Financial Innovations for Freshwater Revitalization: Transboundary Project Finance in Israel, Jordan and the Palestinian Authority (Arabic)

Dec 01, 2009

Israel, the Palestinian Authority and Jordan share common water resources - including the Jordan River and other significant waterways - that have become overexploited or poisoned by sewage and industrial pollutants at a shocking rate.

Ensuring access to clean water is critical, but political tensions and bureaucratic barriers have hindered sustainable cross-border water management. The flow of the Jordan River has dropped from more than 1.3 billion cubic meters a year to less than 100 million cubic meters. Aquifers in the West Bank fill with black wastewater, and the Kidron, flowing from East Jerusalem, runs with more sewage than water, a major source of peril for the Dead Sea.

Researchers and environmentalists worldwide have called for a comprehensive transboundary solution to restore the region's rivers and streams. The vision is complex, yet cross-border mechanisms are succeeding elsewhere around the world.

To examine financing models and their potential applications in the Middle East, the Milken Institute held a Financial Innovations Lab in Jerusalem, convening scientists, ministry officials, capital market investors, water engineers and environmental experts from Israel, the Palestinian Authority, Jordan and the United States. The session examined possible incentives and regulatory mechanisms that could tackle the longstanding problems of refuse, sewage and environmental neglect - issues with serious ramifications for the broader region.

This report describes the steps involved in setting up a transboundary finance facility with the participation of all three governments. Appropriate and fair contributions to a central fund can leverage donor aid and other revenues, with projects managed and overseen by an independent authority.

The result would be a transparent, accountable and risk-averse financial vehicle that develops sustainable water projects across borders - improving the environment and the public health of all the region's citizens.

This Financial Innovations Lab report is also available in English and Hebrew.