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ADB ADB

NEWS FROM THE ASIAN DEVELOPMENT BANK

DECEMBER 2006JANUARY 2007

Policy Notes Is ADB delivering on its Water Policy? Project Proof Rural, Urban, and Basin Water Projects Analysis The New Water Financing Program

DOUBLING FINANCING TO GET DOUBLE THE RESULTS


December 2006January 2007

www.adb.org/review
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WATER

Volume 38, Number 4 December 2006January 2007

ADB

LONG QUEUE FOR RELIEF The new Water Financing Program aims to reduce the risk of floods for about 100 million people in Asia and the Pacific

WATER FOR ALL


lens for analyzing water projects yield greater results?
ADB Photo Library

5 PROJECT PROOF Three Streams to a Thriving Future Rural, urban, and basin waterwill ADBs new 6 Safe, Easy Water: When Women Want It, They Get It 7 Phnom Penhs War-Torn Water System Now Leads by Example 8 Suzhou Creek is Shanghais Comeback Kid 10 ANALYSIS Water Makes a Country Grow
By upping its investment offer, ADB finds an appetite and a bitein countries that believe in water to either support or juice up their growth rates ABOUT THE COVER AND THIS ISSUE
ADBs Water Financing Program 20062010 will ensure that investments work better and deliver actions where they count the moston the ground. This ADB Review issue acknowledges the challenges in providing safe and reliable water sources for all, and the steps being taken to achieve this goal. Photo by Steve Griffiths
ADB Review, Department of External Relations, Asian Development Bank, 6 ADB Avenue, Mandaluyong City 1550, Philippines; review@adb.org; Fax +63 2 636 2648; www.adb.org/review. In this publication, $ refers to US dollars.

with ADB, five countries identified barriers to doubling their investments in water

23 POLICY NOTES Improving the Flow


Is ADB delivering on its Water Policy? Yes and no, says an external review panel

SAFE, EASY, AND RELIABLE Governments are improving old water systems, building new infrastructure, and seeking to ensure that the poor are guaranteed water services

25 Funds Flow-On Effect


After almost 5 years and over $15 million in grants, has ADBs Water Fund been well spent?

18 Are Countries on Track to Meet Target 10 of the MDGs? 20 INTERVIEW Building Bridges Over Troubled Waters
New ADB mandate to double water investments

26 PILOT AND DEMO Tapping Innovation


Big ideas worth testing on a smaller scale get a boost from a special fund

22 COUNTRY DIALOGUES Reservoir of Ideas


Before a typhoon could interrupt finance talks

DEPARTMENTS
9 News for NGOs 29 Bookstore

December 2006January 2007

Bangladesh Daily Star

OVERVIEW
PROSPEROUS TIMES AHEAD This Cambodian woman is just one of millions who will stand to benefit from the Water Financing Programs goal to double investments in water in the Asia and Pacific region

THE

WATER THRESHOLD
Theres plenty to worry about where water is concerned, but there are also signs of progress and initiative to celebrate
By Melissa Howell Alipalo

Communications Specialist and Writer for RSIDs Cooperation Fund for the Water Sector

ater is big news. Rarely does a day pass when a water issue is not featured prominently in the media. It is news when water supply projects come to town, when chemicals contaminate drinking water, when floods wash away lives and livelihoods, and when economies show signs of stagnation because of diminishing water resources. And it is news when industries and commerce are forced to look elsewhere for their water needs. Less prominent are the everyday stories of the silent masses without access to safe water supply. The figures are staggering: one in five people in Asia and the Pacific lacks access to safe drinking water. Half the regions population lacks access to sanitation.
December 2006January 2007 3

Steve Griffiths

LOCAL TECHNOLOGY Rainwater catchment on the airport runway in Majuro, Marshall Islands

Governments are seeking innovative solutions, spending more of their own money on water, and are willing to borrow more for water. Also, they now have a better understanding of the value of partnerships with the private sector in water issues. Conservation Taps Technology Water technology has developed with conservation in mind. For example, a standard flush toilet today consumes six times less water than it did 10 years ago. Drip irrigationwidely used and shown to help conserve water in developed countries is being used increasingly across Asia and the Pacific, and helping reduce poverty among farmers who lack access to irrigated land. Governments in the region are showing the willingness and the commitment to face the water challenge head on. However, the success stories remain outweighed by the challenges that still exist. And that is what this special issue of ADB Review is about: acknowledging the challenges that face the region in its quest to provide safe and reliable water resources to all people, and especially the poor, and recognizing the bold and ambitious initiatives already underway and those planned to help change the water status quo. We examine ADBs new Water Financing Program 20062010, which is a commitment to more than double investments in water in the region over the next 4 years, and the Water Financing Partnership Facility, which aims to raise $100 million in grants that will support governments willing to take on reforms and develop skills within their institutions, utilities, and communities. And we ask ADB water operations staff for their views about the barriers and opportunities that exist in some of the regions fastest-growing economiesthe Peoples Republic of China, India, Pakistan, and Viet Nam, as well as in the slower yet hopeful economies of Indonesia and Philippines. Through this issue of ADB Review, readers will gain a greater understanding of the many factors contributing to Asias water woes and the streams of action ADB, governments, and the communities need to undertake to help preserve, and achieve equitable access to, our most precious natural resource: water.

Governments in the region are showing the willingness and the commitment to face the water challenge head on. However, the success stories remain outweighed by the challenges that still exist
Of the 2.6 billion people worldwide without adequate sanitation, 2 billion live in the Asia and Pacific region. People suffering from easily preventable waterborne diseases take up half the worlds hospital beds. Each year, waterborne diseases, which are often easily treatable, kill more people than HIV/AIDS and malaria combined. Each year, five times more children die from waterborne diseases than from HIV/AIDS. Yet, a simple standpipe can reduce mortality from waterborne diseases by 20%. Patchy Support Despite the news stories and the resulting increasing public awareness of water issues, international economic support for water 4

projects has been patchy. And money spent on water does not always result in improving the access or quality of water for the poor, researchers say. The most desperate countrieswhere less than 60% of the people have access to improved water sourcesreceive the smallest amount of project funds and water aid: about 12%. Widespread criticism of governments and decision makers failure to act on the current water situation abounds. The term water apartheid has emerged to describe the inadequacies and unfairness of the way in which water issues have been managed by decision makers, but the question remains: why arent those in a position to do more to improve the access and quality of water to all people not acting at all, or not acting fast enough? However, some governments, in recognizing the dismal state of their water, are working to improve old water systems and build new infrastructure. They are legislating to protect water resources, seeking to ensure the poor are guaranteed services and rights over water resources, and are investing in new areassuch as enhancing the capacity of local government, utilities, and communities to deal with water issues.

December 2006January 2007

ADB Photo Library

PROJECT

PROOF

Three Streams to a Thriving Future


Rural, urban, and basin waterwill ADBs new lens for analyzing water projects yield greater results?
By Abby Tan
Writer for RSIDs Cooperation Fund for the Water Sector

f football were played the way most water resources are managed, the game would be chaos. Water governance could learn a thing or two from foot-

ball. In football, the game isnt contained to just one corner of the field or controlled by one player for very long. No, the game splices in any given direction, at uneven paces, and with great unpredictability. What holds the game together are players who know their role, know the potential impact of their move and the rules governing the game. Water is like football in that they both by designare not easy to contain, yet need rules to thrive. Water cuts across diverse

landscapes, is managed by dozens of different government ministries, and used by multipleoften rivalusers. It is hard to call water a sector (like football is called a game) because its management and use often lack the rules needed to give it efficiency and effectiveness. As a result, water resources have been depleted, polluted, and unfairly distributedoften leaving the poor on the sidelines with no services and the water resources in dismal conditions. How long can this go on? Rules are exactly what water in Asia and the Pacific need. The principles of integrated water resource management (IWRM) are the rulesthe approachthat leading global and regional institutions have been advocating for years. The problem is that everyone in Asiaor even the majority of governmentsis not playing by them, and, as a result, is faced with rivers either running

too dry, flooded, or polluted to sustain their economic growth. IWRM offers governments a solution. It is all about coordination and thinking holistically to meet the demands from different sectors and between urban and rural areas. ADBs Water for All Policy advocates implementing IWRM in basins specifically, as they are the foundation for sustainable use by the various urban and rural users. Yet, to know how to manage basins, we must know the water situation in rural and urban areas. Internally, ADB has applied a new lens for studying the current status and direction of its water operations, and the management of water resources in the region. Projects are identified as either rural, urban, or basin in nature, and ADB project staff have begun working together in small groups to identify the specific issues, trends, barriers, and possible solutions for rural, urban, and basin water problems. The following series of articles looks more closely at exactly what ADB means by rural water, urban water, and basin water and the kinds of projects that characterize them. The idea behind this threepronged approach is that an integrated plan for water can be assembled only when the mechanics of its parts have been understood. Only then can Asias water resources and urban and rural economies truly have a chance of thriving.

Rural Water
Postcard snapshots of tranquil Asian rural scenes can be deceptive. Rural life is not all free smiles, golden harvests, stately mountains, and a patient pace of life. Reality is harsher than that. But it could be made a lot easier by way of watermore water for irrigating fields, better drainage to prevent floods, drinking water within reasonable reach of peoples homes, and simple sanitation. Governments and private-sector investors tend to give these kinds of improvements low priority, though, simply because the economic returns on their investments are not high enough. However, the return is huge for the individuals who are spared from dry fields, floods, hours of

Water supply. Sanitation. Irrigation. Drainage.


walking for water, and unsanitary environments around their home. The challenge is to find and implement simple technologies. Easy access to communal hand pumps, village standpipes, and collected rainwater can dramatically improve the quality of rural life. There is a need for new flood management methods to be introduced and greater investments in irrigation. Marginalized farmers must come into sharper focus for irrigation investments to truly reduce poverty. MAXIMUM GAINS Easy and reliable access to waterfrom communal hand pumps to village standpipescan dramatically improve the quality of rural life
Enrico Francisco

