BUILDING BIG TICKETS. Practical insights for water sector organisations on thinking and acting big to attract investments for large scale initiatives

Transcription

1 BUILDING BIG TICKETS Practical insights for water sector organisations on thinking and acting big to attract investments for large scale initiatives The Hague, 2016

2 Water NGO Platform Powered by Netherlands Water Partnership and the Partners for Water Programme Big Ticket Working Group Wetlands International Max Foundation Aqua for All Simavi IRC Netherlands Water Partnership (NWP) The Hague, 2016

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4 Contents Executive summary... 4 Introduction... 6 Trends in international development cooperation... 7 Big Tickets are Learning from practice: case studies Analysis Conclusions and recommendations Annex 1: Guidelines for forming Big Ticket partnerships Annex 2: Financing options Acknowledgements

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6 Executive summary Big Tickets are understood as multi-actor, multi-sectoral collaborations which try to establish large scale and high impact initiatives on water-based topics in response to new drivers and perspectives on change in international development cooperation. Big Ticket collaborations are seen as a strategic response to trends in international development cooperation. In this document, seven Big Ticket-like cases studies were examined in detail; these include corporate programs (WWF International s collaboration with Coca-Cola, Heineken s Water Stewardship program), innovative pilot projects (Building with Nature in Indonesia), efforts specifically targeting water, sanitation and hygiene services in Africa (WASH-IT!, MUStRAIN, KALDRR) and an initiative dealing with food security and malnutrition issues (AIM). Lessons learned were captured from the case studies on adoption of programmatic and integrated thinking, effective partnership establishment and management, and innovative financing arrangements. Building a Big Ticket collaboration begins with a shared vision, and a well-defined niche that is both commonly understood by partners and attractive to donors and financing partners. This vision then must translate into a programmatic and integrated approach. As Big Tickets are by nature large, longer term initiatives (and subsequently complex), investing in partner relationships is important for ensuring fruitful, sustained collaborations. Building on existing relationships and/or previously implemented pilot projects is recommended. The report makes the case for innovative financing as the way forward for funding Big Tickets. Combining funds from different sources, or financial blending, brings opportunities and challenges in the face of a changing funding landscape. For the water sector, and NGOs in particular, clear and compelling value propositions are critical to success in pursuing innovative financing. Lessons learned and recommendations presented in this report will inform on-going processes and activities, including the NWP NGO Platform discussions, the Water OS programme, PPP Lab and planned workshops on developing value propositions/business models. 4

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8 Introduction The Big Ticket approach This publication aims to inspire NGOs and the wider network of water sector organisations involved in international development cooperation to adopt a Big Ticket approach. Big Tickets are understood as multi-actor, multi-sectoral partnerships for large-scale and large-impact initiatives on water-based topics. This approach responds to new drivers and perspectives on change in international development cooperation. In order for such collaborations to be successful, new types of partnerships, project designs and funding arrangements are essential, about which the report will provide casebased insights. Rationale and drivers The Big Ticket approach responds to trends influencing international development cooperation, such as the post-2015 SDG framework. The donor landscape is changing, due to (geo-)political changes affecting funding and finance mechanisms in both Western (traditional aid-provider) and non-western (traditional aid-receiver) nations. A reduction in institutional (government) funds has come hand in hand with an increasing focus on financial leveraging and innovative partnerships involving the private sector. Big Ticket Working Group: developing an innovative response Organisations that play a role or have a stake in water related issues must understand these trends, and formulate strategies that anticipate expected changes in the operating environment. With this in mind, the Big Ticket Working Group was formed in late The group is supported by the Partners for Water programme and the Netherlands Water Partnership s NGO Platform, and builds on the valuable contributions of its working group members. The group has taken up the challenge to take stock, analyse and learn from both drivers of change in development cooperation and response strategies. Lessons are drawn from contemporary best practices in initiatives that can be considered as Big Ticket collaborations. Objectives of the report This publication aims to share insights on the Big Ticket approach. The document is primarily written for NGOs and others working internationally in the field of water, and who seek advice or shared perspectives on cooperation and funding arrangements. Through presenting lessons learned based on case studies, it encourages the target audience to pursue Big Tickets by providing practical examples of what works. The focus of the report is on: (1) building a Big Ticket collaboration and (2) funding Big Ticket collaboration. It provides readers with context relevant to the strategic value of Big Ticket thinking and with specific recommendations for follow up. While it comes from a mostly Dutch perspective, many of the trends identified here, as well as the practical tips, are applicable in other contexts as well. Content and structure of the report The next section describes some of the key drivers in international development cooperation over the last two decades. It ends by listing some Big Ticket criteria which, clearly in response to such changes, seem to be essential for Big Ticket initiatives to take off. The following section presents seven Big Ticket-like cases, which provide valuable practical insights. This also includes an analysis of key strengths and components of the examples provided. The report presents conclusions and a number of recommendations. Annexes have been included on how to initiate Big Ticket partnerships (Annex 1) as well as some examples of private foundations that may be potential funding sources (Annex 2). 6

