Ninguno
How can we integrate companies in the solution of the water problem?
December 14 , 2018

​​Governments' efforts need the private sector’s innovation and investment to generate sustainability in water resource management.

How can we merge the efforts of governments and private investment to solve the water problem? What role does civil society play in this discussion? All these questions were discussed in "Private Investment, water and development: How to catalyze transformational change for Peru", an event organized by Universidad del Pacífico Research Center, which brought together international experts to discuss the water problem. Elsa Galarza, professor and researcher from Universidad del Pacífico, presented the discussion table. She said that "water is not only an environmental issue, but a development issue in which private companies have an important role".

The first presentation was in charge of Dominic Waughray, Co Chair of the World Economic Forum, who projected a potential water shortage for the next decade if the population continues to grow at the current rate. Waughray spoke about the Peruvian case and stressed that "although Peru may be an emerging economy with problems in some areas, in others it has a very strong base. It has one of the most important water sources and therefore has the opportunity to make innovative changes in the integral management of water resources". 

Regarding the drinking water service, it was mentioned that "In Brazil, most of the water and sewage companies fail to cover their operating costs. The challenge is to lead these state-owned enterprises to achieve commercial objectives. The regulation of the water service works well in cities like Sao Paulo that have millions of inhabitants, the challenge is in the small ones, those that have only 100,000 inhabitants", said Héctor Gómez, Country Manager of IFC Brasil. 

He added that it is necessary to implement a realistic accounting approach to state businesses that revolve around water. "We do not express the actual cost of water in the bills, we only consider the operational cost, but not the real value of this resource", he noted. 

For his part, Marcelo Carvalho de Andrade, President of the Pronatura Foundation, emphasized the financing of water-related projects. He argued that "from a banker's point of view, investing in the environment is highly risk-related and the financial sector is risk-averse". 

For Carvalho de Andrade, the ideal is that 20% of the capital of this type of project comes from philanthropic funds and that the other 80% is impact capital. "Millennials will be the ones who take over the reins of the main companies and of these projects that can invest in the businesses of the future". 

The event was also attended by Karin Krchnak, Global Manager of 2030 WRG, who highlighted the importance that the efforts aimed at solving the water problem have a targeted goal.

"Water needs real collaboration and partnerships, in which the parties know their role and how they benefit. The private sector needs to be involved. Water challenges are serious and governments can do a lot, but they need support from companies", he said. 

To achieve this, Krchnak advises that companies be grouped to mediate with the State. "I have seen many partnerships between the private sector and the government. Peru is a fabulous example of different government and private initiatives coming together". 

Gonzalo Delacámara, Senior Advisor of the OECD, explained the importance of understanding the role of society in the water problem. "If you want to change water governance, you must understand the interests of its different actors. Integrating not only in hydrological terms, it is about integrating individual and collective goals, it is about defining the problems correctly ". ...

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