December 2006January 2007

Safe, Easy Water: When Women Want It, They Get It


By Abby Tan
Writer for RSIDs Cooperation Fund for the Water Sector

hen potable water supply and sanitation finally started arriving in some of the most remote villages in the Philippines, project implementers noted a common factor: takecharge women. Where women were organized and actively ran the local water user groups, projects succeeded, whether in northern tribal areas or the lowland areas of Samar, Leyte, and Panay islands. The relationship between women and water is life itself. Because from daybreak to sunset, women deal with water, in bathing, cooking, and washing. It is the lifeline for women, says ADB Gender Specialist Jennifer Francis. Women are also the primary caregivers of family members who fall ill from waterborne diseases. The lack of safe drinking water is a major culprit of the kinds of diseases which affect an average of two out of three people in rural Philippines. To get at this problem, the Rural Water Supply and Sanitation Project aimed to bring safe and reliable water supply and sanitation systems, as well as education on health, hygiene, and monitoring water quality, to 3,000 of the most remote communities in 20 of the poorest provinces of the Philippines. Ultimately, 60,000 toilets and latrines were built in villages and schools. They can now take a bath daily. Before that they couldnt; it was a luxury to take a pail of water for bathing, says Project Consultant Edna Balucan. The most efficient and self-sustaining of the projects have been where womens involvement was the highest. Ms. Balucan said women usually took over the discussions in the user group meetingsan observation shared by ADB Project Officer Paul van Klaveren. From the men you get the formal answers, he says. From the women, you get the real story. These user groups were tasked with determining how the new water supply would

LIFELINE Women deal with water from daybreak to sunsetmaking them the ideal organizers and managers of local water user groups

be distributed and paid for. Having a say gave women a sense of ownership, which drove their enthusiasm for the project. The all-women board of the Bulan Bulan village

user group in Guimaras used monthly fees to finance the construction of a water tank on top of a hill. A spring about 2 kilometers away supplied the tank, which fed water through a gravity system to 26 communal faucets that serve more than 100 households. Women beneficiaries were also known to act on their own initiative. ADB Senior Urban Development Specialist Rudolf Frauendorfer recalled a woman in the Cordilleras who kept a meticulous record of how much she had collected from users and had spent on repairs for the village water system. I was astounded, he says. Similar female initiatives have been reported elsewhere. Three user groups in Southern Leyte have succeeded in collecting monthly fees to sustain the facilities and are now moving forward to install water meters for individual household connections. In Eastern Samar, three villages joined forces to form a federated user group to share the water source from a spring. Their operation and maintenance has led to further sharing with another village, and they are upgrading the system to allow for individual connections. ADB Transport Specialist Shigehiko Muramoto says, If somebody teaches them (the women) how to run the water supply systemwhether it is the institutional, financial, or the technical aspectsthey can do it.

Joe Cantrell

Rural, Urban, and Basin Water Lending


(19682007, 3-year moving average)

800 700

2001

2005

Lending in $ million

600 500 400 300 200 100 0 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

Rural water

Urban water

Basin water

December 2006January 2007

PROJECT

PROOF

Urban Water
If cities are the engines of a countrys economic growth, then water is the oil that keeps those engines running. Common among many Asian cities, though, is the fact that water shortage and pollution are stunting growth, making it more expensive to do business and do it efficiently. This is true for the employer and the employee. The productivity and efficiency of the labor force suffer just as much as industries and services when water services are poor. Like businesses, people mitigate these circumstances by investing their own time and money into the problemtime and money that could be better spent if the proper water services were in place.

Water supply. Sanitation.


Water could also be helping raise urban economic standards of living. Inside the miserable housing conditions of city slums are the bulk of the citys workforce. Yet they are the ones often faced with the worst domestic water and sanitation conditions. Their ability to live healthy, productive, and efficient lives must be secured and preserved for their own sake as well the economys. From anyones perspectivethe industrialist, the taxi driver, the hotel manager, or restaurant waiterwater is important for the urban economy, for urban livelihoods, and overall quality of city life.

Phnom Penhs War-Torn Water System Now Leads by Example


By Ma. Christina Dueas
Knowledge and Communications Coordinator for RSIDs Cooperation Fund for the Water Sector

Jay Delfin

BUSINESS UNUSUAL An example of Manilas small piped water networks

n 1993, the state of Phnom Penhs water supply system was prime evidence of the devastation that Cambodias 20year civil war and the Khmer Rouge rule had dealt the city. The water system, the capacity of which had shrunk by 40% between the 1960s and early 1990s, was in a state of serious deterioration. With century-old pipes and a poor distribution network, roughly only a quarter of the population received piped water. The Phnom Penh Water Supply Authority (PPWSA), the Government-owned water supply utility, was barely functioning. Employees were demoralized and underpaid. Only 13% of connections had water meters. Only 28% of the water produced for the system was actually sold, with the collection rate not even reaching 50%. Illegal connections were prolific. Even worse, the employees were responsible for much of the water theft. They were installing illegal connections at $1,000 per connection and receiving kickbacks from large consumers in exchange for lower meter readings. The year 1993 marked the dramatic

turnaround of PPWSA. With funding from ADB, and through internal reforms, PPWSA transformed itself into an efficient, selffinanced, autonomous organization. At the helm of the authoritys culture of change was the young engineer Ek Sonn Chan. In his culture of change, Ek Sonn Chan did several things. He streamlined the utilitys workforce by giving more responsibility to higher management, promoting promising staff, raising salaries and provid-

ing incentives, and fostering teamwork. He improved collection levels, installing meters for all connections, computerizing the billing system, confronting prominent nonpayers, and cutting off water if they refused to pay. He rehabilitated the whole distribution network and treatment plants by hiring locals instead of international consultants. As most of the blueprints for the pipe system were destroyed during Cambodias

Larry Ramos

A CULTURE OF CHANGE Ek Sonn Chan, general director of the Phnom Penh Water Supply Authority, one of Asias most efficient utilities, visited ADB while in Manila to accept the Ramon Magsaysay Award for Government Service. ADB staff member Xiaoyan Ye (right) worked with Mr. Chan on the Phnom Penh Water Supply Project in the 1990s.

December 2006January 2007

PROJECT

PROOF

civil war, he painstakingly searched for the pipes, and mobilized communities to report leaks. He minimized illegal connections and unaccounted-for water by forming inspection teams to search for illegal connections, penalizing water thieves, and giving incentives to the public to report illegal connections. And he increased water tariffs to cover maintenance and operation costs, through a three-step increase in tariffs over 7 years, although the third step did not push through because revenues had reached sufficient levels. Phnom Penhs water service now operates 24 hours a day, covers all of inner-city Phnom Penh, and is being expanded to surrounding districts, with priority being given to urban poor communities. In particular, PPWSA now serves 15,000 families in 123 urban poor communities, giving the poor extra privileges such as subsidized tariffs or connection fees, installment connection fees, and more. Nonrevenue water has also decreased from 72% to 8%, while bill collection is now at 99.9%. Mr. Chans efforts have been duly recognized. He received the 2006 Ramon Magsaysay Award for Government Service, the regions version of the Nobel Prize. Looking back on his achievements, Mr. Chan says, It doesnt matter whether water distribution is done by the private sector or a public agency, as long as these institutions are transparent, independent from political pressures, and accountable.
Visit www.adb.org/water to request a copy of the DVD, Water Voices, which features the story of Ek Sonn Chan and the Phnom Penh Water Supply Authority.

Basin Water
Healthy rivers. Flood management. Hydropower.
Imagine a wetland the size of France that is the area of the basin of the three mother rivers that emerge from Russia to meet at the northeastern Chinese border in Heilongjian province and drain into the Sea of Okhotsk. This vast river basin once supported thriving agricultural communities. But 50 years of efforts to control floods have resulted in even worse flooding upstream, more frequent droughts downstream, reduced agricultural production, and declining biodiversity. Similar problems occur in river basins across Asia. To reverse such damage, governments and communities are introducing new ways of managing and sharing water resources. Often, this requires setting up a basic legal framework that determines who has the authority to manage the basin, which may comprise rivers, lakes, forests and wetlands, and encompass cities as well as vast agricultural tracts. For many basins, these issues are further complicated by ecosystems that cut across administrative and, in some cases, national, boundaries. Water users across many sectors need to agree and abide by a set of rules to jointly operate flood management, hydropower, irrigation, and water supply infrastructureor risk dissipating the limited resources available. The health of the regions river basins and the communities that depend on them will increasingly depend on peoples willingness to manage each basin in ways that integrate the multiple demands on its resources.

Suzhou Creek is Shanghais Comeback Kid


By Cezar Tigno
Web writer for www.adb.org/water

KyeongAe Choe

REGIONAL RESOURCE Sanjiang Plain wetlands in Heilongjiang Province, PRC

It doesnt matter whether water distribution is done by the private sector or a public agency, as long as these institutions are transparent, independent from political pressures, and accountable
Ek Sonn Chan, General Director of the Phnom Penh Water Supply Authority

hanghais Suzhou Creek, a tributary to the Huangpu River, which cuts across Shanghai before meeting the mighty Yangtze River, breathes almost normally these days, thanks to the efforts of the city government and people of Shanghai. The once murky and fetid river has been transformed into an ecological wonder. For too many decades, though, the 53 kilometers of the river served as a convenient sewer for the city as Shanghai grew to become one of the worlds largest mega-

cities. The 1970s and 1980s saw Suzhou Creek in a sordid state as the water turned black and putrid. Makeshift houses and small industries lined the riverbanks, adding to the polluted waters. A green heart to the city was a distant dream. Shanghais government embarked on the huge task to clean up the creek through the ADB-financed Suzhou Creek Rehabilitation Project. The major problem proved to be the task of managing the continuous stream of raw sewage dumped into the river and the adjoining canals. The project constructed control gates to control flows of waste from side canals and to increase water flow in the main channels. The city

December 2006January 2007

NEWS FOR NGOS


New Fund to Boost Clean Energy Projects
ADB has approved the creation of the Asia Pacific Carbon Fund to boost clean energy projects in Asia and the Pacific. Part of a broader Carbon Market Initiative, the fund will be an additional financial source at the early stage of project formulation through payments for future certified emission reductions. Combined with ADBs financial services, it will provide upfront capital and enable projects addressing renewable energy and energy efficiency to move forward. For more information, contact Toru Kubo, Clean Energy and Climate Change Specialist, Regional and Sustainable Development Department, at tkubo@adb.org.