9 Trends in international development cooperation Evolving approaches Perspectives and policy on international development cooperation are always in motion. Since the global push for development cooperation beginning around the mid-1940s, social, economic and political forces have influenced how international collaboration between nations has taken shape, and continues to evolve 1. Over the last two decades, a number of key drivers have emerged that are influencing current opportunities and challenges in development cooperation. These trends come from broader, general observations from the world of development cooperation, beyond the cases presented in this report. The drivers and trends, as shortly mentioned in the introduction, will be presented below, and state the case for the relevance of developing Big Ticket approaches in response. Structuring development cooperation: the post-2015 SDG framework The Sustainable Development Goals (SDG) framework is a global agenda, structuring development cooperation post The framework is being prepared by the United Nations and will come into action by the end of 2015, replacing the Millennium Development Goals (MDG) framework. Two SDGs focus specifically on water issues. Goal #6 stresses ensuring availability and sustainable management of water and sanitation for all. Goal #14 stresses the conservation and sustainable use of oceans, seas and marine resources. Indirectly, goals closely related to water include making cities and human settlements inclusive, safe, resilient and sustainable (#11), taking urgent action to combat climate change and its impacts (#13) and protecting, restoring and promoting sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss (#15). The SDG framework has an even stronger emphasis on creating partnerships and structural cooperation, than the MDG framework. It is increasingly recognized that development problems are not isolated issues, but interconnected to other social or environmental problems. SDG6 is a good example, linking themes and sectors such as gender, energy, hunger, poverty, education, climate action, responsible consumption and production, as well as the social, environmental and economic dimensions of WASH. Such integration is also sought for water resources management and nutrient management 2. Integration is often aspirational rather than a reality in development cooperation. This is both a challenge and an opportunity (for greater impact) for water sector organisations. Integrated approaches are challenging and still innovative, and should be recognized as the complex undertakings that they are. New (geo-)political perspectives on development cooperation Development assistance is no longer a government-only process. Sometimes pursued by government, other types of actors are getting increasingly involved as aid becomes interlinked stronger with trade promotion. This is not to say that other actors, e.g. private sector from developed countries, were not active in developing countries before. Foreign direct investment is taking place everywhere and for all kinds of reasons, but often parallel to and not in partnership with aid initiatives. Currently there is a clear trend towards and policy interest in more strategic integration of development and trade support. As an example, Dutch foreign policy has embraced the hybridization of aid and trade in the form of the From Aid to Trade slogan 3. Governmental (bilateral) funding is shifting towards supporting public- 1 Does Foreign Aid Really Work? (2007) R.C. Riddell 2 For examples, see 3 A world to gain (2013). Dutch Ministry of Foreign Affairs. Accessible online via See also 7

10 private partnerships. This means that programmes focus less on just doing good and more on creating new business opportunities and strengthening the (trade) relations between countries. These shifts in emphasis are envisaged to go hand in hand. The shift from aid to trade relations has also triggered calls for social investments, which implies a business model that has not just financial benefits for investors but also social and environmental advantages for the stakeholders. Social investing does, however, require a new business approach as some (social or environmental) values or returns on investment are difficult to quantify. The PPP Lab, together with REBEL Group and BoPInC has developed a tool to specify the value proposition of this type of interventions which aim to combine monetary and social return on investment. It can be useful for NGOs to use this tool to analyse, define and visualize their Value Proposition, clients, beneficiaries and the type of returns on investment that is to be expected from their interventions. 4 On a different note, global political-economic dynamics influence the way development aid is structured. Several countries are going through transitions from dependence on aid to relative economic prosperity. Countries such as Brazil, China, South Africa, India and Kenya are growing into healthy states with more stable economies. As a result these countries are no longer eligible for some forms of aid, and some have become donors themselves. Growing involvement of the private sector in development cooperation Over the last decade multinational private companies started to be more visible and influential in development cooperation. Some philanthropic foundations and organisations are becoming more visible and influential as well, with a changing, more participative and proactive role. They emphasize integrative approaches and work in consortia by grantees and also themselves. Development banks, much like bilateral agencies, are also looking for new forms of partnerships, with an emphasis on engaging private companies in development. Private sector is also increasingly seeing opportunities for engagement in development, in a diverse array of forms, as a strategic investment in rapidly growing sectors or markets, and as a way of leveraging additional capital, for example in the form of Public-Private Partnerships 5. A distinction can be made between strategic partnerships, intended to work on mutually shared values, and Corporate Social Responsibility efforts which have different goals, usually focused on good corporate citizenship, and brand reputation. In some cases, particularly with corporate foundations and social impact investors, the objective often includes bringing business thinking to bear on social issues and contribute to a better world. Large corporates and multinationals may see possibilities for market expansion capitalizing on the grass root networks of NGOs; in turn increasing numbers of NGOs look to the added value of corporate partnerships and their products/services to strengthen their work. NGOs and private sector organisations may find benefits in working together, if they can find mutual or compatible goals that yield more sustainable project results, although there are potential risks involved for both (that should be acknowledged and addressed as much as possible prior to entering into a relationship. Cooperation can be challenging as each side comes from a very different perspective, and finding common ground, a common language, and navigating how to work together can be difficult. NGOs add value and bring capacity such as established networks based on long term presence in specific countries or regions, their involvement in multi-sectoral programmes, and social market entry. The private sector sees potential in NGOs as social marketeers with their connections and influence on the ground at the local level. This often results in new modes or partnerships (which are no overnight arrangements, but which 4 See for example PPP Business Model Canvas 5 Tomorrow s Philanthropist (2009). Barclays Wealth 8

