Two types of financing for companies that want to invest in water security

Water Security Becomes an Investment Issue

Wetter winters and drier summers make water management less predictable. For water-intensive companies, this represents a tangible business risk. Moreover, the predicted El Niño will amplify prolonged periods of similar weather.

The urgency to invest in water resilience is undeniable. Rainwater harvesting, water storage, and water reuse offer security and self-sufficiency.

The Financing Jungle is Daunting

Investments require capital. Fortunately, the banking sector is increasingly receptive to investments linked to climate transition, innovation, and sustainability.

However, it is not always clear for companies which funding instrument suits which type of investment. Therefore, VITO Knowledge Centre Water is researching within the  focus domain business models for water investments  to identify which instruments can help companies make water investments feasible.

The goal is simple. We want to elevate water on the financial agenda and better guide companies through existing or new financing opportunities.

Two avenues are particularly relevant today:

• the EIB water programme 
• the sustainability linked loan

EIB Water Programme: European Funding for Water Resilience

The European Investment Bank (EIB) has reserved 15 billion euros for water investments for the period from 2025 to 2027. The programme aligns with the European Water Resilience Strategy and focuses on projects that strengthen access to clean water, water resilience, and innovation in the water sector.

Both public and private organisations can be eligible. Consider investments in water reuse, water storage, infrastructure, water purification, or measures to reduce water losses. The funding can proceed in two ways.

For large projects, with an investment amount exceeding 25 million euros, the EIB can finance directly. In this case, the EIB conducts its own credit assessment, and the borrower signs a contract directly with the EIB.

For smaller projects, financing usually goes through a commercial bank. The EIB can provide an intermediary loan to the bank for up to 50 percent of the project cost for investments starting from 40,000 euros.

Currently, the EIB has 7.5 billion euros still available for water investments. Actively discuss water investments with your bank, or contact EIB Belgium via Torsten Brand.

Sustainability Linked Loan: Better Terms with Measurable Progress

A sustainability linked loan ties the interest rate of a loan to sustainability targets. These could be water-related goals, like reduced water use or increased water reuse, but also broader objectives around CO₂ emissions or renewable energy.

The borrower and the bank agree on clear KPIs in advance. If the company meets the agreed goals, the bank can offer better financing terms. The advantage of such a loan is that the resources are relatively broadly applicable. The funds do not always have to be exclusively allocated to a defined water project. However, progress must be measurable and verifiable.

For companies already working on ESG reporting, this can be interesting. Water performance then becomes not only a sustainability indicator but also a financial leverage.