2030 WRG in the News

New Vision: Developing countries look to private investors to solve water crisis

NEWS SOURCE: New Vision

By Fredrick Mugira

Currently, financing for water infrastructure in developing countries comes predominantly from public sources

SOUTH AFRICA  – When Rudy Roberts realised the potential of investing in the water sector three years ago, he patterned with the Danish pump manufacturer Grundfos to launch the Mega Water Corporation in South Africa.

This industrial water company, which Rudy heads as Chief Executive is now credited for revolutionising water supply in South Africa and across the African continent.

Since its inception, the Guatang province-based corporation has implemented various projects in the South Africa’s water sector that range from enabling access to groundwater to rehabilitating hospital water supply among others.

Mega Water Corporation is a perfect example of private investment in the water sector which water professionals and authorities from Bangladesh, India, Kenya, Mexico, Mongolia, Peru, South Africa and Tanzania are advocating for to enable governments tackle water-supply challenges.

The water experts from the eight countries are meeting in South Africa for knowledge exchange organised by the 2030 Water Resource Group (2030 WRG), a global public-private-civil society partnership based in Washington USA in collaboration with Stockholm International Water Institute and the Water and Sanitation Department of South Africa.

Currently, financing for water infrastructure in developing countries comes predominantly from public sources.

But while speaking in an interview after participating in the financing water infrastructure session at Sheraton Pretoria hotel, Rudy said private investment in the water sector will be one of the most important investments in the 21st century.

“It is because I believe water is a very important component of industrialisation; in manufacturing; agriculture; personal hygiene.  It has become a very important commodity. Without water you can’t manufacture. You can’t grow food. You can’t have energy.”

Developing governments face a challenge of financing their water infrastructure. For example, the funding gap for water infrastructure alone in sub-Saharan Africa is over USD11b , according to the Stockholm International Water Institute.

In a country like Uganda, the ministry of water and environment has been receiving only three per cent of the total national budget over the years.  This results into water–supply challenges.

But like other participants at this session, Rudy believes that with more private investors investing in the water sector in developing countries, such challenges would be history in the long run.

But he also acknowledges that it is not ease to invest in the water sector in unindustrialized countries. Why? Because according to Suresh Patel, the governor for Environment, Water and Natural Resources at the Kenya Private Sector Alliance, water is a very low price commodity.

“The cost of water is much lower to make profitable investment. No businessman wants to make losses on an investment.”

Suresh insists that investing in developing countries especially in Africa is generally expensive and the legislative environment is not conducive.

“Investment must be safe, protected and generates sufficient revenue to pay back the loans.”

Contrary, Dr Dana Gampel, the Executive Director for Atum Strategy Consulting based in Johannesburg says investments that focus on profits only have no space in the modern world.

“It is not only about profits. There is need for new approach to business. Investors must focus on sustainability which means long term returns.”

She elaborates that to have healthy consumers of products and services, investors must first address the needs of the communities where their businesses are situated. Such needs, she says, include water.

WaterSan Perspective: Water Experts Call For Partnership in Solving Water Problems

NEWS SOURCE: WaterSan Perspective

By Fredrick Mugira

February 29, 2016

Water experts from different countries across the globe are rooting for the partnership approach in solving water resource problems.

The call comes as the water professionals and authorities from Bangladesh, India, Kenya, Mexico, Mongolia, Peru, Tanzania and South Africa meet in Pretoria, South Africa for a week-long knowledge exchange organised by the 2030 Water Resource Group (2030 WRG), a global public-private-civil society partnership based in Washington USA in collaboration with Stockholm International Water Institute and the Water and Sanitation Department of South Africa.

Addressing the close to 100 participants at Sheraton Pretoria hotel, Anders Berntell, the 2030 WRG Executive Director stressed that partnerships based on collaboration and teamwork would provide more consistent, co-ordinated and comprehensive solution to the water resource problems.