Steve Griffiths

used special boats to pump oxygen into the river to improve water quality. The old wharves, industries, and houses along the river were dismantled and relocated. The project supported a comprehensive resettlement plan that ensured the relocation of 7,700 people affected by the rehabilitation project; and also created new employment opportunities for almost 4,000 skilled and unskilled workers. Wastewater is now collected in a sewer network that transports it to be processed at a state-of-the-art water treatment plant. Once treated, the water is discharged back into the river, helping flush out more filth. The network and treatment process is an essential, basic measure to prevent sewage from entering the river, says Xu Zuo Zheng, General Manager of the Shanghai Suzhou Creek Rehabilitation Construction Company. The city government is rightly proud of a new solid waste transfer station, which has replaced numerous unsightly barges that once collected and transported solid waste. Built in Jingan District, in the heart of Shanghai, the garbage transfer station is of the best international design and is often mistaken as a typically stylish urban building, its true function unsuspected. After the cleanup was completed in September 2005, the city government invited residents to plant trees and flowering bushes in new parks created along the banks of Suzhou Creek. Getting the peoples support and involvement was an

RIVER REVIVAL Shanghai has turned from its polluting ways to now be Suzhou Creeks best friendpromoting and protecting it from dumping of urban water

Rating ADBs Work


ADB is viewed as effective and largely successful in its work, but still has room for improvement, according to an independent perceptions survey of 700 opinion leaders from government, media, civil society, academia, private sector, and development partners in 30 countries. Respondents recognized ADB for its contribution to development, and noted its operational excellence in areas such as infrastructure, and regional cooperation and integration. However, they believe that ADB is spread too thinly and has excessively bureaucratic procedures. For details, contact Sue Hooper, Public Affairs Specialist, Department of External Relations, at shooper@adb.org.

important element contributing to the success of the rehabilitation efforts, says Eri Honda, an Urban Development Specialist at ADB. The government invited older residents to write poetry about the beautiful Suzhou River they remembered from their youth. A new museum about the history of Suzhou Creek was built to promote greater environmental awareness among Shanghai residents. Residents now enjoy the river and some even do their early morning exercises along the banks. The revival of Suzhou Creek continues, with hopes of bringing back aquatic life by 2010. Mr. Xu says, With improved water quality and the renewal of the embankments, Suzhou Creek should become a place for sightseeing and tourism. Ms. Honda says she has already seen many people canoeing in the river. For Shanghai residents, maintaining Suzhou Creeks health means keeping their city healthy and alive. Vice Director Zhu Shiqing, of the Shanghai Water Authority, says, Environmental protection is now the citys priority. If the environment is not protected, economic development will be negatively affected.
Visit www.adb.org/water to request a free copy of the DVD, Chinas Water Challenge, which features the cleanup of the Suzhou Creek.

Developing Business Skills in Rural Cambodia


The Cambodia Business Initiative in Rural Development Foundation will soon mobilize rural communities and business associations in Cambodia, with support from government agencies, NGOs, and donors. The idea for the foundation grew out of an ADB technical assistance project that sought to connect rural villages with companies to help them develop business skills to improve income and living standards.

December 2006January 2007

PART OF THE PIPELINE Governments are ramping up investments in infrastructure to spur growth

By upping its investment offer, ADB finds an appetiteand a bitein countries that believe in water to either support or juice up their growth rates

U
Writer

By Eric Van Zant

nder its new Water Financing Program, ADB is offering to double spending on projects in the water sector as a means for ramping up investments in infrastructure that is critical to capturing and sustaining the huge new opportunities emerging in Asias booming economies.

Making a Country

GROW
10 December 2006January 2007

When you arrive in Bangalore, you can smell the money, says Keiichi Tamaki, an ADB Urban Development Specialist, and its looking for a good place to park. For the past few years, investors have streamed into the capital of Indias southwestern Karnataka State, home of its high-tech and outsourcing boom, eager for return. Hardly a week passes without an article in the global media about the economic opportunity in Asias Silicon Valley, where Tata, Infosys, and Wipro hold court with the worlds information technology (IT) giants. It is, indeed, a worthy symbol of Indias emergence after decades-long economic stagnation. However, money avoids risk if it can and if India is to continue attracting investment to places like Bangaloreand if it is to ensure that benefits of large-scale investment accrue also to the poorestit needs to deal with the deplorable state of infrastructure in many parts of the country, including in Karnataka State. Similarly, in countries throughout Asia, where economies have been booming in recent years, governments need to ramp up investments in the infrastructure upon which growth depends.

ADB Photo Library

A N A LY S I S
ADBs Water Financing Program (WFP) is designed precisely to help countries meet the infrastructure challenge in the water sector, which represents perhaps the most critical gap in financing. Safe and reliable water sources, and the resources upon which they depend, are integral to sustained economic growth, and to meeting the targets of the internationally agreed Millennium Development Goals for reducing poverty. The WFP will initially focus on six countries: the Peoples Republic of China (PRC), India, Indonesia, Pakistan, Philippines, and Viet Nam, which together account for a large part of the regions population and are among ADBs biggest clients. However, the program is open to all ADBs developing member countries (DMCs). Modest and Unpredictable ADBs investments in the water sector over the last 15 years has been modest and unpredictable, averaging $790 million a year from 1990 to 2005, and ranging from $330 million in 2004 to $1.4 billion in 2005. WFP is an offer to increase ADBs overall investments in water operations to an average that is well over $2 billion annually in the next 5 years. In the first phase, ADB has programmed $2.4 billion for 2006, $1.8 billion in 2007, and $1.7 billion in 2008. In the second phase, in 20092010, total delivery could reach $12 billion over 5 years. WFP will also mobilize cofinancing and investments from government clients, the private sector, and multilateral and bilateral partners. Through much of the area covered in the six countries, actual demand for new projects in the water sector is huge. Indeed, it is unlimited in India, says Hun Kim, Director of ADBs South Asia Urban Development Division. The issue becomes how to transform that demand into bankable projects. In most of the countries, the capacity for project design and implementation is complicated by the lack of skill, including in India. In several countriessuch as Indonesia, Pakistan, and Philippinesthat shortfall has been complicated by the decentralization of government services from federal to lower-level governments. To deal with these issues, the WFP will be backed by a grant facilitythe Water Financing Partnership Facilitythrough which more than $100 million in grants may be distributed to top off current projects and fund programs that will develop human resources in public utilities and groups that manage water resources. In others, such as the PRC and Viet Nam, borrowing or lending caps in one form or another make it difficult to boost lending for water-sector projects. However, reforms in recent years have made ADB financially more flexible, introducing several new products that will help governments with limited expertise and funds to create projects to improve rural, urban, and basin water resources. Measures such as the multitranche financing facility (MFF), for example, offer a line of credit (a sort of up-front, umbrella financing) that can be drawn down by a government as needs emerge or the capacity to carry through a project develops. It can combine public-sector lending with sub-sovereign lending and private sector operations. Part of a Larger Effort Just as water has moved up ADBs development agenda, it is gaining more recognition within government ministries and the media. The PRC and India have become a favorite place for international journalists to illustrate the critical nature of Asias water conditions. But nearly every other developing country is facing what the PRC and India are facing, in addition to their own local water issues. ADBs WFP is a part of the solution to Asias water woes. As Asias economies boom, they are creating a huge need for enabling infrastructure to continue attracting eager investors and to ensure capital flows into areas outside the economic centers where poverty is often highest. In places such as Indias Karnataka State, and in the other five WFP countries, and throughout ADBs DMCs, the WFP will seek creative solutions to ensure that the development of water sector infrastructure keeps pace with the increasing demands placed upon it. However, more financing, more partners, and more commitment by governments are needed to continue the investment momentum that this program is attempting to start. The following sections outline some of the opportunities for and barriers to expansion of investment in each of these six countries, as well as some of the barriers to investment. The sections also highlight just some of the projects now emerging from the pipeline that will define ADBs WFP.
TAPPING THE POTENTIAL Demand for new water-sector projects is huge; the issue is how to transform that demand into bankable projects

December 2006January 2007

11

Ian Fox

Reforms in recent years have made ADB financially more flexible, introducing several new products that will help governments with limited expertise and funds to create projects to improve rural, urban, and basin water resources

Peoples Republic of China


Few countries are more directly impacted by water issues than the PRC. Despite having the worlds fourth largest freshwater reserves, the PRC, with just 7% of the worlds water supplies yet 21% of its population, is likely to face severe water challenges over the coming years. Issues include severe water pollution, inadequate urban and rural water supply, and the intense demand for water from booming industries, farms, and sprawling cities. These water-sector challenges can only be addressed through a coherent and integrated national water policy, a change in behavior, and a greater understanding of the challenges the country faces. The PRC Government also sees the private sector as playing an integral role. There are a lot of areas that could be further improved to increase investment, says Amy Leung, an Urban Development Specialist in ADBs East Asia Department. She notes, however, that it will be difficult given the cap on lending to the PRC at $1.5 billion; of that about 41% is for transport, 25.3% for agriculture and natural resources, 22.5% for social infrastructure, and 11.3% for energy. There is no lending cap, however, where projects involve private sector participation. In the water sector, ADB has also focused on improving the urban environment, public health, and quality of life for urban residents through improving wastewater management and supply of potable water, construction and rehabilitation of sewer networks, and strengthening water resources management. For example, the recently completed and ADB-financed Suzhou Creek Rehabilitation Project to clean up the Suzhou Creek was important and a big success, says Ms. Leung. The once murky and severely polluted river, which passes through Shanghai, has been transformed into an ecological wonder. Meanwhile, a second phase of a project to improve the handling of wastewater in

PEOPLES REPUBLIC OF CHINA The Yellow River, infamous for great floods, is slowly dying because of pollution and overdrawing; (below) a mother and her son from drought-stricken Gansu province also need a steady supply of clean, safe water

the capital of Hebei Province was approved this year with a $100 million loan. Wuhan is home to almost 8 million people and is a center of communications, education, culture, commerce, trade, transportation, and industry. The project will construct new and upgrade existing wastewater treatment facilities, extend and rehabilitate collection networks, and add larger-capacity stormwater pumping stations, among others. The city aims to treat 80% of its wastewater by 2010. A third project, in Fuzhou, the capital of Fujian Province, will improve wastewater treatment through the construction and rehabilitation of sewer networks, rehabilitation of the system of inland creeks, and the strengthening of urban governance in water resources management. There is also an increasing emphasis on the policy and management tools needed for better water resource management.

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December 2006January 2007

Steve Griffiths (x2)

These water-sector challenges can only be addressed through a coherent and integrated national water policy, a change in behavior, and a greater understanding of the challenges the country faces

The legal framework and governance are areas where we can work with the Government to improve, says Ms. Leung. There is a lot of work to be done as the water utilities move from complete central Government control to more independent financial and operational management.

