UNCDF together with the Swiss Agency for Development and Cooperation (SDC) and the Gambia River Basin Development Organization (OMVG) have seized the unique opportunity offered by the 9th World Water Forum (the world's largest event on water) to launch the Blue Peace Financing Initiative by hosting a High-Level Panel on “Funding and Financing Blue Peace – how to invest in peace through water”.

The World Water Forum is the world's largest event on water. It has been organized every three years since 1997 by the World Water Council, in partnership with a host country. The 9th Forum is the first of its kind hosted in sub-Saharan Africa: Senegal. By bringing together participants from all levels and areas, including politics, multilateral institutions, academia, civil society, and the private sector, among others, the World Water Forum provides a unique platform where the international water community and key decision makers can collaborate and make long-term progress on global water challenges. This was a great occasion to launch the Blue Peace Financing Initiative.

As a reminder, the Global High-Level Panel on Water and Peace is at the heart of the Blue Peace Movement. The panel included a specific recommendation on the creation of innovative financing mechanisms. “The Blue Peace Financing Initiative is a concrete action on this with the vision to promote access to capital for non-sovereign entities by using water as an entry point for multi-stakeholder cooperation frameworks, which will lead to more sustainable economies and peaceful societies (a peace dividend).” said Mr. David Jackson, Director of UNCDF Local Transformative Finance (LTF) Unit.

The High-level Panel (HLP) was moderated by Ms. Preeti Sinha, Executive Director of UNCDF and saw relevant interventions of its speakers.

“60% of freshwater globally is transboundary but only one third of those transboundary basins have an agreement or cooperation frameworks, we understand how urgent it is to set strong incentives for multisectoral and transboundary water cooperation frameworks. Without cooperation frameworks and negotiated agreements, the natural state of water traditionally has the potential to create tensions” said H.E. Mr. Lamin B. Dibba, Minister of Environment, Climate Change and Natural Resources of The Gambia.

However, the future for transboundary water cooperation can’t be visioned without financing, as emphasized by H.E. Dr. Danilo Türk, former President of the Republic of Slovenia and Chair of the Global High-Level Panel on Water and Peace: “In the panel we had meetings with experts in finance. Looking at the practices developed by various mechanisms and frameworks, we realized that the idea of a financial mechanism like the blue fund must be developed. Joint investment plans to access the fund, a safe-space consultation, risks management and mitigation, all these requirements were captured by the Blue Peace Financing concept. What is new is the development of the special purpose vehicle which will manage the assets.”

The HLP also showcased the pioneering role of OMVG as the first River Basin Organization (RBO) to implement such an innovative financing mechanism. As a well-established RBO with a legal framework that provides the necessary authority to raise and manage funds, OMVG has proven to be ready to try new ways of financing. “We are a strong institution with a long-standing history and strong political will and support from member states, but we are still facing challenges when it comes to mobilizing funds. We thank UNCDF and SDC for accompanying us on exploring innovative financing mechanisms, including the Blue Peace Financing Initiative, to implement projects in the context of our masterplan. This is really the way forward to build financial independence whereby we can implement projects without getting indebted.” said OMVG High Commissioner Mr. Lansana Fofana.

Through a technical assistance process, OMVG is being supported in the development of its master and joint investment plans. This will enable the RBO to gain the institutional capacity needed to issue a financial instrument – the Blue Peace Bond –, get access to the capital market and be better positioned to absorb the financing, roll out physical infrastructure and pay back investors. The perspective of the financial sector and potential investors is important and was highly awaited during the panel. Thus, the CEO of the Standard Chartered Bank for Senegal and Gambia and the Investment Director of Meridiam confirmed a strong market appetite for innovative regional impact investing opportunities and related financing instruments such as the Blue Peace Bond.

“We have to set up innovative mechanisms of risk sharing so that we can attract the private sector. And the role of river basin organizations should be enhanced. Planning transboundary projects and centralizing their management can make them attractive to the international markets. The public sector is faced with difficulties, but the private sector also should make efforts to create equitable and fruitful partnerships. We’re willing to invest more in water in order to have more impact in development.” shared Mr. Amadou Sy, Investment Director of Meridiam.

“Standard chartered Bank is very committed to supporting this initiative. We take capital from areas of the world where it is in excess and move it to areas of the world where it is most needed. I am excited about this blue peace financing mechanism. It would solve many challenges. The projects we have done are at a sovereign level. But this approach looks at multinational and local levels. Bringing the sovereigns together to set up one SPV that we can handhold to international markets is groundbreaking.” added Mr Chuks Ugha, CEO of Standard Chartered Bank for Gambia and Senegal.

The HLP was a successful event. Speakers agreed that the Blue Peace Financing Initiative will provide a new financial incentive for countries and sectors to cooperate and establish political agreements on the sustainable management of shared resources, reducing social, political, economic, and environmental risks and conflicts. Meanwhile, it will change the financial sector’s perception of water, not as a distinct sector, but as an entry-point for multisectoral and regional impact investment opportunity.

Hence, investing in Blue Peace supports the achievement of the 2030 and Addis Ababa Agendas while also transforming water from a potential source of conflict into an instrument of cooperation and peace.