The U.S. Development Finance Corporation (DFC) has provided $25 million to WaterEquity, a facility designed to support institutions that finance water and sanitation projects in several regions of the world, including Africa. The $25 million is the first tranche of a $100 million loan.
It is a move to improve water supplies in Africa, Asia and Latin America. The U.S. Development Finance Corporation (DFC) has injected $25 million into the WaterEquity Fund. This mechanism of the organisation Water.org finances development finance institutions involved in water and sanitation projects around the world. “At least five million people will be able to access improved water and sanitation services on these three continents,” says the DFC.
The funding for WaterEquity is the first part of a $100 million loan. The loan is being provided with “the issuance of fixed income instruments in accordance with the International Capital Market Association (ICMA) guidelines on sustainable bonds. As placement agent for the transaction, BofA Securities is managing the sale and pricing of the $100 million instruments,” says Algene Sajery, DFC’s vice president of external affairs.
On the African continent, the provision of improved water and sanitation services will reduce the rate of waterborne diseases, currently at 80%. Sub-Saharan Africa remains the region of concern with only 28% of the population having access to basic sanitation facilities and 32% still practising open defecation. Faecal sludge is mostly found in waterways, making the resource unsafe.
The disbursement of $25 million by the DFC is part of a WaterEquity financial mobilisation. On April 23rd, 2021, the fund secured $125 million in investments to reach a total of $150 million.