Asian Development Bank (ASX: ATB) expects to double the investments it will finance in the water sector over the next five years according to plans announced at the 4th World Water Forum here today. The move recognizes the clear link between clean water and reducing poverty and is intended to make a significant contribution to the achievement of the Millennium Development Goals (MDGs).
This new Water Financing Program will greatly increase ADB's water investments for 2006-2010, which could grow to well over $2 billion annually. This would make water a core business area of ADB's operations.
"In addition to meeting MDG target 10 of halving the proportion of people without safe drinking water and adequate sanitation by 2015, investments in water are also crucial in meeting other targets such as those relating to the incidence of poverty, the proportion of the world's poor who suffer from hunger, reducing child and maternal mortality, the incidence of major diseases, and environmental sustainability," says Geert van der Linden, ADB's Vice-President for Knowledge Management and Sustainable Development.
ADB's stepped-up efforts flow directly from the report of the World Panel for Financing Water Infrastructure in 2003 (the Camdessus Report) and its successor, the Gurria Task Force on Water Financing in 2006.
Despite good progress made, the Asia and Pacific region is still falling short of targets due to rapid population growth and greatly increased urbanization, as well as low performance in delivering water services. In 2002, about 700 million people in the region lacked access to safe water supply and some 2 billion lacked access to adequate sanitation - about 75% of the world's total.
The Asia Water Watch 2015 study commissioned by ADB, WHO, UNDP, and UNESCAP estimates that annual investments of $8 billion will be needed over the next decade to meet MDG targets for safe drinking water and sanitation alone. In addition, investments are needed in irrigation services, river basin management, flood management and mitigation, and wastewater management. A wide range of governance, institutional, social, environmental, and political issues makes this an even bigger challenge.
The new ADB program will focus on the delivery of substantial investment, reform, and capacity development in three key areas - rural water services, urban water services, and river basin water management.
"As we start the second five years of implementing our Water for All policy, we are ready to step-up water investments in the Asia-Pacific region through long-term partnerships with ADB's developing member countries and closer collaboration with the private sector and civil society," says Wouter Lincklaen Arriens, ADB's Lead Water Resources Specialist. "We have also updated our financial products to meet the changing needs of our clients."
Concrete outcomes of the program will be safe drinking water and improved sanitation for about 200 million people, improved irrigation and drainage services affecting livelihoods of 40 million people, reduced flood risk for about 100 million inhabitants in rural and urban areas, and integrated water resources management introduced in 25 river basins.
In addition to ADB's ongoing and planned program of water investments in countries across the region, significant increases in are expected in People's Republic of China, India, Indonesia, Pakistan, the and Viet Nam. As part of the program, ADB will mobilize cofinancing and investments from government clients (through counterpart financing), the private sector, and multilateral and bilateral partners. Higher levels of grant cofinancing assistance are expected to support the program through a range of modalities.
"In the end, we are not just talking about investment here," says Mr. Van der Linden. "ADB's Water Financing Program combines expanded investments in water infrastructure with a strong emphasis on good governance to manage water as a resource and as a service, with people in the center, leadership at the national level, and a focus on better decision-making and implementation."
About ASIAN DEVELOPMENT BANK: ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 64 members - 46 from the region.
In 2005, it approved loans and grants for projects totaling $6.95 billion, and technical assistance amounting to $198.8 million.