“A prolonged period of low public investments in irrigation has resulted in poor service to farmers, which in turn is demotivating farmers from making their own investments in agricultural inputs.” Wouter Arriens, Lead Water Resources Specialist ADB
Development Banks loan money for economic development to developing countries. The proportion of this money going to projects that are wholly or partly dedicated to water is increasing. The question is what are they funding and where are these projects being built? This post will highlight what the regional development banks are doing with regards to water.
The four regional multilateral development banks which I will describe here are the Asian Development Bank (ADB), African Development Bank (AfDB), Inter-American Development Bank (IDB), and European Development Bank (EBRD). These banks cover various regions and therefore have different goals and focuses pertinent to the specific needs of member states.
The ADB has always been involved with water but has really generated an increase in water lending. From 1968 to 1999 the bank lent $15.7 billion accounting for 18% of total bank lending. While lending dropped slightly in the years following it has rebounded to a targeted 25% of the banks portfolio. It has stated goals of getting 200 million people access to WASH, reducing flood risk for 100 million, increasing 40 million people’s irrigation efficiency, introducing Integrated Water Resources Management to 25 basins, and aiding in national water governance reforms.
There are a number of different types of projects that the ADB works on in water. If you are interested you can search through the projects database. Within the total number of projects funded the ADP has an interesting niche where it is a pioneer in developing Pilot programs which demonstrate new techniques and approaches. For those who like market based solutions the ADB is working on a pilot to develop a payment mechanism for benefits in the Chishui River Basin. It is also working on rural drinking water and purification of that supply for communities.
If you are searching for information on a specific area within the ADB it publishes an e-newsletter called Water for All News that covers a number of different topics. It also publishes a number of reports and studies on specific regions and topics.
The AfDB places a high priority on water as a means of development within its region. Its front page for Water, Supply, and Sanitation has some very interesting facts that both set the stage of the problem and note the gap in funding to solve it. For example in the AfDB region only 20% of irrigation and 6% of hydropower potential have been exploited. There is also a funding shortfall of $9 billion in order to reach Millennium Development Goals.
AfDB currently has over 50 projects ongoing which account for roughly $2 billion in funding. There are four main initiatives; Rural Water Supply & Sanitation Initiative, African Water Facility, New Partnership for Africa’s Development (NEPAD) (see picture at right from their website), and Multidonor Water Partnership Program. These programs bring experts to bear on multilateral funding initiatives to ensure that dollars spent are being put towards improving Africa’s water use.
The IDB (formerly known as the IADB) is active in water and can proudly boast nearly doubling households water supply and increasing fivefold the number of households with sanitary connections between 2005 and 2008. The IDB has contributed further through its cutting edge innovation (jointly with FEMSA) the Water and Sanitation Prize. This prize is given to municipalities and awarded in 3 areas Water Management, Sanitation Management, and Solid Waste Management.
Like the other development banks, IDB has a number of more conventional programs to approach water from multiple angles. Its four programs include 100 Cities Program, Water for 3,000 Rural Communities, Water Defenders and Efficient and Transparent Utilities. As you can see the IDB has succeeded in its cities goal (see chart below).
The IDB also publishes a number of reports on projects and countries. I found it interesting that they have sectoral plans for a number of different countries that highlight areas of opportunity.
The ERBD supports a number of different projects. Water is not as big a focus of the ERBD because the majority of its member states live in countries with relatively high levels of access to drinking water and sanitation. If you are interested in a list of their projects here is a link to a search on their website.
Regional development banks play an important role in financing water infrastructure. They focus on all aspects of water and are on the cutting edge of new practices in water use and efficiency. From small scale irrigation projects for rural agriculture to large scale river basin IWRM these banks finance a variety of projects.