Outcome of the EU-UfM High-Level Conference on Water Finance and Investment: The Cairo Action Agenda

Following up on the UfM EU Water investment forum, held on 17-18 October 2022 in Cairo the UfM, the Sectorial Co-Presidencies and MWI/EU Delegation in Egypt published the  result of the debate in the High Level segment and the overall two days event.

THE CAIRO ACTION AGENDA

Water and Climate Change
1.      Adopt a strategic approach to enable the water-related sectors to contribute effectively and efficiently to addressing the climate emergency. Invest in knowledge to enable evidence-based policy-making. Elaborate long-term strategies (linked to action plans and key performance indicators). Improve governance (leadership, stakeholder involvement, cross-sectoral coordination, finance framework). Encourage stronger engagement of the private sector.
2.      Integrate climate change risk in water investment policies and planning. Assess your current water investment policies and revise them to integrate climate risks. Adopt a gender transformative approach to investment policy development and implementation. Implement the recommendations of the 2021 EU-UfM Water Investment Policy Forum. Use basin and catchment management plans to articulate coordinated multi-sectorial investment programmes.
3.      Develop a climate-smart portfolio of water projects. Move away from the traditional focus on supply-augmentation. Invest more on soft solutions (e.g. national water allocation, tenure, insurance), nature-based solutions, and hard solutions that support a circular economy (e.g. water reuse). Invest more on water-saving (e.g. modern irrigation, network rehabilitation) and cost-saving measures (e.g. energy recovery and efficiency).
4.      Strengthen your national water finance framework to ensure that the water sector is ready to address the climate emergency.Define the contributions of user and polluter charges (tariffs), public budgets (taxes) and development and climate grants (transfers) as sources of finance to ensure the financial sustainability of projects and programmes – possibly through the development of a national water finance strategy, building on the UfM Financial Strategy for Water.  Undertake institutional, policy and regulatory reforms to strengthen the enabling environment for attracting public and private financiers (repayable finance) – possibly supported by a regional initiative. Build capacities to develop beneficial projects that offer a fair risk-reward balance. Use water tariffs to help reduce sector costs (through water demand management) and to increase sector revenues, while providing targeted support to ensure that services remain affordable.

5.      Make the case for investing in water as part of national climate adaptation and mitigation strategies. Invest in understanding the benefits of water investments for agriculture, energy, urban and rural development, transport, health, education, environment and other sectors. Engage with those sectors to discuss those benefits and how to realize them. Assess how water-related investments (e.g. water and energy efficiency, use of renewable energy, water reuse, hydropower generation) can contribute to national mitigation goals.

6.      Mobilise and use climate finance strategically.  Don’t let the climate finance “tail” wag the water investment “dog”: formulate the investment programmes and projects that make sense, identify the “climate additionality”, and then look for the climate finance source that is the best match. Engage in a whole-of-government approach to climate finance -- avoiding competition among sectors and duplication of efforts and capacity needs. Use climate finance as part of blended finance, to attract private investors.

7.      Use partner support to identify and implement water finance and investment policy reforms. Engage meaningfully in policy dialogue opportunities offered by the EU’s Team Europe Initiatives on Water and other partners to identify priority policy reforms:  whether through TA recommendations, donor coordination mechanisms, or annual sector reviews. Use financial resources mobilized by the EU and other partners to support the implementation of policy reforms. Lead the coordination of partners, don’t play them against each other.Take part actively in regional initiatives that aim to support the implementation of this Cairo Action Agenda.