Vision for Water for the World Bank

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1 Vision for Water for the World Bank How the Bank will increase its effectiveness to help clients deal with an increasingly urgent and increasingly complex water challenge EAP Water CoP June 2015

2 The Water Vision outlines how the WBG will increase the impact of our actions in water Validation that existing WBG corporate policies and strategies remain largely valid Recognition that challenge is more cross-cutting, more complex and more urgent than before Requirement to demonstrate how water contributes to corporate goals of ending poverty and boosting shared prosperity Acknowledgement that most decisions are and should continue to be made at country level Demonstration of actions the water practice can take to increase its effectiveness

3 The Principles laid out in previous strategies remain valid 1993 Water Resource Management Policy Paper 2003 Water Resources Sector Strategy 2010 Mid-cycle Implementation Report (of 2003 Strategy) Integration and WRM Focus on modern WRM; i.e., independent mgmt of water by different sectors not appropriate; selection of river basins as the unit of analysis Placement of water resources management central to sustainable growth, with emphasis on basin-wide efficiency in irrigation Highlighting of climate change adaptation & mitigation, need for cross-sector linkages Stakeholders and institutions Emphasis on stakeholder participation in WRM; need for respect for principle of subsidiarity Emphasis on political economy of change Emphasis on building client capacity for results-based decision-making Position on infrastructure Hard infrastructure in concert with demand management Re-engagement with high-risk, high-reward hydraulic infrastructure Reiteration of emphasis on infrastructure, with efforts to link quantity, quality to infrastructure investments Economic principles Emphasis on incentives and economic principles in improving allocation and enhancing quality Emphasis on water pricing, cost recovery and utility reform Emphasis on improvement of efficiency for water supply systems, support for low-cost, on-site sanitation and assessments suggest limited returns to formal sector strategies so the objective of the Water Vision exercise is not to change strategy, but to focus more practically on how to increase our impact

4 But water challenges have become more intense and more cross cutting Health & human settlements Food Security Energy and industry Environment Major demand increases will see 40% increase in urban population without WSS access 80% of all people lacking WSS access are rural 70% increase in food production will be required in 40 years At current rates of water productivity in agriculture, we would need to find 45% more water to meet that increase Global energy consumption expected to increase by ~50% from Power outages caused by lack of cooling water already seen in many countries Ecosystem damage largely coincides with high water stress and fertilizer runoff (dead zones) Over-consumption of water, water pollution and inadequate pricing results in loss of massive ecosystem benefits with the Lack of sanitation can cost potential to countries up to 6% of GDP derail poverty reduction and prosperity Unreliable water supply and farm-to-market access can deprive farmers of 2/3rd of their potential income Energy security is threatened by water challenges; 3% of Kenya s GDP from lost hydro production over Losses of biodiversity & ecosystem services with increasingly visible economic cost (e.g., China losing 5% GDP to pollution, of which water is a part) Growing competition for water resources, and impaired water quality affecting all uses; Major increases in climate variability expected with the heaviest impact on the poorest 4

5 External recognition of the urgency has increased World Economic Forum survey of Global Leaders puts water among top five risks to global economy, Jan 2013 UN Consultations on SDG themes saw 4x more interest in water than any other topic. Jan-Feb 2013

6 A 4 World expresses itself through water Hydrological volatility increases both seasonality and extremes, both affecting the poor disproportionately. Climate change may make increased volatility the new normal. Too little water a Water security Too much water Poorly managed "extreme water" can cost countries several multiples of a severe economic recession 6

7 US$m Our finance really matters, but we need to work more intensively to have the needed impact Our lending has important impacts Our projects approved in FY11 are planned to: Connect over 5 million people to improved water sources Connect around 2.7 million people to improved sanitation Improve irrigation and drainage services for around 2 million hectares Generate over 2,600 Gigawatt hours per year of renewable energy through new hydropower. but not at the scale the world needs Around 2.5 billion people still remain without access to sanitation despite our comparative size and our increasing commitments. Development Financing Committed for Water in 2010 (US $m) 8,000 World Bank Japan ADB Germany IDB^ United States AfDB^ France 6,000 4,000 2,000 0 FY02 FY04 FY06 FY08 FY10 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 ^ IDB and AfDB approvals are for "Water and Sanitation" and do not include commitments for agricultural water or hydropower. Figures for MDB commitments include concessional financing and non-concessional financing whereas bilateral commitments reflect Official Development Assistance only. 7

8 Our impact comes from a combination of finance, knowledge and convening services Knowledge services span multiple dimensions of water basic access and poverty targeting for water supply and sanitation Water diplomacy in transboundary basins Strategic studies about the economic impact of both inadequate services and poor water resources management

9 Water Dimension Water contributes both directly and indirectly to the corporate poverty and shared prosperity goals Nature of Intervention Poverty-targeted Foundations for Development Service Delivery Type 1: Improved water supply and sanitation for the poor For example, urban or rural water supply and sanitation projects that provide connections for poor people to services. Type 2: Sustainable urban water supply and sanitation services For example, reform of water utilities to ensure financial sustainability of services through cost recovery and low non-revenue water losses Resources, development and management Type 3: Targeted water resource interventions For example, helping poor farmers deal with depletion of groundwater they are using for growing food. Type 4: Broad water resource interventions For example, multipurpose river basin development and aquifer management that helps balance competing uses of water by industry, cities, and farmers.

