Tapping local capital markets

The Water Finance Facility (WFF) mobilises large-scale private investment from domestic institutional investors, such as pension funds, insurance companies and other qualified investors,  by issuing local currency bonds in the capital market in support of their own country’s national priority actions on water and sanitation service delivery. The aim is to develop several country level water financing facilities, which can issue bond in their capital markets to provide long-term loans to public or private water utilities that have little or no access to commercial finance or that have access at unfavorable terms, such as short tenors. Through the pooling of projects of credit worthy water and sanitation companies, the bonds will have lower risk. This risk can be further reduced, if reserve funds, guarantees, soft loans or grants for blended finance can be incorporated into the capital market structures.

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