Such partnerships could be between individuals; private sector; agencies; organisations and governments. And according to water experts attending this meeting, this would help to solve problems like: water scarcity; aquifer depletion; corruption in the water sector; water overuse; pollution and changes in water availability among others.

One of the countries that have benefited from this approach is Kenya, a country facing a 30 per cent deficit between the water resources and demand, according to water experts.

In an exclusive chat with WaterSan Perspective at the meeting, Kimanthi Kyengo, the Kenya’s Deputy Director in charge of Water Services said such an approach is a practical solution to Kenya’s water problems.

“It is one of the solutions that is potentially beneficial to Kenya. It brings ideas, expertise and resources in the water sector.”

To make this approach work, Kimanthi says Kenya has, “Developed concepts on how it would benefit the economy, the environment and the citizens; sensitised all the stakeholders about the process and is now in the process of recruiting stakeholders to come together to look for solutions.”

Similarly, this approach has worked in Tanzania. Engineer Christopher Sayi, the chairperson of National Water Board for Tanzania says it is helping to make sure all stakeholders especially the private sector know their roles in conserving the water resource.

“That is why we are encouraging these partnerships so that they (private sector) can also contribute in terms of technology and also contribute towards financing the management of water resources in the country.”

Earlier, while speaking during the opening session, Anton Earle, the Director of Africa regional centre for the Swedish International Water Institute gave an example of partnership between governments citing the South African government which is partnering with that of Lesotho to import water to Pretoria, some 400 kilometres away, following high rains in Lesotho.

Business Day Live: Our dirty, dwindling water supply

News Source: Business Day Live

By Tom Nevin

WHILE a drought is threatening SA and there is growing demand for water and a diminishing capacity to supply it, the real issue now is the worsening quality, experts say. The Council for Scientific and Industrial Research (CSIR) believes that quality, rather than quantity, is the big issue and warns that an increase in population and economic growth could result in serious water shortages by 2025.

CSIR water resource competence area manager Harrison Pienaar says the water crisis “is not a debate” — increasing quality problems are underlined by the already inadequate supply of clean water in certain parts of the country “to meet the needs of citizens, agriculture and industry, or to sustain the country’s ecological baseline”.

South African Institute of Civil Engineers chairman Chris Herold says a key issue affecting the security of clean water supply — besides a growing deficit of rain — is ageing infrastructure causing clean water loss because of pipes bursting or leaking.

He says Gauteng spends between R50m and R100m a year on infrastructure maintenance, but “this is not enough to cover one-third of the cost required for maintenance, let alone refurbishments”.

The Department of Water and Environmental Affairs has proposed a strategy of reducing water demand by 15%, but the likelihood is that usage will fall by just 1% a year — “meaning that the required savings will only be realised in 15 years’ time”, says Herold.

SABMiller head of sustainable development Andre Fourie says SA is heading for a major usable water crisis within 10 years if the situation is not brought under control.

“We’re one drought away from a major crisis,” he says.

“SA is possibly the world’s most water-stressed country and yet we’re wasting water, we’re not caring for it and we’re not pricing it correctly. It’s important that the public and private sectors get together and look for sensible solutions.”

Gauteng infrastructure development MEC Nandi Mayathula-Khoza says more private investment is needed to fix Gauteng’s water woes.

With the province’s population increasing by 300,000 people a year, water infrastructure — such as canals, pipelines, stormwater drainage systems and dams — should be scaled up sooner rather than later.

Mayathula-Khoza says rainwater harvesting should be increased, as well as the desalination of acid mine drainage. “We need private sector investment as these projects are investment-ready,” she says.

“The government has fewer resources available for infrastructure and is keen to avoid the debt trap. We need new ways of financing our infrastructure programme through public-private partnerships, new development finance institutions such as the Brics New Development Bank and politically effective user-pays systems. There needs to be a new mood of co-operation.”