11 require careful exploration and consideration), such as public-private partnerships, as well as in funding arrangements or financial blending, which will be discussed next. Astrid Broekaart, Netherlands Enterprise Agency (RVO): It is important to think broad As NGO, identify the potential business case of your project. And as company, identify the potential local development. New arrangements and mechanisms in funding development cooperation Traditionally, development aid has been funded by bilateral and multilateral donors on a grant or soft loan basis. This type of finance has been slimming down rapidly in the past decade, and will continue to do so. Western governments have less funding available for development projects and governments of emerging economies generally pursue tied aid policies. All in all this means that the new financing arrangements, in contrast to traditional forms, are required. For example, in the Dutch DGIS (international development cooperation unit within the Ministry of Foreign Affairs) budget allocation has evolved from directly funding NGOs, to co-financing in the form of subsidies, to Strategic Partnerships with shared investments. Pim van der Male, Dutch Ministry of Foreign Affairs: Important to development cooperation is that local partners have a substantial role and responsibility in the partnership. For the water sector, where most of the financing for initiatives still comes from the public sector, these new innovative approaches present an opportunity but also a challenge. of financing require a policy arena conducive for new approaches. The UN Water Security & Global Water Agenda states that Innovative financial mechanisms need to be promoted that contribute towards the goal of achieving 9

12 water security through a supportive policy environment. 6 It can be safely assumed that large-scale collaborations will be funded by multiple sources. Options include investments from the private sector, micro-financing schemes, particularly with local communities, and other innovative options for funding (e.g. crowd sourcing). See also text box below for more information on types of funds raised, and funding sources. GENERAL FUNDRAISING AND CORE FUNDING: By general fundraising here we are referring to short-term and relatively unrestricted income, such as one-off fundraising events and donations from direct marketing (mail or online). Useful for building up reserves or for gap funding, as project funding often fails to cover 100% of real costs, particularly the indirect (core) costs of the organization in supporting projects, also sometimes called overhead. This type of funding usually comes from individuals, but some corporate donations may also fall in this category. In some cases, institutional (government) donors and charitable foundations give relatively unrestricted core support grants. This type of grant can be hard to find, and making the case for a vision rather than a project with tangible deliverables can be challenging. Another way to cover core costs can be through income generation activities, such as cause-related marketing (e.g. selling t-shirts or calendars). Any profit can be used as the organisation chooses, as long as it is reinvested in the organization towards achieving its mission it is unrestricted income. Programme and project funding: Programme funding: longer term with some restrictions, these are funds usually provided by partners where a strong working relationship has been established, or in other words where they have faith in the ability of the organization receiving the funds to manage and deliver a large, longer-term programme. In most cases (and increasingly), the NGO is asked to provide considerable match-funding, for example USAID grants require 50% of funds to come from other sources. Some institutional (government) donors and large foundations give this type of funding. It is sometimes easier to acquire after the organisation has built a project track record with the funding partner. Project funding: Short-term and relatively restricted income, generally from institutional donor agencies, private foundations, and some corporates. Being project-specific, these funds generally last for 1-3 years and are difficult to extend further leading to a loss of project continuity. This is the most common form of NGO financing. Project funding is often via proposal or tender processes. PPP: the term "public-private partnership" has often two characteristics: first, it relates to the provision of public services or public infrastructure, and second, it necessitates the transfer of risk between partners. It often consists of a hybrid financing mechanism involving both public (government / institutional) and private (in this case corporate) funds

13 Big Tickets are multi-actor, multi-sectoral collaborations responding to new drivers and perspectives on change in international development cooperation, which try to establish large-scale and large-impact initiatives on water-based topics. This formulation, which is by no means a formal definition, is based on various interpretations of the concept, but above all formulated as a strategic response to the drivers and trends in development cooperation sketched above. A number of characteristics are outlined below with the dual objective of a) developing the Big Ticket concept a bit more at this stage, and b) explaining on which basis the seven case study projects have been selected. Big Ticket initiatives should include A shared vision or common theory of change Ambition: 3M (multi-million, multisectoral, multi-annual) potentially multi-country Complementary capacities Crossovers (connecting to other sectors) System thinking/integration/holistic analysis Active commitment to the partnership Proof of success/impact Partners can have differences of opinion, goals and perspective, but there needs to be a common thread that binds them a shared vision. A bigger scope for more impact. The goal should be systemic change, not small-scale localised impact. By bringing in different skill sets, a stronger consortium can be created, for tackling complex issues from different angles. Taking on not just water issues (and integrating better within the water sector) but also issues from other sectors, such as food, energy or agriculture. Such a crossover can bring new potential partners and opportunities. Recognizing and include that parts of a project do not stand on their own, but are connected through the (eco)system. This requires a holistic approach. It is important that all the involved parties are committed fully to the partnership, both organisationally and financially. As these projects are of a more long-term nature, it is important that all parties have faith in each other and the cooperation. Success breeds success, and tangible evidence that this initiative can bring results will convince investors and other stakeholders better than anything else. 11

