The Global Risks Alliance (GRA)
Investment in food systems, water supply and energy builds the services every other sector depends on, and the three share their risks. A drought cuts hydropower and irrigated yields at once; tariffs below cost weaken the utilities that lenders and guarantors rely on; a price shock raises import bills and borrower stress together. This page sets out how risk propagates across these sectors in development finance, which records evidence it, and who decides.
GRA · Established · service level R0
Food, water and energy investment builds the services every other sector depends on, and the three share their risks: a drought cuts hydropower and irrigated yields at once, tariffs below cost weaken the utilities that lenders rely on, and power producers carry the risk that a state offtaker pays late.
How a dry season is read against the point where drought cover starts to pay. Synthetic season and design terms.
Essential service resilience. The dossier below sets out how the risk develops, what is measured, where the data come from, how it is modelled and who decides.
Hydropower, irrigation and urban supply draw on the same rivers and aquifers. A dry year reduces all three, so a portfolio that looks diversified across sectors can carry one correlated exposure.
Tariffs below cost recovery, high losses and late payment by public customers weaken utility balance sheets. Lenders then rely on sovereign support, and sector risk becomes a contingent liability of the state.
Independent power projects depend on a purchase agreement with a state utility. When the offtaker cannot pay, risk passes to liquidity facilities, payment guarantees, the treasury and political risk insurers.
Fertiliser, fuel and grain price swings and weather shocks hit smallholder incomes, agribusiness borrowers and food import bills in the same season, when food security programmes also need finance.
Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.
| Term | Definition |
|---|---|
| Offtaker | The buyer under a long-term purchase agreement, such as a state utility buying power from a private plant. |
| Cost recovery | The extent to which tariffs cover a utility's operating and capital costs. |
| Transmission and distribution losses | Electricity lost between generation and the customer, technical and commercial. |
Each indicator carries its unit, its cadence, the kind of source behind it and the evidence label a value would carry. No values are shown: a programme supplies them under its own authority.
| Indicator | Unit | Cadence | Source type | Label |
|---|---|---|---|---|
| Operating cost coverage of utilities | ratio of operating revenue to operating cost | annual | Utility financial statements | OFFICIAL |
| Non-revenue water | percent of system input volume | annual | IBNET, utility records | OFFICIAL |
| Electric power transmission and distribution losses | percent of output | annual | World Development Indicators | OFFICIAL |
| Offtaker payment delay to producers | days of receivables outstanding | quarterly | Utility and regulator reports | REPORTED |
| Access to electricity | percent of population | annual | Tracking SDG7 | ESTIMATED |
| Moderate or severe food insecurity | percent of population | annual | FAO Food Insecurity Experience Scale | ESTIMATED |
| Area equipped for irrigation | hectares | periodic | FAO AQUASTAT | OFFICIAL |
| Private participation commitments in energy and water | US dollars | annual | World Bank PPI database | REPORTED |
The topic as a computational graph: named sources feed the methods, an evidence review gates the outputs, and the decisions stay with the authorities that hold them.
Fig. 02Nodes carry their type, two metric rows and a state; connectors show what feeds what; dashed frames name the owners; the timeline is the cadence. Design of the pipeline, not a record of a run.
Named public datasets and institutional records, each with its licence class. Sources by agreement are used only under their terms and never republished.
| Source | What it gives | Licence class |
|---|---|---|
| World Bank Private Participation in Infrastructure database | Project-level private commitments in energy, water, transport and digital infrastructure in low and middle income countries | CC BY 4.0 |
| IBNET (World Bank) | Benchmarking indicators for water and sanitation utilities | Terms per database |
| Tracking SDG7 (IEA, IRENA, UN DESA, World Bank, WHO) | Access, clean cooking, renewables, efficiency and international public flows for energy | Free, attribution |
| FAOSTAT and AQUASTAT | Production, prices, food security and irrigation statistics | Free, attribution, FAO terms |
| WRI Aqueduct | Water stress, drought and flood risk layers | CC BY 4.0 |
| IJGlobal transaction database | Project finance transactions with sponsors, lenders, instruments and dates | Proprietary, subscription |
| National energy and water regulators | Tariff decisions, performance and compliance reports | Public records, terms per regulator |
Development Finance Nexus prepares evidence. The decisions below are taken by the authorities named, under their own rules, and never by the platform.
| Who decides | The question | Evidence this page serves |
|---|---|---|
| Energy and water regulators | Whether tariffs and subsidies cover the cost of reliable service | Cost coverage, losses, arrears and service quality records |
| Finance ministries and debt management offices | Whether to support a utility or an offtake agreement with a guarantee | Utility financial evidence, the contingent liability register, the record of similar projects |
| Development finance institutions and project lenders | Whether revenues can withstand drought, price and offtaker shocks at the same time | Correlated scenarios, offtaker payment record, water and price evidence |
| Agriculture ministries and food security programme boards | Which investments in irrigation, storage and markets reduce exposure to the next shock | Yield, price and water evidence with labels, distribution of benefits |
When essential services fail, everything else follows: health, education, livelihoods and business. Investments in one system affect the others: an irrigation scheme changes water available for towns, a hydropower dam changes river flows for farming, and electricity prices shape the cost of pumping and cold storage. Investment decisions that consider these links reduce the risk of solving one problem by creating another.
Essential services are coupled through resources, prices and institutions.
Water investments face competing demands and changing availability. Science: Water Nexus.
Power systems support pumping, processing and storage, and face fuel price and climate risks. Science: Energy Nexus.
Investments in production, storage and markets depend on water and energy. Science: Food Nexus.
A common pattern in essential service investment is the gap between building and operating. New assets are financed, but revenues and budgets do not cover their operation and maintenance, and service quality declines. Evidence that links investment to long-term operating sustainability, including the affordability of tariffs for poor households, gives financiers and governments a more realistic picture of resilience.
Linked analysis of water, energy and food systems, drawing on agricultural, soil and food science and engineering. Models depend on behavioural and policy assumptions.
Assessment of tariffs, costs and financial sustainability of service providers.
Mapping of resources, demand and hazards using geospatial information systems.
Household survey data on spending and access, with limited frequency.
The current service level is R0: information and enquiries. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.