Zama Siqalaba, programme manager for the Nepad Business Foundation’s Strategic Water Partners Network, says the municipal sector experiences water losses and non-revenue for water of about 36.8% of total use — amounting to about R7.2bn a year — highlighting the need for better management of available resources.

“SA is world-renowned for its excellent water legislation, which indicates that it’s not thought we lack. It is coherent planning, implementation, compliance monitoring and enforcement we struggle with,” he says.

SIQALABA believes a multipronged approach is required to develop tariffs that are better matched to the real cost of water production, which would lead to improved leak repair, pressure management, education and awareness.

“In the mining sector, we need to rethink the notion of mine water as a liability and start looking at it as a potential resource. This requires strong policy related to the treatment of mine water to potable standards for sale to municipalities or to a lesser standard for agricultural use and the rules of engagement between the public and private sector in this regard,” Siqalaba says.

Many companies are increasingly factoring in water as a crucial business risk — “and they should”, he adds. The network recognises that water is the number one risk to the future of business worldwide.

The plight of the rickety water infrastructure platforms, especially when taken together with similar shortcomings in the energy and transport sectors, “is a serious deterrent to foreign investment”, says the chairman of Japan’s Chamber of Commerce and Industries in SA, Sachio Kaneki. “They are SA’s most urgent priorities. Get them right and more Japanese investment will follow.”

He says Japanese firms have the technology, funding and experience to assist SA in dealing with infrastructure backlogs.

“And Japanese firms are willing and eager to pursue public-private partnerships,” he adds.

Companies in SA have a hoard of R500bn on tap and the best access to what is left of SA’s bank of skills, especially in the fields of infrastructure development. However, the government and the private sector don’t trust each other and that gets in the way of forging partnerships.

THIS need not necessarily be the case, says Jeff Immelt, CEO of General Electric (GE), the world’s biggest infrastructure company. He says public-private partnerships are the best solution to get things moving, as long as both understand their roles and that the key lies in long-term value commitment.

“If you’re going to do a big public-private partnership project, the partners have to sign up to a 20-year commitment, and we would insist on the deal including a local private partner,” he says.

Immelt says GE wants to play a bigger role in SA’s infrastructure development, including getting involved in funding. He maintains that there is plenty of cheap capital looking for a home.

“If the US Treasury rate is (almost flat) and you can finance a 20-year infrastructure project that has a long-term sovereign or big corporate-backed purchase price agreement earning 4%-6%, that’s a good trade. You will find capital for projects like that,” he says.

The biggest culprit in the despoliation of water is the government, says the lobby group AfriForum.

“The government is discharging approximately 1.6bn litres a day of sewage effluent that does not comply with safety standards into our rivers and dams.

“That means 74% of waste water treatment facilities are unlawfully polluting our water, which is criminal,” says AfriForum’s head of environmental affairs Julius Kleynhans.

Some fear it may take a dam failure to bring home the importance of infrastructure development and maintenance.

The Department of Water and Sanitation’s dam safety office says in its latest annual report that only 60% of its category I and category II dams comply with basic dam safety standards, while some category III dams — the largest — are also a cause for concern.

SA is possibly the world’s most water-stressed country and yet we’re wasting water, we’re not caring for it and we’re not pricing it correctly. It’s important that the public and private sectors get together and look for sensible solutions.

 

Coastweek: Kenya launches public private partnership to sort water scarcity

News Source: Coastweek via Xinhua News Agency

NAIROBI (Xinhua) — Kenya’s Ministry of Water and Irrigation has launched a partnership with multilateral agencies, industry and civil society to explore innovations that would offer durable solution to water scarcity in the country. Officials said the launch of Kenya 2030 Water Resources Group (2030 WRG) marked a critical milestone in the management and supply of the commodity to different users.

“Ensuring a safe and abundant supply of water is vital to attaining vision 2030. A partnership with the private sector and civil society will help generate collective solutions to secure water for the economy, society and the environment,” said Water and Irrigation Cabinet Secretary Eugene Wamalwa.

