4 FRAMEWORKS AND BUILDING BLOCKS FOR THE EUWI

Transcription

1 4 FRAMEWORKS AND BUILDING BLOCKS FOR THE EUWI The EU Water Initiative is not developing in isolation: it sits within a wider architecture of aid and finance mechanisms. A range of frameworks and initiatives for improving the financing of infrastructure in developing countries and in particular, financing to the water sector, already exist. A series of policy declarations have also shaped the way in which the financial challenge can and should be addressed. This section presents a summary table of the existing policy, sector specific and financing initiatives that relate to the water sector and which provide the context or building blocks for the EUWI. More details on each initiative are provided in Annex D. Some of these initiatives may be useful complements of the EUWI and some could potentially be extended at the European level. It is recommended that each regional component expand upon this review at future stages of the development of the initiative, seeking those linkages of most use to its particular agenda. This is especially important, if the EUWI is to build on existing initiatives as much as possible, in order to lower transaction costs for potential users, rather than invent its own new bureaucracies. The initiatives have been grouped under the following headings: Policy initiatives and international agreements that shape the way in which development assistance can be provided globally and in the EU; Water-specific policy initiatives, focusing on the most recent initiatives that form the conceptual basis of the EU Water Initiative; Non-water specific financial initiatives, which have developed innovative financial vehicles that could potentially be tapped into by the Initiative; Water Specific financial initiatives, specifically the proposed EU Water Fund water initiatives, which tend to act as knowledge networks and have accumulated considerable expertise on the water sector; Country-specific water initiatives, which have been developed by one donor in particular or for a particular recipient country or region. DFID/European 58 DFID/ European Commission

2 1 Policy initiatives World Summit on Sustainable Development WSSD Policy setting Agreed to mobilise international and domestic financial resources for WATSAN investments. Support for a world solidarity fund agreed upon in Johannesburg Johannesburg summit: launching of the initiative in a favourable climate. EUWI will need to coordinate with new global financing instruments proposed The EU/ACP Partnership Agreement New Partnership for Africa Development Cotonou Aid agreement European ACP Financial protocol for ACP countries and guidelines Has increased the profile of water within EU for aid provision ODA. EUWI could seek to build upon proposed investment facility NEPAD Policy setting Africa Africa Policy principles: increase financial investments in infrastructure by lowering risks facing private investors, with respect to policy/regulatory frameworks. Clear emphasis on governance. Direct interlocutor in Africa African Ministers Conference on Water AMCOW Policy setting Under NEPAD Africa Key objectives for reviewing the development of the water sector Direct interlocutor in Africa for EUWI Environment for Europe Process EEP Policy setting Ministers CEE and NIS Policy process and set up the EAP Task Force and the Project Preparation Committee Led to the creation of initiatives which provide a good basis for the EUWI 2 Water specific policy initiatives EC Resolution on Water Management in Developing Countries Resolution European Developing countries Initiated the EU Water Initiative and stresses the need for good governance and to strengthen coordination within the European Key policy basis for the EUWI Bonn Recommendations for Action Policy declaration Detailed analysis and statements about financing the water sector Conceptual basis for the EUWI 3 Non water- specific financial initiatives Financial Sector Reform and Strengthening FIRST Technical Assistance Grants Donors (UK largely involved) Technical Assistance support for reform of the financial sectors Addresses the broader financial framework EUWI initiative could piggyback on some innovations or countries where reform successfully implemented. Public Private Infrastructure Advisory Facility PPIAF Technical Assistance Grants Donors (UK, Japan, World Bank) Technical Assistance grants to support private sector participation in the infrastructure sector Addresses institutional and regulatory issues EUWI could act in areas where reforms successfully implemented Environmental Action Programme Task Force EAP Task force Governments & OECD CEE and NIS Has identified urban water sector reform in the NIS as one of its key priorities. The EUWI could use the knowledge and practical tools developed by the EAP task force 59

