W R G O F F E R I N G: A D VA N C I N G G LO B A L WAT E R S E C U R IT Y T H R O U G H P U B L I C-P R I VAT E C O L L A B O R AT I O N 2030 WATER RESOURCES GROUP OFFERING: Advancing global water security through public-private collaboration W R G O F F E R I N G: A D VA N C I N G G LO B A L WAT E R S E C U R IT Y T H R O U G H P U B L I C-P R I VAT E C O L L A B O R AT I O N WHO WE ARE The 2030 Water Resources Group (WRG) is a multi-donor trust fund managed by the World Bank’s Global Water Practice that advances the role of the private sector in addressing global water insecurity and climate change impacts together with government and civil society (see 2030wrg.org). 2 W R G O F F E R I N G: A D VA N C I N G G LO B A L WAT E R S E C U R IT Y T H R O U G H P U B L I C-P R I VAT E C O L L A B O R AT I O N HOW WE WORK WRG catalyzes collaboration between the private sector and government to tackle water security challenges and climate change impacts. WRG engagements center on four steps: 1. FRAME CHOICES TO SUPPORT EFFECTIVE proceed to priority initiatives, which require more effort but DECISION-MAKING. WRG frames choices have greater impact, and then to more complex high-impact for decision-makers in government and the major projects requiring more significant effort, as depicted private sector to address water security in the diagram below. challenges in three areas: water for food, water for cities, and water for planet. The purpose is to prioritize critical decisions and actions that will have a significant impact WRG ADDS VALUE BY on water security and climate outcomes, with an important role for the private sector. This work draws on data and 4. Enabling scale analytics within and beyond the World Bank such as water security diagnostics,1 country climate and development reports,2 water sector assessments, hydro-economic 3. Supporting implementation analyses, and Aqueduct.3 2. Facilitating country platforms EXAMPLES: WRG routinely performed hydro-economic analyses to inform water allocation choices and trade-offs, identify options to close the water demand-supply gap, and 1. Providing evidence for decision-making provide an entry point for stakeholder engagement. Hydro- economic analyses have been undertaken in Bangladesh, India (Karnataka, Maharashtra), Kenya, Mongolia (Box 1), Peru, Rwanda, South Africa, Tanzania, and Vietnam.4 A HIGH recent analysis of the country climate and development Priority 3 reports pointed to a need to structure support for high- initiatives Major value, low-regret investments while crowding in multiple projects 2 financing sources.5 Impact FUTURE FOCUS AREAS: WRG provides a framing of critical choices for decision-makers based on available evidence and an assessment of impact versus the level of Bridge- Time effort and complexity involved to achieve results. These builders sinks will be supported by relevant diagnostic tools. Depending 1 LOW on the context, decisions could be sequenced, starting with options to build trust early in the process through “bridge- LOW Level of effort & complexity HIGH builders” and to achieve some visible quick wins. This could 1 www.worldbank.org/en/topic/water/publication/water-security-diagnostic-initiative 2 www.worldbank.org/en/publication/country-climate-development-reports 3 https://www.wri.org/aqueduct 4 https://2030wrg.orzg/publications/# 5 Diving into Water, Climate, and Development: An Analysis of Water in the Country Climate and Development Reports, Water Economy and Climate Change Global Solutions Group, October 2023 3 W R G O F F E R I N G: A D VA N C I N G G LO B A L WAT E R S E C U R IT Y T H R O U G H P U B L I C-P R I VAT E C O L L A B O R AT I O N 2. FACILITATE COUNTRY PLATFORMS. WRG convenes and facilitates platforms that bring together stakeholders across sectors to develop a common understanding of pressing water challenges, agree on priorities, and work together to implement effective solutions. The platforms build trust, enabling more complex challenges to be addressed. Government Private sector Multi-stakeholder platforms are typically established at a country level but can also be convened at a city-region and state level. WRG also facilitates monitoring and reporting, increasing accountability among partners. EXAMPLES: Mongolia (Box 1), Bangladesh (Box 2), India Civil society (Box 3), South Africa (Box 4), Brazil, Kenya, Mexico, Peru, Rwanda, Tanzania, and Vietnam. level