 We're talking about what is the finance challenge in the water sector, particularly under the SDG lanes, and then the conceptual framework on access to commercial finance, why we're talking about commercial finance, and then maximise finance with development, which is the sort of a set of idea or principle that the World Bank Group will develop in recent months in terms of to mobilise finance for all sectors, not just water, but water clearly is one of those areas. And then I mentioned a few cases in the countries that we're walking on, and then some concluding remarks. As we begin, we all know, I think sitting here is all water professionals, of the challenge that the humankind are facing in the 21st century in the water agenda. I mean, there are many factors affecting the sort of water resources we survey the demand, and the key among them, of course, is the population growth and, of course, the climate change impacts. So here among professionals, I don't need to get into the details by why this is a really key challenge. But moving on from the Menendon Development Goal, moving to the Sustainable Development Goal in 2015, is also giving us another new challenge, which is the fact that in the MDG period, we're talking more about access. Now, in the SDG period, we're talking about safety managed access, which has really different concepts. An example of that is that when you have access to drinking water, but what's the quality of the water? I mean, we have done a poverty, a worst poverty dynamic recently in 18 countries in Bangladesh, for example. What's the difference between the e-colar contamination in tap water vis-a-vis in pond water? Well, the answer, you may be surprised, is that it's not really different. In other words, when you have access to water, but if the quality is a problem, it doesn't really solve the challenge we're facing. So under the SDG period, we're giving a lot more emphasis about the quality of this agenda. And of course, about sanitation as well. But raising this bar means that we require a lot more finance than traditionally be available. So if we continue on the business as usual approach, we simply have no chance to reach the SDG goals. So status quo is not an option. This slide shows you an estimate that we did in 2016 on the paper, which I highlighted there. Comparing the MDG period, which is the gray bar, basically investment between 2015 in the drinking water and sanitation breaking up into urban and rural. And that's the amount that we actually invest during the 15 years period. And then the black bar is that if we remain on the MDG goals, how much it will cost in providing universal access to sanitation and to drinking water both in rural and urban. And then the blue bar shows a quantum jump in terms of, by the definition of the SDG particular. This is where only focus on two of those. This is SDG 6.1 and 6.2 about safely manage universal access to drinking water and sanitation. You're talking about the total of this is estimated about $114 billion a year worldwide. Obviously this amount mostly developing country because in OECD countries access obviously is not an issue. Now just to put things in perspective, how does that compare with actually spend currently? We're talking about currently among developing countries. We're talking about only spending something like at most roughly about $30 billion a year worldwide. And this is with our requirement of spending $114 billion a year. We're talking about between three to four times of increase. And to highlight and also want to emphasize that while in the MDG period done very well in access to drinking water, but sanitation is an area that has been somewhat neglected. So much of the investment, in fact 60% of these investments we estimated is required is on sanitation, particularly in urban sanitation. I think Bravo yesterday mentioned about the number of billions of people depends on how you estimate it. So we're talking about between four or five billion people they have no universal access in the SDG definitions. So how do we finance in the water supply and sanitation sector? The financing equation for the water sector is actually quite simple. And it's not very different from looking at household financing. Essentially you need to finance to cover the cost of expanding, operating and maintaining services. And for service provider, users rely on non-repayable funding sources. These are including tariffs, meaning that the amount that user pays, these include different forms of collection. And also about transfers, which is typically from phenotopycos or multilateral bilateral organization that providing funding for the water supply and sanitation. And then of course there's taxes the government collected and then we invest in the water supply and sanitation sector. But typically that leads in financing gap. Mostly these kind of resources, so-called non-repayable funding sources, not sufficient to cover all the costs. And that's where we traditionally have to tap into so-called non-repayable financings. In many of the OECD countries, this has been in practice for the last 100 years. It's nothing new. But in developing countries, particularly in low-income developing countries, tapping to these non-repayable financing is relatively new. In fact, those that have been able to use that resources traditionally has been tapping to concessional financing from the World Bank, from IDB, from African Durham Bank, and multilateral organizations. The commercial finance part is relatively minor among developing countries, particularly low-income developing countries. The point we're making here is that if we want to meet the SDG goals, that's an area that we really need to focus on because there's simply not enough concessional resources available or funding from the bilateral multilateral to meet the large funding gap that we are facing. But if you look at the market, there are different kind of commercial financing is available and they come from different forms. And it depends on the large or small of the utility or the service provider. From the household level, the smallest, some households can access microfinance. For example, we're talking about Saraj Bharat. In India, some of those households are actually accessing microfinance for building toilets, for example. And then to the other extreme, there's a large utility like ICER to surpass the next door, that they can access different kind of commercial financing. Typically, the smaller door, they will focus on microfinance or vendor finance and