News

February 2014 Water Finance Update

ebrd-worldbank-adb-gef-eib-afdbFebruary 2014: Throughout the month of February, the World Bank, the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) and the African Development Bank (AfDB) undertook a number of activities and highlighted various projects in a range of countries, including: Afghanistan, Bangladesh, Bhutan, Cameroon, Djibouti, the Former Yugoslav Republic (FYR) of Macedonia, Guinea-Bissau, Kenya, Kyrgyzstan, Malawi, Mauritius, Moldova, Morocco, Nepal, Pakistan, Romania, Swaziland, Turkey and Zimbabwe. 

The projects funded infrastructure to, inter alia: improve access to water and sanitation; provide access to energy through the construction of large and small hydropower projects; reduce pollution; and improve climate resilience.

The World Bank issued a statement on the proposal by FYR Macedonia for funding of the Lukovo Pole Power Project, a storage reservoir designed to improve hydro output from three downstream hydropower plants. The project would divert water from the Radika River into the Vardar River, a transboundary river shared by Albania, Kosovo, Greece and Serbia. The World Bank emphasized the project is in the design phase and will include consultation with riparian States and finalization of the ongoing Environmental and Social Impact Assessment (ESIA) in compliance with World Bank environmental and social safeguard policies, including on international waterways. The World Bank also highlighted that the expected diversions are under the ceilings established by the International Agreement signed by Albania and Yugoslavia, and subsequently by FYR Macedonia in 1962.

On existing projects, the World Bank highlighted the Water Management Improvement Project (WMIP) in Bangladesh, which aims to restore damaged water infrastructure and support national water institutions, including the Bangladesh Water Development Board (BWDB) and the Water Resources Planning Organization (WARPO). Outlining the challenges faced in the water sector in Bangladesh, such as the inundation of 20-30% of the country during monsoon season and the need for irrigation after the monsoons. WMIP has helped facilitate the decentralization of the BWDB's authority to community organizations, with the aim of engaging community stakeholders through the participatory scheme cycle management (PSM) approach and the development of community water management organizations (WMOs), and is engaged in the restoration of 63 BWDB projects on 513,000 ha of flood-damaged land.

The World Bank discussed results from micro-hydro projects in Nepal implemented through the Alternative Energy Promotion Center (AEPC), which has constructed over 1,000 micro-hydro plants in 52 districts using an inclusive community driven model. Presenting the example of Darbang, Myagdi District, the World Bank noted economic growth due to industrial expansion and environmental benefits, such as emissions reductions from reduced kerosene and wood fuel usage.

The World Bank also outlined benefits of the Anatolia Watershed Project in Turkey, which provides rural farmers with sustainable irrigation technology, among other things. The Water Rehabilitation project, started in 2005 and funded by both the World Bank and the Global Environment Facility (GEF), has provided local communities with a means of engaging in water management, which resulted in requests for solar hot water heaters.

Highlighting the disaster risk management project in Malawi, the World Bank discussed project results including training in flood and drought forecasting models. Financed through the Global Facility for Disaster Reduction and Recovery, the project led by the World Bank's Africa Disaster Risk Management Group has facilitated the Malawi Economic Vulnerability and Disaster Risk Assessment on socioeconomic impacts, which led to the establishment of the Shire River Basin Management Program to implement flood prevention measures.

Underscoring project results from a National Solidarity Project (NSP) funded and the World Bank and the Afghanistan Reconstruction Trust Fund, the World Bank described outcomes in Unaba and Deh Meina villages in Panjshir Province, Afghanistan. The NSP mobilized the communities to form community development councils (CDCs), which then decided to apply for a joint project, each receiving US$60,000 to construct the canal crossing Deh Meina and terminating in Unaba. Among project outcomes was reduced water conflict and increased agricultural productivity.

The World Bank approved a US$15 million grant to extend the Rural Community-Driven Development Project, which includes construction of improved water sources. The grant is funded through the International Development Association (IDA), which targets funding towards the world's poorest countries, and will extend the project through 2017 allowing expansion of the project that has already successfully constructed 62 water access points.

On 29 January 2014, AfDB and the African Union Commission (AUC) signed a project grant in Addis Ababa, Ethiopia, which will channel funds for implementation of regional infrastructure programmes under the Programme for Infrastructure Development in Africa (PIDA) through Regional Economic Communities, including the Community of Sahel-Saharan States (CSSS), the Common Market for Eastern and Southern African (COMESA), the East African Community (EAC), the Economic Community of Central African States (ECCAS), the Economic Community of West African States (ECOWAS), the Intergovernmental Authority on Development (IAD), the Southern African Development Community (SADC), and the Arab Maghreb Union (AMU), in addition to the AUC and the New Partnership for Africa's Development (NEPAD) Planning and Coordinating Agency (NPCA). The US$8.6 million capacity-building grant will include cross-border water infrastructure projects.

The African Water Facility (AWF), a multilateral fund established by the African Ministers' Council on Water (AMCOW) and hosted by AfDB, has undertaken a website redesign, aimed to improve the user interface and make information about the AWF's programmes easier to access, and includes a new blog, expanded presence on Facebook and Linkedin, and a new newsletter.

