IRC was founded in the Netherlands in 1968 as a knowledge broker, a focal point for a global network of institutions active in water supply research and development. Over the last decades, they have focused more on seeking solutions to build resilient WASH systems at a local and national level, through action research: using innovative approaches to deal with complex problems. As the pandemic highlighted the vital role of safe water and hygiene for the health response, IRC has strengthened its efforts to make decision-makers see that WASH services are key for public health. We have talked with Catarina Fonseca, IRC Associate and finance specialist with extensive experience in the water and sanitation sector about the path ahead towards ensuring universal, sustainable WASH services.
Question: Can you tell us briefly about your career path and your current role in IRC?
Answer: I started to work in a non-profit organisation in Portugal after I finished a master’s degree in Economics. It was an organisation that worked in the urban slums of Lisbon (yes, there were many slums there in the 80s). Mostly supporting immigrant women with training opportunities to get them back in the job market. I remember the open sewers and the awful conditions they lived in.
I came to the Netherlands to do a master’s degree in Rural and Agricultural Development and that led me to a research associate contract at IRC in 2000. It was my first contact with the water sector. I also learned at that time, that very few colleagues (besides those working with large utilities) talked about or discussed financial issues in the sector. I remember asking “But how much does it cost to increase by 10% the coverage in this district?” and the answer, at best, would be “this handpump costs $10 per person”. No one had a straight answer beyond pieces of technology, no one talked about maintenance costs for instance.
At IRC the focus has always been on supporting colleagues in the sector to talk about finance, to engage with financing mechanisms
That’s how I ended up in the sector and working 20 years for IRC. The focus has always been supporting colleagues in the sector to talk about finance, to engage with financing mechanisms, to understand public finance and how important it is to support innovation and also to reduce inequalities. During this period, IRC has also supported me to do a part-time PhD in Water Sciences.
I joined the management team of IRC and became the head of the international programme in 2012. I have enjoyed the incredible scope of working directly with citizens, with community organisations, with district officials, with bankers, with very wealthy philanthropists and with high-level government colleagues. I managed, over the years, to always combine technical work, teaching, management and advocacy work. I have travelled all over the world and have never stopped learning. Since mid-2019 I became an IRC Associate and have created my own company Pulsing Tide. I am an advisor for several agencies and partnerships working in the sector.
Q: What is the strategy of IRC to contribute to achieving sustainable WASH services?
A: The most important aspect of the IRC strategy is a systems-thinking approach to the water sector. This means thinking about district master plans to reach universal access and not simply about pieces of technology or infrastructure construction; it means thinking about all the stakeholders that need to be involved to deliver clean water and to ensure waste is treated.
Civil society can bring about change faster and at a scale that many don’t think possible, also related with finance in the sector
IRC does this by having several country offices that engage both upstream with national government on regulatory frameworks, sector planning, monitoring processes and at district and local level with local government but also with civil society organisations. We also join forces with many other organisations in the sector and we do a lot of international advocacy to ensure that the water sector remains high on the political agenda. It’s a disgrace that in 2021 so many people do not have clean water or a place to relieve themselves.
Q: 2030 is approaching fast. How can current successes be scaled up to meet SDG 6 in the next 10 years?
A: I have co-written the Handbook for Finance Ministers – How to make public investments work for Sanitation and Water for All. In the handbook, we have chosen some of the best success cases across the world on how countries have raised additional finance or made existing finance more efficient.
All the success cases have a couple of things in common. The first one is the strong backup and leadership from Heads of State and their cabinets. Raising the amounts of finance we need for the sector does require a systems thinking – and involving more than the usual technical colleagues. Recently, talking with a State Secretary responsible for budgeting in a country where sanitation is off track, he said quite boldly: “We prioritise health, not sanitation”. Many heads of states and Ministers of Finance and their teams don’t actually know the impact of sanitation on health and the environment. This is not something you see in the media either. So besides strong commitment from heads of state to the sector, we also need more citizens to speak up, more journalists that show the consequences of illegal mining on water supplies or unregulated runoffs from industry, the impact from raw sewers running through towns, and the impact of disease burden and productivity on countries’ economies. Its civil society that can hold their governments accountable, and funding for civil society in the water and sanitation sector is close to none.