India
An interesting thing happened recently in Karnataka State as ADB went looking for ways to increase investment in watersector projects: government officials there expressed an interest in private-sector involvement. Renowned in past decades for its hostility to intrusion on government turf, In-

INDIA Constructing an irrigation canal (below); women in Gujarat (right) have to walk 34 kilometers to fetch their days water supply

Tom Panella

dian governments, state and federal, for decades shunned the capital-rich private sector, throwing up legal and regulatory hurdles. In the 1990s, then Finance Minister Manmohan Singh (now Prime Minister) helped kick-start reforms that have cleared room for the new economy to emerge and made way for visionary politicians in places like Karnataka. It was a pleasant surprise, says Keiichi Tamaki, who works in ADBs South Asia Department, of the new interest in the private sector. However, he notes that Indian governments are realizing they are in a furious competition for investment with countries such as the PRC and, to retain the interest they have already attracted, they need to attend with greater urgency to infrastructure. India is making good progress increasing infrastructure for water supply and sanitation in urban and rural areas. However, it is still lagging behind other countries in expanding services that are reliable and sustainable. The water supply in most cities is still intermittent, mostly between 2 and 4 hours a day. In India, we see lots of publicity about IT and the difference it is making in the economy but when we look at the groundlevel reality in infrastructure, such as water supply, it is in a deplorable state, says Mr. Tamaki. And with 14% of the worlds population, the country has only 4% of the total average annual river run-off. A number of areas are already in crisis, including in the most populated and economically produc-

Funds are available for meeting these challenges. The main barrier now to increasing investments is the difficulty of linking funds available to viable investment projects
tive parts of the country. Estimates reveal that by 2020, Indias demand for water will exceed all sources of supply. At the same time, 70% of Indias irrigation needs and 80% of its domestic water supplies come from groundwaterin the past a successful practicebut that has lowered groundwater tables and depleted aquifers. It is no longer sustainable. The picture is further muddied by unclear rules governing the allocation of water rights of the countrys interstate rivers, which drain some 90% of Indias territory. Funds are available for meeting these challenges. For example, ADB is supporting Indias Jawaharlal Nehru National Urban Renewal Mission, a national fund created to encourage sustainable urban development and expected to invest about $11 billion equivalent in developing infrastructure in 63 of the largest cities in India over the next 7 years. ADBs support will help build capacity for identifying and preparing projects, among others. We have the WFP and they have JNNURM. We can take advantage of that, notes Mr. Kim.

The main barrier now to increased investment, Mr. Kim and Mr. Tamaki say, is the difficulty of linking funds available to viable investment projects. Indian towns and cities are not yet creditworthy. The commercial banks are not ready to help them and they need support in conceptualizing and producing a project, says Mr. Kim. What is missing, says Mr. Tamaki, is a workable model that can connect available funds with projects and be replicated in other parts of the country, or region. In steps Karnataka where rapid urbanization and underinvestment in infrastructure have created serious environmental and health problems, as elsewhere in Indias cities. The majority of urban households, particularly the poor, have limited access to potable water, sanitation, and drainage facilities and services. The situation is even more pronounced in the so-called urban local bodies (ULBs) of North Karnataka where rapid urbanization is yet to start. In these ULBs, water supply may be as infrequent as once a week. Only a few have piped water for 12 hours each day, and the quality is usually poor. This deficiency is a serious impediment to economic development. To address the imbalance between communities in the northern and southern parts of the state, the Government asked ADB for financing totaling $270 million through the newly created MFF. Serving as

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Halsey Street

Indonesias leadership in river basin management is widely regarded as a success

INDONESIA The demand for improving water supply and sanitation services is great in rural and urban areas something like a line of credit, the funds will be drawn down over an 8-year period to finance an overhaul of the infrastructure and institutions governing the states water supply. It will improve urban services for 4.3 million people in 25 ULBs, improve and sustain infrastructure services, and promote private-sector participation in selected subsectors, with the aim of bringing in a proper incentive framework for efficient and equitable service provision. To involve the private sector, companies will be invited to bid for either a 10-year lease-style contract (on water utilities), in which the contractor is expected to put up some funds itself, or a shorterterm management contract sending a private management team to a water utility. The first requires private contractors to bring partial bridge financing for the construction, and operation and maintenance costs of subprojects in exchange for annuity-like and performance-based payments over a 10-year period. The second recognizes that the risks of the first may dissuade prospective private companies, and the companies are instead invited to bid for a so-called performance-based management contract, under which the contractor is responsible for overall management and provision of services, typically over a 5 to 6-year period. Our money, says Mr. Tamaki, is attempting to create a demonstration effect. We hope that through it there will be a continuous flow of money, which is already available in India and looking for decent investment opportunities, into these and

other utilities. However, Mr. Tamaki admits that ADB funds are just a drop in the bucket.

Indonesia

In Indonesia, too, a fragmented political environment presents a formidable barrier to increased investment in the water sector. Few countries have decentralized as fast as Indonesia has since the fall of President Suhartos government in 1998. Once one of the worlds most centralized countries, it is quickly becoming one of the most decentralized. Decentralization will have major benefits in the future, but currently there is still much to be done to get the legal and institutional framework rightit is a very slow process, says Rudolf Frauendorfer, a senior ADB Urban Development Specialist. This impacts lending, particularly for water supply and sanitation in the urban areas, he says. The country has made excellent progress in reviewing and developing water resources policy, but modernizing the legislative basis and implementing changes on the ground is proving more difficult. Unpaid debts in many of the countrys more than 300 regional governmentowned water enterprises, called perusahaan daerah air minum, or PDAMsand in part originating in the Suharto yearsalso hinder increased investment. Nonetheless, there is huge demand for improving water-supply services in rural

ADB Photo Library (x2)

and urban areas, says Mr. Frauendorfer: only 39% of urban residents have access to piped water, or 18% of the population countrywide. Indonesias leadership in river basin management, in particular, holds promise and is widely regarded as a success, with the WFP envisioning lending of $700 million a year from 2006 through 2010a jump from a total of about $1.36 billion over 10 years ending in 2005. Attention will be focused on the Citarum River Basin, a system of several rivers, which covers more than 11,000 square kilometers, is home to about 9 million people, and irrigates around 390,000 hectares of rice. More than 85% of the basins water is used for irrigation, and supplies some 80% of Jakartas raw water. Yet inadequate institutional arrangements, deteriorating infrastructure, competing water demands from agriculture, and rapid urban and industrial growth have led to severe water supply shortages and unhealthy environmental conditions throughout the basin. Once again, the new MFF is expected to provide flexible and less-burdensome funding for the complex array of interlinked problems affecting the Citarum basin.

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Steve Griffiths

PAKISTAN Irrigated land is responsible for about 80% of agricultural production, and agriculture makes up 25% of the countrys GDP, GDP , employs over 50% of the rural labor force, and provides 6070% of exports

Ian Gill

Water resources are vital to Pakistans economic well-being, and their improved management is vital to poverty reduction
Fact-finding missions are already underway as planning for the first tranches under the MFF plan begin. Each tranche is likely to be between $50 million and $100 million, with the first tranche focusing on institutional-level reforms and project management.

Under it, says Urooj Malik, a Director in ADBs Southeast Asia Department, ADB is helping put together a 1015 year program that will deal with these problems in an integrated manner. Citarum will provide a roadmap over 15 years, he says. The MFF is opening up new opportunities and raising considerable interest with its flexible and staggered debt commitments. It is well-suited to putting in place an integrated water resource management (IWRM) plan, an area in which Indonesia is among the leaders. (Under the MFF) the policy and institutional changes that are required can work hand in glove with the irrigation systems, Mr. Malik says. A TA for preparing the Integrated Citarum Water Resources Management has been completed and presented to the Government. The proposed project will aim to improve environmental management within the basin, address water conservation and use, and cover watershed management, agriculture, water supply, and energy. The TA will also help the Government update the IWRM plan for the Citarum River basin and strengthen the institutions overseeing it, and review the Government policy on raw water tariffs and on the operation and maintenance of water supply systems.

Pakistan

In Pakistan, the expansion of water-sector investments is hindered by the lack of capacity for sector planning and strong management to take on new projects, and the frequent disagreement among the federal and four provincial governments over the best way to proceed. According to Katsuji Matsunami, a Director in ADBs Central and West Asian Department: Sometimes it seems as if Pakistan is not one country, but several under a weak federal organization. There is consensus about the critical need for increasing investment, but lack of trust among the four provinces over the allocation of water resources and toward the federal Government must be overcome for substantive progress. The country has a long history of devel-

oping its infrastructure for water resources management, and is home to the largest contiguous irrigation system in the world. Irrigated land is responsible for about 80% of agricultural production. Agriculture represents 25% of Pakistans gross domestic product, employs over 50% of the rural labor force, and provides 6070% of exports. The Indus River canal system not only supplies agricultural water but is also a primary source of rural, municipal, and industrial supply. Clearly, water resources are vital to Pakistans economic well-being, and their improved management is vital to poverty reduction. There has been a longstanding call for better water resource management to exploit fully waters productive benefits, says Mr. Matsunami. Yet the irrigation system urgently needs rehabilitated and stronger institutional arrangements: the rate at which groundwater resources are being tapped is unsustainable; the coverage, quality, and reliability of urban water supply are grossly inadequate, especially in light of the burgeoning urban population; and urban wastewater treatment is nearly nonexistent. Pakistans drainage network collects agricultural wastes along with mostly untreated municipal and industrial effluent and expels it into rivers. Officials in Pakistan are quite aware that they need major water-sector investments and institutional reforms, says Mr. Matsunami. He notes that there has been progress under the government of President Pervez Musharaff, and that the cur-

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One recent project to help improve water supply in urban areas outside Manila successfully improved the capacity of water districts to implement water supply subprojects and operate and maintain their systems
rent Government has begun an ambitious program of governance, administrative, and economic reforms which have the potential to bring major benefits to the water sector. Motivated by the need for energy and water storage as the country posts economic growth rates above 8%, President Musharaff has also committed to the building of five new mega dams. Provincial governments have likewise shown a strong commitment to reforms and are undertaking major water sector investments. ADBs WFP is music to their ears, says Mr. Matsunami. There is interest in the new financing modalities, including the flexibility of the MFF, and there is talk of the need for greater private-sector participation. Programmed lending under the WFP would raise loans to Pakistan to over $1.5 billion over the 3 years 20062008, from roughly the same amount in the 10 years ending in 2005. To proceed, however, there needs to be greater capacity at the federal, provincial, and local levels for managing water resources; for designing and implementing projects; and better coordination among the provinces and the federal Government. ADBs assistance to Pakistan in the water sector, therefore, puts an emphasis on capacity building. For example, the technical assistance (TA) grant, Water Sector and Irrigation Development, will help develop a TA program in collaboration with the Government suitable for financing by ADB or other donors. The program will provide significant capacity development at the provincial and federal levels for investment planning, policy analysis, and water resources management. This emphasis on strengthening institutions and capacity
ADB Photo Library

PHILIPPINES Outside Metro Manila, water is mainly provided by about 500 water districts, under the authority of the Local Water Utilities Administration, or by more than 1,000 local government-operated water utilities

development for water is fundamental to support the desperately needed sector investment and ensure it provides sustainable economic growth for all Pakistanis.

