WACDEP Global Coordination Meeting

Port of Spain, Trinidad and Tobago

Andrew Takawira, Senior Programme Officer, WACDEP Africa

Investment planning and project preparation – lessons and experiences from

Africa

BACKGROUND

North West Sahara Aquifer (SASS)•Tunisia

Volta Basin (Burkina Faso and Ghana)

Lake Chad Basin (Cameroon)

Limpopo Basin (Mozambique and Zimbabwe)

Kagera Basin (Burundi and Rwanda)

WACDEP IN AFRICA

Piloted in 8 countries so far:

•Ghana •Burkina Faso•Cameroon •Tunisia•Burundi•Rwanda•Mozambique•Zimbabwe

WP 2: National development and sector plans

WACDEP builds on the lessons learnt in

IWRM Planning carried out from

2004 - 2009

Closing the planning loops

Water Reforms – 2000 (Africa Water Vision) and FFA??

IWRM Plans – 2005??

Water in development– how do we close the planning loop?

- Addressing water financing needs…

WATER CLIMATE DEVELOPMENT PROGRAMME -AFRICA

Water security and climate resilience integrated in Africa's growth and

development

Investments in regional and National

Development

Regi

onal

and

Tr

ansb

ound

ary

Coop

erat

on

Nati

onal

D

evel

opm

ent

and

Sect

or P

lans

No/

low

Reg

rets

In

vest

men

ts

Proj

ect P

repa

rati

on

and

Fina

ncin

g

Innovative Green Solutions

Dem

onst

rati

on

Proj

ects

Knowledge and Capacity

Development

Capa

city

D

evel

opem

ent

Know

ledg

e an

d A

war

enes

s

Partnerships and Sustainability

Gov

erna

nce

and

Fund

risi

ng

OU

TCO

ME

OU

TPU

TS

ACT

IVIT

IES

Enabling activities Integration, investments in Climate resilient growth and development

Taking identified priorities forward

• Investment planning – planning aimed at ensuring that projects are prioritised and funding (from different sources) is identified

• Project Preparation – developing prioritised investment options into fundable projects

INVESTMENT PLANNING

What we asked?

• What is an investment plan and its purpose?• What are the types of investment for water

security and climate resilience?• How do we fund (pay for) investments?• How do we consider resilience & robustness?• What institutional arrangements are necessary?• What process should we follow?• Who drives it and who must be involved?• What experiences do we have in Africa?• How do we ensure financing (investment)?

Investment plans support institutions to:

•Motivate priorities for investment

•Define institutional arrangements for implementation

•Estimate resource requirements

•Increase the understanding of costs and benefits

•Propose sources of funding

Purpose of an investment plan

Investment Planning Process in WACDEP

GWP teams in countries have been:

•Conducting assessments to better understand how investment

planning is being conducted

– New experiences – requiring to engage with Ministries of

Finance and sector planning department

– Context in each country differs – no one size fits all

•Output – Roadmap (technical brief) on investment planning

identifying entry points and recommending an option to support

through WACDEP

Understanding enabling conditions

(strategies; plans; institutions)

Water user associationWater user association

Who drives investment planning?

Municipality / WSPMunicipality / WSPLocal

Provincial(catchment/system)

National

Regional(basin)

Provincial Government (water & agric)Provincial Government (water & agric)

Basin organisationsBasin organisations

Regional Economic CommunitiesRegional Economic Communities

National Government (DWA, others)National Government (DWA, others)

International Basin Authority/Commiss

ion

International Basin Authority/Commiss

ion

Bulk UtilityBulk Utility

AU/NEPAD AU/NEPAD Pan- African

Depending on the identified entry points:

•Facilitate engagement with stakeholders to define the

investment objectives and expected outcomes

•In some countries – guidance is provided from Ministry of

Finance/Planning

•Align to capacity development programme – to ensure

planners have clear understanding (water security and

climate resilient development, no/low regret etc.)

Investment objectives (outcomes)

Defining investment priorities (projects)

Institutional and social development

Catchment water planning, protection,

information, utilisation & monitoring

Built infrastructure planning, construction, operation & maintenance

Green infrastructure conservation & rehabilitation

Cost and benefit analysis of identified options:

•WACDEP invested in a capacity development programme aimed

at ensuring that planners define better investment impacts

•Economics of Adaptation training with UNDP GEF with

planners from targeted institutions

•Key value addition to showing benefits (social,

environmental and economic) of investing in water security and

climate resilience

Investment impacts (costs and benefits)

Targeting and criteria for Financing the Investment Plans

Climate Finance

Investment Plan

Allocative efficiency Financial viability

Development outcomes

Social, economic&ecologicalcost & benefits

Financial viabilitycosts & revenue

Donors(transfers

)

Funders(capital)

Treasury(taxes)

Adaptation outcomes

Reduce vulnerabilities; increase adaptive capacity

WHERE ARE WE NOWAND

WHAT ARE WE LEARNING?