Kenya became the tenth country in the world to enlist as a member of 2030 Water Resources Group, an initiative formed in 2009 by multilateral agencies, private sector and civil society to promote water security in the global south.

Wamalwa said strategic partnerships are crucial to address a growing water insecurity occasioned by climate change, population growth, pollution and competing demands.

“The aim of our new partnership with multilateral agencies and the private sector is to accelerate the attainment of sustainable development goal six on water and sanitation for all,” said Wamalwa.

The Kenyan 2030 WRG partnership will focus on innovative approaches to boost agricultural water productivity, urban water supply alongside adoption of appropriate technologies to strengthen conservation of the resource.

Anders Berntell, the Executive Director of 2030 WRG said innovative partnerships have provided lasting solution to global water supply challenges.

“Across the globe, WRG partnerships are helping push the water resources agenda to the forefront of high level national debate. In Kenya, these partnerships will address water scarcity and pollution,” Berntell said.

The Kenyan industrial sector has invested in new technologies to enhance water use efficiency.

Vimal Shah, the CEO of Bidco Africa said water scarcity could undermine economic growth and stability in Kenya.

“Water is the lifeblood for everyone and for the manufacturing sector in particular. Improving water resources management is key to realize socio-economic progress in the country,” Shah said.

NTV Kenya: Kenyans urged to engage in water conservation, banking

News Source: NTV Kenya

How informed are Kenyans on water conservation efforts, especially as El Nino approaches? Are there any water banking efforts? By the year 2030, the country will have a 31% gap between water demand and supply. This is according to World Bank affiliate, 2030 Water Resources Group, which co-launched a water security and conservation programme to sensitise Kenyans on this vital resource.

Anders Berntell NTVKenya Partnership Launch

See the news item on KBC TV’s Youtube channel »
See the press release for more information »

 

KBC TV: Kenya steps up efforts to address water shortage

News Source: KBC TV

 

The government, the private sector and civil societies in partnership with the 2030 Water Resources Group are deliberating on addressing the issue of water shortage in the country. 2030 Water Resources Group Executive Director Anders Berntell says unsustainable use of water resources will have negative effects for economic development, food security and ecosystems.

Anders Berntell KBC Kenya Partnership Launch

See the news item on KBC TV’s Youtube channel »
See the press release for more information »

Watershed Connect: Watershed Managers Seek Large-Scale Finance In Private-Public Partnerships, Knowledge Brokering, And Risk Sharing

News source: Watersched Connect

By Kelli Barrett

The global water crisis will hit everyone from brewers to bakers hard, but it’s still the rare company that steps up to conserve watersheds. Several participants at a World Water Week event last week highlighted the need to entice private actors into partnerships with public entities by spreading both awareness and risk.

4 September 2015 | In a world of water stress and scarcity, a company’s sustainability can be measured in its use and conservation of water – an analysis of which often yields surprising insights. When Belgian brewer Anheuser-Busch InBev (AB InBev) examined its own water footprint, for example, it found that barley-growers are responsible for 90% of the company’s water usage. In response, it launched several pilot projects to test water management practices and knowledge-sharing networks in agriculture production. By engaging with its agriculture supply chain, AB InBev is already thinking outside its operational walls. Now the company is collaborating with public entities and environmental NGOs to build sustainable management systems in various watersheds.

In Brazil’s drought-stricken Jaguariúna region, which supplies greater Sao Paulo with water, it joined forces with The Nature Conservancy (TNC) and public-sector entities like the Jaguariuna Bureau of the Environment and the Brazilian National Water Agency and others in a watershed restoration program that aims to use large-scale green infrastructure to ensure a clean and steady supply of water for all stakeholders in the Jaguari and Jundiai watersheds. This includes elements of reforestation and soil conservation techniques. The collaboration was the beginning of a unique public private partnership that now includes other national and regional stakeholders.

