Transcript CIDC 3 Consolidation of the Institutional Development

International Water
Association
Financing Water Security
Rudolf Frauendorfer
Asian Development Bank
Introduction
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Why “Financing Water Security”
Linking Water Security to Water Safety
ADB’s water program, Water Security and
Water Safety
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Overview
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ADB’s approach to Water Security
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Use Viet Nam as an example of
developmental context
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Serves to illustrate approach to water
security in Southeast Asia
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As pre-requisite for water safety
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Viet Nam in history
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September 1945: independence
1954: Dien Bien Phu, Geneva Accords
1975: Reunification
1986: “Doi Moi” declared: renovation
1993: ADB operations resumed
1994: US trade embargo lifted
2007: Accession to World Trade Organisation
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2010: Regional Indicators
INO
MAL
PHI
THA
VIE
Population
231.4
28.3
92.2
66.9
86.0
Poverty, %
54.6
7.8
45
11.5
48.4
4,149
13,493
3,514
8,056
2,992
% Industry
13.2
17.2
8.7
14.4
21.5
% Urban
43.1
63.7
65
33.8
29.6
GDP (/cap, $
PPP
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Poverty: % population on < $ 2/day
Poverty, < $2/day 1994 - 2007
100
80
60
Poverty, %, 1994
40
Poverty, %, 2007
20
0
INO
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MAL
PHI
THA
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Employment in Industry
Employment in Industry, %; 1995 - 2009
25
20
15
% in Industry, 1995
10
% in Industry, 2009
5
0
INO
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MAL
PHI
THA
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Urbanisation
Urban Population, in %; 1995 - 2009
70
60
50
40
% Urban, 1995
30
% Urban, 2009
20
10
0
INO
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MAL
PHI
THA
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Transformation of the economy
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Strong industrial growth
Transition to market economy; part of global
economy
De-centralisation: administrative / fiscal
Agriculture: still 52% of employed
Still using 80% of water
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Water Resources
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Annual Rainfall: 1,200 – 3,000 mm/year
Rivers discharge: 830 billion m3/year
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57% from Mekong basin
16% Red – Thai basin
> 1700
m3/cap/yr
“under stress
Total 60% generated
outside
borders
Water endowment: 9,800 m3/capita.year
In some basins: < 3,000 m3/capita.year
Critical in dry season for Dong Nai and
other basins
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Water Users
2008
2020
Agriculture
82%
72%
Aquaculture
11%
14%
Industry
5%
9%
Urban
3%
5%
Total use 2008: 80 billion m3/year
Total use 2020: 120 billion m3/year
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Ground Water
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Strategic reserve – essential for rural areas
Renewable potential: 63 billion m3/yr
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Water source for 55% of population:
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In Northwest: 3,770 m3/cap.yr
In Mekong delta: 84 m3/cap.year
34 % of urban population
65% of rural population
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Ground water - issues
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Unknown resource: insufficient data on
renewable Quantity or Quality
HCMC and Hanoi: groundwater table
lowered by 30m+
Need to protect strategic resource
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Storage to bridge between floods and
droughts
Potential for artificial / induced re-charge?
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Water Safety Plans
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System Assessment: to review supply
chain
Operational monitoring of all control
measures
Management Plans: documenting day-today operations; emergency measures
a. Minimize contamination: protect source
b. Reduce or remove contamination: treat
c. Prevent further contamination: protect network
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Urban water supply
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68 water companies, under VWSA
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Coverage: 98% “access to improved source”
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59% with house connection
39% shared connection or standposts
Investment 1991 - 2008: $ 2 billion
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Design capacity 5.4 million m3/day
Operating at 4.2 million m3/day
Mainly treatment & transmission,
15% on distribution improvements
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Urban water: data needs
1.
2.
Reliable: independent verification
Relevant: performance indicators,
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Financial performance
Asset inventory and valuation
Comprehensive: data on small town
systems (~ 400 towns)
Minimum requirements to
attract private sector interest in
management, operation,
investment
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Urban water:
non revenue water NRW
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VWSA: some doubt on data
Range: 15 – 70% means of measurement lacking
Average: 30% (2009) down from 39% (2000)
Government target: 15% by 2025
$ 500 million government program, to be
supported by ADB
Importance of reducing NRW as indicator of
improved all-round efficiency
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Urban water:
Business principles
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Legislation: enables tariff increases to full
cost recovery
Some hesitation to apply but promising
progress
Affordability not an issue < 1% hh income
Ownership of assets still unclear: prevents
progress with full privatisation
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Rural water: the issues
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Coverage: 90% (2009) from 43% (1990)
Sector in transition:
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supply driven developments
no funding for operation & maintenance
unsustainable systems
Provincial water companies: combining
urban + rural responsibility.
ADB project in Hue: pilot with sustainable
rural schemes to become part of urban
company.
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Urban wastewater: the issues
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Coverage: waste from <10% of urban
households is treated
Government target: 70% coverage by 2025
Investment implication: $ 15 – 25 billion
Decentralised: local government’s
responsibility
Financing: tariff can be raised, but not
widely implemented.
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Summary of Issues
A. Efficient water supply companies:
WSP step 1
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define assets, then
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manage to improve efficiency and safety
B. Protect the sources:
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WSP step 2
Reduce waste discharges, to secure sources
for the future
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ADB’s strategies
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Water supply: support to water supply
companies – including NRW reduction – to
enable access to investment by private
sector: Improving Efficiency
Wastewater – assist local government to
meet government’s targets in waste
treatment: Protect the sources
Province-wide programs combining urban
& rural water & sanitation
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Water supply
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Line of credit $ 1 billion, 2011 – 2020
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Institutional Support to water companies
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Four large cities initially, specified
Smaller cities to submit applications
NRW reduction program
Asset inventory & management
Run on business principles, maintain service
charter
Prepare for privatisation
Gain access to capital markets
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Wastewater
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Starting point
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Long term programme
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City sanitation strategies + capacity building
Loan preparation ==> line-of-credit 2013 - 2022
New approaches:
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Skills gap / Awareness gap / Funding gap
Explore decentralisation
Fit-for-use treatment
Local re-use
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Conclusion
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Promote Water Safety Plans
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By better understanding on essential
operating data, to improve efficiencies,
to achieve financial sustainability,
critical for maintaining safety of supplies
Protect the sources
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Urgent and large scale
Creative approaches & flexibility required
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