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Financial Innovation for Water Cooperation

e. Formal third-party approval: Any project that seeks the be substantial in size, with a significant potential impact on the
support of the Blue Fund must have been approved by population.
MDBs or other donor agencies which are willing to support
the capital costs, implying that feasibility studies and an Providing a “Safe Space” for the Preparation
environmental impact assessment have been carried out. of Bankable Projects

Technical issues such as cost coverage by the Blue Fund, A serious obstacle to progress in transboundary water
and currency risks, among others will need to be reviewed cooperation, and in water cooperation more generally, is the
separately by experts. The Blue Fund is being recommended current shortage of bankable projects. Two approaches to
precisely at a time when the High-Level Panel on SDGs is addressing this problem include taking advantage of existing
aiming to increase water financing to meet the SDGs. The financial facilities and institutional innovation.
Blue Fund will encourage the international community to
set aside a part of those water funds for transboundary Launched in 2014, the Global Infrastructure Facility (GIF) of
water cooperation. the World Bank is an example of an existing financial facility. It
is a “global open platform that facilitates the preparation and
Blue Fund Regional Test Case structuring of complex infrastructure public-private partnerships
(PPPs) to enable mobilization of private sector and institutional
A proposal to support a new funding mechanism for a pilot investor capital. The GIF supports governments in bringing well-
project in the Congo basin has been put forward to the structured and bankable infrastructure projects to market. GIF’s
international community. The Congo Basin Blue Fund will help project support can cover the spectrum of design, preparation,
the riparian nations of the Congo basin to jointly work towards structuring and transaction implementation activities, drawing
economic development by shifting their focus from deforestation on the combined expertise of the GIF’s Technical and Advisory
to the benefits derived from the sustainable use of the Congo Partners and focusing on structures that are able to attract a
River and its tributaries. The proposal has support from the wide range of private investors.”
riparian countries in order to ensure sustainable development
leading to peace and stability in the region. The proposal was GIF could also serve as a support facility for riparian nations by
formally launched at the Africa Action Summit, a component of having a dedicated water component to help countries design
the 22nd session of the Conference of the Parties (COP 22) to projects that are ecologically-sensitive and technologically-
the United Nations Framework Convention on Climate Change in sound, but have a transboundary water component. The
Marrakesh, Morocco in November 2016. preparation of such a component, however, would require
special effort.
The Memorandum of Understanding for the Creation of the
Congo Basin Blue Fund was signed by Ministers of the Congo This brings to the fore the need to create a “safe space” or
basin countries in Oyo, Republic of Congo on 9 March 2017. an opportunity for pre-negotiation consultations and other
Ten riparian countries have signed the instrument thus far. The activities at an early stage of project development. The safe
Congo Basin Blue Fund will focus on creating real economic space would allow stakeholders to proactively address major
assets such as: implementation issues early, as well as to generate innovative
ideas. Additionally, it would help create the necessary confidence
▪ Improved river navigation and transport, including dredging among all stakeholders. Facilities for such a safe space could be
and small ports infrastructure, provided by existing water cooperation organizations or by the
▪ Hydro-electric projects/small dams, Global Observatory for Water and Peace, a new facility proposed
▪ Irrigation projects to increase productivity of existing arable in the next chapter of this report.
and agricultural land,
▪ Fishing and fish farming,
▪ Water and waste water treatment, and
▪ Eco-tourism.
The Fund’s annual target is €100 million for project costs,
including full costs for some cases and interest subsidies for
others.

The Congo Basin Blue Fund will be used for transboundary
projects or projects in a single country where transboundary
effects require transboundary cooperation. Projects should
target climate change objectives and reduce the population’s
reliance on forest-based resources through the creation of an
active “blue economy” based on water. Projects also have to

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