Pooling water projects to move beyond project finance

New investments in the water and wastewater sector tend to be much smaller than those in other infrastructure sectors because of the market's fragmentation. Even where large investments are expected, they are spread over time, keeping pace with growth in demand. This pattern of small, incremental investments contrasts with that of power and transportation projects, which typically require large investments over a short period and gain the attention, and often the support, of national governments. New financing techniques in other sectors and their early applications in water and sanitation suggest that pooling projects may be a way to move beyond project finance, particularly for the many small projects that need financing. Multi utilities, entities that deliver multiple infrastructure services such as water and electricity, offer another approach to attracting private capital. These multi utilities can gain credit strength through a diversified revenue base that enhances the prospects for corporate finance.