government commitment, private sector support, and alignment with World Bank operations, especially with FUTURE FOCUS AREAS: WRG convenes country, state, those under the Water, Agriculture, and Environment Global and city-region platforms where there is alignment with Departments.. This work is based on an assessment of its three themes (water for food, cities, and planet), high- potential impact (water security risk and scale of impact). CRITERIA FOR EXPANSION Potential for impact • Water security risk • Alignment to themes • Scale of impact Source: https://www.nytimes.com/interactive/2019/08/06/climate/world-water-stress.html Institutional alignment • Government demand • Private sector support • World Bank alignment Source: https://maps.worldbank.org/projects?status=active 4 W R G O F F E R I N G: A D VA N C I N G G LO B A L WAT E R S E C U R IT Y T H R O U G H P U B L I C-P R I VAT E C O L L A B O R AT I O N 3. SUPPORT IMPLEMENTATION. EXAMPLES: The Bangladesh program is scaling water WRG supports implementation by offering pollution management by mobilizing both private capital tested solutions and piloting innovative and expertise, in support of climate change mitigation approaches. 6 It adopts an adaptable rapid- and adaptation. (See Box 2.) learning approach, with a focus on creating and improving markets and mobilizing private sector participation and The PRAGATI accelerator in Uttar Pradesh, India, is helping financing. It does so primarily through the design of 1 million farmers increase their incomes and improve large-scale programs in a particular country. WRG enrolls sustainable agriculture and water management practices implementation partners from the government, the across key crop value chains in the state. (See Box 3.) private sector, and civil society, and mobilizes resources WRG helped develop an innovative hybrid annuity model to support implementation. to finance municipal wastewater treatment in the Ganga basin. This model has subsequently been replicated in other contexts. (See Box 5.) 6 See 2030wrg.org/innovations/ 5 W R G O F F E R I N G: A D VA N C I N G G LO B A L WAT E R S E C U R IT Y T H R O U G H P U B L I C-P R I VAT E C O L L A B O R AT I O N 4. SCALE SOLUTIONS. Security and Climate Adaptation, which aims to accelerate Proven solutions will be scaled by expanding in- impact on water and climate outcomes through targeted country programs, with the support of additional investments and greater involvement of the private sector. financing, and replicating programs across regions and globally. WRG will link successful initiatives with FUTURE FOCUS AREAS: WRG will replicate the successful finance through the World Bank, other development finance Uttar Pradesh Accelerator PRAGATI in other states in India institutions, and the private sector, under the umbrella of the and in the South and East Asia regions, with an initial focus World Bank’s Global Challenge Program: Fast Track Water on climate-smart rice production. RICE PRODUCTION TOP 9 IN ASIA million tons RICE PRODUCTION - ASIA China 213 India 195 Bangladesh 57 Indonesia 54 Vietnam 44 Thailand 33 Myanmar 25 Philippines 20 Pakistan 14 China India Bangladesh Indonesia Vietnam Thailand Myanmar Philippines Pakistan 0 50 100 150 200 250 Source: https://ourworldindata.org/grapher/rice-production 6 W R G O F F E R I N G: A D VA N C I N G G LO B A L WAT E R S E C U R IT Y T H R O U G H P U B L I C-P R I VAT E C O L L A B O R AT I O N PARTNERSHIPS IN ACTION BOX 1 Improving water security in Mongolia “WRG has been instrumental in establishing the first-of-its-kind public, private, and civil society partnership in the Mongolian water sector. This collaboration has significantly contributed to achieving various TSENGEL TSEGMID , initiatives to address the country’s State Secretary, Ministry water challenges and we are collectively of Environment and Tourism, Government of Mongolia, working to creatively leverage this Chairperson of WRG Mongolia partnership further.” steering board FRAMING. Economic activity is concentrated in Mongolia’s the treatment works, and increased levels of reuse, thereby capital, Ulaanbaatar, which accounts for about 70 percent reducing reliance on freshwater. of total potable water consumption in the country. Limited water supplies were heavily polluted by industrial discharge. UNLOCKING FINANCE. WRG also facilitated a multi- The hydro-economic analysis conducted by WRG