Collect and share data to enable the tracking and evaluation of investment and financing needs in water resilience. The portfolio of projects would require provisions for data collection to ensure impact monitoring and assessment as well as to enable timely infrastructure maintenance and upgrades. Stack up and streamline different types of finance to structure innovative market mechanisms and create investment opportunities at different scales. Public finance can target projects requiring long- term investment and patient capital to bridge financing gaps. Such finance can also attract private capital, through first-loss guarantees, concessional finance elements for lower-income countries, and co-investment arrangements to manage risks. Collaboration with tech firms and water suppliers can enhance expertise sharing, benefiting investors new to water resilience. Collaboration could lead to innovative mechanisms, adapted from climate and nature instruments, to support freshwater ecosystem protection and restoration – for example: –Ecosystem value-based instruments: sustainable use fees, payments for ecosystem services and insurance discounts for activities promoting water resilience, monetizing ecosystem services while targeting self-sustaining returns. –Water credits: modelled after carbon and biodiversity credits, offering alternative revenue streams for suppliers and enabling large-scale project financing. –Water savings certificates: inspired by the EU’s energy efficiency certificates, these certify water savings from efficiency measures, with potential for a trading market to boost ROI on such projects. Develop collaborative policies, regulations and standards that balance supply- and demand-side measures to foster sustainable water resilience investments. Examples include: –Supply-side measures: grants, subsidies, tax breaks and mandates to promote investment in water reuse, desalination and efficient water use in industries, securing sustainable financing and resilience. –Demand-side measures: pricing water to reflect its true value and offering incentives for private investments, large-scale adoption of conservation technologies and community education to drive behavioural change. –Utilities’ governance: transitioning utilities from local government departments to independent agencies for stronger governance and financing capacity. With 85% of utilities serving under 10,000 people,70 addressing subscale cost-efficiency challenges requires continued dialogue and collaboration between governments and relevant stakeholders. Private sector lead Collaborate with other organizations, including utilities, government agencies, large private sector water consumers, insurers and innovators, to better understand water-related risks, share and gain expertise in investing in water, and identify opportunities. Scale-up capital according to risk appetite and specialization: –Banks, insurers and pension funds can focus on scaling-up existing innovative mechanisms (e.g. bonds) and mainstreaming the adoption of tools to understand water risk. Green bonds71 are growing within the sustainable finance space,72 and water-related green bonds specifically grew 30 percentage points faster than the overall green bonds market from 2020 to 2023, while water-related loans have grown 17 percentage points faster than sustainability-linked syndicated loans during the same period.73 –Venture capital and private equity can finance disruptive technologies and scalable solutions, while investing in market consolidation to address fragmentation in the water sector. –Impact investors can provide patient capital for long-term, high-impact water projects, supporting resilient infrastructure and conservation. –Philanthropists can offer financial support and strategic partnerships necessary to help catalyse water stewardship initiatives, while supporting innovative and experimental approaches and community- led initiatives. Water-related green bonds grew 30 percentage points faster than the overall green bonds market from 2020 to 2023. Water Futures: Mobilizing Multi-Stakeholder Action for Resilience 21

Water Futures Mobilizing Multi Stakeholder Action for Resilience 2025