Improving Access to Water
Water is vital for maintaining health, growing food, generating energy, managing the environment, and creating jobs. However, 4.2 billion people around the world lack safely managed sanitation services, 2.2 billion lack access to safely managed drinking water services, and 3 billion do not have basic handwashing facilities. Climate change is expected to increase this risk, in addition to placing greater stress on water supplies.
The need for investment in water and sanitation is clear, but private financing in this sector in developing countries has lagged far behind that for other infrastructure sectors, reflecting in part the limits of private capital contributions and the lack of appetite to bear the political risks associated with these projects.
MIGA guarantees are well-suited to mitigate the particular risks associated with investing in water and sanitation projects in emerging markets. These guarantees, covering both new investments and project expansions, help to ensure that investors are able to operate in a stable and predictable environment.
In recent years, MIGA has supported projects globally to help improve access to water, including in China, Ghana, Rwanda and Jordan.
Examples of MIGA-Supported Projects in Water and Sanitation
In March 2018, MIGA issued up to approximately US$9.97 million in guarantees covering equity and quasi-equity investments by Metito Utilities Limited of the United Kingdom for the construction, operation, and maintenance of a greenfield 40,000 m3/day bulk water facility to be located in Kanzenze, in the southeastern part of Kigali. The guarantees are issued for a period of up to 20 years against the risks of Transfer Restriction, Expropriation, War and Civil Disturbance, and Breach of Contract.
The project consists of a water treatment plant, a well field, pumping stations, pipelines, and storage reservoirs, and will increase access to water in Kigali, which suffers from an acute water shortage.
In June 2013, MIGA issued guarantees of $13.1 million covering equity investments by Suez Environnement, Infilco Degremont and Morganti Group in the As-Samra Wastewater Treatment Project in Jordan. The coverage is for a period of up to 20 years against the risk of Breach of Contract.
The project involves the expansion of the existing wastewater treatment plant at As-Samra, northeast of Amman, and will increase the wastewater treatment capacity by some 37 percent, from the current 267,000 m³ per day to 365,000 m³ per day, to meet the needs of the population from 2015 to 2025.