identified stakeholder process that led to the development and that ensuring adequate treatment of wastewater and adoption of national standards for reusing treated recycling effluent discharged from the central wastewater wastewater for different uses in Mongolia. Inspired by treatment plant in Ulaanbaatar was the most cost-efficient international best practices, the guiding principle behind solution to close the demand gap. the standards is ensuring cost-effectiveness through fit- for-purpose treatment of wastewater. These standards, CHANGING INCENTIVES. The analysis also highlighted together with an assessment of the wastewater reuse that there was no regulatory provision to allow for reuse of potential, unlocked $98 million from the Millennium treated wastewater, nor were there incentives or revenues Challenge Corporation to invest in water reuse. for treating and reusing wastewater. To enable higher levels of wastewater treatment and reuse, a change in RESULTS. Construction of a major water recycling plant in the laws and new incentives were required. WRG worked Ulaanbaatar began in 2022. Local industrial users across with stakeholders to explore alternatives. Based on a eight industrial sectors are developing water efficiency review of international best practices, a simpler model and wastewater management projects in the South Gobi for determining water pollution fees was proposed and and Ulaanbaatar regions. The collection of water pollution adopted after consultation into a new Water Pollution fees is providing revenues for the operation of the central Fee Law. The law supports better monitoring of effluent, wastewater treatment plant in Ulaanbaatar. In addition, 11 includes a clear methodology for estimating pollution mining companies in the South Gobi region have adopted levels, and provides economic incentives for industry to a voluntary code of practice for water management. This treat and reuse treated wastewater before discharging it program has reached maturity and WRG is not currently into the central sewerage network. The law has reduced active in Mongolia. the volume of discharge, increased revenues to operate 7 W R G O F F E R I N G: A D VA N C I N G G LO B A L WAT E R S E C U R IT Y T H R O U G H P U B L I C-P R I VAT E C O L L A B O R AT I O N BOX 2 Reducing water pollution in Bangladesh “With regard to water, an economic zone should ensure the use of zero or near to zero water discharge technologies through rainwater harvesting, sustainable and circular water use, efficiency improvement and effluent treatment, and it should improve the resilience of the water supply system, which was not previously addressed. Economic zones are expected to responsibly source water, considering local water scarcity issues and sensitive water reservoirs.” PABAN CHOWDHURY, Executive Chairperson, Bangladesh Economic Zones Authority FRAMING. Untreated wastewater in industrial areas is private sector capital and expertise. The program aims to polluting the country’s surface water, posing a severe mobilize $450 million in public finance and $100 million in health risk to surrounding communities. These challenges private finance for wastewater management, reach about are exacerbated by legislative gaps, policy overlaps, and 20 million people with wastewater management services, lack of institutional capacity The overall costs associated and treat more than 65 million cubic meters of wastewater with water pollution in Bangladesh are estimated to be by establishing central effluent treatment plants and about $2.8 billion annually. Untreated wastewater from the sewage treatment plants in economic zones and city textile sector is a major source of pollution. corporations. COMMITMENT. The Bangladesh Water Multi-Stakeholder RESULTS. WRG, in collaboration with the World Bank and Partnership was formed in 2015 and formalized through the International Finance Corporation, is developing the a notification in the government gazette, giving it a quasi- first-ever replicable model of public-private partnership legal status. The overall goal of the partnership is to develop (PPP) financing for municipal wastewater management in a fact-based, analytical approach to address water security Bangladesh, for the Gazipur City Corporation (GCC). challenges at national and local levels for economic development and a healthy ecosystem. The partnership is GCC, north of capital city Dhaka, is