The Urban Water Catalyst Initiative (UWCI), an initiative announced at the UN 2023 Water Conference in New York in March this year, is on the point of supporting its first utilities. The initiative, spearheaded by the German government and supported by the government of the Netherlands, seeks to be a ‘game changer’ in financing a water secure and climate resilient future. As the name suggests, the initiative has an urban focus and more specifically, a focus on medium sized urban utilities in low- and middle-income countries.
The UWCI will focus on improving both the financial and the technical performance of utilities through an integrated support package which consists of technical support, operational finance and financing for infrastructure development. The key focus for infrastructure development will be both on providing services to un(der)served communities and on developing climate resilient infrastructure.
The UWCI rests on five core principles for implementation. First, reform will be needed, and utilities need to demonstrate their willingness to set goals and provide the leadership needed to make these changes towards increased service coverage and climate resilience. Secondly, the process will be competitive and will require the utilities to provide argumentation around the changes that they intend to make. This willingness to persuade is seen as a condition of entry. Third, the partnership is to be institutional rather than project based: rather than a short-term project focusing on new infrastructure development, the focus is also intended to be on optimization of existing operational efficiency by reducing ‘non-revenue water’: water lost in the system or deliveries of water that are not billed to the consumer. Fourth, if utilities are helped to improve their cost recovery (by far the most utilities in low-and middle-income countries operate at a loss), refinancing their debts and other mechanisms become easier on the local capital market. And lastly, technical support is to be integrated with financial support and will operate on the same, harmonized, planning and budget cycle, reducing complexities for the utility in question.