The Challenges of Water Resources Management with Increased Hydro Vahid Alavian Generation Water and Hydropower Advisor Africa Region The World Bank

Transcription

1 The Challenges of Water Resources Management with Increased Hydro Generation Vahid Alavian Water and Hydropower Advisor Africa Region The World Bank

2 Outline The water resources landscape The water legacy of Africa Hydropower the water/energy nexus Two-track approach to hydropower An example of coordination and cooperation Final remarks

3 Water has many dimensions and cuts across many sectors of economy

4 Water for: Rural Cities Irrigation

5 Water for: Energy Transport

6 Water for: Biodiversity Livelihood

7 Mozambique 2000 & 2001 winters extreme flooding

8 Kenya winter flood 1997/1998 $2.39 Billion infrastructure damage

9 Kenya Drought 1998/2000 $2.4billion losses

10 Dual nature of water As a source of destruction, poverty & dispute Hydropower can help mitigate As a source of production, growth & cooperation

11 Irrigation Drought & desertification Navigation Floods Environment The key is shared water resources and responsible infrastructure development Environmental health Fisheries Hydropower Recession Ag.

12 Much easier said than done in Africa Natural legacy extreme variability 35-40% around the mean Historical legacy 60+ international rivers 160% Kenya: Annual Rainfall Variation about the Average 140% 120% 100% 80% 60%

13 Hydrologic Variability - deviation from mean Source: UNESCO, 1999

14 Economies and hydrologic variability Developed Economies Harness hydrology Intermediate Economies State of Water resources management & Stock of hydraulic infrastructure Manage hydrology Less Developed Economies Hostage by hydrology

15 Hydropower: nexus of water and energy And Africa is well endowed with potential hydropower

16 But has developed so little of its potential % of potential developed Europe Africa North America South America China Potential in million GWH/year Asia (excl China)

17 Hydropower has high strategic value for water management Contributes to a minimum platform of infrastructure for water/energy security Helps manage the hydrologic variability and catastrophic events (droughts and floods) Is a major source of renewable energy Plays both mitigation and adaptation roles in climate change Is a mature, reliable technology Has ancillary benefits, such as system stability, peaking capability Can store massive amounts of energy

18 Hydropower and multiple water objectives thermal Power Water resources Sources Multi-purpose management new renewable nuclear storage & regulation irrigation Single-purpose, primary hydropower Multi-purpose, byproduct water supply navigation, recreation..

19 But, there are risks High capital costs and long payback period Long lead time for development and operation Cross-sectoral and multi-disciplinary nature has complications Environment and social concerns and uncertainties Complicated transboundary and regional trade issues Opportunities for corruption are high Uncertain market rules and risk sharing for private sector engagement Contentious and political

20 World Bank two track approach Track 1 investment lending Finance the robust stock of ready projects; scale up by investing in making near-ready projects financeable Track 2 strengthen the foundation and pipeline Promote sustainable practices; leverage regional development; strengthen planning; scale up financing; and build partnerships. Track 2 requires close coordination of water management and hydropower development

21 Track 1 Africa s horizon is bright World Bank Group: Potential Hydropower-Related Investment Lending (by Region, Bank Project Contribution) 6,000 5,000 4,000 US$ millions 3,000 2,000 C-Horizon B-Prospective A-Pipeline Approved FY2008 1,000 - AFR EAP ECA LCR MNA SAR

22 Track 2 build the pipeline Scale up financing Project prep fund; hydrological risk insurance Update feasibility studies and move potential projects to feasibility stage, ready for financing Private sector participation in rehabilitation projects Blended public/private ventures and risk sharing Carbon financing - EU directive; Green bonds Strengthen planning Blend water and energy planning Address environmental and social issues early Assess political economy factors Multi-purpose design Optimize varied energy sources

23 Zambezi Basin Investment Opportunities Analysis 8 riparian states Pop.: 32m in basin GDP: ~ $100b

24 Development domain hydropower and irrigated agriculture All other water uses assumed non-negotiable SAPP: Southern Africa Power Pool investment plan

25 Economic assessment of tradewoffs (change from current conditions in terms of Net Present Value) 2A with coordinated cluster ops SAPP Plan SAPP + E-flows Coordinated ops Hydro Development Irrigation development Balanced development Interbasin transfer Note: NPV near zero reflects a return of ~10% on investment.

26 Hydropower + good water management = regional cooperation Coordinate operation now: ~10% gain in firm energy over stand-alone Coordinated operation with SAPP: 23% gain in firm energy over stand-alone Rumakali Songwe Lower Fufu Itezhi- Tezhi Kafue Upper Kariba Cahora Bassa Nkula Falls Tedzani Kapichira Itezhi-Tezhi Kafue Lower Kariba Kholombidzo Cahora Bassa Nkula Falls Tedzani Mpenda Nkuwa Kapichira Batoka

27 Final remarks Multipurpose investments in water management and hydropower are essential for sustained growth. Investments in water & hydropower promote economic integration, growth, and stability. The hydropower moral maze must be navigated with principled pragmatism for good development.

28 Thank you!