3 Project Preparation Committee PPC Coordination of IFIs IFIs (hosted by EBRD) CEE and NIS Innovative networking mechanism for coordinating assistance to CEE and NIS. Has allowed financing for the environmental sector to be allocated more effectively The EUWI could consider this type of mechanism for other regions in order to develop Project Preparation Facilities Joint Environmental Programme JEP Financing Vehicle for Technical Assistance Multilateral donors (WB/EC) NIS and Mongolia Mechanism for funding feasibility and preparation studies for selected investment projects The EUWI could consider this type of mechanism for other regions in order to develop Project Preparation Facilities Private Infrastructure Donor Group PIDG Project financing Donors (Neth, Sweden, Switz., UK) The group aims to mobilise private investment and controls a Trust, based in Mauritius, that can support initiatives such as EAIF and others under preparation (see below) EUWI could scale-up with the inclusion of additional EU members in the group. Infrastructure Development Company (Planned) DevCo Project Preparation Multi-donors, UK-led Creation and structuring of infrastructure opportunities and presentation of these opportunities to the private sector through a competitive and transparent process es on the need to prepare good projects. Development Guarantee Company (Planned) GuarantCo Guarantees Multi-donors, UK-led Partial risk guarantees for local currency bonds issued by municipalities and utilities for infrastructure work Emerging Africa Infrastructure Fund EAIF Long Term Loans Multi-donors (UK, Sweden, Switz., Neth.) and banks Africa Long-term lending to infrastructure companies (including water and sanitation) for the poorest countries, focusing on Africa. Coordinated approach between donor and banks, including commercial and development banks is an innovation. The EUWI could consider a similar approach for replication, with a focus on water or provide more resources to EAIF for water Public Private Partnerships for the Urban Environment PPPUE Grants UNDP and Donors (UK, Switz, New Zealand) Innovative partnership grants for projects and activities establishing adequate policy, legal and institutional frameworks for PPP at local level particularly at the urban level Grants for establishing conducive institutional environment: impact on risk reduction. 60

4 Community-Led Infrastructure Financing Facility CLIFF Project financing UK and NGOs India Loans/credit guarantees to community-led slum upgrading initiatives 4 Water specific financial initiatives EU Water Fund EUWF Sector specific finance EU member states; EC EC ACP Proposed one billion euro fund to support the EUWI. Providing co-financing and capacity building Potentially of interest, but some key issues need addressing: The potential bypassing of the EDF investment facility How to manage it without creating a new bureaucracy or agency, thus raising transaction costs How to make sure a sector-specific fund does not distort country-led, demand driven processes for aid requests., such a s within the PRSP 5 water initiatives Water Partnership GWP Partners network Knowledge network Ongoing initiative focusing on governance issues Governance issues are crucial to ensure better performance of aid flows to the water sector EUWI to build on results World Water Council WWC International thinktank and network INGO Key influence on the agenda for the World Water Fora EUWI to build on the WWC The World Panel on Financing Water Infrastructure Camdessus International Panel Camdessus paper presented at Kyoto. EUWI should draw on the research presented by the panel to inform its own decision making, and should build on the recommendations made in the report. Water Supply and Sanitation Collaborative Council WSSCC Cross between professional association and international NGO Donors (UN) Knowledge network. Not a provider of finance but only seed money to influence organisations EUWI to build on existing knowledge and documents Water and Sanitation Program WSP INGO WB and UNDP Seeks to influence policy in the water sector with strong regional presence. Ongoing projects EUWI should draw from ongoing projects analysing financing and in particular 61

5 examining financing issues, at a relatively micro-scale but still focused on water services rather than IWRM. examining the role of micro-finance in Africa. Business Partners for Development BPD Tri-sector Partnership Water Utility Partnerships WUP Professional organisation Donors Particular focus on exploring the merits of trisector partnerships for water and sanitation services UAWS Africa Created by professional organisation and training bodies in Africa. Prepared a toolkit for services to low-income communities. EUWI could consider scaling-up this initiative through additional involvement. EUWI could build on this organisation to identify good projects in Africa. World Bank Water Resource WB INGO + network WB, Neth, GEF, etc World Bank is developing a Water Resources Strategy in coordination with other organisations EUWI could develop a similar water resources strategy but building a specific EU line on water issues 6 Country-specific water initiatives The African Water Facility AWF Investment Support Tacis (water specific component) Multilateral European Africa Promote innovative actions, assist to create an enabling environment, help to build governance and management capacity Financing initiatives and programmes linked with the management of transboundary water bodies in the NIS Nile Basin Initiative NBI Direct investments Donors Nile Providing finance to large projects in the Nile basin on the basis of an integrated river basin management approach NIS The EUWI can use the AWF to channel funds for water projects in Africa. EUWI could collaborate with Tacis for the management of transboundary water bodies Innovative example of multi-donor facility. EUWI could scale-up and expand to other river basins. Partners for Water and Sanitation Professional partnerships UK Africa Professional partnerships to develop access of poor communities to water and sanitation EUWI could potentially scale-up this initiative, although not directly financial Netherlands multilateral Partnership donor and multilaterals Neth. Also known as the Dutch window. Partnerships with multi-laterals and in particular with the World Bank but also other regional banks. Partnerships between donors and multilateral has proved efficient for focusing on water. EUWI could potentially scale-up. 62