n economics of climate change study conducted by the Ministry of Water and Environment (MWE) reveals that the cost of inaction (not adapting to climate change) is very high, estimated to reach between US$ 3.1 and 5.9 billion per year by 2025, compared to climate finance needs estimated at USD 3.9 billion (USD 258 million per annum) by 2030.
Although the current level of spending on the full spectrum of water categories is difficult to estimate, most capital investment is funded by governments, Official Development Assistance (ODA) and non-OECD sources, while recurrent expenditure comes mainly from user charges and government budgets. Specialised climate finance currently remains a minor source. Innovative approaches to financing water, sanitation, environment, and climate change are needed to make sufficient funding available. Financing strategies will benefit from a blend of traditional water finance sources alongside specialist climate finance. The circumstances for financing water for climate resilience are very varied, and thus financing strategies should include innovative approaches to make sufficient affordable funding available. In considering innovative financing for receptive sustainable climate resilient development, the following options could be explored
This sub-theme will dialogue and bring forward the innovative climate resilience funding approaches and strategies blended with traditional finance sources (combining different funding sources) alongside specialist climate finance. It will further explore Investments for water and environment security and climate resilient development and financing away from the recurrent expenditure that comes mainly from user charges and government budgets such as subsidies and taxes, public goods, insurance policies, commercial loans, and equity among others. It will also focus on innovative solutions for more efficient and productive development and management of water, environment, and natural resources to inform and guide planning and prioritization of the country’s strategies and plans to enhance climate resilience of water and environment infrastructure developments. To leverage climate and disaster resilience finance, decision-making especially on financing water, environment and climate resilient infrastructure needs to be more risk-informed other than disaster-solving. To ensure the sustainability and long-term financial viability of Water, Sanitation, Hygiene, Environment and Climate Change programs in Uganda, a clear policy framework for financing is needed. The balance between pre-disaster and post-disaster investment needs to be examined more explicitly. Pre-disaster investment needs to be considered within financial strategies for climate resilience.