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Financing of transboundary water cooperation

A key aspect for ensuring sustainable transboundary basin development and cooperation is funding. Funding requirements and sources depend on the scope, mandate, objectives and ambition of the transboundary cooperation arrangement. The lack of sustainable funding models however often prevents countries from deepening their cooperation. Many countries also face difficulties in financing transboundary water cooperation from national sources since often the benefits of transboundary cooperation are not always known and funding is often targeted to national and local water projects. Sustainable financing models for joint bodies and cooperation processes as well as transboundary basin development are therefore crucial.

The work on facilitating financing of transboundary water cooperation, part of the Water Convention’s Programme of Work 2019-2021, is co-led by Switzerland and the Netherlands and implemented by UNECE. It aims at supporting countries and River Basin Organizations in understanding and identifying sustainable financing mechanisms for transboundary water cooperation and management. More specifically, the objectives of this programme area are to:

  • Draw global attention to the importance of financing transboundary water cooperation and raise awareness on the importance of enhancing the financial sustainability of transboundary water management institutions and implementation programmes;
  • Facilitate knowledge sharing and peer learning (among national authorities, joint bodies and development partners) on funding options to enhance the sustainability of transboundary water management;
  • Support national authorities and joint bodies in securing financing for transboundary water cooperation from different sources, including national budgets;
  • Promote the development of joint investment plans and financing strategies in transboundary basins

In terms of activities, the work on financing transboundary water cooperation includes:

  • Contribution to relevant global discussions and processes to raise awareness on the importance of sustaining financing for transboundary water cooperation
  • The development of a background study on the current opportunities and challenges with regards to financing of transboundary water cooperation
  • Exchange of experiences at global and regional levels to facilitate peer-leaning and knowledge sharing on how to mobilize sustainable financing for transboundary water cooperation processes and basin development

On 9 October 2018, back-to-back with the eighth session of the Meeting of the Parties to the Water Convention (Astana, 10-12 October 2018), UNECE organized a high-level workshop on financing transboundary basin development in partnership with Switzerland, the Netherlands, the World Bank, the Global Environment Facility: International Waters: Learning Exchange and Resource Network (GEF IW:LEARN), the Asian Development Bank (ADB) and the European Investment Bank (EIB).

Building on a background document, the workshop laid the ground for a better understanding of the concrete financial needs of basins with regards to transboundary water cooperation as well as the financial sources available.  As a result of the workshop, a set of conclusions and recommendations have been captured in a co-chair summary, in which the urgent need to create enabling conditions for investments in shared basins, namely through appropriate and strong legal and institutional arrangements for cooperation, was highlighted.

With the aim of strengthening cooperation with international financial institutions and multilateral development banks missions were organized to the African Development Bank and World Bank in Spring 2019 which showed that strengthening cooperation may improve sustainability of investments in transboundary basins.

On 30 May 2019, UNECE led a session on sustainable financing of transboundary cooperation at the 5th Targeted Regional Workshop for GEF International Waters Projects and Partners in Africa in Gaborone, Botswana.

Up-coming activities:

On 28 August 2019, UNECE will organize in partnership with AfDB, ADB, EIB, GEF IW:LEARN, the Organization for Economic Cooperation and Development (OECD) and the World Bank an event on  Mobilizing financial resources for transboundary water cooperation and management at Stockholm World Water Week 2019.

From 16 to 18 December 2020, in Geneva, UNECE Switzerland, the Netherlands ADB, AfDB, EIB, GEF IW:LEARN, OECD and the World Bank will organize a Global workshop on financing of transboundary water cooperation and basin management.

Based on the background study to be developed, the workshop will review different sources of funding (e.g., national funds, revenue from joint infrastructure, water fees, external donor funding from bilateral and multilateral sources and innovative financial tools). It will discuss opportunities and challenges with regards to financing of transboundary water cooperation and will enable countries and RBOs to learn about financial mechanisms available for transboundary water cooperation. Cooperation will be sought with ministries of finance and relevant financial institutions (banks, bilateral donors, etc.).