Philippines

In the Philippines, opportunities to expand water sector lending are hindered by some of the same factors that affect Indonesia, says Mr. Frauendorfer, particularly weak capacity at the local level for developing new projects. The Philippines has also suffered in recent years from the poor performance of previous projects and the sorry state of Government finances, although a cleanup of the ADB loan portfolio and a concerted effort by President Gloria Macapagal Arroyos administration have improved the situation markedly. Outside Metro Manila, urban water supply is mainly provided either by about 500 water districts, under the authority of the Local Water Utilities Administration (LWUA), or by more than 1,000 local government-operated water utilities. Many of the small water districts and local government-operated water utilities lack the staff skills to prepare new projects. One recent project to help improve water supply in urban areas outside Manila successfully improved the capacity of water districts for implementing water supply

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Kevin Roland Hamdorf

subprojects and operation and maintenance of their systems. Before the project, only about 70% of the urban population had access to safe water. In smaller towns, the coverage was much lower than the national urban average. ADB approved the Small Towns Water Supply Sector Project in 1996 to enhance urban water supply coverage Outside Manila, ADB is looking at the financing of water districts either through LWUAprobably using the MFFor, on a sub-sovereign basis with larger, wellperforming water districts. The MFF seems to be a suitable financing modality to address the demand for improved urban water supply in water districts and local government-operated utilities.

VIET NAM At the September Water Financing Program conference in Manila, the Government showed that they have plans for several water projects, including hydropower, river basins, urban and rural water supply, and sanitation

Improving the tariff structure would provide funds for debt service and operation and maintenance of facilities
Within Manila, ADB has also prepared MFF financing for the rehabilitation and improvement of the Angat Dam watersource system, which provides 98% of the citys water supply. The MFF for the Angat Water Utilization and Aqueduct Improvement Project would provide a $400 million credit line for the Metropolitan Waterworks and Sewerage System (MWSS), and would be part of a 10-year investment program amounting to about $1.4 billion. This program covers major investments in improving and expanding raw water sources, transmission, treatment facilities, distribution networks, and storage. The MWSS will be responsible for the execution of various subprojects under the operation.

Viet Nam

At the WFP conference in September at ADB headquarters, a high-level delegation from Viet Nam came with ideas for $5 billion worth of projects, including hydropower, river basins, urban and rural water supply, and sanitation. They knew what they wanted, says Hubert Jenny, a Senior

Urban Development Engineer in the Infrastructure Division at ADB. He says that the question is not what, but how? The country is still eligible for cheap money from ADBs concessionary Asian Development Fund (ADF), but has access to ordinary capital resources (OCR) funding. However, officials are reluctant to borrow OCR for anything outside the energy sector, a highly important sector in Southeast Asias fastest-growing economy, while ADF funding is at its cap and mostly mobilized for 3 years. In discussions with Government officials, says Mr. Jenny, ADB is pointing out that investment in water utilities, like power utilities, can also pay off if adequate tariffs are in place. There are 300 towns without central water-supply systems they use wells or are supplied by trucks and I guarantee those people are willing to pay, but is the Government willing to charge? he says, adding that tanker water is typically much more expensive than piped water. Improving the tariff structure would provide funds for debt service and operation and maintenance of facilities. The rationale is there, and a tariff on water is also an effective inducement to its conservation, says Mr. Jenny. There has been a very positive response from the Government. ADB is exploring several ways to boost investment, including OCR loans, guarantees, and local currency financing, which offer better rates than local commercial banks (typically 712 years at 812%) with

Ian Gill (x2)

the use of ADBs new financial instruments from the Innovation & Efficiency Initiative, this includes the MFF, an instrument allowing the financing of a sector over 10 years. For example, ADB is proposing to the Government an MFF funding for project preparation in Viet Nam of $300 million or more, including $50 million for a first tranche for the Tien Giang water supply project, with another tranche of the same amount for a Tien Giang sanitation project. Meanwhile, another tranche could fund the remaining towns excluded from the Central Region Small and Medium Towns Development Project. A proposed $50 million ADF loan for the Small and Medium Towns Development would provide water supply and sanitation investments in Binh Thuan, Dac Nong, Khanh Hoa, Ninh Thuan, and Phu Yen provinces. Seven towns with urban and water components duly prepared were dropped due to lack of ADF resources. The objectives are to expand and rehabilitate facilities, support decentralized management of water supply and sanitation, and sustain the delivery of services through institutional and policy reforms, capacity building, and adequate cost recovery. ADB has also been in discussion with state-owned Hanoi Water Company No.1 regarding the $60 million Phase 1 of the Red River water supply project supply for the capital, and a nonrevenue water project of about $25 million to lower the 42% leakage rate in Hanoi.

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Building Bridges Over Troubled Waters


New ADB mandate to double water investments
By Ma. Christina Dueas

Knowledge and Communications Coordinator for RSIDs Cooperation Fund for the Water Sector

ADB Photo Library

t was an unprecedented commitment: during the 4th World Water Forum in March 2006, ADB promised to double investments and accelerate actions in water to get double the results. In 2000, the Millennium Development Goals (MDGs) urged countries to use the next 15 years to cut by half the number of people without clean water and basic sanitation services. Six years down the line, some countries just arent getting there. And worse, water problems of all kinds are escalatingfrom shortages to pollution to wetlands degradation and more. Clearly, countries need all the help they can get to accelerate their water programs and meet their MDG targets. This is where ADBs new Water Financing Program (WFP) 20062010 comes in. Over the next 5 years, it intends to catalyze some $20 billion water investments in Asia-Pacific to ensure that 200 million gain sustainable access to safe drinking water and improved sanitation; 100 million people face reduced risks to floods; 40 million people have more productive irrigation and drainage services; integrated water resources management is introduced in 25 river basins; and countries improve their water governance. Wouter Lincklaen Arriens, ADB Lead Water Resources Specialist, talks candidly about the thinking behind this new program. Why develop the WFP now? We need more investments if we want to resolve water problems. But financing alone 20

is not enough. We need to make sure that these new investments work better and deliver results where they count the most on the ground. Unfortunately, despite increasing need for water interventions, ADBs investment portfolio for 20002004 dropped to $4 billion, a dramatic reduction from the $6.3 billion figure of 19951999. There is scope for ADB to be more responsive to the increasing demand for water. Is the WFP just about financing? No, it isnt. Doubling investments is the means to an end, not the end itself. WFP is about providing water and sanitation services, reducing peoples exposure to flood damage, improving irrigation and drainage, and introducing sustainable water resource management practices. It is also about taking bold, new steps to deliver these results. WFP adopts a comprehensive strategy for each investment combining improvements in infrastructure with promoting reforms, building institutional capacity, and forging strategic partnerships. Finally, WFP applies new lenses for ana-

lyzing water projectsrural water, urban water, and basin water. Rural water focuses on water supply, sanitation and irrigation in rural areas. Urban water focuses on water supply and sanitation in cities. Basin water covers integrated water resources management (IWRM), hydropower, flood management, wetlands conservation, and more. Why focus on rural, urban, and basin water? The linkages are clear. In Pakistans rural areas, household water supply and pumped irrigation water often come from the same aquifer. Upstream of Jakarta in Indonesia, industrial pollution corrupts the water supply of downstream city dwellers. There are so many examples of this interconnectivity but we often miss them because we view water through the lenses of separate subsectorswater supply, irrigation, flood management, and others. If we use rural water, urban water and basin water as our lenses, we can see the linkages more explicitly. And when we do, well have a better chance of looking across institutional boundaries and addressing the op-

ON THE GROUND At a press interview during the 4th World Water Forum in Mexico City

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INTERVIEW
portunities and consequences of our project interventions. How would countries benefit from the WFP? For sure, client countries can count on improving their service delivery and water quality. In fact, WFP plans to enable countries to go beyond the MDG targets and achieve more extensive coverage. But they can also access a number of in-country and regional initiatives that provide more rapid assistance. Through the new Water Financing Partnership Facility, which aims to raise $100 million in grants,
IDEAS EXCHANGE Talking with regional water specialists in Cambodia as part of the review of ADBs water policy implementation

ADB will support governments, apex bodies, river basin organizations, water utilities, and communities pursue reforms and innovations, build their capacity, forge strategic alliances, monitor the results of their investments, and more. What will help WFP to succeed? Even when WFP was just being developed, it already succeeded in directing more attention to ADBs water operations. The result was a significantly increased 2006 2008 pipeline of over $7 billion, with good indications that this will further increase. Beyond that, we can already observe

several indicators on the readiness of ADB and its client countries for a program like the WFP. For starters, senior levels in governments now accept that a more integrated and sustainable approach to water resources management is essential. And ADB has just introduced a range of new financing modalities to address constraints raised by its clients, such as the multitranche financing facility, local-currency financing, subsovereign lending, and more. Add to that the fact that ADB now has greater success in delivering project interventions to specific target groups, particularly the urban and rural poor. We think that the conditions for the success of WFP are now moving into place. What changes can we expect in ADBs water programming? The next 5 years will be exciting times for water in ADB. One of the main challenges will be to increase investment in sanitation and wastewater treatment to mirror the investments made in water supply. Given the current spotlight on renewable energy, we can also expect a significant increase in investment demand for hydropower development. That will require closer coordination as part of IWRM. In addition, ADB will need to continue assisting its clients to introduce enabling conditions and build the capacity of national water apex bodies, river basin organizations, and utilities. WFP will offer a range of interventions but the ultimate test will be in delivering the desired results for the community, country, and regional stakeholders concerned.

