Four principles for WRM financing

Traditionally the water sector has been dominated by plans to achieve certain water policy goals (whether in terms of water availability, water services or flood control) focused on building new infrastructures. Discussions on financing were limited to how much money governments should provide to build the infrastructure. Over time, the discussions have evolved, with an increasing emphasis on cost recovery from water users (both for drinking water supply and sanitation and for irrigation but potentially also for hydropower, navigation and others). Article 9 of the Water Framework Directive in Europe is a prominent illustration of this issue. It states that “Member States shall take account of the principle of recovery of the costs of water services, including environmental and resource costs, having regard to the economic analysis and in accordance in particular with the polluter pays principle”.