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Transfers refer to funds from international donors and charitable foundations, including non-governmental organisations, decentralized cooperation or local civil society organizations and typically come from other countries (WHO and UN-Water, 2012).
For an overview of transfers available for water, sanitation and hygiene (WASH) projects or businesses in developing countries see [[Transfers of - Available Funds]].
'''Transfers can be made in the form of a:'''* [httphttps://en.wikipedia.org/wiki/Grant_(money) %28money%29 Grant], non-repayable funds disbursed by one party (grant makers), often a government department, corporation, foundation or trust, to a recipient. In order to receive a grant, some form of "Grant Writing" often referred to as either a proposal or an application is usually required. Most grants are made to fund a specific project and require some level of compliance and reporting.* [http://en.wikipedia.org/wiki/Loan Loan], the borrower initially receives or borrows an amount of money from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. Most commonly used loans in the water and sanitation sector are:** [http://en.wikipedia.org/wiki/Concessionary_loan Concessionary loan], is a loan bearing no interest or a rate of interest that is below the average cost. ** [http://en.wikipedia.org/wiki/Microcredit Microcredit], is a very small loan extended by a bank or other financial organisations that provide services to poor households (Saywell and Fonseca, 2006).* [http://en.wikipedia.org/wiki/Surety Guarantee], a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. The person or company that provides this promise, is also known as a surety or guarantor.
* [http://en.wikipedia.org/wiki/Loan Loan], the borrower initially receives or borrows an amount of money from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. Some sources do not include loans as part of transfers as the borrower is obligated to pay back or repay an amount of money to the lender at a later time (EUREAU, 2012). :Most commonly used loans in the water and sanitation sector are::* [http://en.wikipedia.org/wiki/Concessionary_loan Concessionary loan], is a loan bearing no interest or a rate of interest that is below the average cost. :* [http://en.wikipedia.org/wiki/Microcredit Microcredit], is a very small loan extended by a bank or other financial organisations that provide services to poor households (Saywell and Fonseca, 2006).:*[http://en.wikipedia.org/wiki/Surety Guarantee], a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. The person or company that provides this promise, is also known as a surety or guarantor. ===Transfer mechanisms=== These transfers can be made by: * Oversees Development Assistance (technical support and budget support)* Carbon credits* Direct transfers
====Oversees Development Assistance (ODA)====
Transfers include official development assistance (ODA). Ideally official Official development assistance should could be seen considered as part of taxes and not transfersan international tax transfer since it is paid for by tax payers from other countries. Aid policies✷ policies (*) suggest more aid be delivered in the form of budget support, which implies that they would be disbursed in much the same way as national public budget resources (OECD, 2009). [http://en.wikipedia.org/wiki/Official_development_assistance Official development assistance ] is usually seen as part of transfers, as donors are still disbursing most of their aid through projects and programmes, rather than through recipient country budget processes. Another important feature that distinguishes official development assistance from taxes is that they are levied in foreign countries, rather than nationally, and the political and administrative process of securing ODA resources is very different from taxes (OECD, 2009).
Another important feature that distinguishes official development assistance from taxes is that they are levied in foreign countries, rather than nationally and the political and administrative process of securing ODA resources is very different from taxes (OECD, 2009). In many developing countries, transfers remain a major source of financing for sanitation and drinking-water, mostly for [[Capital_Expenditure_(CapEx)|capital expenditure]] (WHO and UN-Water, 2012). Over US$ 8.9 billion in [http://en.wikipedia.org/wiki/Official_development_assistance official development assistance (ODA)] (part of transfers) was directed to sanitation and drinking-water in 2009 (WHO and UN-Water, 2012). [http://en.wikipedia.org/wiki/Official_development_assistance Official development assistance ] for sanitation and drinking-water accounts for more than 1% of Gross Domestic Product (GDP) in seven developing countries (see table 1). (*) Defined in the Paris Declaration (2005), the Accra Plan of Action (2008) and the Busan Partnership Agreement (2012).
[[Image:Transfers fg 1.jpg|thumb|none|600px|Source: WHO and UN-Water, 2012, page 51]]
With budget support, the funds are channelled through the systems used for a government's own funded expenditures. This happens through the government's finance ministry (or "treasury") via regular government procedures, to the ministries, departments or agencies responsible for budget execution (Williamson and Dom, 2010).
* Payments to consultants, advisers and similar personnel as well as teachers and administrators serving in recipient countries (including the cost of associated equipment).
Recovering methane from wastewater treatment plants to generate power not only saves energy costs, it also helps to reduce greenhouse gas emissions, which offers operators in developing countries an opportunity to sell carbon credits under the Kyoto Protocol's Clean Development Mechanism (CDM) (E-Source, 2009). The sale of these credits could be used to finance treatment plants. The Andean Development Corporation (CAF) is helping Peru's state water utility Sedapal to see how the sale of carbon credits could help finance a pilot project at the Carapongo wastewater treatment plant, in Lima's Ate Vitarte district. Sedapal has bought equipment to convert the methane gas that is produced at the plant. Potential buyers for the carbon credits will be sought through the Clean Development Mechanism (CDM). ====Remittances====The largest transfers in the world are direct transfers of money by a foreign worker to his or her home country, also known as remittances. The World Bank estimates in their Remittance Market Outlook that remittances totalled US$ 414 billion in 2009, of which US$316 billion went to developing countries that involved 192 million migrant workers. What percentage of remittances is spend on water, sanitation and hygiene service delivery is unknown. ===Examples===
====Chile: loans for sewerage connection====
In a financing model introduced by the Municipal Works Company of Santiago (EMOS) in Chile, poor households can apply for loans to finance the connection costs to the sewerage network (Sijbesma, 2011). Loans can last for a duration of 12, 24, 36 or 60 months. Eligibility and duration are based on the city’s social services department’s classification of each household. Households are expected to repay loans, in addition to meeting their respective monthly [[Tariffs|tariff]]. The ultra-poor pay between US$ 5 and US$ 10, in ten installments.
