[[Image:financing streams icon.png|right|100px|]]
The main financing sources to recover the [[Costs of WASH Service Delivery - Introduction | costs of water, sanitation and hygiene service delivery]] are (a combination of) [[Taxes | taxes]] levied by national or regional governments, [[Transfers | transfers]] made by development partners, and [[Tariffs | tariffs]] or own contributions paid by users of a service (see figure 1). These financing sources in the water and sanitation sector are also known as the ''three T''s (e.g. taxes, transfers and tariffs).
'''Figure 1. Financing sources should be greater than or equal to the and costs for sustainable service deliveryper year.'''<br>Note that the figure is not meant to represent the relative magnitude of recurrent costs.
[[Image:financing sources fg 1.jpg|thumb|none|600px|Source: IRC and WSUP, 2012, page 7]]
The three ‘T’s’ is a formulation devised by the Organisation for Economic Cooperation and Development (OECD). The OECD distinguishes these sources from other forms of finance that have to be repaid, such as loans, bonds or equity. According to the OECD (2009): ''Establishing the water sector on a financially sustainable basis requires finding the right mix between the ultimate revenues for the water sector''.
'''[[Transfers]]''' refer to funds from international donors and charitable foundations (including NGOs, decentralized cooperation or local civil society organizations) that typically come from other countries ([[#GLAAS|GLAAS]], 2012). These funds can be contributed in the form of grants, concessionary loans (i.e. loans that include a ''grant'' element in the form of a subsidized interest rate or a grace period) or guarantees.
'''[[Tariffs]]''' are funds contributed by users of water, sanitation and hygiene services for obtaining the service ([[#GLAAS|GLAAS]], 2012). Users generally make payments to service providers for getting access to the service and for using the service. When the service is self-provided (, e.g. when a household builds and operates its own household latrine), or when households try to improve the services they receive, e.g expenses with water purification devices, the equity invested by the household (in the form of cash, material or time, sometimes referred to as '''sweat equity''') would also fall under tariffs.
'''[[Taxes]]''' refer to funds originating from domestic taxes that are channelled to the sector via transfers from all levels of government; , including national, regional and local ([[#GLAAS|GLAAS]], 2012). Such funds would typically be provided as subsidies, for capital investment or operations. ''Hidden'' forms of subsidies may include tax rebates, soft loans (i, e.eg. loans at a subsidized interest rate) , or subsidized services (, e.g. subsidized electricity).
==Examples==
'''Financing flows''' <br>
The way in which the main financing streams (, e.g. taxes, transfers and tariffs) , typically circulate in the water and sanitation sector is depicted in figure 2. The main actors involved are the water, sanitation and hygiene service providers, households and domestic governments, and development partners.
The dark blue boxes show the financing sources and the light blue boxes show the financing channels for public funding (note that the central government or its agencies may play the role of both financing source and financing channel at the same time) (GLAAS, 2012).
What is missing in the overview of figure 2 (see above) are transfers ''from'' donors other than governments, such as charitable foundations (, including NGOs, decentralized cooperation or local civil society organizations, or individuals) ''to'' individuals, households, service providers, and different levels of governmentsgovernment.
====Financing sources and costs of water and sanitation service delivery====
IRC International Water and Sanitation Centre presented a generalisation (Pezon et.al, 2010, page 7) of how the [[Costs of WASH Service Delivery - Introduction | costs of water and sanitation service delivery]] are covered at present recovered by the main sources of financing.