Countries have identified entry points and finalising development of

roadmaps

•At the national level (where we envisaged to work)

– Big national projects; big donors and players

– Need to define GWPs added value in national investment planning

(institutional capacity development aimed at strengthening national

planning departments ; stakeholder engagement – clear winners)

– Opportunities mainly in supporting resource mobilisation for plans and

strategies – costing exercises

– Cameroon, Zimbabwe, Rwanda and Burundi supporting national

investment planning processes

Defining entry points – scale

Greatest opportunity has been at the local level

•At the local level

– Clear and well defined demand from catchment management

institutions and level planning authorities

– Linking investments identified by catchment agencies to local and

national development investment processes

– Limited capacity in local institutions for investment planning

(especially catchment management institutions) are new and weak

– Demand for clear definition of priorities and better understanding of

investment impacts

– Tunisia, Ghana, Burkina Faso and Mozambique supporting national

investment planning processes

Defining entry points – scale

1. Investment Plan in support of water-related

sector strategy

– Burundi and Rwanda supporting in the development

of an investment plan to implement IWRM strategies

2. Stand alone climate investments ~ no / low regrets

– Mozambique identifying climate investments for

uptake in the Country Climate Investment

Programme from the catchment institutions

Emerging Focus on Investment Planning

3. Mainstreaming water security and resilience into other

investment plans

– Zimbabwe supporting Resource Mobilisation Strategy for the

Climate Change Response strategy (focusing on WS&CR issues)

– Cameroon supporting the National Biodiversity Strategic Action

Plan

– Ghana mainstreaming into Local Development Investment Plans

– Tunisia mainstreaming investments from the watershed into the

Water and Land Preservation Strategy

– Burkina Faso support to developing an investment plan for local

IWRM Plan

Emerging Focus on Investment Planning

Entry points – WACDEP Investment Planning

Local

Provincial(catchment/system)

National

Regional(basin)

Municipality / WSPMunicipality / WSP

Municipal water services

development plan ????

Bulk UtilityBulk Utility

Provincial Government (water & agric)Provincial Government (water & agric)Ghana –White Volta

Pan- African AU/NEPAD AU/NEPAD PIDA

International Basin Authority/Commiss

ion

International Basin Authority/Commiss

ion

Kagera Investment Plan

LCB

Investment Plan

Regional Economic Communities.Regional Economic Communities.SADC Regional Infrastructure

Plan

ECOWAS Groundwater Investment

Water usersWater usersTunisia –

W&L Strategy

Basin organisationsBasin organisations

BF - Nkanbe

Moz- Climate

investments

National Government (DWA, others)National Government (DWA, others)NCCRS - Zimbab

we

Green Growth and CR Strategy

- Rw

Cam - National

Biodiversity Plan

Burundi – WRM invest.

plan

We have a critical role to play in supporting

investment planning

– Through institutional development at all levels –

for better investment planning

– Convening diverse stakeholders and promote

integrated investment planning

– Supporting institutions to better define the

investment impact of interventions/projects

identified (as this attracts funding)

What does this all mean for GWP?

PROJECT PREPARATION

National budget allocation per sector in Africa

Regional Development Banks (2012)

Regional Development Banks Support to Sectors

Among other issues specific to water financing inadequate project preparation has

been identified as an area of concern

GWP is working with the

ICA (Infrastructure Consortium

for Africa) to bridge the gap

between project lists (demand)

and getting projects funded

(supply)

Project Preparation in WACDEP

Key insights in project preparation

Project Preparation Cycle

Enabling Environment

Project Definition

Project Feasibility

Project Structuring

Marketing

Transacting

Identifying legal , regulatory,

institutional and other impediments

Sector Planning, Project Identification &

Screening

Detailed engineering, environmental,

social and economic appraisals

Detailed financial and legal structuring

Promotion of the Project and

Assessment of interests

Procuring & Negotiating Project

Documentation and finance

Project Preparation Funding

Considerations for WACDEP support

Focus of current support from

the ICA – GWP supporting institutions at different levels

Enabling Environment

Project Definition

• Enabling Environment –

being done under Work

Package 3

• Also working from existing

investment plans

• Support provided by ICA for

a Finance Expert to assist in

better defining projects and

project impacts

Deliverables: •13 Pre-feasibility Studies (with investment impacts) to take forward to project preparation facilities•Report on constraints and bottlenecks to project preparation•Report on Funding sources•Pan-African Conference on Project Preparation

Added value of GWP involvement in

the Early Stage

• Contributing to the early stages which are under funded leading to weak prioritisation of projects

• Increasing the understanding of challenges, bottlenecks and constraints for different types of climate-water projects in varying contexts and in the project cycle

• Project preparation of distinct projects in diverse contexts to support water security and climate resilience at varying scales

• Identification of potential funding sources and access to ICA partners

• Capacity and insight to develop projects with varying sources of finance supported by different funding sources

Moving forward with Africa Water Facility

Enabling Environment

Project Definition

Project Feasibility

Project Structuring

Marketing

Transacting

Detailed engineering, environmental,

social and economic appraisals

Detailed financial and legal structuring

Promotion of the Project and

Assessment of interests

Procuring & Negotiating Project

Documentation and finance

GWP’s role and added value

in the middle and late stages

• Opportunity to work with the Africa Water Facility in taking forward the Pre-Feasibility Studies and existing projects in Investment Plans (Limpopo and Kagera)

GWP’s role of institutional development – to ensure institutions have the capacity to interact with experts

Knowledge Sharing Engaging diverse stakeholders ???

• How can our partnerships play a role in the project preparation cycle?