14 Learning from practice: case studies In order to make the general context and conceptual thinking outlined previously more tangible, a number of real world experiences will be examined. The Working Group identified seven case studies that fit criteria for Big Ticket partnerships. After briefly introducing them below, more details regarding project objectives, critical success factors and lessons learned will be provided. At the end of this section a short (comparative) analysis is presented, which highlights more general insights on the themes of project formulation, partnership establishment and financial arrangements. 1. KALDRR-WASH, Kenya Kenya Arid Lands Disaster Risk Reduction Water, Sanitation, and Hygiene aims to build resilience against drought in arid and semi-arid lands. It is a two-year programme supported by USAID and the Government of the Netherlands. 2. WASH-IT! Strategic Partnership IRC, together with SIMAVI, Wetlands International and Akvo have developed the WASH-IT! programme to work on improving governance of access to water and sanitation. The consortium is a 5 year partnership with the Ministry of Foreign Affairs, The Netherlands, to implement a joint lobby and advocacy programme that aims to improve access to water and sanitation services, and will begin in January Building with Nature, Indonesia The project began in 2010, through a partnership formed by Wetlands International and the (mostly private sector) Ecoshape Consortium, and is funded by the Dutch government Sustainable Water Fund. Mangrove restoration, using Building with Nature principles, is the key to rehabilitation of a 20 kilometre stretch of coast in Demak, Indonesia. 4. Multiple Use Services (MUS), Ethiopia (MUStRAIN) MUS was created out of an existing partnership and existing projects on the ground, among them were IRC, RAIN and RiPPLE. The project is funded by Partners for Water and started in The project is focused on developing opportunities for multiple-use water services linked to water harvesting innovations and household-led investment. 5. Water Stewardship Heineken In Ethiopia, East Africa, Heineken and partners execute a project supported by the Dutch government Sustainable Water Fund. The initiative is intended to reduce the use of water, both in the agricultural production chain as well as at the level of the local beer brewery. 6. Water Stewardship Coca-Cola WWF International is collaborating with Coca-Cola through its Water Stewardship program. This cooperation focuses on water management improvements at the catchment level in countries/regions where Coca-Cola is operational. 7. Amsterdam Initiative against Malnutrition (AIM) AIM was started in 2009 by Unilever, Akzo Nobel, DSM and GAIN (Global Alliance for Improved Nutrition). Later on ICCO and Wageningen University joined the partnership, which was made with the Dutch Ministry of Foreign Affairs. The project is funded by the Facility for Sustainable Entrepreneurship and Food Security (FDOV) and focuses on different aspects of the food supply chain, such as farmers, family-based business, suppliers, infrastructure and enhanced nutrition. 12

15 Case study 1: KALDRR-WASH Focus: WASH/3R/MUS/DRR Location: Kenya Timeframe: Proposal trajectory / Dec 2012 Dec 2014 Partners: Akvo, CARE, World Vision, Food for the Hungry, Acacia Water, IRC, Millennium Water Alliance (MWA) Donors: USAID, Aqua for All, CARE, Catholic Relief Services (CRS), Food for the Hungry, Millennium Water Alliance, World Vision (+ in kind contribution Acacia Water & IRC) Budget: $ 9,831,126 Contact person: Dick Bouman Background and value proposition The KALDRR-WASH program was an USAID initiative to provide safe water, improved sanitation, and hygiene education (WASH) to areas of rural Kenya impacted by drought and climate change. The program is part of a larger effort to assist the Kenyan government and local communities to increase their resilience to droughts and flooding caused by a changing climate while simultaneously increasing access to improved water, sanitation and hygiene services. KALDRR-WASH integrated emergency relief efforts with long term development efforts in order to increase water storage capacity, improve water, sanitation and hygiene conditions at health facilities and nutrition centres and improve access to and use of safe drinking water, point of use water treatment, and good hygiene behaviours to reduce diarrheal diseases. 7 The program targeted 160,000 people in five counties Garissa, Isiolo, Marsabit, Turkana, and Wajir. Situated in Kenya s northern arid region, these counties are particularly vulnerable to a changing climate and the on-going drought in the Horn of Africa. Poverty rates are high, most homes are food insecure, and access to clean water and sanitation is well below national average. The value proposition of the program was based on emergency relief activities, combined with efforts to increase long-term resilience to drought and flash floods, simultaneously increasing access to improved water supply and sanitation services and improving hygiene behaviours for poor and vulnerable populations in the five arid counties 8. The project was implemented between December 2012 and December The financing consisted of $8 million from USAID and the Office of Foreign Disaster Assistance; $1.83 million in matching funds 9. The initial plan for the program was to be set up as follows: DGIS started with 1.25 million, which would be matched 1:1, by Aqua for All to 2.5 million. Then MWA would bring it up to 5 million and finally, USAID would add another 5 million, doubling it again for a total of 10 million. DGIS Aqua for All MWA USAID TOTAL 1.25 million 1.25 million 2.5 million 5 million 10 million

