The Water Security Financing Framework for Latin America and the Caribbean responds to one of the region’s most urgent challenges: closing the gaps that still exist in water access and sustainability in a context of climate change, rapid urbanization and limited financial resources. Despite progress in access to water and basic sanitation, the region faces structural shortcomings that jeopardize the universalization of the human right to safe drinking water and sanitation, sustainability, equity and resilience. This framework emphasizes that the problem lies not only in the shortage of financial resources, but in the limited institutional capacity to convert needs into well-structured and bankable projects.

To address that, this document introduces the Water Security Financing Framework (WSFF): an adaptable methodology based on principles of new institutional economics and systemic thinking aligned with the British “five case model” (strategic, economic, commercial, financial and management) for justifying and prioritizing public investments. The Water Security Financing Framework offers a step-by-step process that enables governments, operators, the private sector and civil society to jointly construct robust investment cases, design effective contractual arrangements and strengthen governance, funding and financing arrangements. It thus seeks to close two critical gaps: between political decision-makers and technical experts, and between investment needs and existing financial mechanisms.

The document is structured as follows: after an introductory chapter that provides the context and rationale for consolidating this financing framework for water security, chapter I analyses the region’s challenges and implementation gaps in achieving water security. Chapter II presents an analysis of transformations in the global and regional financial architecture. Chapter III examines emerging financing mechanisms: green and blue bonds, blended finance, carbon and water credits, and philanthropic capital. Chapter IV examines in depth the strategies used to channel climate funds at the local level, with examples from South Africa and the Indian city of Surat. Chapter V describes the Water Security Financing Framework in detail, with example cases from the region. Finally, chapter VI concludes with recommendations for policy reforms, institutional strengthening and investment priorities.

To summarize, the regional Water Security Financing Framework offers a common-language, practical road map for mobilizing public, private and philanthropic capital to catalyse and enable transformative investments in water security for Latin America and the Caribbean.