Funding Sanitation and Sewer Systems in Asia

Feature | 17 October 2013

ADB's new Sanitation Financing Partnership Trust Fund with the Bill & Melinda Gates Foundation promises to bring innovative sanitation solutions in the Asia and Pacific region.

In Asia and the Pacific, about 1.7 billion people still lack access to improved sanitation, 780 million people still practice open defecation, and around 80% of wastewater is discharged without treatment. Open defecation, lack of improved sanitation, and inadequate wastewater management systems pollute groundwater, rivers, and coasts - the same water bodies we use for drinking, bathing, swimming, and fishing.

These problems are solvable, even as the latest report of the WHO/UNICEF Joint Monitoring Programme (JMP) for Water Supply and Sanitation says the world will still not meet the Millennium Development Goal (MDG) target on sanitation - halving, by 2015, the proportion of the world's population without sustainable access to basic sanitation. Asia, the report says, needs a total of $71 billion in sanitation investments.

Working with a new partner

ADB's partnership with the Bill & Melinda Gates Foundation would help provide decent toilets to families in Asia's cities and rural communities that still lack access to basic sanitation services. The Bill & Melinda Gates Foundation has generously contributed $15 million into a new Sanitation Financing Partnership Trust Fund that will be administered under ADB's Water Financing Partnership Facility (WFPF).

The WFPF is ADB's facility that pools and coordinates financial and knowledge resources from development partners for ADB's development work in water and sanitation. It finances activities designed to result in significantly more poor people in the region with access to safe drinking water and improved sanitation, higher productivity and efficiency of irrigation and drainage services, more people with reduced risk of flooding, and more river basins implementing integrated water resources management. To date, WFPF committed contributions stand at $87.3 million.

The Bill & Melinda Gates Foundation is banking on ADB's experience in financing quality sanitation projects for Asia's poor. ADB is leveraging on the Bill & Melinda Gates Foundation's contribution to finance over $28 million in non-sewered sanitation and septage management projects across the region in the next five years.

Asia's sanitation investment need

Under the Water Operational 2011-2020, ADB has committed to increase from 14% to 25% the share of sanitation from ADB's total water lending. As of December 2012, the share stood at 23%. ADB is currently implementing a number of stand-alone sanitation projects and water supply projects with a strong sanitation component, including the Kyrgyz Republic's Issyk Kul Sustainable Development Project and Pakistan's Sindh Cities Improvement Investment Program.

The WFPF has enabled ADB to steadily increase its water and sanitation portfolio, with a total of $8.86 billion in loans and technical assistance since the WFPF was established in 2006.

Other priority targeted outcomes of the Water Operational Plan are:

  1. expanded wastewater management and reuse,
  2. expanded knowledge and capacity development using technology and innovation more directly, and
  3. enhanced partnerships with the private sector.

Shared vision on innovations

The Bill & Melinda Gates Foundation shares the similar vision of bringing innovative solutions to Asia's sanitation sector, and solidifies its commitment to this vision by formalizing its partnership with ADB. The trust fund will specifically finance innovations in non-sewered sanitation and septage management, the Bill & Melinda Gates Foundation's preferred approach to sanitation, which ADB has not yet fully explored in terms of investments. In other words, the trust fund provides ADB opportunity to provide development finance into areas that are not typically included in ADB's pipeline of water and sanitation projects.

The types of out-of-the-box projects to be funded by the trust fund include piloting innovations in sanitation and septage management technologies, supporting septage management and sludge treatment policies, and supporting innovations in project delivery mechanisms.

It is in these exciting new areas that ADB and the Bill & Melinda Gates Foundation will finance innovative solutions that could just speed up access to safe sanitation and bring the region closer to achieving the MDG sanitation target.


About Water Thinkpieces

Water Thinkpieces are articles written by ADB water experts that provide insights and analyses of current issues and challenges facing Asia's water sector.

This article was written by Gil-Hong Kim, Director of the Sustainable Infrastructure Division, Regional and Sustainable Development Department, ADB.