ADB Photo Library

Steve Griffiths

There are so many examples of [rural, urban, and basin water] interconnectivity but we often miss them because we view water through the lenses of separate subsectors water supply, irrigation, flood management, and others. If we use rural water, urban water and basin water as our lenses, we can see the linkages more explicitly. And when we do, well have a better chance of looking across institutional boundaries and addressing the opportunities and consequences of our project interventions
Wouter Lincklaen Arriens, ADB Lead Water Resources Specialist

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COUNTRY

DIALOGUES

Reservoir of Ideas
Before a typhoon could interrupt finance talks with ADB, five countries identified barriers to doubling their investments in water
By Cezar Tigno
Web writer for www.adb.org/water

he looming bad weather on Manilas skyline in the last week of September seemed a Shakespearean witches brew. But something else was brewing inside ADB Headquarters that week. Delegations from India, Indonesia, Pakistan, Philippines, and Viet Nam that included a strategic mix of high-level national and local government officials from different ministries78 in allwere meeting with ADB water operations staff to discuss the barriers and opportunities facing their water sectors. The country-based dialogues were the centerpiece of the conference entitled Doubling Water Financing and Results. The conference started action on ADBs New Water Financing Program, which aims to double ADBs water investments in the region between 2006 and 2010. The country teams worked for two days to answer the conferences central question, How can ADB help address your countrys water investment needs? The five countries were specifically invited to the conference because they represent a great proportion of the regions need for better water service delivery and resource management, ADB Water Committee Chair Arjun Thapan said. Hun Kim, Director of ADBs South Asia Urban Development Division, said, This is the first time that we had the chance to sit down and seriously talk with DMC officials from all levels of government national, state, and local. The conference was part of a longer chain of efforts to achieve the Millennium Development Goals, particularly the water targets aimed at improving access to safe drinking water and sanitation for half of the worlds poor by 2015. By the time the conference ended on 28 September, typhoon Milenyoone of the strongest to hit the Philippines in

recent yearsstarted ravaging Manilas streets. Most delegates flights were delayed by at least a day, but they werent returning home empty handed. Solving Problems, Finding Opportunities As an outcome of the conference, delegates produced country reports on their water sector barriers and opportunities, which were presented at the last plenary session. India identified funding requirements for water supply and sanitation improvements in cities not covered by the Jawarharlal Nehru National Urban Renewal Mission, which ADB supports. The country delegation said it needs ADBs support in developing a complete irrigation project for 15 million hectares of agricultural land that is currently underutilized. The delegation from Viet Nam listed hydropower, irrigation, and urban water supply and sanitation as its main concerns. Also high on the Governments agenda is reducing nonrevenue water in Hanoi, and large infrastructure projects along the Red River and the Mekong Delta. The Philippines showed a great interest in sub-sovereign lending to local governments as a way of helping expand access to water supply and sanitation outside Metro Manila. More money is also needed to bring

integrated water resource management plans to the Agusan River basin in Mindanao. Pakistans river basinsRavi, Tochi, Naigaj, and the Balochistan aquifer demand immediate integrated water resource management, while construction of major multi-purpose dams and development of flood management strategies are required in rural areas. The dialogue between Indonesia and ADB zeroed in on the pollution problem of the Citarum river basin, which supplies around 80% of Jakartas water. Representatives from the country came prepared with a detailed analysis of water-sector barriers and, with the ADB team, discussed their vision and investment targets. ADBs new Multitranche Financing Facility was of special interest to participants as it acts as a line of credit, providing larger amounts in slices to finance cluster projects. India, Indonesia, and Viet Nam have requested in-country dialogues similar to those conducted at the conference to pursue investment possibilities using the multitranche facility. Senior officials from the Peoples Republic of China were also invited but did not attend. Discussions are, however, ongoing regarding the conduct of a future incountry dialogue.

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Larry Ramos

POLICY

NOTES

Improving the Flow


Is ADB delivering on its Water Policy? Yes and no, says an external review panel
By Melissa Howell Alipalo
Communications Specialist and Writer for RSIDs Cooperation Fund for the Water Sector

s ADBs Water Policy half full or half empty? An Independent Review Panel considered this question during its evaluation of ADBs implementation of the Water for All Policy, approved in 2001. The Panel concluded that the Policys implementation was both half full and half empty, acknowledging successful elements, but also highlighting areas that need improvement. ADB must think outside the box and conduct business unusual to improve conditions in Asias water sector and to meet the Millennium Development Goals (MDGs) by 2015, says Erna Witoelar, the Panel Chair. Ms. Witoelar is also the United Nations Special Ambassador for MDGs in Asia and the Pacific, and the former Indonesian Minister of Human Settlements and Regional Development. Released in May this year in Hyderabad, India, during ADBs Annual Meeting, the review included five main recommendations

to improve ADBs water sector operations and investments. These are to: increase ADBs investments and develop its staff capacity; develop long-term partnerships with stakeholders in developing member countries (DMCs), and among donors; focus the implementation of integrated water resource management (IWRM) on stakeholder needs and ownership; promote business unusual through innovations to increase access, affordability, efficiency, and cost effectiveness; and to improve ADBs processes to ensure effective policy implementation. The Panel found that ADBs lending levels and staff capacity had not kept pace with the increasing needs of the water sector in DMCs. It suggested that ADB double its investments in the water sector over the next 5 years and sustain those levels with balanced investments in infrastructure, capacity building, and reforms. It also suggested that ADB develop a long-term strategic plan for recruiting, retaining, and developing its water sector staff. Need to Build Broad-based Support Recommending that ADB develop longterm partnerships with stakeholders in

DMCs and among donors, the Panel found that ADBs impact in the regions water sector had been weakened by its project-byproject approach. It suggested that ADB focus on building broad-based support for the Water Policys principles through longterm programs rather than project-centric regional and in-country programs. It also suggested that ADB take the lead among donors in the sector to harmonize efforts. This broad-based approach to support should give special attention to implementing IWRM as the panel found institutions in DMCs to be severely constrained in this area, needing training and help with planning and implementation. The Panel suggested that women, civil society, the poor, and other marginalized groups whose needs must be considered be given greater opportunities to be more involved in the decision-making process. Such involvement would increase the feeling of ownership among these groups and this would result in more effective implementation. The Panel also particularly cited support for IWRM in river basins, the foundation of a water sector. On the sectors services side, the Panel found that ADB needs to clarify its stand on water pricing and charges. It suggested that ADB remove ambiguities in the Water Policy, specifically on issues of subsidies, cross-subsidies, and differential pricing. The Panel also recommended that ADB work harder at expediting service delivery

REVIEW PANEL AT WORK (From left) Wilson Siahan, Erna Witoelar, Pradeep Singh, Li Yuanyuan, Ravi Narayanan, Annelie Hutach, Gilbert Llanto, K.E. Seetharam, and Wouter Lincklaen Arriens

The Panel suggested that ADB focus on building broad-based support for the Water Policys principles through long-term programs rather than project-centric regional and in-country programs
December 2006January 2007 23

Richie Abrina

ADBs new Water Financing Program will double ADB investments in the water sector over the next 5 years
to the poor, which would help countries meet their relative MDG targets. This would require alternative approaches to the typical, large-scale infrastructure projects that sometimes span up to 10 years. There was also a need, the Panel noted, to change ADBs corporate culture so that the principles of the Water Policy drive the organizations day-to-day operations, affecting the size, scope, direction, and character of ADBs water-sector portfolio. To do this, the Panel said ADBs water operations staff needed tools and incentives to absorb genuinely the Water Policys principles into their own work and throughout the project cycle. One way of addressing the gap between policy and practice inside ADB would be to create an operational strategy and plan linked to staffs 3-year rolling work plans. These strategies and plans, the Panel suggested, should be punctuated with quantifiable targets and implemented throughout its business processes. Doubling Investments in Water In response to the findings, ADB says it supports the general thrust of the Panels report and recommendations. The review has provided ADB with important feedback on how the Water Policy is being implemented, says Bindu Lohani, Director General of ADBs Regional and Sustainable Development Department. He says ADB accepts the challenges outlined by the Panel, and is committed to increasing investments in the water sectorto more than $2 billion a yearcatalyzing reforms, and supporting capacity development. As such, ADBs new Water Financing Program will double ADB investments in the water sector over the next 5 years and provide additional technical assistance for DMC water sector reform and capacity building. ADBs Water Committee is expected to work with operations staff in building an action plan based on the Panels recommendations. 24

Seven Keys to Water for All


ADBs Water for All Policy, approved in 2001, has seven principal elements
1. Promote a national focus on watersector reform. There is an urgent need for water-sector reform throughout Asia and the Pacific. ADB helps its developing member countries (DMCs) reform their water sectors by assisting in the establishment of effective national water policies and water legislation, strong coordination arrangements between institutions, and a national water action plan for reform. ADB also provides support, advice, and training to countries in setting up and operating these institutions. 2. Foster the integrated management of water resources. From drinking, cooking, or sanitation to irrigating crops, manufacturing, or tourism, water across Asia has multiple uses, multiple demands on it, and a wide variety of agencies and institutions responsible for it. ADB promotes water investment projects that are based on a comprehensive assessment of the river basin concerned, with a participatory approach. ADB particularly focuses on interlinked water investments within river basins. 3. Improve and expand the delivery of water services. In many parts of Asia and the Pacific, people have inadequate access to water services. About 682 million peopleone third of Asias population do not have safe drinking water. ADBs goal is to make water services efficient, affordable, and sustainable in water supply and sanitation, and irrigation and drainage. To meet this goal, ADB supports autonomous and accountable service providers, private-sector participation, publicprivate partnerships, and promotes greater access to water services for the poor. 4. Foster the conservation of water and increase system efficiencies. Globally, water withdrawals have increased by more than six-fold during the last century. In the Asia and Pacific region, water withdrawals are the highest in Central Asia (85%), followed by South Asia (48%), and Mongolia and the northern Peoples Republic of China (25%). ADB supports appropriate water tariffs that encourage users to conserve water and allow service providers to recover costs. Cost recovery leads to increased system maintenance and provides the necessary capital for expanding services to poor consumers. ADB supports the improved regulation of service providers and increased public awareness on water conservation. ADB also supports provisions to ensure that the needs of the poor are met. 5. Promote regional cooperation and increase the mutually beneficial use of shared water resources within and between countries. Whether it be the Mekong in Southeast Asia, the Syr Darya and Amu Darya in Central Asia, or the Ganges-Brahmaputra river system in India and Bangladesh, many Asian countries share their water. ADB supports regional activities that help countries exchange information about their experiences with water-sector reform and the benefits of shared water resources. ADB also supports the creation of sound hydrologic and socio-environmental databases related to transboundary water resources and joint projects between neighboring countries. 6. Facilitate the exchange of water sector information and experience. ADB supports socially inclusive development in the water sector and participation at all levels. In particular, ADB supports water investments that involve public, private, and community partnerships. 7. Improve governance and capacity building. Many experts view todays water crisis as not so much a crisis of water scarcity but a crisis of governance. On a global scale, there is enough water to provide water security for all, but only if there is a change in the way it is managed and developed. ADB prioritizes support of good governance through decentralization, capacity building, and improved monitoring, evaluation, and learning at all levels in the water sector.