AfDB approved US$32 million for the second phase of the sanitation project of Yaoundé (PADY 2) through the African Development Fund (ADF). The project aims to improve the health and reduce the poverty of residents of Yaoundé, including through the construction of a six-km drainage canal. AfDB also approved a total of US$53.4 million in grants through the Zimbabwe Multi-Donor Trust Fund (Zim-Fund) and the ADF, in part to rehabilitate urban water supply and sanitation infrastructure in Harare and undertake preparations for projects in Chitungwiza, Redcliff and Ruwa. The project will feature hygiene promotion and water conservation, while targeting the most vulnerable populations.

Kenya and AfDB signed two financing agreements for US$97 million and US$120 million, including for the Thwake Multi-Purpose Water Development Programme (TMWDP). The project will construct a multipurpose dam for irrigation, water supply and hydropower generation, as well as flood control. AfDB, through the AWF, has provided EUR 960,000 to the Secretariat of the Niger Basin Authority (NBA) to undertake the preparation of infrastructure projects to reduce climate change-related risk, and improve agricultural production and resilience of the population.

The AfDB Board of Directors approved the Country Strategy Papers (CSPs) for 2014-2018 of Mauritius and Swaziland on 5 February 2014, in Tunis, Tunisia. The CSPs consist of two pillars and results-based clusters that address inter alia: clean water provision; water and sanitation infrastructure; and underground water pollution reduction.

The AWF also participated in the launching ceremony of an infrastructure project to provide water for domestic and agricultural use in Sadaye, Djibouti. The AWF had provided a EUR2 million grant to the project in January 2008, with the aim of increasing the water security of pastoral communities facing extreme aridity and climate vulnerability.

Through the Neighbourhood Investment Facility, EIB, EBRD and the EU will provide EUR59 million in loans for modernizing water and wastewater infrastructure in Moldova, Chisinau. The funds will help reduce water loss, improve water quality and reduce health risks.

EIB also provided a EUR100 million loan to Pakistan for the construction of the Keyal Khwar Hydropower project, an 128 mega-watt (MW) run-of-river hydropower plant that will mitigate carbon dioxide emissions and provide economic development. EBRD is providing EUR65 million through the SEMED Cooperation Fund and the SEMED Multi-Donor Account, with funds from Austria, to expand access to drinking water supply services to over 480,000 people in Azilal, Ben Guerir and Ouazazate in Morocco, and outlying rural areas.

A capital grant of EUR2 million is being provided by the EBRD, with a EUR1.85 million from the EU Investment Facility for Central Asia and US$1.5 million from the GEF's Special Climate Change Fund (SCCF) to modernize water and wastewater services in Talas, Kyrgyzstan. The EBRD also highlighted outcomes of an ongoing project to improve water and sanitation services in Bishkek, Kyrgyzstan, which provided a EUR5.5 million loan with EUR5 million in co-financing from the Swiss State Secretariat for Economic Affairs (SECO). The project has replaced old pipes and water mains and allowed engagement of communities on water savings and payment for service.

EBRD, with the EU Cohesion Fund, is providing a EUR11.8 million loan constituting co-financing for a regional programme of water supply and wastewater facilities and networks in Romania. The project will build infrastructure for drinking water treatment and distribution and wastewater collection and treatment to a service area benefitting 250,000 people. The project includes construction of a fish ladder to allow local migratory fish to continue moving upstream and downstream of the diversion.

ADB highlighted that the Dagachhu Hydropower Plant in the Dagana District of Bhutan, and funded by the US$119 million loan from the ADB, will open in mid-2014. The project is estimated to reduce 500,000 tonnes of carbon dioxide emissions and qualifies for Certified Emission Reductions (CERs) under the Clean Development Mechanism (CDM) established by the Kyoto Protocol to the UN Framework Convention on Climate Change (UNFCCC).

ADB also provided a US$25 million to Nepal to finish work on the Melamchi tunnel aimed to reduce water shortage in Kathmandu Valley. The project includes reform measures in the urban water sector, such as establishing an independent commission for water tariff regulation. [World Bank Press Release: FYR Macedonia] [World Bank Press Release: Bangladesh] [World Bank Press Release: Nepal] [World Bank Press Release: Turkey] [World Bank Press Release: Malawi] [World Bank Press Release: Afghanistan] [World Bank Press Release: Guinea-Bissau] [AfDB Press Release: PIDA Grant] [AfDB Press Release: AWF] [AfDB Press Release: Cameroon] [AfDB Press Release: Zimbabwe] [AfDB Press Release: Kenya 1] [AfDB Press Release: Kenya 2] [AfDB Press Release: NBA] [AWF Press Release: NBA] [AfDB Press Release: Swaziland] [AfDB Press Release: Mauritius] [AfDB Press Release: Djibouti] [EIB Press Release: Moldova] [EBRD Press Release: Moldova] [EIB Press Release: Pakistan] [EBRD Press Release: Morocco] [EBRD Press Release: Kyrgyzstan 1] [EBRD Press Release: Kyrgyzstan 2] [EBRD Press Release: Romania] [ADB Press Release: Bhutan] [ADB Press Release: Nepal 1] [ADB Press Release: Nepal 2]