The African Development Bank explores Financial Instruments and cooperation with development stakeholders to support the Water Sector

A Consultative workshop on Financing and Cost Recovery in the African Water Sector organized in Tunis by the African Development Bank (AfDB), brought together representatives of regional member countries, multilateral development partners, financial institutions, and other stakeholders such as Private sector and civil society organizations to examine Financial Instruments and Cooperation with development stakeholders with a view to supporting the Water Sector in Africa.
The workshop was opened in Tunis on Tuesday by Mr. Joseph B. Eichenberger, AfDB Vice President in charge of Policy, Planning and Budget. Mr. Kordjé Bedoumra, Director of the African Water Facility, presented an overview of the Bank’s water initiatives to the audience. The plenary session was chaired by Mr. Philibert Afrika, Operations Policies and Review Department Director. The Keynote Statement, describing Water and Sanitation financing challenges was presented by Dr. William Muhairwe, Managing Director of Uganda’s National Water and Sewerage Corporation.

The three-day stakeholder Consultative Workshop dealt with issues relating to “User Fees and Cost Recovery for Water, Sanitation and Irrigation projects to achieve Financial Sustainability” within the context of Integrated Water Resources Management. Participants also examined the findings of an AfDB-led study on “Financial Instruments to Facilitate Investment for Water Sector Infrastructure”. The purpose of this study is to promote dialogue between Bank staff and potential clients and beneficiaries, as well as to strengthen collaboration with specific institutions and agencies on the effective deployment of the financial instruments.

Participants discussed specific and standardized means of collaboration between the AfDB and other institutions on utilizing financial instruments to promote investment in water and, finally establishing networks to facilitate follow-up activities and improvement of knowledge and information on experiences in the water sector. The Draft Guidelines on User Fees and Cost Recovery in the Water Sector will also be revised to take the proposals and recommendations made at the Workshop into account.
In Africa, resources to provide infrastructure for irrigation, flood control, electricity generation and water supply, among others, are in dire need of financial resources. This has resulted in Africa’s water resources being under-utilized. The potential for economic development in the continent is thereby hampered. With the African continent lagging so far behind in water and sanitation coverage levels as well as in irrigation and hydropower, a lot needs to be done to increase financing of new infrastructure while optimizing the use of existing infrastructure.
The projected costs of achieving African Water Vision targets and the related MDGs amount to about US$20 billion per year. Current funding from donor agencies and governments is not enough to cover these investment needs. It is therefore imperative to mobilize funds from other sources if the MDGs are to be achieved.