16 Partners The collaboration between MWA and Aqua for All began in 2010, where they met during the Stockholm World Water Week. At the Dutch embassy in Kenya follow up meetings were initiated with Dutch and American actors. The two directors of MWA and Aqua for All, Sjef Ernes and Rafael de Jesús Callejas Calderón, instantly clicked. During this meeting they brainstormed on financial opportunities and options for the DGIS and USAID. The added value of Aqua for All to MWA is the introduction of innovative and progressive concepts combined with bringing the Dutch water sector partners along. MWA offers access to a large network of implementers in the ground. The combination of the two made that they were eligible for the USAID grant. On the 24 th of December 2012 USAID approved their proposal. Because of the dynamic nature of the collaboration, no general brand has been developed for the project. Each organisation worked with its own name and brand. Critical success factors Connections: Personal connections between partners can be really helpful. It makes people more generous and patient and can help a project get through the difficult moments. Complementarity: Complementarity is important, avoid overlapping of capacities among the parties. This will minimize the competition within the collaboration. Lessons worth sharing Relationships: Take your time to invest in a relationship of trust. Time: When you are planning to develop and implement a strategy, take enough time; at least 1 year. Within this programme Aqua for All formulated a strategy and a method, but two years was too short a timeframe to spread this at the grassroots level. Avoid envy/internal competition: Avoid envy between the partners; you have to allow each partner to have successes. Negotiation: At the same time, dare to negotiate, even within the partnership. 14

17 Case study 2: WASH-IT! Strategic Partnership Focus: Inequitable and unsustainable WASH services, lobby and advocacy. Location: low and lower middle-income countries. Timeframe: Proposal trajectory , Programme trajectory Partners: IRC, Simavi, Wetlands International, Akvo, Dutch Ministry of Foreign Affairs. Donors: Dialogue and Dissent programme, DGIS, Dutch Ministry of Foreign Affairs. Budget: 8 million Euros. Background and value proposition The aim of the project is to improve the current situation of inadequate financing and accountability, lack of citizen participation, lack of integration of WASH and water resource management, lack of operationalization of international commitments, insufficient leadership by governments. WASH-IT! will address these issues with the involvement of a range of stakeholders, focusing on good governance. The WASH-IT! alliance brings together IRC, Simavi, Akvo and Wetlands International who focus on improved delivery of water, sanitation and hygiene (WASH) services building on their work in the existing Dutch WASH Alliance. The value proposition of the WASH-IT! Programme is to work on improving governance of access to water and sanitation. The comprehensive lobby and advocacy programme will enhance the interplay between the most important WASH stakeholders at local, national and international levels. Civil society, governments and private sector have an important role to play in strengthening governance so that poor and marginalised people will receive the services that they are entitled to 10. Globally 2.5 billion people still do not have access to improved sanitation and 750 million people lack access to safe water. By 2030, it is estimated that 47% of the world s population will face high water stress, making sustainable solutions imperative 11. WASH-IT! will develop the tools, methods and capacities for civil society, government and the private sector to work towards, and hold each other accountable for, the sustainable achievement of the Human Right to Water and Sanitation. This is exactly what Dutch Foreign Trade and Development Minister Lilianne Ploumen aims at under her new Dialogue and Dissent programme: strengthening civil society organisations to improve the relationship between citizens, government and business in low- and middle income countries. Equitable and sustainable WASH services are a top priority of the Dutch Ministry of Foreign Affairs: The Netherlands has a strong profile in the area of WASH services for the ultra-poor. Inequitable and unsustainable WASH services are often caused by poor governance. In line with the Ministry, WASH-IT! believes that central, regional and local governments are responsible to provide adequate WASH supply services and for protecting their water resources. In order to achieve this, the alliance Dutch-Ministry-Foreign-Affairs.aspx 15

18 will work with a wide range of partners on ensuring better policies, better regulation and better enforcement of regulation 12. Partners The four alliance partners; IRC, Simavi, Akvo and Wetlands are complementary. They all have different areas of focus and their combined value combines the strategic and the practical. Akvo is the practical supplier of software, IRC aims to intervene at a more strategic (strategy/policy) level and focus on WASH at the regional and national scales. The expertise of Simavi is the translation of policy to the community level, while Wetlands has a broader scope and focus on lobby activities related to integrated water resource management. There is no overarching brand for WASH-IT!. All actors act in their own identity, although they have the intention to act together, which is reflected in the aligned communication plan. Critical success factors Complementarity: The combination of different expertise among the partners makes the partnership successful and strong. Shared vision: The partners have a positive drive. They are inspired by the same goal. Aligned messages: Aligned communication is a key to success. Local presence: Local presence contributes to the track record. Lessons worth sharing Avoid envy / internal competition: Avoid too much competition within the alliance. Strong leadership: Have a strong chairmanship, define one leader. Strong leadership: Have a tight process, keep it together; keep up the pace. Shared vision / time: It takes time to understand each other and to create a mutual Theory of Change Complexity: Be aware that managing such a project is a complex task 12 Dutch-Ministry-Foreign-Affairs.aspx 16

