact of the crisis, and building on experiences from similar emergencies, the World Bank has published the document "Considerations for Financial Facilities to Support Water Utilities in the COVID-19 Crisis". Download it if you have a stake in the water sector!

The objective of the World Bank document is to lay out the options and considerations in the design of emergency financial support facilities for water utilities struggling with the impact of the COVID-19 pandemic. The document builds on the experiences from previous financial crises such as the global financial crisis of 2007–08 and the Asian Financial Crisis of 1997, their impact, and the appropriate responses.

It aims to support informed decision-making by governments in developing financial responses to ensure utilities continue to function during the crisis and offers a discussion basis for the World Bank country teams and Task Team Leaders assisting them. The type of facility described by the authors either builds on existing instruments or related mechanisms (fiscal transfers, guarantees, subsidy programs, or others), or it could be the kernel of a new institution or financing instrument with a long-term role in post-crisis sector financing.

The World Bank paper recognizes the likely need to consider new external borrowing in the context of ensuring macroeconomic and fiscal stability. Even before the onset of the COVID-19 crisis, many emerging markets were showing signs of over-indebtedness. The costs associated with the pandemic will further increase the demand for resources, including public debt, and the World Bank reminds readers that macro-economic stability must be anchored on sustainable paths of public and external debt. Decision-makers need to consider this in coordination with ongoing initiatives by the Group of Twenty (G20), the International Monetary Fund (IMF), and others to ensure debt sustainability and transparency.

Those involved in managing, financing or governing are encouraged to download “Considerations for Financial Facilities to Support Water Utilities in the COVID-19 Crisis” as a valuable input for sustainable utility financing strategies in times of crisis.