December 2006January 2007

Funds Flow-On Effect


After almost 5 years and over $15 million in grants, has ADBs Water Fund been well spent?
By Ma. Christina Dueas
Knowledge and Communications Coordinator for RSIDs Cooperation Fund for the Water Sector

hy does Baguio City in the Philippines, a water cradle with reliable water wells, face water scarcity on a daily basis? There is an easy explanation: just look at the citys thriving tourism industry, rapid urbanization encroaching on forestland, dilapidated infrastructure, fragmented water management, and weak regulation. Taking the bull by its horns, the City government decided to integrate water resource management and service delivery. With support from ADBs Cooperation Fund for the Water Sector (CFWS), the city improved coordination among its water agencies, formulated a water investment

agenda, and enacted a water code. Then, this year, it won an international award for outstanding achievement in promoting socially-equitable and sustainable development. The success of Baguio Citys program makes CFWSs $50,000 investment in the city money well spent. However, can the same be said for the rest of the Funds $20 million investments? Looming Water Crisis CFWS evolved after the widespread realization that a water crisis was looming. In 2001, one in three people in Asia had no access to a safe water supply, and half the population had no sanitation facilities. Asia is home to nearly two thirds of the worlds poor, and they are the hardest hit by floods, drought, scarcity, pollution,

disease, and other water-related challenges. Clearly, there was an urgent need for actions that responded to these challenges. ADB established the Fund to jump-start water reforms in the Asia-Pacific region. With a variety of interventions, CFWS aimed to address the differing needs of stakeholderswomen trudging 12 kilometers a day to fetch water, water utilities needing to recover their costs to survive in the business, national governments needing to decide on water rights, regional water networks needing to teach their members to benchmark their performance. Under the Microscope In late 2005, the Government of the Netherlandsthe CFWSs major donortasked expert evaluators Bert van Woersem and Jetse Heun to review the Funds operations. The Fund has definitely added value for ADB and its developing member countries (DMCs), said Mr. van Woersem and Mr. Heun in their report that highlighted, among others, the Funds specific contributions. These included: improving water policies, reforms, and strategies through innovative products and approaches; developing the capacity of critical water organizations; and opening up dialogue between stakeholders in DMCs, such as governments, development agencies, and civil society. Although Mr. van Woersem and Mr. Heun say that some of the results of the Funds interventions will be long term, they acknowledged that during the Funds first 4 years of operation, there had already been some positive results. For example, the Fund has commissioned studies that provide new knowledge on performance benchmarking for water utilities, river basin organizations, and national water sector apex bodies. Responding to complex stakeholder needs also means using different techniques, media, and approaches, many of which were untried by ADB in the past. In this, Mr. van Woersem and Mr. Heun found the CFWS to also be successful. One previously untried approach was a series of water media workshopsin which more than 400 journalists participated to increase journalists understanding of water issues. Influencing one Chinese journalist can lead to hundreds of thousands of readers having a better understanding of water, December 2006January 2007 25

The Fund has definitely added value for ADB and its developing member countries
Fund Reviewers Bert van Woersem and Jetse Heun

Tim Cullen

BETTER UNDERSTANDING Wang Ning, a participant in ADBs media workshops and correspondent from China Economic Times in Beijing, interviews Dhaka residents during an exchange assignment with Bangladeshs Forum of Environmental Journalists

CFWS at a Glance
The Cooperation Fund for the Water Sector (CFWS) is a 5-year, $20 million fund, in its final year of supporting the following set of activities designed to add value to ADBs water projects, and carry out its Water for All Policy: Promotion and awarenessdesigned to raise awareness on water issues, policies, reforms, and strategies Knowledge management and capacity development develops critical capacities in ADB staff and country stakeholders Pilot and demonstration activities promotes innovative local initiatives Water partnershipsstrengthens national and regional water partnerships in the region Regional events supports important events that promote water reforms Program coordination, monitoring and evaluation ensures smooth implementation of activities and achievement of results As of October 2006, CFWS resources have been allocated as follows (see table). The Fund is expected to end in mid-2007. RETA 6031 0.79 1.24 0.40 0.63 0.40 0.33 3.80 RETA RETA RETA 6093 6123 6219 (In $ million) 0.20 0.22 0.00 0.00 0.48 0.10 1.00 1.00 0.63 0.501 1.33 0.53 0.32 4.30 0.52 1.84 0.60 1.30 0.63 0.71 5.60

By Cezar Tigno

Web writer for www.adb.org/water

Program Category Promotion and Public Awareness Knowledge Base and Capacity Building Pilot and Demonstration Activities Water Partnerships Regional Events and Initiatives Program Coordination, Monitoring, and Evaluation Total

Total 2.51 3.92 1.50 3.26 2.04 1.46 14.70

said Wang Yao, editor of Chinese newspaper Quingnian Cankao. The Funds Pilot and Demonstration Activities (PDAs) are another innovation. These grants to nongovernment organizations, governments, and ADB project staff support local initiatives with significant potential for replication or scaling up. Demand-driven and operating within a 12-month timeframe, PDAs enable communities to solve their water problems faster. From cleaning up coastlines through wastewater treatment facilities, to providing livelihood opportunities through drip irrigation, the Dutch review found that PDAs allow people, especially the poor, to manage better their water resources. Whats Next? The Fund should intensify its efforts to focus on activities in a three-fold manner, says Mr. van Woersem and Mr. Heun. The 26

CFWS should work on a number of strategic themes, on a selected number of countries, and on issues directly related to ADBs comparative advantages, such as the technical expertise that project staff offer countries along with loan money. The lessons from CFWSs implementation and the Dutch review are especially helpful as ADB begins work on the Funds successor, the Water Financing Partnership Facility. This facility will raise and invest $100 million to support ADBs new Water Financing Program 20062010, which will deliver substantial investment, reforms, and capacity development in rural and -urban water services, and river basin management. If the $20 million from CFWS can already do so much, imagine how much more good the new $100 million financing facility can do. The challenge will be to keep pushing for more reforms and innovations.

or 2007, about $600,000 is available in grants to nongovernment organizations (NGOs), local governments, and ADB project staff who want to test promising new solutions at the community-level. ADBs Pilot and Demonstration Activities (PDA) fund provides grants, usually of about $50,000 each, for testing ideas that are both innovative and replicable on a larger scale. By testing innovation on a small scale first, the fund hopes to provide largescale projects with fresh ideas that come with the benefit of lessons learned and recommendations. Since 2002, the fund has financed 28 projects worth $2.1 million. Fifteen have been completed. PDAs have been proposed and approved in every subregion of Asia and the Pacific. The majority of PDAs11 have been approved in Southeast Asia, 7 in South Asia, 4 in the Pacific, and 3 each in East Asia, Central Asia, and West Asia. The subject of PDAs varies widely, but the majority have dealt with institutional reforms (10), policy reform (7), and public awareness (5). The other PDAs have focused on women, the poor, and technology. Sometimes the PDA involves technology or approaches tested elsewhere but needing to be tested in a specific location, or those involving nuances. Certainly, wastewater treatment plants are no innovation. And the principles of integrated water resource management have been around for decades. Yet the PDA fund supported two such projects recently because they brought the tested innovations to new contexts. Smart Sanitation Once known for its pristine sands, the beaches of Lilo-an, Cebu in Central Philippines provided the local economy with a steady supply of tourists for restaurants, souvenir shops, and beach vendors. Then came the slime and stench. Newspaper headlines, such as Dirty Beach Water Unfit for Swimming, spelled doom for Lilo-ans dependence on beach tourism. The Lilo-an Public Market became the primary suspect as investigations into the pollutants revealed liquid extracts from vegetables, fish, and meat. Wastewater from the markets public toilets was also

December 2006January 2007

PILOT

AND

DEMO

Tapping Innovation
Big ideas worth testing on a smaller scale get a boost from a special fund
found to be flowing untreated into the sea. Coliform bacteria that thrive on these kinds of wastes rose to alarming levels. The local government, with the help of the Department of Environment and Natural Resources, applied for PDA funding to build a wastewater treatment plant. But not just any plant. On less than $50,000, the local government built a plant that uses a rotating biological contactor to intercept wastewater from the public market and households through Lilo-ans existing canal system. It removes all toxic elements before releasing the sanitized water safely back into the ocean. Another innovative feature of the Liloan treatment facility is that it is decentralized. A cooperative of market vendors and residents learned how to operate and maintain the plant through training seminars. The PDA also financed workshops that fed them ideas on how to quickly and easily raise funds to recover the plants cost within 10 years. I still cant believe that we are able to own and operate a wastewater treatment facilitythe first of its kind in northern Cebu, Lilo-an Mayor Maria Sevilla says. Weekend tourists are returning to Liloans beaches, bringing hopes of a thriving tourism industry. Conflict Management It is usually not a good idea to meddle in other peoples business, especially when there is potential for conflict. But other peoples conflict is precisely the business of Thailands Bang Pakong River Basin Committee. By looking after the rivers health, the water management experts on this committee must settle intense conflicts between shrimp, fish and agricultural farmers, factory owners, tourism promoters, and large residential communities. Their uses of the river often compete, leaving someone with too little or too dirty waterdepending on how influential they are. The river basin committee received PDA funding to develop a way of resolving conflicts between the rivers users. The committee started by holding consultations with different groups about their uses and level of understanding of basin issues. Workshops were also held to address misunderstandings and educate users about the river. We need to increase peoples awareness so we can address the river basins problems, said committee member Suaydee Chamroon. The different users of the river have to come together and find a solution. Together, they agreed with the committee to use the Water Evaluation and Allocation Program, or WEAP system, for managing the basin. The WEAP system is a computer software program that helps groups like the Bang Pakong River Basin Committee balance supply and demand issues. The software system will provide the committee with three essential tools: a water balance database, for maintaining water demand and supply information; a scenario generation tool, for simulating water demand, supply, runoff, stream flows, storage, pollution generation, treatment and

discharge and in-stream water quality; and a policy analysis tool for evaluating a range of water development and management options, taking into account the competing uses within a water system. The committee also established an independent network for users to share information and experiences and resolve conflicts through focus group discussions, workshops, training, and dialogue. The committee will soon begin formally testing the WEAP system. Already, though, the government committee has earned respect among user groups for taking these initial steps and treating them as co-managers of the Bang Pakong.
MARKET CULPRITS Investigation into Lilo-an's seaside pollution detected extracts from vegetables, fish, and meat. The suspect list narrowed sharply to the public market, where about 120 vendors make their living.

KEEPING IT SIMPLE The Lilo-an local government opted for a rather simple aerobic wastewater treatment technique known for its low operation and maintenance efforts and costs, which a cooperative of market vendors oversee.

ADB Photo Library (x2)

December 2006January 2007

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Does Your Idea Have Potential?


Grants from ADBs Pilot and Demonstration Activities (PDA) fund to test innovative water projects on a small scale are available to nongovernment organizations (NGOs), local governments and ADB staff. Here are answers to frequently asked questions about the fund. Which ideas qualify?
Proposed projects should: Focus on freshwater resources and/or freshwater services. Be able to be implemented within 12 months or less. Involve a maximum request for $50,000 financial assistance. Not duplicate ongoing or pipelined activity in the developing member country (DMC). Be directly relevant to the sector outcomes cited in ADBs Country Strategy and Program for the country concerned. Lesson learnedgenerates distinct and relevant lessons learned Pro-poordirectly benefits the poor Participatory and gender-sensitive engages immediate stakeholders, especially the poor and vulnerable ADB operations supportdirectly supports ADB operations in DMCs Technically stronginternally logical, has a realistic timeline and budget, implementers are aptly experienced and skilled, roles and responsibilities are clear, there are indicators against which to assess quality, and has a public dissemination plan Consistent with ADBs Water for All Policy Contributes to the achievement of the Millennium Development Goals

Who will evaluate the proposals?


