World Water Day - 22 March 2004

World Water Day: EU agrees to set up new Water Facility to boost access to clean water and sanitation

The European Union agreed today – World Water Day – to set up a special Water Facility to promote access to clean water and sanitation for people in Africa, the Caribbean and the Pacific. The facility, originally proposed by President Prodi in 2003, could in a first phase be worth up to € 500 million and is designed to have an important catalytic effect in generating additional funds for water and sanitation.

Following the decision by EU foreign ministers, Romano Prodi, Commission President, Poul Nielson, Commissioner for development and humanitarian aid and Margot Wallström, Commissioner for Environment said: “We strongly welcome this bold and timely decision by member states which, on World Water Day, sends a strong signal that the EU remains prepared to stand by its commitments and alongside its partners to ensure that halving the number of people without clean water and sanitation becomes more than just a goal – but a reality.”

“We launched the EU water initiative in Johannesburg 2002 to ensure a collective and efficient delivery on our engagements. We have been busy implementing the initiative and we have now created a coherent and cost effective approach to the planning and delivery of our water related programmes that amount to an approximate € 1.4 Billion a year. Water has been placed firmly on the top of our political agenda. But funds remain scarce. We hope today’s agreement on the Water Facility will mark a turning point and will prove a catalyst in generating additional funds for this vital campaign.”

“When people around the world today mark World Water Day, they do it against a gloomy background: with one in two hospital beds in the world occupied by victims of water-borne diseases and with an estimated 6 000 children dying every day of diseases caused by poor sanitation and hygiene. Access to clean water and basic sanitation is a matter of life and death. For billions of people around the world this is a harsh reality. With increasing pressure on the world’s freshwater supply and the continuous degradation of water quality in some regions, we face a formidable challenge. We have taken upon ourselves the challenge to halve by 2015 the proportion of people without access to safe drinking water and basic sanitation. World Water Day is an occasion for us to come together and reconfirm our commitment to act – and act decisively. “

Background

- The Water Facility is based on an initiative taken by the Commission in 2003 to boost the delivery of water and sanitation infrastructure in ACP countries. The Water Facility will promote (i) Governance: It will offer a helping hand to those ACP countries. Funds will be invested in measures to build or strengthen institutional and regulatory frameworks in those countries that display real commitment to the development of sound national water policies; (ii) Ownership: The facility will be demand driven. It will be an instrument to support and deepen the involvement of actors in ACP countries in the design and implementation of water policies; (iii) Access to flexible sources of funding. A maximum impact will be sought by offering creative combinations of grants with other financial sources (such as soft loans, loan guarantees, micro-finance etc.) to fund basic infrastructure. These funds could constitute the necessary seed capital to get projects off the ground. And it will be a tool in forging the public private partnerships needed to increase funding.

- The joint ministerial EU/ACP meeting in Botswana in May will take a final decision on the establishment of the Water Facility.

- In 2000 member states allocated €13.5 billion to the 9th EDF. At the same time member states decided to keep €1 billion in reserve to be released pending a favourable development in the performance of the EDF. Following on the Commission’s proposal, member states have decided to consider € 500 million out of the conditional billion € for the Water Facility. A first tranche of €250 million will be allocated immediately to the facility. In the light of the outcome of the mid-term reviews of the country strategies and of the performance review of the EDF, Member States will at the latest in March 2005 decide on the release of the second tranche of € 250 million, and on the use of the remaining €500 million from the reserve.

- EU spends an approximate €1.4 billion a year in international aid for water and sanitation programs. Within the framework of the 9th European Development Fund € 555 million have already been allocated to water programmes in 14 ACP states.

- Within the framework of the EU water initiative which was launched at the WSSD in Johannesburg in 2002 Community, member states, civil society, financial institutions and the private sector are working together to: (i) Reinforce the political commitment to improve access to clean water and sanitation in the context of poverty reduction; (ii) strengthen water governance arrangements by promoting public-private partnerships, and strengthening institutional capacity at regional, national and local level; (iii) improve co-ordination and co-operation in the implementation of water-related activities, through the introduction of sector wide approaches, multi-stakeholder processes and promotion of south-south co-operation; (iv) encourage regional and sub-regional co-operation on water management issues, including on a river-basin scale; and (v) generate additional funding, through the development of new, flexible and innovative funding mechanisms that will attract new partners.