gradually moving to commercial form of financing, like commercial loans from the banks, development banks or commercial banks, or issuing bonds. Now, bond issuing is not, again, it's not new among OECD countries, but it is relatively rare among developing country utilities. But that being done, for example, ICER, in fact, has a plan to issue bonds in the next couple of months. And of course, it will come to the case like Sebasti and others that's been doing this type of financing for many years. However, the financing is available there, but most utilities that we work with, unfortunately, is not necessary in a very healthy path to access to the finance. Because to access to finance, you have to position yourself well. But many of the utilities we work with, particularly in low-income countries, in the vicious path. And this vicious path is basically saying that because for whatever reason, start with a government constraint and tariff increase. So tariff level is very low. And because the price is low, consumers tend to waste the water resources. And this increases the cost of services and enlarges the gap between operating costs and revenues. And which lead to insufficient money for OEM costs. And then since service deteriorated and decreased the willingness by the customer to pay. And then they go down the drain. So unfortunately, there are quite a number of utility worldwide that are going through this path. So the idea is to really turn around this utility performance before they can access commercial finance. And to do that, this is nothing new to you, but we're just kind of calling them in a little bit systematic way. We're talking about the government need to develop sound policies and implementing institutional regulatory reform to enable utility to move in reverse that vicious path that we talk about. Like it or not, incentive drives organization, ministries, providers and individuals, managers. So it's why incentive scheme in the performance utility is very important part of the so-called PIR policy institution and regulatory framework. And it requires a holistic approach to address this kind of reform. And many utility in their turnaround path has gone through their process. And fundamentally, when you go through this kind of reform, there are three major areas that one has to address. One is about subsidies and then it's about the sector's own capacity to regulate and planning and then incentive to manage it and staff for increasing efficiency. Now in developing countries like subsidy for water users is a big part of the finance in any government policy. At the World Bank, we're not against subsidy per se. However, many of the subsidy schemes, particularly in low income countries are not necessarily well targeted. So they're not necessarily bringing efficiency in promoting efficient use of water resources. Many of the subsidy schemes are based on water metric scale, meaning that if you use more water, you tend to get more subsidies. But if you look at most urban areas, the poor tend to live in particularly developing countries. The poor tend to live in the periphery area. Those are areas that have no access to basic pipe water, drinking water. So they don't necessarily have even have access to this kind of a subsidy. While people tend to be wealthy living in the center, tend to consume more water and they tend to get more subsidies. So in many utilities, the tariff level, because of this subsidy, the tariff level is too low to recover operating maintenance costs, not to talk about moving to recover capital costs. On that basis, of course, there's no possibility to access commercial finance. But many countries recognize that. In fact, Argentina, for example, last year increased the tariff for 400%. And, you know, it's fairly significant to be able to recover operating maintenance costs. And many other countries are trying to do something in that nature. And at the same time, during this reform process, again, we're not saying that we're against subsidy, but I think we need to make subsidy much more targeted. And there could be different kind of payment scheme to support that. And then, of course, we talk about incentive already. I'm not going to repeat that. So by doing all this, we basically want to turn around that path. And from the vicious path to the tourist path, it is possible. There isn't one size fit all, but this is some idea of the path that one can reverse. Usually, we cover stuff with introduction of incentive system in the organization for manager and for staff to make it operational relevant. And this will lead to better services. When you have better services, you'd also typically reduce the non-revenue water. And this will improve the satisfaction of the customers. And they will be willing to pay more. And when they're willing to pay more, they increase the revenue, then will allow the utility to expand services, and then you raise your revenue base. And then you will be able to move to a full cost of recovery even with surplus path. And that's where we want to see. And this is a sort of simple picture to show that among the utility worldwide, obviously, we have thousands of utilities. Basically, you can see them on these ladders. You have utility at the bottom that are totally unviable, not even able to recover their operating maintenance costs. To a utility that are fully credit worthy that can access commercial finance, meaning the revenue is more than the operating maintenance costs. They can even recover part of their capital expenditures. The question is that how do we move this path from the bottom to the top? And typically, when utility at the bottom, they will rely on grant financing from budget or from bilateral or multilateral. But we really want, while this is the case, to work with them to move this path. And along that, then you can bring in concessional finance, we call it a brand finance, including a certain amount of commercial finance when you move to the top. And we have examples of utility along all these ladders. And on the far right side, I also show there's something we can also use in the World Bank of credit enhancements like guarantee instrument to help utility to move and to reduce the risk to get access to commercial finance. So as you can see from this graph, as you move the ladder, you will get more sort of your finance from the commercial source rather than from the grant and public sources. So this is really what in the World Bank we support this kind of a transition for utility in starting with developing a strategic financing