Private Enterprise and Financial Markets > Environment > Integrated Water Resources Management
Strategy for Integrated Water Resources Management
(12/98, ENV-125, En, Es)
This strategy (GN-1908-4) was formally considered by the Board of Executive Directors and the management of the IDB on May 27, 1998.
Abstract
The recent past has been a period of rapid institutional change aimed at increasing efficiency and attaining sustainability while increasing the participation of communities in making decisions on issues that affect them. One of the most vital of these issues--if not the most vital--is water. Since its creation, the Bank has participated actively in this sector, financing projects in sanitation, hydropower, irrigation and drainage, watershed management, flood control and waterway projects.
This paper presents the Bank strategy for its involvement in integrated water resource management in Latin America and the Caribbean. The strategy highlights the flexible application of instruments on a case-by-case basis, and focuses on how the Bank can incorporate elements of integrated water resources management in its water related operations in order to shift the emphasis of its actions in the sector from a project based approach aimed at increasing supply, to an integrated supply and demand approach.
This paper is available in PDF format or in printed form (mariak@iadb.org). The report's Introduction appears below.
Introduction
In response to the mandates of the Eight General Increase in the Resources of the Bank, this paper contains the strategy for its involvement in integrated water resources management in Latin America and the Caribbean. The strategy applies to all Bank water related projects whether they have a government guarantee or not.
IDB-8 specifically calls for the Bank to "develop and implement guidelines on water resources management which support an integrated approach to watershed management based on consideration of all sources and uses of water in a particular river basin".
It also calls for providing assistance to the borrowing member countries to develop viable fresh water sources and systems through a variety of initiatives, such as: developing and implementing guidelines; devising and employing integrated approaches that will converge over time upon least-cost solutions for investments in water resources development; identifying and preparing projects and project components, including water conservation programs; and encouraging better use of water resources and advances in water technology.
The period leading to the next century has been of rapid institutional change in LAC, including changes in policy, law and other institutions to increase efficiency and attain sustainability, allowing the participation civil society in making decision about issues that are important for the affected communities. Water is one, if not the, most vital of these issues.
Since its creation, the Bank has been active in water, predominantly financing projects in sanitation, hydropower, and irrigation and drainage, but also in other areas such as watershed management, flood control and waterway projects.
Since 1961, the Bank has invested almost one billion US dollars per year in water-related projects, and this trend is expected to increase in the near future. The total amount of financing for water-related projects between 1961 and 1995 amounts to US$32,270 million (in 1995 US$) which is 25 percent of the total value of all Bank loans. Investments in hydroelectric projects dominate over the 35-year period (total US$14,298 million), followed by investment in water supply and sanitation projects (US$11,886 million). With increasing private investments and the creation of the Bank's private sector loan window, the emphasis on hydroelectric projects is giving way to other types of project-based generation more amenable to private sector investments. A similar situation has started to develop in water supply, although the effect of this in the Bank's pipeline is not yet apparent.
The Bank´s investments have mostly been subsectoral and project-based; multipurpose projects have been the exception rather than the rule. However, useful lessons have been learned during the past 35 years, and some interesting trends can be noted both in LAC as well as in Bank financing of water-related projects. In particular, increasing attention has been paid to watersheds; to the quality of receiving waters; to management aspects in the water use subsectors; to concern for integrated water resources planning; and to financing private investments for the provision of services that for a long time were the sole domain of the public sector. Some of these, like hydropower, irrigation, water supply and sanitation, deal with the use of a common resource at both ends of the spectrum: the source of supply and the receiving bodies for the wastewater.
Despite advancements made to follow a water management approach when financing projects (water supply and sanitation, for example) one of the main problems still confronted is that the use of water resources has been regarded as one of production and consumption, and not one of integrated management, which would also include its links with other water uses as well as consideration of the quality of the water supply and of wastewater disposal.
An international consensus exists that the efficient and sustainable use of water is one of the major global issues for the next century. Agreements have been reached about what should be done to achieve such purpose; namely, emphasis on integrated management, recognition of water's economic value, stockholder participation in decision-making, access to water services for the poorest users, ecosystem approach, and private sector contribution. Efforts are currently underway in different regions to reach agreements about how to do this since some of the proposed mechanisms are controversial.
The new elements brought in by the strategy therefore, focus on how the Bank:
- can incorporate elements of integrated water resources management into its water-related operations, in order to shift the emphasis of its actions in water resources from a project-based approach to increase supply to an integrated supply and demand management approach;
- using the instruments at its disposal, can help its borrower member countries to achieve integrated water resources management in order to:
- conserve water through a more efficient allocation of the resource;
- solve conflicts among competing uses and users;
- account for the social, economic and environmental value of water;
- increase the participation of communities and the private sector in decision-making and financing.
The strategy focuses on principles and on the flexible application of instruments on a case by case basis. The strategy is also envisioned as a continuum involving a succession of actions of diverse nature, that does not start or end with this paper. It started with the strategy development and consultation process,whose results are reflected in this document, and shall continue with an iterative implementation procedure, whose initial supporting actions are described in this document and whose results ought to be reflected and periodically evaluated in the field.
Last updated: 03/21/07