19 Case study 3: Building with Nature Thematic focus: Location: Timeframe: Partners: Budget: Contact person: Building with nature, coastal protection Northern coast of Central Java, Indonesia (and extension/upscaling expected) Boskalis, Van Oord, Deltares, Witteveen+Bos, Wetlands International, IMARES, Ecoshape, Indonesian Ministry of Marine Affairs and Fisheries (MMAF) and Ministry of Public Works and Human Housing (PU), Wageningen UR, UNESCO-IHE, Indonesian regional and local governments, local communities. 5,000,000. Donors: SWF (second phase), Ecoshape, Mangrove Capital Project, Deltares, Witteveen+Bos, Dutch Government Pieter van Eijk Background and value proposition Building with Nature is an approach to water management and coastal protection that is primarily taking shape in the Netherlands via the efforts of the Ecoshape consortium, made up mostly of Dutch engineering firms, in which Wetlands International is the only NGO member 13. Several projects are underway using Building with Nature principles: anticipating and capitalizing on dynamics in the natural system, for example the capacity of sea currents to distribute sediment and the protective services provided by ecosystems such as oyster reefs and mangrove forests 14. Such projects may be cheaper, more effective, and less harmful to the natural environment as compared to conventional engineering methods. After successful completion of projects in the Netherlands, Wetlands International was brought in as a partner in the consortium to help develop an international application of this method. A suitable location was identified in Central Java, Indonesia, where coastal erosion and inland flooding threatens a population of about 70,000. The Public Private Partnership effort consists of implementing a coastal protection measure based on using permeable brush wood dams to capture silt, sediment nourishments and the rehabilitation of a mangrove buffer along the shoreline. In parallel a mangrovebased aquaculture system is put in place, thereby addressing unsustainable land-uses that caused the erosion 15. This integrated approach is considered more suitable in these environments compared to more traditional solutions that rely on infrastructure only. Wetlands International and Deltares, together with MMAF (Indonesian government) invested a relatively small amount of funds to conduct a pilot project, after which consortium partners and other agencies in the Indonesian government became interested in joining forces. This resulted in a project proposal to the Sustainable Water Fund, which was funded, and is currently under implementation. The value proposition of the project departs from ecologically-based coastal engineering, which is deemed cheaper and more sustainable when compared to conventional methods. In addition, the

20 project includes an aquaculture component, which is interesting to local communities to start earning a living from, and which can be integrated with mangrove rehabilitation and protection efforts. Partners The partners were selected or came on board as the project initiative was taking shape. Ecoshape and its partner network were interested in implementing projects along the thematic lines of building with nature in other countries. The engineering companies and consultants benefited from an NGO such as Wetlands International (which has a local office in Indonesia) to connect to Indonesian governmental institutes and local stakeholders. A number of research and knowledge institutes were invited to join, because of their complementary expertise in the fields of ecology and hydrodynamics, feeding into both the design and monitoring of the project. Critical success factors Time: It took quite some time to not only formulate the project and bring together the right partners, but also to obtain the funding required for up-scaling the pilot project. The conviction that this initiative could, in the end, materialize was an essential driver of project coordinators and closest group of partners. Local presence: Local presence, in this case the country office of Wetlands International, was key to link the Dutch and Indonesian water sectors together. Funding for up-scaling: A substantial funding mechanism (the Sustainable Water Fund in this case) was important to scale up a pre-funded pilot project. Uniqueness / niche: In terms of content, the project is unique as it introduces a relatively new philosophy on eco-engineering in Indonesia, adapting it to the local context. The integrated nature of the project (e.g. the inclusion of sustainable aquaculture components to support local livelihoods) was important to get broad support. Collaboration with government: Close collaboration with Indonesian government partners was important, enabling linkage to existing coastal zone management projects and ensuring political support. Lessons worth sharing Flexibility: Funding mechanisms often have tight guidelines for the design of projects. Integrating the approach and vision as developed by the consortium required flexibility and creativity. Shared vision / demonstrated results: Developing a long/term (5 year) outlook for the project and working to this vision through consecutive staged approaches, including a demonstration pilot in the field has proven critical to successful project development. 18

21 Case study 4: Multiple Use Services (MUStRAIN) Focus: MUS, combining different uses of water in one approach, including WASH, health, agriculture, food security and livelihood diversification Location: Ancharo Watershed in Kalu woreda (Amhara region, Ethiopia) Timeframe: May 2011 December 2014 Partners: Millennium Water Alliance, Aguayuda, CRS, CARE, Food for the Hungry, Global Water, Helvetas, IRC, Lifewater, Living Water International, Pure Water for the World, Water.org, WaterAid, Water4, Water for People, Water Missions, World Vision, Hope 2020, local partners: Ethiopian Evangelical Church-Mekane Yesus, Kalehiwot Church, RiPPLE. Donors: Conrad N. Hilton Foundation, The Coca-Cola Africa Foundation Budget: $ Contact person: John Butterworth Background and value proposition In this project, RAIN worked together with its partners in Ethiopia, as well as IRC, Water Health and Quest-Consult. MUStRAIN was all about developing opportunities for multiple-use water services (MUS), making use of rainwater harvesting and household-led investment in decentralised water supply (self-supply). The project, which was generously supported by the Partners for Water Programme, had two phases. The first was focused on carrying out research and demonstration activities. These activities concentrate on developing communal MUS schemes in arid environments. The second phase was focused on documenting a wide range of MUS case studies in various environments in Ethiopia 16. The goal of the partnership activity was to address the critical water problems in water scarce rural areas of Ethiopia by collaboration, implementation of innovative and alternative solutions and exchange of knowledge and mutual learning. People living in rural and peri-urban settings need water for drinking, cooking, washing, sanitation, watering animals, growing food and generating income. MUS cater to these various needs. MUS is not new and often privately-owned household level water supplies and traditional water supply schemes already function like this. But many modern approaches and practices of sector professionals do not, with fragmented interventions across water, agriculture and health sectors common. What is new is the focus on systematic approaches that can be scaled up. The MUStRAIN project contributed to that effort with a link to water harvesting innovations and household-led investment. The aim was to develop new approaches that better support water and food security: two critical and interrelated issues. Partners The MUStRAIN project involved the Dutch-based partners IRC International Water and Sanitation Centre (a foundation), the RAIN Foundation, and specialised private sector water consultancy businesses, Water Health and Quest-consult, working in Ethiopia with the Ministry of Water, Irrigation and Energy (MoWIE), the Millennium Water Alliance Ethiopia Programme (an alliance of NGOs), the NGO Catholic Relief Services (CRS), RiPPLE (a local NGO focused on water sector and knowledge management), the Hararghe Catholic Secretariat (HCS) and other local organisations

