Addressing water utilities’ growing liquidity challenges to ensure inclusive service continuity through the coronavirus pandemic
TUESDAY , AUGUST 11, 2020
13.30 – 15.00 CEST
Water and sanitation services are a crucial cornerstone in efforts to manage the pandemic, e.g. the role of handwashing in killing the virus. Ironically, however, some measures taken to ensure water and sanitation services are widely available are putting a financial burden on water utilities that may compromise their ability to deliver essential public services throughout the pandemic and beyond.
The growing liquidity crisis of public utilities under COVID-19 is caused by a twofold burden of (1) increasing costs and (2) decreasing revenues. Costs for service provision have increased due to mounting operational expenses, like additional safety and hygiene measures to protect personnel’s health. Moreover, given their critical role in maintaining public health, many utilities have expanded service provision to stall the spread of the virus by way of public hand-washing facilities and standpipes, among other measures.
At the same time, revenue streams have fallen because of a pandemic-induced economic slowdown that is seeing decreased demand by industrial actors and the inability of household customers to pay their bills on schedule. Many governments have mandated that utilities freeze payment compliance measures during the pandemic, such as disconnecting households with water bills in arrears, leaving water operators without enough cash flows to operate on a sustainable basis.
This session aims to raise awareness and share experiences on financial liquidity risks for water operators in light of the global coronavirus pandemic. As part of GWOPA’s webinar series, it will bring together experts in the water service provision field with water / wastewater utilities from different regions to hear about their challenges, potential solutions, and outlooks on financial solvency. Participants will elaborate on potential solutions to equip utilities with sufficient resources to operate sustainably and deliver desired results. In addition, World Bank colleagues will speak on recent findings around utility solvency and introduce their novel Covid19 Financial Impact Assessment Tool for Water and Sanitation Providers.
Having no or limited cash reserves, many utilities already struggle to maintain a service that provides safely managed water and sanitation for all. The economic downturn in low- to middle-income countries, which is leading to increasingly high public debt levels, means that scarce public resources for water supply and sanitation may decline even further.
How can utilities continue to provide everyone with lifesaving water and sanitation services, without a sustainable cash flow? How big is the shortfall, and who is paying for it?
After the webinar, and for 5 consecutive working days, we invite the panelists to respond to the questions unanswered during the webinar and exchange more information in a dedicated group on Workplace.