Squeezed by austerity and pressured to recover costs: Portugal’s municipal water operators in need of public bank finance

ABSTRACT

This article maps the relationship between public banks and municipal water operators in Portugal. Multilateral public banks play a central role in financing the sector. However, access to public banking finance plays out unevenly across Portugal’s heterogenous water landscape. While the state-owned bulk system appears to face no shortage of finance, there is evidence of a financing crisis at the municipal level, where austerity and pressures to recover costs through tariffs serve as obstacles to bank borrowing. With a new public financial institution in the making, the article argues that new public–public financing relationships should be explored.

KEYWORDS:

• Water and sanitation
• public banks
• European Investment Bank
• neoliberalism
• austerity
• municipal economy

Acknowledgements

I am grateful to all informants who shared their expertise, and I particularly thank Miguel Lemos and Nuno Vitorino for helping to organize interviews. I thank David McDonald for his generous and insightful feedback, as well as two anonymous referees who helped to improve this manuscript.

Disclosure statement

No potential conflict of interest was reported by the author.