22 The IRC International Water and Sanitation Centre is a think-and do tank focused on the WASH and IWRM sectors but with a strong interest in cross-sectoral approaches to development and a background as a founder member of the MUS group. IRC were responsible for research and knowledge management activities, with specific thematic interests in multiple uses of water and Self-supply, as well as overall project management. The RAIN foundation led the implementation of demonstration activities on water harvesting with a technology focus on sand dams and sub-surface dams. Water Health joined the project in 2013 to provide additional research expertise, and specifically focused on the development of a series of MUS case studies. Quest-consult joined the project in 2013 to provide additional operational expertise in Ethiopia with a focus on implementation of demonstration and training activities relating to Self-supply. The project partnered with key Ethiopian organisations to support the implementation (and ultimately aiming to support scaling-up) of demonstration and other activities. The knowledge-focused NGO, RiPPLE, were the lead Ethiopian partner working with the implementation-focused NGO HCS on the water harvesting demonstrations. The Millennium Water Alliance Ethiopia Programme (MWA-EP) became involved in the Self-supply acceleration pilots, and particularly its member NGO, CRS, which supported piloting in one woreda (district). The project worked with government at federal and local levels, including the Dire Dawa government in relation to water harvesting demonstrations. The Self-supply acceleration demonstration activities were undertaken with the federal Ministry of Water, Irrigation and Energy, regional governments in Southern Nations, Nationalities, and Peoples' Region (SNNPR) and Oromia, and local government in the 3 pilot woredas 17. Critical success factors Complementarity: The partners brought different experience and skill sets. In this case RAIN brought expertise on rainwater harvesting, and IRC brought experience in domestic water supply. Shared vision/time: A vision for collective projects already existed, developed in a previous project in which the partners collaborated, which meant that IRC could build on this rather than spend time on it. Local presence: A local contact proved to be very important for setting the project up and knowing what was needed on the ground. Lessons worth sharing Flexibility: Change the strategy when necessary. In this project they changed their strategy and focussed on the highlands, and they switched from community-based to household-based implementation. This stimulated the local people to use their own money to invest in their own water use systems and it makes the prospects for scaling up much better. Fortunately, Partners for Water approved the adaptions in the project. Relationships: Choose your partners carefully. Shared vision: The organisations had different priorities, which made it difficult to cooperate. The activities in practice were not synchronized properly. Niche / attractiveness to donors: Have a good demonstration project and it is important to have a good idea at the core of your project. Think about scalability. Funding for up-scaling: If there is no revenue to cover the operation and maintenance costs, there is a relative limitation to scale up. In this project the case cannot operate without investments by NGOs and governments

23 Case study 5: Water stewardship Heineken Project themes: Water supply chain, waste water treatment, water footprint, WRM Location: Corporate programme, executed in various countries including Ethiopia Timeframe (SWF project Ethiopia): Partners (SWF project Ethiopia): Heineken Breweries SC, Vitens-Evides International, Acacia Water, Royal HaskoningDHV, MS Consultancy, Harar Water and Sewerage Authority (HWSA), Harar People Regional State (HPRS), Ethiopian Catholic Church Budget (SWF project Ethiopia): 5,481,549 (SWF contribution 3,260,000) Contact persons: Ron Bohlmeijer, Peter Jonkers Background and value proposition A large multinational brewery such as Heineken depends heavily on the sufficient supply of water for its production process, both in terms of quantity and quality. On-site, at the breweries, various technological improvements can be done to treat water to make if suitable for production. Likewise, effluent can be treated before it leaves the factory, to avoid environmental pollution. The overall amount of water used in production can be reduced, based on on-site water footprint insights, but also by increasing the efficiency of water usage in agricultural supply chain commodities required for brewing beer 18. Since water resources are increasingly being shared with new and more users, the availability of water becomes stressed especially in already water scarce regions. Assessing water use and options for improved water treatment at the site level are not effective in themselves if the general water supply is unreliable. Therefore, initiatives should be developed that respond to a number of challenges simultaneously: both improving water use in production processes within breweries, but also dealing with water related risks in connection to its wider geographical region, and associated stakeholder network. These challenges are addressed in a programmatic manner via the Heineken Water Stewardship program 19. It was initiated in 2009 as part of corporate sustainability efforts. The initiative addresses the following water issues: I) Reduce the amount of water used in production; II) Responsible discharge of brewery effluent; III) Reduce the amount of water used in other supply chains, notably agriculture; IV) Protect water resources in water-scarce and water-distressed regions; V) Balance water that is extracted and not returned to the local watershed. 18 As an outcome of this policy, in 2014 Heineken managed to decrease its overall water consumption to 3.9hl/hl, while the ambition stands to further decrease this to 3.5hl/hl, and 3.3hl/hl for breweries in waterscarce regions. Compared to 2008, when 5.1hl/hl was used, this equals to a reduction of 23% (