In Vietnam, the National Social Development Bank administers a government loan scheme where households can take out a loan for a sanitary toilet and/or a water supply connection (Sijbesma, 2011). Each household can take a loan of up to VND 3 million for a toilet, and the same amount for a water supply provision or connection. Together, the sanitation and water loans constitute about 7% of the total loans portfolio of the bank.
===Key documents===✷ Defined in the Paris Declaration (2005), the Accra Plan of Action (2008) and the Busan Partnership Agreement (2012).* Carbon credits: potential source of funding for wastewater treatment projects, [http://www.sourceircwash.irc.nlorg/pagenews/48222 e-source-sanitation-news E-Source], 19 May 2009 * EUREAU, 2012. [httphttps://celinehervebazinwww.filesecologic.wordpress.comeu/2012/03/eureau-3ts-short-guide-version-internet.pdf 4154 ‘3Ts’ Tariffs, taxes and transfers in the European water sector]. Short guide. * OECD, 2010. [http://www.oecd%E2%80%90ilibraryituc-csi.org/developmentIMG/civil%E2%80%90society%E2%80%90and%E2%80%90aid%E2%80%90effectiveness_9789264056435%E2%80%90en pdf/Civil_Society_and_Aid_Effectiveness_2_.pdf Civil society and aid effectiveness: Findings, recommendations and good practice.] Organisation for Economic Co‐operation and Development/ Development Assistance Committee. * Pezon, C., Fonseca, C. and Butterworth, J., 2010. [http://www.ircircwash.nlorg/contentresources/download/152801/519929/file/02_Background_Paper_zw.pdf irc-symposium-2010-pumps-pipes-and-promises-background-paper-pumps-pipes-and-promises IRC Symposium 2010 Pumps, Pipes and Promises. Background paper: pumps, pipes and promises. Costs, finances and accountability for sustainable WASH services]. The Hague, The Netherlands: IRC International Water and Sanitation Centre.
* Saywell, D. and Fonseca, C., 2006. [http://www.lboro.ac.uk/well/resources/fact-sheets/fact-sheets-htm/mcfs.htm Microfinance for Sanitation]. WELL factsheet. Loughborough: WELL/WEDC- Water, Engineering and Development Centre, Loughborough University of Technology.
* Sijbesma, C., 2011. [http://www.ircircwash.nlorg/homeresources/information_services/publications/publications_by_date/sanitation_financing_models_for_the_urban_poor sanitation-financing-models-urban-poor Sanitation Financing models for the urban poor]. Thematic Overview Paper 25. The Hague: IRC International Water and Sanitation Centre (Published November 2011). * OECD, 2009. [http://www.oecd.org/greengrowth/sustainable-agriculture/44476961.pdf Setting the stage. Managing Water for All: An OECD perspective on pricing and financing.] ISBN-978-92-64-05033-4 * Verhoeven, J., Uytewaal, E. and de la Harpe, J., 2011. [http://www.ircircwash.nlorg/homeresources/information_services/publications/publications_by_date/aid_effectiveness_in_the_water_and_sanitation_sector aid-effectiveness-water-and-sanitation-sector-policies-practices-and-perspectives Aid effectiveness in the water and sanitation sector: policies, practices and perspectives]. (Thematic Overview Paper 26) The Hague: IRC International Water and Sanitation Centre.
* Water Institute, 2012. Carbon credits and HWTS: a viable "green" funding mechanism? Webinar, 17 July 2012. Chapel Hill, NC, USA, The Water Institute, Gillings School of Global Public Health, University of North Carolina at Chapel Hill
* WHO and UN-Water, 2012. [http://www.who.int/water_sanitation_health/publications/glaas_report_2012/en/index.html UN-Water global annual assessment of sanitation and drinking-water (GLAAS) 2012 report: the challenge of extending and sustaining services]. (UN-water global annual assessment of sanitation and drinking-water (GLAAS) report; 2012). Geneva, Switzerland: World Health Organization (WHO).
* Winpenny, J., 2011. [http://www.gwptoolbox.org/images/stories/Docs/euwi%20fwg%20primer%20on%20financing%202011.pdf Financing for water and sanitation: a primer for practitioners and students in developing countries]. Stockholm, Sweden: The European Union Water Initiative Finance Working Group, EUWI-FWG.
===Links===* [http://www.ircircwash.nl org/ IRC International Water and Sanitation Centre] is a knowledge broker, innovator and catalyst of change within the water, sanitation and hygiene (WASH) sector working internationally and in selected focus countries and regions. IRC seeks to extend WASH services to the less privileged, while ensuring that services are based on the sustainable use of water resources, are appropriately managed, and are better governed. IRC works in partnership with governments, the public and private sector, Dutch and international organisations, UN institutions, development banks and non-governmental networks and organisations.
* [http://www.who.int/water_sanitation_health/publications/glaas_report_2012/en/index.html Global Analysis and Assessment of Sanitation and Drinking-Water (GLAAS)] is produced every two years by the World Health Organization (WHO) on behalf of UN-Water. It provides a global update on the policy frameworks, institutional arrangements, human resource base, and international and national finance streams in support of sanitation and drinking-water.