Environmental Engineering Reference
In-Depth Information
Chapter 5
Results-Based Financing and Its Potential
Role in Advancing the Nexus Approach
Mario Suardi and Mathew Kurian
1 Introduction and Context
The need to improve the effectiveness of development financing provided by
multilateral and bilateral development institutions led to the design and adoption of
some results-oriented
financing tools that aim to incentivize the delivery and sus-
tainability of the pursued results (outputs and outcomes) that serve long-term
objectives. However, as the development community takes a closer look at the
interrelations between the different sectors in which the interventions have been
traditionally structured, the need to ensure that improvements in one sector do not
cause deterioration in the situation of other sectors becomes evident. The nexus
approach aims to provide a rational framework to deal with this complex challenge.
This chapter scratches the surface of potential collaboration between the nexus
and Results-Based Financing (RBF) approaches, beyond the use of Payments for
Environmental Services (PES), which is an RBF tool naturally
fit to contribute to
advance the nexus approach.
After this brief introduction, this chapter shows some of the challenges facing
the nexus approach and a simpli
ed introduction to the RBF universe that, despite
efforts made to keep it to the bare minimum, may seem long in the context of this
chapter. This explanation is provided to ensure that all readers, even those unfa-
miliar with RBF, understand the discussion regarding how RBF instruments could
contribute to advance the nexus approach.
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