Recent statistics on financing of the water sector in Africa indicate that major changes are needed in the way water is financed, including reversing current downward trends in government and donor funding, better targeting of external funding to the lowest income countries, and catalytically using public or concessionary finance to improve investment bankability and crowd in private financing.

Since 2018, ODA loans have exceeded ODA grants for the water sector in Africa, while ODA equity investments remained relatively marginal. Private sector finance also remains limited, where water supply and sanitation accounted for just 2% of private finance flows to Africa over the period 2012-2020. In Africa, as high as 80% of infrastructure projects fail at the feasibility and business planning stage, and half the remaining projects do not achieve financial close. In many contexts, water service tariffs are inadequate to cover even operating costs.
The enormous gap in adaptation finance – which provides catalytic funding for countries to address climate change impacts and strengthen their resilience – further drives the motivation to adopt a paradigm shift to translate climate-resilient water investment priorities to actual projects on the ground.

According to the UNEP Adaptation Gap Report (2024), international public adaptation finance flows to developing countries have increased but remain vastly inadequate to meet needs, which are estimated at $215–387 billion per year by 2030. Even doubling current adaptation finance flows would reduce this gap by only 5%, underscoring the urgent need for innovative financing approaches and strategic investments in climate resilience, particularly in critical sectors like water.

Hence, business-as-usual for water financing will not lead Africa to achieving its water security and water resilience goals. Africa’s least-developed countries (LDCs) and small island developing states (SIDS) not surprisingly face the greatest constraints to accessing finance.

With technical support from the Global Water Partnership, participating countries are developing investment-ready projects that are being showcased for matchmaking. Among others,

• The projects are bankable or near bankable
• Have a clear development and economic impact
• Have strong alignment with national and regional priorities
• Focus on infrastructure, water and sanitation, irrigation, flood management, basin and coastal area management, sector governance and other closely related sub-sectors