WATER INFRASTRUCTURE FINANCING IN SPAIN: POTENTIAL FOR SECURITIZATION

Abstract

Water scarcity is a persistent problem in Spain. There has consequently been a long-standing debate about the role that the public sector must play in water policies, as well as that of market-based instruments. In this paper we analyze the advantages and disadvantages associated with public and private financing of water infrastructure projects. For this purpose, we discuss how water infrastructure financing has evolved in Spain over the past century and analyze the possibilities of using securitization to finance water infrastructure projects. We present an optimization program that could facilitate public securitization processes to determine the optimum volume of cash transfer in each period, and we solve this using fuzzy programming.