the largest city governed by the National Steering Board, which is chaired corporation in Bangladesh, and home to 2.5 million people. by the Cabinet Secretary, the country’s highest-ranking GCC has no municipal wastewater management facility civil servant. The National Steering Board meets twice a and is one of the cities that is most severely affected by year and resolutions, signed off by the Cabinet Secretary, surface water pollution. explicitly inform the country’s water agenda. The Ministry of Local Government has also asked WRG to CHANGING INCENTIVES. Consultations facilitated initiate a PPP-based municipal wastewater management through the multi-stakeholder platform have resulted in project in the Cumilla City Corporation, which is home to the approval of rules and regulations for the Bangladesh 1 million people and many industrial activities, but lacks a Water Act, a green economic zone guideline, approval wastewater management facility. of a national framework on incentivizing water-resilient In addition, WRG is working with the Bangabandhu Sheikh production practices for the textile and apparel sector, Mujib Shilpa Nagar Economic Zone in Mirsarai, the largest real-time monitoring and reporting on river water quality, economic zone in Bangladesh, to develop a hybrid annuity and potential local application of a global handbook for PPP model for the first central effluent treatment plant in implementing tradable wastewater reuse certificates. an industrial zone in the country. Based on this work, the UNLOCKING FINANCE. The water pollution management Bangladesh Economic Zones Authority has asked WRG to program supports the implementation of the government’s develop PPPs for central effluent treatment plants and solid Bangladesh Delta Plan 2100 with strategic interventions waste management systems in two additional economic to mainstream water pollution management by mobilizing zones (Jamalpur and Srihatta). 8 W R G O F F E R I N G: A D VA N C I N G G LO B A L WAT E R S E C U R IT Y T H R O U G H P U B L I C-P R I VAT E C O L L A B O R AT I O N BOX 3 Accelerating the transition to sustainable rice production in India FRAMING. Rice accounts for about 30 percent of and by reducing supplier risks through partial upfront freshwater use worldwide and contributes to 12 percent payments together with escrow-facilitated payments on of global anthropogenic methane generation. India is the completion. The special purpose vehicle is also facilitating second-largest rice producer globally, and the state of Uttar higher uptake of mechanization, and improving productivity Pradesh, with a population of 250 million, is the second- and farmer incomes. This transition will be supported largest rice producer in the country. Uttar Pradesh is also by creating a digital platform to support farm equipment the second-poorest state with 23 million economically rentals, aggregating demand and supply, making credit more marginal smallholder farmers. Smallholder farms in the accessible, and expanding capacity-building initiatives with state are characterized by low productivity and low water- a focus on women. use efficiency, and contribute significantly to greenhouse gas emissions. UNLOCKING FINANCE. The model of climate-smart agriculture adopted by WRG’s Uttar Pradesh program is COMMITMENT. In 2022, Uttar Pradesh’s Cabinet approved being scaled through a new World Bank operation titled a program to reach 1 million smallholder farmers over five “Uttar Pradesh Agriculture Growth and Rural Enterprise years, increasing the area under micro-irrigation fivefold, Ecosystem Strengthening Project” (UP AGREES), with increasing the area under direct seeded rice tenfold, and financing of $350 million. WRG is also working with the reducing greenhouse gas emissions by 60 percent. World Bank’s Climate Warehouse to support voluntary carbon markets through the use of digital tools and CREATING MARKETS. The Uttar Pradesh multi- platforms, to create scalable solutions that can be stakeholder platform, facilitated by WRG and working with implemented regionally and globally. 