Multilateral development banks drive technological innovation in water utilities
The opening day of the Spain Smart Water Summit presented a detailed overview of the trends and challenges facing technological innovations in the water utilities sector. Experts from multilateral development banks and representatives from water utilities shared insights into the strategies being employed to drive digital transformation across the sector.
Moderated by José María Blasco, Director of Infrastructure, Healthcare, and ICT Division of ICEX Spain Export and Investment, the session provided a comprehensive analysis of how banks are facilitating the implementation of cutting-edge technologies, while utility companies discussed their real-world experiences, including the successes and obstacles they have encountered.
Paula Florencia Auerbach, Private Finance Operations Senior Specialist (IDB Lab) at Inter-American Development Bank, focused her presentation on the innovative solutions the Bank is promoting to achieve universal access to safe, efficiently managed water and sanitation services. She explained that the IDB’s strategy is not only to fund these initiatives but also to strengthen the innovation capabilities of service providers, fostering an environment where new technologies can thrive.
Auerbach cited several examples of projects supported by the IDB, highlighting the use of artificial intelligence (AI) and machine learning for detecting fraud, as well as the analysis of satellite data for the detection of water leaks in municipal networks. These technologies, she explained, are instrumental in reducing operational losses, optimizing resource management, and making water utilities more sustainable over the long term.
One standout example Auerbach discussed was the support provided to Brixsan, a Peruvian company that develops biological cleaning products aimed at improving sanitation in underserved areas. Through initiatives like this, the IDB demonstrates its commitment to creating innovative solutions for some of the most pressing challenges in the water and sanitation sectors. Furthermore, Auerbach stressed the importance of building a robust foundation of knowledge to accelerate the adoption of new technologies, noting that public recognition of innovative efforts helps foster a culture of ongoing improvement in the sector.
Fabián Cazar, Manager of Water and Sanitation at ETAPA EP in Ecuador, spoke about the critical role multilateral banks play in helping utilities implement these technologies. He stressed that their experience and technical knowledge are essential in navigating the complexities of the constantly evolving technology landscape. Cazar highlighted the ongoing digital transformation of Cuenca’s potable water and sewer systems, a project heavily supported by multilateral organizations. This initiative includes implementing real-time monitoring systems, data analysis for leak detection using AI, and satellite imaging to enhance operational efficiency. The project aims to address the issue of non-revenue water (NRW), which currently accounts for 38% of the water distributed in the area, with a target to reduce it to 30% by 2030. Future strategies will involve the use of AI and Internet of Things (IoT) technologies to further minimize water loss and improve overall system performance.
The session provided a comprehensive analysis of how banks are facilitating the implementation of cutting-edge technologies
Jeanne Astrid Fouegue-Ngako de Foki, African Development Bank Division Manager for Water Coordination and Partnerships, addressed the enormous opportunities and challenges that Africa faces as its population continues to grow rapidly. By 2100, Africa is expected to account for nearly 40% of the global population, which will place significant stress on the continent's water resources and sanitation systems. Ngako emphasized that the bank's water strategy focuses on ensuring water security across Africa by investing in smarter, more resilient water systems. She explained that these efforts are not just about providing access to water, but also about ensuring that water resources are managed sustainably to support economic growth and development.
To help utilities accelerate their digital transformation, the World Bank has developed several initiatives, including “Digital Starter” and “Digital Week
Projects funded by the African Development Bank include the creation of intelligent systems to enhance operational efficiency, as well as initiatives aimed at ensuring water for energy production and addressing the water needs of both urban and rural areas. Ngako also stressed the importance of building resilience to climate change through the implementation of early warning systems for natural disasters and by improving water infrastructure across the continent.
Jean-Martin Brault, Senior Water and Sanitation Specialist, Latin America and Caribbean Region, World Bank, delved into the ongoing challenges water utilities face in adopting digital technologies. Despite the clear benefits of digitalization, Brault noted that only a small portion of water utilities have developed formal strategies or allocated budgets specifically for digital initiatives. Most utilities are still focused on collecting basic data on flow and pressure, with only a few using advanced tools such as big data analytics or artificial intelligence for predictive maintenance or performance optimization. To help utilities accelerate their digital transformation, Brault explained that the World Bank has developed several initiatives, including “Digital Starter” and “Digital Week,” which assess the digital maturity of utilities and provide targeted training, expert consultations, and field visits. These programs are designed to help utilities identify specific challenges and gaps in their technological infrastructure and develop a roadmap for improvement.
Brault also underscored the importance of collaboration between water service providers and regulators, noting that both face similar challenges, particularly with the explosion of data and the rapid pace of technological advancements. He emphasized that addressing these challenges requires a shift in the traditional culture within utilities, focusing on modernizing work processes, improving customer interactions, and leveraging technology to enhance billing and revenue collection. Brault concluded by stressing that digital transformation is not just about adopting new technologies; it is about fostering a culture of innovation and collaboration across all stakeholders.
The session concluded with a question-and-answer segment, where panelists discussed the importance of scaling innovative solutions across the water sector. Paula Auerbach explained that the IDB’s approach is to start with pilot projects and scale them once successful, but this requires careful planning and a deep understanding of the local context. Jean-Martin Brault highlighted the need to adapt solutions that work in one country to fit the specific needs of another, which can help accelerate the transfer of knowledge. Ngako emphasized the importance of balancing affordability with profitability when implementing new technologies, particularly in regions where water access is still a significant challenge. All panelists agreed that the private sector has a crucial role to play in driving innovation, while multilateral banks are essential in mitigating risks and providing financial and technical support to ensure the success of these projects.
This session has shown that multilateral banks are playing a key role not only in financing projects, but also in strengthening innovation capacities, highlighting the importance of a holistic approach that balances innovation, sustainability and affordability, while fostering a culture of continuous improvement and climate resilience.