Financial Management of Water in the Caribbean


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Water management (whether for potable, wastewater or stormwater) has specific challenges in the Caribbean setting:

For potable water, many Caribbean islands have one large government-affiliated provider, with a smaller section of the population being served by small community systems. Pressures of “economies of scale” versus “local community independence” sometimes create tension between these two provider types.

For wastewater, estimates are that 85% of the wastewater entering the Caribbean Sea is untreated. This has a negative impact on the coral reefs and other tourist attractions on which these island economies depend.

For energy management, Caribbean islands have among the highest electricity rates in the Western Hemisphere -- which in turn drives potable water and wastewater costs higher. Dependence on expensive fossil fuels imported from off-island, lack of economies of scale, and lack of full adoption of energy efficiency measures and renewable energy opportunities are contributing factors to these high costs.

In terms of stormwater, the EFC produced a paper that examines water management in Trinidad and Tobago and recommends areas to explore for financing flooding and stormwater management: Financing Water Quality Protection in the Caribbean - A Case Study of Trinidad and Tobago

In terms of potable or drinking water systems, the EFC at UNC also conducted a series of financial management workshops in Spanish in Puerto Rico, as well as a series of energy management workshops on St. Thomas, U.S. Virgin Islands, for small community-based systems. These workshops focused on setting rates for water customers, creating a balanced budget and how to build community support for paying for water service.