Finance Models and Policies (IRP2-WP4)

Overview

This work package will review existing finance models and policies. We will:

• work with end users to identify existing finance model, policies and mechanisms (such as financial incentives) used to foster public and private investment in water sensitive cities.
• review policies and models for investments in other sectors that aim to foster investments that generate public goods.
• present a set of different funding approaches, with examples/case studies on where these approaches have been used, and identify factors that help or hinder project funding, and highlight principles from the economic evaluation framework that could be used to support, direct or negotiate a funding approach suited to the circumstance.
• evaluate the effectiveness of existing models and policies, and identify successful approaches and the requirements for success.

We will also engage with regulators and agencies to design a small number of alternative approaches to investment financing and policy that appear likely to be effective in the context of water sensitive cities. These approaches could include:

• beneficiary identification methods;
• risk sharing;
• cost-sharing principles;
• payment mechanisms (such as value capture).

We will workshop these approaches with CRC end users, policy makers and experts in financing projects to evaluate their likely success. If we are able to identify approaches that are judged to be likely to succeed, then we can work with policy agencies to explore the legal, practical, political and financial feasibility of implementing the approach. This procedure would help in understanding how to engage and negotiate with policy makers to facilitate investment.