Facts and Figures

Charging for Water?

  • There are three sources of revenue for financing water supply and sanitation services:
    • User tariffs, including payment for environmental services, which can include cross-subsidies within the sector or from other sectors (for example, electricity or other municipal services).
    • Public expenditures funded by taxation.
    • Transfers in the form of external aid, from official or philanthropic sources.
  • A common yardstick for assessing the affordability of water charges for households is that payments should not exceed 3% (in some cases 5%) of net household income. In practice, surveys show that in developed countries households connected to urban public systems pay on average 1% of incomes on water bills, including the cost of sewerage, which may be double that for water. Such an average is not a very reliable indicator, however, especially given the wide variability among income levels in a country. Generally speaking, poorer groups tend to pay a higher share of household income for water.
  • In developing countries the picture is complicated by the widespread use of informal and small-scale private water distributors charging full market prices; in these cases the poorest households can pay 3%–11% of income on water.

Related themes: Valuing Water

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