As a result, many water utilities are in dire financial situations, with under-capitalised balance sheets that impede their capacity to raise debts. In the absence of any repayment capacity or history of past lending, most commercial banks are unlikely to lend to the sector which they do not perceive as being “creditworthy”. There is often a discrepancy between long-term investments needed in the water sector to match the life of the assets and the shortterm lending capabilities on local markets.