Background Gradient

Latin America and the Caribbean

The Latin America and the Caribbean as a region presents particularities related to its geography, demography, ethnicity, economy and regional integration, which affect the relationship that the countries of the region have with water resources and their natural environment. Likewise, its history has affected the development and evolution of the institutions in charge of providing water and sanitation services, governance and regulation that, although they vary from country to country, show common elements and challenges for their consolidation.

While Latin America and the Caribbean only has 8% of the the world’s population, it has over 30% of the world’s water resources.

At the same time, approximately 80% of the region’s population lives in urban areas, compared with 55% globally.


Consequently, while 15% of the land area is under water stress, 35% of the population is living under water stress.

As a result, the region experiences high levels of water stress.

This is due to a disparity between the location of the water resources relative to population centers and inefficiencies in institutional management.

Percent of the population living in areas with water stress

IADB DIA (2020)

Comparable data and quality

One of the biggest challenges in the region is that of comparative data. In general, each country collects water and sanitation data differently. Many times this is due to the fact that each country has specific and localized needs. There are important differences in terms of water and sanitation data in the region. While countries like the Dominican Republic and Mexico rely mostly on bottled water for drinking, almost no one in Costa Rica does. In the same way, while Central America depends almost exclusively on septic tanks, even in urban settings, in Peru these hardly exist, even in rural areas. The reasons for these trends have to do with cultural, climatic and social patterns that are important to understand in order to have successful water and sanitation solutions and thus achieve universal coverage.

Regional SDG Progress

However, there is little really comparable data for the region. Household Surveys in general provide us with the most accurate data for the countries but in many cases they do not correctly distinguish between improved and unimproved latrines or surface water sources from protected water sources. These distinctions are necessary to correctly measure sustainable development goals. In fact, only Bolivia and El Salvador correctly distinguished all the categories.

Efforts to create comparable data

Household surveys do not always contain the same questions and wording, making cross-country comparisons difficult. The Latin American Public Opinion Project (LAPOP), which surveyed households in 18 countries across LAC, allows us to compare the same questions across the region. For example, many countries address the continuity and quality of water provision services differently or not at all on their household surveys. In their country-level household surveys, only 7 countries ask households if they have water 7 days a week while LAPOP has this information for 18. While the LAPOP methodology eliminates many of the comparibility issues that arrise in the country-level household surveys, its data are less precise because they have a smaller sample in each country.

Water Quality

LAPOP also allows us to understand people’s opinion on the quality of the water they receive though service providers. Although it is subjective, it is essential for understanding the perception of service providers, the ability and willingness to pay, and the behavior of those receiving the services.

Most people rate their service as good or very good, however understanding water cleanliness and quality goes beyond simply evaluating user satisfaction.

Regional financiers and service providers

The management and distribution of urban water depends directly on the provider companies. The organization and management of these companies is highly variable, and the most accurate data on quality will only be available to companies. While some countries like Uruguay have a single company that provides water to the entire territory, in countries like Mexico or Brazil there are thousands of companies that cover municipalities, cities or even entire states. In turn, the availability of water, variability of geographic conditions, and cultural uses of water create additional challenges. Therefore, classifying and comparing them is a complicated challenge. Aquarating is an effort made by multiple companies in the region in conjunction with the Inter-American Development Bank (IDB) that consists of a qualification system for water and sanitation service providers.

AquaRating addresses the challenges faced by providers of water and sanitation services in an exhaustive way, evaluating their performance through indicators and examination of management practices in order to establish an international standard based on information verified by independent auditors accredited by AquaRating.


To date, about 80 companies have been examined in 19 countries in the region. These companies are rated anonymously on the following dimensions:

  1. Quality of service (QS): taking into account water quality, distribution, wastewater and user service.
  2. Efficiency and planning in investment and implementation (PE): taking into account investment plans, implementation, asset efficiency, emergency plans and R&D.
  3. Efficiency in operation (OE): taking into account the control of water both in origin and destination, the management of losses and its net losses in the network.
  4. Efficiency and Business Management(ME): taking into account strategy, management, organizational structure, human resources, hiring and employee efficiency.
  5. Financial sustainability (FS): taking into account its total sustainability, financial management and client management.
  6. Access to the service (AS): accounting for levels of access versus population served.
  7. Corporate Governance (CG): taking into account its autonomy, decision-making capacity and transparency.
  8. Environmental sustainability (ES): takes into account wastewater management and treatment, as well as environmental management in general.

In general, it has been found that service access is the component with the greatest variability, while corporate governance is the component with the best evaluation.

Regional Water and Sanitation Management

The institutional framework of the water and sanitation sector in the region is different in each of the Latin American and the Caribbean Countries, finding some countries with strong governing entities and others where it is still in process of consolidating.

The regulatory and legal framework of the sector is defined by several institutions in charge of regulating water and sanitation services and a complex arrangement of laws and standards that define the conditions for service provision and water resource management.

Water and sanitation services are provided mainly by private service utilities, by municipalities (direct provision) and by community-based organizations in rural areas. One of the biggest challenges to increase the coverage and quality of the water and sanitation services is to increase the performance of utilities; mainly reducing water losses in the distribution system and recovering the costs on providing the services in order to be able to maintain existing infrastructure and invest in expanding the service.