Access to water is a basic human need, which is why Millennium Development Goal (MDG) number 7 aims to “halve by 2015 the proportion of people in urban and rural areas without sustainable access to safe drinking water”. The EIB is a major player in the water sector and considers itself to be committed to the MDGs. The bank records has provided lending of EUR 30.3 billion to a total of 651 water supply and sanitation projects in both the EU and Partner Countries since its creation in 1958, and has intensified its lending to this sector in the last decade, with an annual average of EUR 1.6 billion.

There are big concerns shared by NGOs and affected communities about the ideological commitment of western governments and the international financial institutions to the privatisation of water over the last decade and a half. Privatisation is now widely accepted to be a failed solution to the difficulties attached to the wider provision of clean water: it drives up prices, produces very few additional connections and often results in supply cuts to the poorest and most vulnerable households.

In spite of this, the EIB seems deeply committed to this outdated privatisation agenda. It prioritises projects in the form of public-private oartnerships (PPPs), where the national government gives the private sector the duty to supply water and build infrastructure in an agreed timeframe, with the EIB lending to the private investor (often a European company). In general, PPPs have brought no improvements in delivering a safe water supply to the poor. What they have done, though, is increase state’s debt burden and at at the same time put states into legal litigation processes. PPPS have had difficulties ensuring sustainability, implementing contract provisions and increases, and providing access to water services, especially for the poor who cannot pay high tariffs for basic water services.

The EIB is not equipped to deal with access to water in the South. In its assessment of projects, the EIB marginalises the social criteria that should have priority in water projects, such as water tariffs, citizens’ involvement in the choices made by the public utility, or the strengthening of local skills. Downstream, the EIB fails to analyse whether the projects it has backed have improved local living conditions.

The EIB should:

  • focus on acceptance of projects by local communities and the strengthening of local players.
  • in the initial selection stage of the project cycle, integrate concrete social requirements and results as priority criteria.
  • adopt new criteria for the screening of its projects, inlcuding poverty alleviation, participatory and democratic processes, strengthening and enabling local players.
  • set up a frame for evaluation that will emphasise the social aspects of the project and rely on experts familiar with the social aspects of access to water.

Related Reports