WATER RESOURCES AT THE
IDB
Washington, D.C.
May 2004
STRUCTURE OF PRESENTATION
• Overview of LAC
• Main Challenges
• The IWRM Strategy
• Financing the Strategy: The Water
Partnership
• Pipeline of projects
OVERVIEW OF LAC
URBANIZATION IN LAC
Total LAC = 517
millions
% population
100%
80%
389 millions = 75%
in urban areas
60%
40%
20%
0%
1960
1965
1970
Latin America
1975
1980
Argentina
1985
Brazil
1990
1995
Guatemala
2000

APPROXIMATELY 116 (50 IN URBAN AREAS) MILLION
PEOPLE WITH NO ACCESS TO SANITATION SYSTEMS AND 75
WITHOUT POTABLE WATER (26 IN URBAN AREAS)

URBAN FLOODS COST MEXICO US$ 150 MILLION/YR,
SEVERE IN CENTRAL AND SOUTH AMERICA (eg CHILE THIS
MONTH)

70% OF WATER EXTRACTIONS ARE FOR AGRICULTURE

HYDROPOWER GENERATES 64% OF TOTAL ENERGY

NAVIGATION VERY IMPORTANT (AMAZON RIVER BASIN,
RIO DE LA PLATA BASIN). IN 2000, 18 MILLION TONS OF
GOODS WERE TRANPORTED IN THE AMAZON BASIN
HYDROPOWER POTENTIAL
3.6
1.0
0.8
70%
72%
Europe
North
America
21%
Asia
1.0
6%
1.6
África
33%
South
America
Potential (millions Gwh/yr)
Total utilized
70%
Percentage utilized
MAIN WATER RESOURCES MANAGEMENT
PROBLEMS IN LAC

WEAK INSTITUTIONS (UNDERFUNDED, POLITICIZED,
ILL-ORGANIZED, UNDERSTAFFED) RESULTING IN
DETEORIORATED INFRASTRUCTURE AND LOW
EFFICIENCIES

WEAK REGULATORY FRAMEWORKS PREFERRED OVER
INCENTIVE-BASED APPROACHES

LACK OF OR OUTDATED LEGAL FRAMEWORKS AND NO
ENFORCEMENT

HIGH RATES OF URBANIZATION LEADING TO POOR
WATER QUALITY

WATER RESOURCES MANAGEMENT ACTIVITIES ARE
DIFFUSED AND FRAGMENTED

WATER HIGHLY CONCENTRATED IN A FEW AREAS
MAIN CHALLENGES IN LAC
Social
Challenges
Increase coverage rates
Improve health conditions
natural hazard risk mitigation
Economic
Challenges
Economic valuation of water resources
Water allocation among competing uses
integrated approaches to water management
Financial
Challenges
Raise funds for operation and maintenance
Financing infrastructure
Financing institutional development
Environmental
Challenges
Reduce and control pollution
Integrated approaches to water management
Ecosystem approach to water management
Institutional
Challenges
Water law reforms
Institutional innovation including regulation
Stakeholder participation
IADBs STRATEGY ON
INTEGRATED WATER
RESOURCES MANAGEMENT
THE GOALS
 SUPPORT
THE IMPLEMENTATION IN
LAC OF:
 PRINCIPLES
OF DUBLIN
 AGENDA 21
 THE
SAN JOSE DECLARATION
 BOLIVIA SUMMIT
DEVELOPMENT
ON SUSTAINABLE
SPECIFIC OBJECTIVES
CHANGE IN PARADIGM:

FROM DEVELOPMENT TO MANAGEMENT

FROM SECTORAL TO INTEGRATED
APPROACHES IN WATER RESOURCES LEADING
TO:



MORE EFFICIENT WAYS TO ALLOCATE AND
CONSERVE WATER AND TO SOLVE
CONFLICTS AMONG COMPETING USES;
ACCOUNT FOR THE SOCIAL, ECONOMIC AND
ENVIRONMENTAL VALUE OF WATER; AND
INCREASE PARTICIPATION OF THE PRIVATE
SECTOR AND COMMUNITIES
GUIDING PRINCIPLES
PROMOTING COMPREHENSIVE NATIONAL WATER
RESOURCE MANAGEMENT POLICIES AND
STRATEGIES
FOCUS ON INSTITUTIONAL INNOVATION AND
CAPACITY BUILDING
ATTENTION TO BOTH SHORT- AND LONG-TERM
EFFORTS FOR BANK ACTION
CONFORMING TO BANK’S AND COUNTRIES
OBJECTIVES AND TO INTERNATIONALLY ACCEPTED
PRINCIPLES
INCENTIVES FOR COUNTRY INVOLVEMENT AND
FOR INTERNAL BANK COORDINATION; AND
COOPERATION AND COORDINATION AMONG
INTERNATIONAL FINANCIAL ORGANIZATIONS
SITUATIONS TO ENCOURAGE

INTEGRATED WATER RESOURCES
MANAGEMENT

STAKEHOLDER EMPOWERMENT AND
PARTICIPATION

PRIVATE SECTOR PARTICIPATION

ENTITY TO COORDINATE “TOP-DOWN” AND
“BOTTOM-UP” APPROACHES

MARKET OR OTHER INCENTIVE-ORIENTED
MECHANISMS TO ALLOCATE THE RESOURCE

ENTITY TO COORDINATE, FACILITATE, AND
REGULATE THE PROCESS OF WATER
ALLOCATION PLACED OUTSIDE AND ABOVE OF
ANY SPECIFIC WATER-USE-SUB-SECTOR
STRATEGIC INSTRUMENTS