26 private sector partners, launched the Uttar Pradesh Accelerator PRAGATI program (which means progress in RESULTS. The launch of the micro-irrigation project has Sanskrit) as a special purpose vehicle. The special purpose already resulted in significant economic gains for farmers vehicle created a micro-irrigation platform that increases by reducing unit costs by between 30 percent and 40 farmer uptake by reducing farmer costs and risks through percent and speeding up delivery timelines by 50 percent standardized prices and contracts with quality assurance, on average. Photo by Siva Guru on Unsplash 9 W R G O F F E R I N G: A D VA N C I N G G LO B A L WAT E R S E C U R IT Y T H R O U G H P U B L I C-P R I VAT E C O L L A B O R AT I O N BOX 4 Partnering for a water-secure city region in Gauteng, South Africa FRAMING. The Gauteng city region, which accounts for to improve the region’s water security. Participants will about one-third of South Africa’s GDP and is home to a agree on priority actions, based on robust analysis, and quarter of its population, is water insecure. The current gap report on progress, increasing accountability and building between actual use and reliable supply is about 400 million trust. The platform will pilot new ways of working and will liters per day, representing 10 percent of the region’s total identify meaningful contributions by the private sector and water use. Failure of the water supply system would have civil society. a catastrophic impact on the region and South Africa as a whole. A collaborative effort between public institutions UNLOCKING FINANCE. While the short-term investments (government, the regional bulk water provider, and local needed for reducing demand are relatively modest, the governments), the private sector, and various other users is partnership will seek to unlock innovative financing needed to both increase supply and reduce demand. mechanisms, with a focus on incentives and results. In the medium term, investments will be needed to expand COMMITMENT. The director-general of the national and upgrade wastewater treatment and to invest in reuse. water department asked WRG to establish the Gauteng Underlying institutional and financial weaknesses across Water Security Partnership, a multi-stakeholder platform the water supply system need to be addressed to secure comprising government, the private sector, and civil financing. society, to strengthen capability to implement interventions THE ECONOMIC SIGNIFICANCE OF THE GAUTENG REGION IN SOUTH AFRICA Gauteng region Formal Employment per Municipality Source: https://www.gcro.ac.za/outputs/map-of-the-month/detail/significance-cities-jobs/ 10 W R G O F F E R I N G: A D VA N C I N G G LO B A L WAT E R S E C U R IT Y T H R O U G H P U B L I C-P R I VAT E C O L L A B O R AT I O N Rehabilitating the Ganga River BOX 5 through innovative financing FRAMING. The Ganga River basin is home to more than paid to the private concessionaire over 15 years, along 600 million Indians and accounts for over 40 percent of the with operation and maintenance expenses, based on country’s GDP. The main river runs through 50 major Indian performance targets. Importantly, the structure builds in cities, which generate about 3 billion liters of sewage every accountability and incentives for performance over the day, only a fraction of which is treated, with far-reaching life of the project. impacts on human and environmental health. RESULTS. The hybrid annuity model allows for scaling UNLOCKING FINANCE. In a significant step toward because the government does not have to pay all costs up revitalizing the Ganga River basin, the Indian government, front. Moreover, it provides incentives for the private sector in collaboration with WRG and the World Bank Group, to deliver by linking payments with the achievement of pioneered the country’s first PPPs for municipal wastewater defined, measurable results. By 2017, PPPs had launched in treatment and reuse in 2015. The partnership incubated a three towns (Mathura-Vrindavan, Varanasi, and Haridwar), pilot project in the cities of Mathura and Vrindavan using expanding in 2019 to 13 towns in the Ganga basin. To date, an innovative hybrid annuity model, where the government contracts worth more than $1.5 billion have been launched paid for 40 percent of the project construction costs as under this program, with over $650 million mobilized from milestones were met. The remaining 60 percent is being the private sector. Photo by Shiv Prasad on Unsplash 11 W R G O F F E R I N G: A D VA N C I N G G LO B A L WAT E R S E C U R IT Y T H R O U G H P U B L I C-P R I VAT E C O L L A B O R AT I O N To find out more about our work, visit: 2030wrg.org | 2030wrg@worldbank.org | twitter.com/2030WRG