Financing of water resources management (WRM) is essential for the viability of current reforms to manage water at the catchment or basin level though River Basin Organisations (RBOs). Little is known however, on how RBOs are financed and the effectiveness of the financing mechanisms in relation to the objectives of improved and sustainable management of water resources. The EU-Finance Working Group (EU-FWG) is currently working with OECD carrying out case studies towards a report on “financing water resources management”. Cap-Net and partners-are wrapping up case studies on the practices of financing WRM in four river basins in Argentina, Vietnam, South Africa and Indonesia.

As part of a seminar to examine and measure factors for effective Water Governance by River Basin Organisations, 3 of the case studies were presented at the World Water Week in Stockholm on 9 September 2010. The presentation from Indonesia highlighted that the RBO, Jasa Tirta I Public Corporation, has increased revenue 700% in the last 20 years. This has been coupled with increasing water use efficiency. Income from water service fees have overtaken the funding from government and become the major source of finance. The success was attributed to accountability and customer satisfaction with the services among other things. In Argentina the RBO (ACUMAR) evolved in response to serious pollution and was given a mandate by a Supreme Court ruling. The RBO is funded from government and loans. The RBO does not allocate water and there is no basis for water charges. Polluters are required to carry out remediation plans but not to pay for pollution. In South Africa, the RBO’s water resources management functions are comprehensive and financed by charges and general taxes. In practice, institutional uncertainly has hampered the effectiveness of the financing because the concept of RBOs managing river basins has not been fully embraced.

As part of a seminar to examine and measure factors for effective Water Governance by River Basin Organisations, 3 of the case studies were presented at the World Water Week in Stockholm on 9 September 2010. The presentation from Indonesia highlighted that the RBO, Jasa Tirta I Public Corporation, has increased revenue 700% in the last 20 years. This has been coupled with increasing water use efficiency. Income from water service fees have overtaken the funding from government and become the major source of finance. The success was attributed to accountability and customer satisfaction with the services among other things. In Argentina the RBO (ACUMAR) evolved in response to serious pollution and was given a mandate by a Supreme Court ruling. The RBO is funded from government and loans. The RBO does not allocate water and there is no basis for water charges. Polluters are required to carry out remediation plans but not to pay for pollution. In South Africa, the RBO’s water resources management functions are comprehensive and financed by charges and general taxes. In practice, institutional uncertainly has hampered the effectiveness of the financing because the concept of RBOs managing river basins has not been fully embraced.

The 3 case studies illustrated the impact of the prevailing national socio-political priorities on water governance at the basin level. This influences the viability of river basin organisations and can severely limit the opportunity to use financial and economic instruments as a water management tool. Two main lessons have been drawn thus far for the viability of RBOs and effectiveness of financing mechanisms: (i) that government should fully empower RBO to manage water resources, and (ii) that RBOs need to become more transparent and accountable to their clients.