Private Sector Strategies for Water Sustainability

March 22, 2024

This World Water Day, IFC Audio Stories dives into the crucial topic of water. Host Lindy Mtongana is joined by IFC's Lalrin Sailo and George Butler to explore IFC's work in supporting emerging markets in meeting their sustainable development goals for water and sanitation. Learn about the role of the private sector in water management and the importance of valuing water properly in light of evolving climate change impacts. 

Subscribe & Listen



Lindy Mtongana: Welcome to another episode of IFC audio stories - where we look at IFC Audio Stories I'm Lindy Mtongana. March 22nd marks World Water Day - and for that reason I'm joined by Lalrin Sailo - an Operations Officer in IFC's Global Municipal and Environmental Infrastructure team. Welcome to IFC Audio Stories Lalrin. 

Lalrin Sailo: Thanks for having me, Lindy. 

Lindy: Now, Lalrin, your team here at IFC looks at issues around water. And how municipalities in emerging markets work towards meeting the water needs of their communities. 

Lalrin: That's right Lindy. In fact, what World Water Day is an opportunity for us to share more about what we do here at IFC around water, and how we help our client countries meet their sustainable development goals of universal access to safe water and sanitation, all while adapting to climate change. I sat down recently with my colleague George Butler. He's a water and sanitation specialist at IFC. In the context of this World Water Day, we spoke about the various ways in which water supply can be better managed and how private sector participation can support the water sector in our client countries.

...  Conversation with George .... 

Lalrin: Welcome, George, thanks so much for joining me today for a conversation on what IFC is doing in the water sector. 

George Butler: Thanks, Lalrin

Lalrin: This year's World Water theme is Water for Peace, and the critical role water plays in the stability and prosperity of the world. So, George, tell us how does IFC seek to support increased prosperity through investing in the water sector? 

George: As well as being vital for life, water underpins all prosperity. Without adequate water, there's no agriculture, manufacturing, or even cities. So, water really is key to prosperity and growth. IFC invests across the water and wastewater cite from building the water infrastructure to providing advisory services to make the sector more efficient.

Lalrin: I hear congratulations are in order as you welcome your new grandson. I imagine this gets you thinking about the world we leave behind for the future generations. In this context, what are some of the ways our client countries can manage their water resources better for future generations? 

George: Yes, having grandchildren really focuses the mind on having water for the next generation. Better management of water resources comes through three areas. First, better protection of the scarce water resources by preventing pollution of the raw water. Do you know that only about 20% of sewage is properly treated in emerging markets? So that, obviously, is a big area for improvement. Second, is not wasting water. Agriculture uses over 70% of water abstracted, so efficient irrigation is vital. But you know, over 40% of drinking water is lost or stolen during distribution. So that obviously is an area where you need better management of the water networks. But finally, it is so important that we value water properly. And that means sustainable levels of water tariffs.

Lalrin: That's right, George sustainable level tariffs is the elephant in the room that we need to bring up much more in the conversations we have with our clients. This should go hand in hand with supporting our clients establish strong policies, institutions and regulations, what we call PIR in the sector. And this is what we are currently working on through the Global Challenge program on water, where IFC is working closely with the World Bank and MIGA to help client countries strengthen their water security through systems change and increasing private sector participation in water. Now, George, you mentioned the importance of minimizing water losses. Can you tell us a bit more about the importance of non-revenue water (NRW) management?

George:  Yes, I think I mentioned that over 40% of treated water is lost during distribution. This is what we term non-revenue water or NRW. Can you actually think of another high quality product where over 40% of it is lost in distribution? There aren't many. Well so reducing NRW is predominantly about good management of the water distribution network. And IFC specializes in advisory services in this area through our Utilities 4 Climate tool.

Lalrin: That's right through our utilities for climate or U4C program, we are currently providing technical assistance to water utilities in countries like Brazil, Turkey, Indonesia to help them develop strategies to reduce their water losses and also support them in implementing their action plans. IFC also has a strong focus on sustainable wastewater treatment and reuse infrastructure. How do these contribute to addressing water stress and climate change? And how can we unlock public and private finance for such projects in emerging economies?

George:  Wastewater treatment and reuse were previously the Cinderella of the water sector. But things are changing. The need to protect water resources and to stop trashing our environment has led to increased focus on wastewater treatment. Major emerging market countries such as China, India and Brazil are making big improvements in this area. And wastewater treatment provides benefits for the environment, but also for health, education and gender issues. And wastewater reuse is being driven by the simple fact that in many parts of the world, we're running out of water resources. So, sewage should be treated as a resource, not a waste.

Lalrin: Looking ahead, what are some emerging trends or priorities in the water sector that IFC is focusing on, particularly in light of evolving climate change impacts?

George: Well, Lalrin, I've covered a couple of these emerging trends in earlier questions. And  so increased focus on wastewater treatment and reuse and reducing non-revenue water (NRW) are certainly current trends. I should also mention desalination, which is a growth area due to the problems with water resources. But climate change is increasing the pressures on water supply. So I would pick valuing water and sustainable water tariffs as the key priority going forward.

Lalrin:  Great, thanks so much for your time today, George.

.... outro .....

Lalrin: As you heard there Lindy, IFC is doing some very important work in the water sector. IFC is also working very closely with the World Bank and MIGA on the Global Challenge Program on water, where we can have a much bigger impact working as a One World Bank Group institution to bring in more private sector participation in this important sector. With climate change affecting the availability of water and regional ecosystems threatened by polluted wastewater, financing the expansion of water infrastructure is more important than ever.

Lindy: Absolutely. Well, thank you so much, Lalrin, and thank you too, to IFC water and sanitation expert, George Butler for sharing those insights. That's all we have time for today. This is IFC audio stories. I'm Lindy Mtongana. Thanks for listening.