The objective of this document is to layout the options and considerations in the design offacilities to provide emergency financial support to waterutilities in response to the COVID-19 pandemic. It builds onthe experiences of previous financial crises (such as theglobal financial crisis of 2007–08 and the Asian FinancialCrisis of 1997), including their impact and responses tothem. Its main audience is government policy makers tryingto develop financial responses to ensure utilities continueto function during the crisis, as well as the World Bankcountry teams and Task Team Leaders assisting them. The typeof facility described in this document may be based on anexisting one or related mechanisms (fiscal transfers,guarantees, subsidy programs, or others), or it could be thekernel of a new institution or financing instrument that maycontinue to have a role in sector financing after thecrisis. Considering this, the paper recognizes that therewill likely be a need to consider new external borrowing inthe context of ensuring macroeconomic and fiscal stability.Many emerging markets were already showing signs ofover-indebtedness before the COVID-19 crisis and the costsassociated with the pandemic will only increase the demandfor resources, including public debt. Macro-economicstability must be anchored on sustainable paths of publicand external debt, and countries will need to consider thisin coordination with ongoing initiatives by the Group ofTwenty (G20), the International Monetary Fund (IMF), andothers to ensure debt sustainability and transparency.
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