24 The program departs from concerns about water use and potential water related risks in relation to the full value chain, or from barley to bar. The use of water can be made explicit by means of a water footprint, both at the beginning and end of the production process. It starts with agricultural products that are used to produce beer, which requires a certain amount of water. A part of this can often be saved by better water resource management practices at farm level. The end of the process typically implies the distribution and use of the product, which may occur well beyond the watershed in which the beer has been produced. The extraction of this water from the regional hydrologic cycle may be compensated by improving water retention and or quality in the watershed as a whole. The value proposition of this effort is found in a broader collaboration with stakeholders and social actors both within and well beyond the brewery, working together to improve a number of water related issues in relation to beer brewery in an integrated manner. This will be made more explicit by discussing a Public Private Partnership project in Ethiopia, in which Heineken participates. Water Stewardship initiative: Sustainable Water Fund project Ethiopia One of the projects that fit within the scope of the Water Stewardship program is an initiative in Ethiopia. Within the context of and supported by the Sustainable Water Fund (SWF) 20, Heineken participates in a PPP project between private sector companies, research institutes, governmental organisations and an NGO 21. The specific objective of the project is to develop an integrated water resource management plan for the region. Its main goal is to ensure long term water availability for urban, rural and industrial consumers. The project has a timeframe of five years ( ). Within this timeframe, a decalcification unit for the City of Harar will be installed at the water intake point to reduce high calcium levels found in extracted ground water. This contributes to the long term (technical) sustainability of the infrastructure required to provide the city with drinking water of appropriate quality. Vitens-Evides International mainly focuses on the urban interventions, while Heineken predominantly works in the rural area, where the brewery is located. This component includes the formulation of a broad stakeholder platform to discuss water management issues on a regional level. By means of water assessments and the use of scenarios in planning for a sustainable water management strategy up to 2025, the projects aims to contribute to improved water management on a regional level. In addition, drinking water systems will be constructed in the project area to improve urban and rural water supply. Critical success factors Buy-in from top management: On a corporate level, it is important to acknowledge the strategic value of water and act accordingly with formulating policy and practical interventions. In this case, a broadened scope beyond the brewery fence proved essential. Local presence: Local collaboration with NGOs, regulators and other stakeholders is essential in forming working partnerships or PPPs. Funding for up-scaling: A funding mechanism (the Sustainable Water Fund in this case) provided a substantial boost, to scale up an existing partnership initiative

25 Lessons worth sharing Attractive to private/profit sector return on investment: Return on investment is usually expected, especially from a private sector perspective, but based on the involved stakeholders or project partners, specific targets can be formulated which can be interesting to all involved. The timeframe of when to expect returns on investment can, for example, be made flexible, to still be interesting for private companies. Shared vision / collaboration / local level action: Although top down initiatives at the corporate level can be agenda setting, water risks are local always and need to be addressed at the local level. Water risks are shared risks and collaborative action by all stakeholders involved the watershed is essential to arrive at sustainable solutions. Time/relationship-building: Adopting a long term perspective is key to work towards sustainable partnerships with stakeholders and local communities, and sometimes essential to justify investments. 23

26 Case study 6: Water stewardship Coca-Cola Project themes: Location: Timeframe: Since 2008 Partners: Donors: Budget: Contact person: Improve water resource management, protection and restoration of water and natural resources, raise awareness about water issues, improve access to water and sanitation Worldwide WWF International, The Coca-Cola Company (Coca-Cola), U.S. Water Partnership, Water for People, USAID, The Nature Conservancy, World Resources Institute, WBCSD, WaterAid, United Nations Development Programme, UN-HABITAT, The Global Compact Various companies including Coca-Cola and H&M. 40 million Jochem Verberne Background and value proposition WWF International is a globally operating NGO which strives for the protection and restoration of nature and natural resources. About 13% of its funding comes from the private sector. In 2008 the organisation launched its Water Stewardship program, which is funded completely by private sector partners. It is the organisation s fastest growing department in financial terms. About 10 companies each contribute with more than 3 million per year. The Water Stewardship programme specifically targets partnerships with private companies based on the following rationale 22 : The value proposition of the programme is based on the step-wise increase in companies awareness and investment in sustainable water resources management. This can materialize in efforts to reduce water use in production processes, treatment of effluent water from factories to reduce environmental impact, and the restoration and protection of water resources on a regional scale. The start of the programme was initiated by a growing interest of the private sector in sustainable management of water resources. Water is a necessity to practically all production processes. At the same time, companies started to acknowledge various water related risks that start to place stress on business operations. These risks are expected to become greater and more complex. In the case of Coca-Cola, reputation management was also an important driver to get involved. WWF s Water Stewardship programme comprises various actions, from assisting existing partners with project on the ground, to identifying potential new partners (including International Financial Institutions), and validation and scaling up of lessons learned. The Water Risk Filter 23 enables companies to quantify water-related risks related to their particular business or geographical location p