ADBs Water Committee reviews and ranks proposals as follows: High can be funded immediately. Medium or Low will be on hold pending availability of funds and/or improvement of the proposal. Not qualified

What are the next steps upon submission of the proposal?


Proponents will be informed in writing of the evaluation results and ranking. For approved proposals, the proponents will develop the detailed terms of reference and implementation plan for the PDA. They will work with the PDA coordinator regarding administrative arrangements. For the implementation of each PDA, national and international NGOs, academic/research institutions and, where needed, domestic and/or international short-term individual consultants will be engaged to help the PDA activity officer implement PDAs in DMCs. Engagement of implementing parties will take place after the Water Committee has approved the PDA proposal, and a DMC focal agency has given concurrence for implementing the PDA in the host country. After DMC concurrence has been obtained, ADB will enter into a letter of agreement (LOA) with the implementing agency for the implementation of the PDA. Implementing parties can begin operations upon receipt of all required documents. The funds will be released based on the implementing partys billing.

Which ideas would not qualify?


Projects wholly comprising workshops and conferences or training/course materials development Projects wholly focused on capacity building Activities that would typically be included in an ADB technical assistance or loan-funded project

Who can apply?


NGOs, community associations, or other development partners in an ADB DMC A professional staff member of an ADB regional department (In the case of non-ADB proposals, a PDA activity officer from ADB staff will be assigned to oversee the project.)

What kind of assistance would successful ideas get?


Successful proposals will be allotted up to a maximum of $50,000 funding assistance. These funds can be used for, among others, consultant services in developing, validating and demonstrating new approaches, and field-based applied research and demonstration by local stakeholders, including NGOs.

How should proposals be submitted?


Proposals should use the standard Request for Support Form and include details on how the proposal would address the PDA ranking criteria. Forms can be downloaded from www.adb.org/water/pda/ request_form.pdf. Proposals should be submitted to the PDA coordinator who will pool all received proposals on a monthly basis for evaluation. E-mail proposals to mlnavarro@adb.org.

How are proposals considered?


The program has 10 criteria of equal weight: Innovationnew to the particular situation/market Replicability: Actualwith strong demonstration element; includes advocacy and dissemination Replicability: Potentialtests original approaches, but with little work on bringing-to-scale

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December 2006January 2007

BOOKSTORE

Water Knowledge Products


Read or view these print, electronic, and multimedia materials on Asias water sector produced by ADB and its partners. For more information, visit ADBs Water for All website www.adb.org/water.
TITLES PRODUCT TYPE Rural CATEGORY Urban Basin General

ADB Policy and Operations


ADB Water Policy Water for All Water Brief: The ADB Water for All Policy Water Policy Water for the PoorSetting the Rules and Finding the Money Charting Change Gender Responsiveness in ADB Water Policies and Projects Water Brief: Results from ADBs Commitments at the 3WWF Water for All #15: An Agenda for Change Water for All: Translating Policy Into Action Summary of Review Panels Report* Water for All: Translating Policy Into Action The Review Panels Final Report and Recommendations Book Water brief DVD CD-ROM Book Technical notes Water brief Book: Water for All series Book Technical report

Evaluation
Water for All #14: Water Voices Documentaries Cooperation Fund for the Water Sector: Findings from the 2005 Review of the Netherlands Ministry of Foreign Affairs Book: Water for All series Water brief

Finance
Cooperation Fund for the Water Sector Water Financing Program: Background Paper Water Brief: Water Financing Program ADB Review: Water Financing Program Issue Fact sheet Technical report Water brief Magazine

Millennium Development Goals


Asia Water Watch 2015 Strategic Thinking to Achieve Water MDGs Visionary and Analytical Perspectives of Water and SanitationCoverage and Achievement of the MDG Targets Water Brief: Asia Water Watch 2015 Water Brief: The MDGs and the importance of Target 10 Book Technical report Technical report

Water brief Water brief

Planning Tools and Techniques


Dhaka Diagnostic Water Assessment Model Terms of Reference: Diagnostic City Water Assessments Model Terms of Reference: Implementing Zonal Management Approach to Urban Water Supplies Technical report Model terms of reference Model terms of reference

December 2006January 2007

29

TITLES Model Terms of Reference: Mainstreaming Small Scale Private Water Piped Networks Model Terms of Reference: Planning Urban Sanitation and Wastewater Management Improvements

PRODUCT TYPE Rural Model terms of reference Model terms of reference

CATEGORY Urban Basin General

Reforms
Water Brief: Water and the International Agenda From Dublin to Mexico Promoting Water Sector Reforms Water Brief: Apex BodiesThe Coordinating Eye Behind WS Reforms Water Brief: Fostering ParticipationWater Management by Local Communities Water for All e-newsletter Water in the 21st Century Water brief Technical report Water brief Water brief E-newsletter Book

Sanitation
Smarter Sanitation Water Brief: Sanitation and Wastewater ManagementSaving Public Health and Sustaining Environment CD-ROM Water brief

Water and Poverty


Poverty and Environment Partnership: Linking Poverty Reduction and Water Management Water Brief: Water and Poverty Water for All #1: Water & PovertyFighting Poverty through Water Management Water for All #2: Poverty & WaterUnderstanding How Water Affects the Poor Water for All #3: The Water & Poverty Initiative What Can We Learn and What Must We Do? Water for All #4: Water & PovertyThe Themes Water for All #5: Water & PovertyThe Realities Water for All #6: Water for the PoorPartnerships for Action Water for All #7: Water & Poverty at the 3rd World Water Forum Water for All #9: Impact of Water on the Poor Water For All Publication Series 2006 Chinas Water Challenge Water Voices Series Book Water brief Book: Water for All series Book: Water for All series Book: Water for All series Book: Water for All series Book: Water for All series Book: Water for All series Book: Water for All series Book: Water for All series CD-ROM DVD DVD

Water Resources
Dams and Development Islands and Climate Change Saving Cambodias Great Lake NARBO Information Sheet Supporting the Development of Effective and Efficient River Basin Organizations* Water Brief: Integrated Water Resources Management* Water Brief: Water and Floods Water for All #11: Floods and the Poor CD-ROM DVD DVD Fact sheet Technical report Water brief Water brief Book: Water for All series

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December 2006January 2007

BOOKSTORE
TITLES Water for All #12: Past Experience and Future Challenges Water for All #16: Dams and Development Water For All Publication Series 2006 Chinas Water Challenge Water Voices Series PRODUCT TYPE Rural Book: Water for All series Book: Water for All series CD-ROM DVD DVD CATEGORY Urban Basin General

Water Supply
Asian Water Utilities: Reaching the Urban Poor Databook on Southeast Asian Water Utilities Developing a Flagship Program on Water in MetrosBackground Paper on Indonesia Developing a Flagship Program on Water in MetrosBackground Paper on PRC Serving the Rural PoorA Review of Civil-Society-Led Initiatives in Rural Water Supply and Sanitation Water Brief: How the Poor Suffer Water Brief: Should Asias Urban Poor Pay for Water? Water for All # 10: Water in Asian CitiesUtilities Performance and Civil Society Views Water for All # 13: Small Piped Water Networks Water for All # 8: Bringing Water to the Poor Selected ADB Case Studies Book Book Technical report Technical report Technical report Water brief Water brief Book: Water for All series Book: Water for All series Book: Water for All series

Country Papers
Water Sector Roadmap: Bangladesh Water Sector Roadmap: Cambodia Water Sector Roadmap: Pakistan Water Sector Roadmap: Viet Nam Country Water Profile: Peoples Republic of China Country Water Profile: India Country Water Profile: Indonesia Country Water Profile: Pakistan Country Water Profile: Philippines Country Water Profile: Viet Nam
* Forthcoming

Technical report Technical report Technical report Technical report Technical report Technical report Technical report Technical report Technical report Technical report

Smarter Sanitation Toolkit


Smarter Sanitation is a new electronic toolkit to help national and local governments put their sanitation and wastewater sectors on the MDG success path. Loaded with links to the best websites, resources, and case studies and virtually everything about sanitation and wastewater management that planners and managers need to know. It also includes SANEX, a high powered software for assessing and planning sanitation systems in developing countries. This innovative toolkit is ADBs way of doing business unusual itself, and getting its developing member country partners to also think in innovative ways. Time is of the essence. By 2015, developing countries have agreed to halve the proportion of people without sustainable access to safe drinking water and improved sanitation.

Water for All News


Water for All News is a monthly electronic e-newsletter that features stories on successful water initiatives in ADB developing member countries as well as articles and case studies on water actions on the ground. Whether you are a policymaker, working in a water agency, doing research, or a water user, you will find ideas here to take action to help solve many water-related problems facing the region. Take time to browse through and sign up for monthly delivery of new issues to your email address. To subscribe, visit www.adb.org/water

December 2006January 2007

31

SNAPSHOT

SOLVING ASIAS WATER WOES Asia is home to almost 700 million people who drink unsafe water each day, and some 2 billion who do not have adequate sanitation. The Water Financing Program (WFP) 20062010 intends to improve the quality of life for some 300 million Asians in the next 5 years. This issue of ADB Review explores the thinking behind the WFP, its threepronged approach to water projects, and the prospects of key Asian countries in terms of doubling their water investments.

ADB ONLINE
Publisher: Jeffrey Hiday Editor: Carolyn Dedolph Contributing Editors: Melissa Howell-Alipalo, Ma. Christina Dueas, Judy Bryant Layout Artist: Keech Hidalgo Assistant Editors: Frix del Rosario, Lily Bernal Distribution: Publishing Unit Fulfillment: ADB Printing Unit ADB Review reports on development news from Asia and the Pacific and on the activities of the Asian Development Bank. Opinions and materials in ADB Review do not necessarily reflect the official views of ADB. Materials may be reprinted with credit given to ADB Review. Comments may be e-mailed to review@adb.org. For a free subscription, e-mail review@adb.org; fax a message to +63 2 636 2648; or write to ADB Review, Department of External Relations, Asian Development Bank, 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. For the web version, go to www.adb.org/review.

www.adb.org

To read ADB Review online, go to www.adb.org/review For information, send an e-mail to information@adb.org or go to www.adb.org To explore business opportunities with ADB, go to www.adb.org/ business/opportunities For publications, go to www.adb.org/publications For the latest news, go to www.adb.org/media

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December 2006January 2007

ISSN: 0118-8674

ADB Photo Library