plan, moving to segment the market. We're talking about differentiates of the utility and then identifying the container financing approach. And I'm not going to detail, but for example, one survey we did was that the first part is very important. I think utility needs to think about a longer-term perspective in terms of how they finance, how they meet the universal target. Many countries set out, you know, the policy to provide universal access to drinking water sanitation, but how do you finance and how do you get to that path? So ISA, for example, recently have developed such a plan and they're planning over the next couple of years to invest between four to five billion dollars. So that's the idea, but then the next question, how do you get access to that kind of finance? Because the budgetary support is only going to be a small portion of that and multi-lateral loan is also a small portion of that. So we're moving and then segmenting market is really to distinguish the utility based on the performance. As you probably know, working in the World Bank, we developed a database called IBNet that give you the data among the performance of the utilities in terms of where they, how they depend, what's the degree of creditworthiness. And then the last point about the PIR, policy institution and the creditory framework is really, I think one emphasizes that it has to be a holistic approach to this reform. And also we want to emphasize that we don't prescribe one particular model with another because every country, every utility have to look at their local condition, the political economy, and to develop what is suitable for their path. So this summarized into this so-called principle of maximizing finance with development that the World Bank Group we have developed over the last one year. And by the way, this principle applies to all sectors, not just water. In fact, water is probably lacking behind, let's say, compared with renewable energy, compared with, you know, part of the transport sector that are moving far ahead in terms of accessing commercial finance. Basically, the idea is that if we have a project to finance for infrastructure, for water supply and sanitation, we first ask the question, is there commercial financing available, willing to finance such a project? If there is, then we should use commercial financing that is available for that, that builds the discipline, but also recognize the fact that concessional or public resources is limited. Now, if for whatever reason, possibly because the policy failure or market failure or policy environment is not conducive for getting such a commercial finance, then our support is to work with the utility, work with the government to improve the policy environment and to create that regulatory framework that will reduce the risk for commercial finance to get into the sector. And along that path, we can use different type of instrument. I mentioned here for guarantees, and I'll give you an example from other discounted financing that could be developed. And then for those utility that are really just obviously maybe in a certain segment of the sector, let's say rules, sanitation or water supply that is not easy to get commercial finance, and that's where traditionally you use the limited public resources to provide finance for that. And that's what we call the principle of maximizing finance for development. And next, I just give you really, I'm not going to go into detail of this example, but just showing you, within this region, what I just mentioned earlier is being done in different utility. This is an example in Colombia where they're setting up this second tier financing organization called FinData. Basically, the idea of this is to create incentive for commercial banks to lend to municipalities for water supply and sanitation with FinData providing a bridge road and providing sort of discount loan to provide the financing. It's really just to create incentive to support using moving commercial finance to municipal utility. And this is happening now. In 2014 in FinData, 28% of disbursement is actually for water supply and sanitation. So this commercial finance is actually moving to the sector as we speak. And this is an example in Peru, where we talk about this holistic approach for policy institution and regulatory reform. This is a chart to show the overriding goal is to achieve universal sustainable access to water supply and sanitation. But to do that, the government recognized that they have to have a holistic reform approach to all the major players in the sector, from the policy environment to the water utility to the regulatory body and creation of a water supply and sanitation fund. All these are elements of a holistic reform approach to create that environment so that water supply and sanitation utility can access commercial finance down the path. And this is another example of SBASB, which is very well known in this region. It's a new SBASB has been accessing commercial finance for many years. You will see the chart, right? More than 50% is owned by the government, but 49% of it has been floating in a new exchange. Recently they're working with the World Bank Group, with IFC and with us, to actually help them to create a holding company to sell some of the minority assets that we capitalize, expanding their capital basis for SBASB to further expand the services. Again, I'm not going to de-do it because their colleagues from Brazil can explain to you much more on this. So this is my last slide. We're talking about the fact that we need a greater leverage of limited concessional finance. It's very necessary because based on what I show, there's simply not enough public sector money available for the sector if we're going to meet the SDG goal by 2030. And to do so, the government need to create policy, institution and regulatory framework to create a creditworthiness of the utilities. And domestic finance is the key on this because utility, we see the revenue on domestic currencies. Of course, if you borrow from externally, you also have one into a foreign exchange risk as well. But obviously, it depends on whether you have a vibrant domestic capital market. And finally, I won't say that the incremental approach is really necessary. Nobody's saying that this is going to happen overnight. It's a path towards creditworthiness for the utility and for accessing to commercial finance. And for the World Bank side, we're ready to work with our clients. Many of them are sitting here in this approach. Thank you very much.