COST RECOVERY

PRIVATE SECTOR PARTICIPATION

CAPACITY BUILDING

STAKEHOLDER PARTICIPATION

DECENTRALIZATION

TRADABLE WATER RIGHTS

RIVER BASIN COUNCILS
LEVELS OF ACTION FOR THE
BANK
CONSTITUTIONAL LEVEL:
Establishing laws and policiesa national strategy for integrated
water resources management
ORGANIZATIONAL LEVEL:
River basin management- allocating water flows,
assimilative capacity, ecosystem maintenance,
capability, potential energy
OPERATIONAL LEVEL:
Water uses and users-using water resources, subject to
operational rules, to meet demands and needs
FINANCING THE STRATEGY
BANK INSTRUMENTS
IDB
MIF
PRI
IIC
•COUNTRY DIALOGUE
•COUNTRY AND REGIONAL TECHNICAL ASSISTANCE GRANTS
•TRUST FUNDS
•SECTOR AND HYBRID LOANS
•PROJECT SPECIFIC LOANS
•SMALL PROJECT LOANS
•COFINANCING
•COUNTRY AND REGIONAL TECHNICAL ASSISTANCE GRANTS
•FOR MICROENTERPRISE AND SMALL ENTERPRISE
•EQUITY FUNDS/INVESTMENTS
•SMALL BUSINESS VENTURE CAPITAL FUNDS
•PRIVATE SECTOR LOANS
•GUARANTEES
•SUBORDINATED LOANS
•PRIVATE SECTOR LOANS TO SMALL AND MEDIUM
•ENTERPRISE
•EQUITY FUNDS/INVESTMENTS
•COFINANCING
The IDB-Netherlands - Water
Partnership Program
INWAP
INWAP´S OBJECTIVE:
The general objective of INWAP is to support
the implementation of internationally
recognized principles of integrated water
resources management (IWRM) in Latin
America and the Caribbean.
 This objective will be achieved through joint
efforts: internally to improve and strengthen
the Bank’s operational capacity in the area of
IWRM, and externally to improve such
capacity in the Bank’s borrowing member
countries.

INWAP 2004 Work Plan centers
around two sets of strategic
priorities:
 The
ones stated on the Bank´s
Institutional Strategy
 The ones stated on the Bank´s
Integrated Water Resources
Management Strategy
Priorities stated under the
Bank´s Institutional Strategy:
The Bank´s two overarching objective are:
a) sustainable economic growth, and b)
poverty reduction and the promotion of
social equity, implemented through four
priority actions areas: social development,
modernization of the state, competitiveness,
and regional integration. Environment is a
cross-cutting theme.
Priorities stated under the the Bank´s
Integrated Water Resources
Management Strategy :


The goal of the strategy is:…¨to support water
resources conservation through a process of
change regarding water resources issues;
namely, a shift from development to management
and from a sectoral to an integrated approach¨.
The strategy aims to mainstream critical aspects
of IWRM related to each country’s water sector
in general in the Bank’s water-related
operations.
Strategic Lines of Action for the
2004 Work Plan:
Based on the main objectives of the
Bank and the principles of the
IWRM Strategy, new eligible
activities will place emphasis on:
 Poverty
Reduction and the
Promotion of Social Equity
 Water Governance
Poverty Reduction and the
Promotion of Social Equity
Areas of concentration are: a) support compliance
with the Millennium Development Goals (MDGs) in
potable water and sanitation and b) provide the
methodological tools to assess the impact of waterrelated activities on the poor.
Water Governance
Areas of concentration are: a) support the
formulation of IWRM strategies and plans as set in
the Implementation Plan of the World Sustainable
Summit and b) strengthen the institutional, legal,
and policy frameworks of the Bank's borrowing
member countries.
Strategic Lines of Action for the
2004 Work Plan:
Based on the main objectives of the
Bank and the principles of the
IWRM Strategy, new eligible
activities will place emphasis on:
 Poverty
Reduction and the
Promotion of Social Equity
 Water Governance
INWAP´s Strategic Activities for 2004
INWAP´s Strategic Activities for 2004
IDB´s IWRM Strategy Objectives
Poverty Reduction
MDG´s in water
and sanitation
Water and poverty
Facility for Small Scale
Providers in Water
Empirically Linking
Water and Poverty
Wate Governance
IWRM strategies
and plans
Institutional, legal
and policy
frameworks
Water Resources
Plan for Brazil
Water Policy
for Bolivia
Awareness and Training
Strategy on IWRM Plans
National Tariff
Framework for Peru
Technical Seminar
on WQM
Congress on Public
Policies for WRM
Course on IWRM
for Central America
Capacity Building for
Legislators
Pipeline of IDB Loans
For 2004-2005 there are approx. USD 2.9
billion in the pipeline
 USD 1 billion in hydropower (Tocoma in
VE, Porce III in CO, two small PRI
projects in BR and PN)
 USD 250 million in irrigation (BR, ME
and JA)
 USD 1.5 billion in potable water and
sanitation (large loans in ME and BR and
smaller loans in variety of countries)
 USD 40 million in watershed management
(CR, PN and VE)