Water and sanitation infrastructure are climate adaptation and mitigation measures, but are small in financing agencies’ portfolios
And the third point, if we look at middle- and higher-income countries is that from a financing perspective there is still not much of a climate adaptation and mitigation narrative. Water and sanitation programmes that are receiving climate funds are less than a handful. Ministers of Finance don’t know much about sanitation, but neither do our climate colleagues. Most of the larger financing agencies are increasing their climate finance to 50% of their portfolios. Water and sanitation infrastructure are in themselves climate adaptation and mitigation measures, but they are still quite small in the financing agencies portfolios. Flood management and control make cities resilient to climate threads, waste water treatment protects ecosystems and biodiversity, water for irrigation is critical for food security. The new EU typology for climate finance will reflect in detail many of these aspects and what they mean for decarbonisation, but much more knowledge is required within the water sector to access the potential of climate finance.
Q: Is finance the main bottleneck in the way of achieving the SDGs? What aspects of finance? Can there be less costly WASH solutions?
A: It is certainly a very large bottleneck, but there are many funds available to the sector that are not being used. It’s a necessary condition, but it is not sufficient. And certainly, there can be less costly WASH solutions.
In the Handbook for Finance Ministers, we have made very explicit that some of the instruments to raise more finance to the sector are in fact all about restructuring internal public finance management aspects and incentivising sector performance with better planning and management. These would allow maximising value from existing public finance and in the process make the sector more trustworthy to attract private finance.
Some instruments to raise finance to the sector are about restructuring internal public finance and incentivising sector performance
These are followed by not very popular measures, but those that have the highest impact in the amounts of finance that can be mobilised: tariff reforms would solve a lot of problems and existing inequalities, increasing national budgets to the sector, introducing earmarked taxes (partly how South Korea reached universal access in one generation, how India reduced dramatically open defecation) and implement cross subsidies and solidarity taxes, which are commonly used in high-income countries too. In middle-income countries or countries where the water sector is willing to reform, increasing repayable domestic finance is another way to raise the required financing.
But none of these will materialise without consensus and high-level political buy in to prioritise universal access to sustainable water and sanitation services. Especially sanitation is hard to sell and is not getting the amounts of funds it requires. Supporting the sector with the necessary reforms to achieve the required foundations to mobilise funding and finance is the most important in the medium to long term.
Q: The pandemic increased the visibility of the water sector highlighting handwashing as essential for health. To what extent do you think emergency measures against COVID-19 will have a positive effect regarding the provision of water services?
A: It’s interesting because the pandemic has increased the awareness for handwashing, but that has not translated necessarily in increased sector visibility. Devex is tracking the post-COVID response which is going mostly to economic recovery, small and medium enterprises and health programmes. WASH is at bottom of the list. Health has gained visibility, not water and sanitation. But improved sanitary facilities IS a health response.
The pandemic has increased the awareness for handwashing, but that has not translated necessarily in increased sector visibility
At the moment, many utilities and service providers that were struggling, are more and more in debt with reduced revenues due to less water consumption for industry and commerce. Financing institutions have opened new short term credit lines for supporting service providers coping with liquidity issues. But unless some of the reforms I have mentioned above take place, many of the service providers will be even less creditworthy than before COVID. We risk going backwards in the progress that has been made in the past 10 years in low-middle income countries.
Q: Considerable progress has been made towards increasing the number of people who have access to WASH services, yet those left behind are harder to reach, the most vulnerable communities. What needs to be done to get to them?
A: The same that has been done in rich countries. First, we need to understand who are the people being left behind. Who they are, where they are and the barriers that are preventing them to access services. This analysis leads, in many cases, to the conclusion that the root cause of some of the problems is not financial at all – that it has to do with the status of illegal settlements, the political marginalisation of minority groups, lack of social safety nets for poorer families. Once the barriers are identified, specific programmes need to be designed for these marginalised and vulnerable communities – again, most of them are well beyond the water sector. For those that live in remote areas, self-supply options are available – and can be facilitated through credit programmes for instance if there is the ability to pay.
The root cause of some problems has to do with illegal settlements, marginalisation of minorities, lack of safety nets for the poorer
I think that we have seen decades of underinvestment in the sector beyond the large cities – and overall, as a sector, we have been accepting this as a norm rather than investing in rural areas, in sanitation, in poorer areas. We have populations with “basic services” that most of us would not find acceptable. Again, this is where I think citizens can play a larger role and demand more accountability to their governments, and work jointly with service providers and local entities to reach these marginalised areas. Civil society can bring about change faster and at a scale that many don’t think possible, also related to finance in the sector.