10 Our Emerging Water Vision: Water helps people, economies and ecosystems thrive Process to update our vision : 1. Diagnosis completed June 2012; 2. Transformed work of leadership and central functions; 3. Established indicators and baselines; 4. Formal discussion and endorsement of new strategic framework in summer What we will focus on: 1. Strengthening our country-led business; 2. Helping non-water teams do water well; 3. Focusing on integrated solutions in a few particularly challenging places; 4. Going deep on select topics for the future. How we will work better: 1. Strengthening governance and leadership in the practice; 2. Making our knowledge work harder; 3. Increasing collaboration across sectors and units; 4. Managing our talent. 10

11 Water Vision: What we will focus on Country Business, driven by clients and country teams Global Focal Areas, set by the Bank-wide practice Pillar 1: Deliver core water products with increasing results Pillar 2: Make water components of non water activities watersmart Pillar 3: Coordinated approach in geographic areas where water constrains growth Pillar 4: Go Deep on a small number of topics Ensure that our work prepares our clients for the future Address disconnects between what we say and what we do in relation to: Poverty Financial sustainability Gender Climate risk Seek consistency in approaches where context allows WBG work on transport, mining, urban management, and rain-fed agriculture (among others) has significant impacts on water, or is significantly impacted by water. The water practice needs to help other practices address water in an appropriate fashion. Sector Board has so far identified: Central Asia India Kenya LAC megacities Mekong delta Morocco Northeast Brazil Nigeria West Balkans as the most likely areas, with further discussion needed. Invest in thinking through a few issues of global significance Develop distinctive tools and methods to address these issues Could be where: The WBG is very active but needs to consolidate its knowledge; Issues of future importance where we do not yet know enough 11

12 Water Vision: How we will deliver more results What works well What we will do to improve A Governance and leadership Water Sector Board making an effort to become a stronger decision-making body GPPs have significant staff and budget resources Clearer and more inspiring vision and strategic approach to Bank s water work More guidance from the WSB on priority topics More knowledge leadership and sharing Align donor funds with the vision B Knowledge management Significant expertise in many key topic areas for water More of a demand-driven approach to knowledge prioritization and creation Better systems for sharing knowledge across sectoral and regional boundaries Record frequently asked questions Develop position papers on key topics C Collaboration across the sector When staff do work together, they produce highquality work and enjoy their work Practice animation from anchor to help match skills with tasks Sector Board tracking cross support rates WET expanded to support all sectors -- not just water D Talent management High quality, highly motivated staff with expertise that covers a broad range of relevant topics Sector board to spend 20% of time on staffing Active management of vacancies and talent pools Learning plan aligned with Vision Learning events reach out to all staff working on water not just water mapped staff 12

13 Specific tools to address each pillar Pillar 1: Deliver core water products with increasing results Focus on themes where we have diagnosed gaps between our goals and our current actions Poverty Gender Climate resilience Financial sustainability Main responsibility: country teams, regional water units. Main driver of change: managers on Water Sector Board. Corporate assistance: Anchor support to a subset of projects Additional WSP support in relevant countries WPP funding for relevant topics

14 Specific tools to address each pillar Pillar 2: make water components of non-water projects water smart Main responsibility: managers of relevant activities in regional sector units Main driver of change: water sector board to review activities in one non-water sector per year. Anchor to provide analysis. Relevant experts from across the practice mobilized. Additional corporate support: Anchor water resources business line to provide additional support to select projects

15 Specific tools to address each pillar Pillar 3: Coordinated approach in geographic areas where water constrains growth Currently identified Nigeria Kenya LAC Megacities Northeast Brazil Mekong delta SE Europe Morocco India Main responsibility: activity led by relevant region. Main driver of change: Sector Board to provide management attention and free up top experts from across the practice to work on priority topics. Anchor to coordinate and stimulate actions. Additional resources: WPP WSP where relevant 2030 Water Resources Group where relevant

16 Specific tools to address each pillar Pillar 4: Focus analytical work a small number of topics Sector Board has identified first set of topics Service delivery in WSS Water Allocation Water and Energy Climate Adaptation and Water Main responsibility: water anchor, WSP and thematic groups where relevant Main driver for change: Water Sector Board to ensure that time of relevant staff is freed up Corporate assistance WPP and WSP resources where relevant Anchor coordination

17 This is a vision for how the Bank can best use its human and financial resources to package knowledge, convening power and financing to help its clients meet its increasing needs to manage water

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