AB InBev isn’t the only company engaging in such private-public partnerships. South African energy and chemical company, Sasol, formed a partnership with a local municipality and GIZ, Germany’s premier development agency, in an effort to reduce shared water risk through improving urban water infrastructure and plugging leaks. SABMiller, another brewery, partnered with South Africa’s government, WWF and GIZ to identify and reduce watershed risk to hops growers.

And in India, a consortium of national institutions, governments and irrigation companies crafted a program that provides thousands of farmers with credit to upgrade their irrigation systems. Governments benefit from the increase in efficiency and farmers benefit from a larger yield and higher revenues. According to Alastair Morrison, a Senior Operations Officer at 2030 Water Resources Group within the International Finance Corporation, the partnership builds trust between the different parties.

“The public-private alliance isn’t traditional. But each party benefits from working together,” Morrison said during a World Water Week event last week.

This collective approach could be the wave of the future in terms of managing shared and limited water resources. The UN Global Compact CEO Water Mandate notes sustainable water management is effectively tied to engagement among all the parties with a stake in a water source. And working together often means developing or tapping into new sources of funding.

But don’t be fooled by these success stories into thinking crafting and implementing public private partnerships for water management is easy. “It’s a complicated and difficult task,” said Morrison. The event focused on the issue of collective action in the water space from a financial perspective looking specifically at aligning finance for watersheds, agriculture and development. Along with Morrison, panelists from the World Resources Institute, AB InBev and Ecosystem Marketplace publisher Forest Trends were present.

Why is This so Hard?

“It’s difficult for most private companies to think long-term. Most are focused on profits and next quarter sales,” said Ezgi Barcenas, a Global Manager in AB InBev’s Better World, its corporate social responsibility group.

That’s one of several challenges, which range from communication issues to political reasons, in mobilizing the private sector to engage in water stewardship on a grand scale. This grand scale means engaging with an entire supply chain as well as all parties in a watershed as AB InBev appears to be doing.

Outside of the short-term mindset of private-sector actors, the space is relatively data-sparse and that forms another challenge. AB InBev’s pilot projects and information platform on barley-growers is a good example of what’s needed.

“It’s early days with this and there are a lot of unknowns, which to companies, means risk,” said Todd Gartner, a Senior Associate at WRI.

Morrison noted the lack of knowledge and experience regarding public private partnerships can impact decision-making.

The role of government is also tricky. Governments are a key stakeholder that, ideally, establishes the governance and regulatory measures that allow for a fair playing field for companies to engage, Morrison said. However, Barcenas said that governments can come to the table with their own notions about the role of the privates sector which doesn’t necessarily coincide with a business perspective.

Reeling in the Investors

But the overarching key problem lies in project design, according to Gena Gammie, a Manager in the Water Initiative of Ecosystem Marketplace publisher Forest Trends. Project developers and organizations shape their projects and products to appeal to the traditional philanthropic modes of funding. “They don’t have investors in mind,” Gammie said.

Jan Cassin, the Director of the Water Initiative, agreed, noting institutional investors want short-term returns. And watershed restoration projects do deliver short-term returns despite the typical belief that they don’t. The hydrological benefits take a long time to develop but there are immediate results in the form of improved operational efficiencies or cost savings from less dredging because of the reduction in sedimentation, Cassin said.

“We need to demonstrate these short-term benefits while we wait for the long-term return on investments,” she said.

Gammie noted an investments in watershed services project in Peru’s Jequetepeque watershed was stalled after failing to secure an additional $40 million. Further analysis, however, showed the project was capable of generating returns outside of a watershed benefit that could attract investors. Agroforestry and silvopastoral interventions, which the project implemented, generate the financial return investors are looking for.

Those involved in the project learned a significant lesson: “in order for these mechanisms to work, we really need to understand the goals and criteria of each actor,” said Gammie.

Smart Investments for Smart Projects

Although most in the water space agree and believe in collective action, it isn’t applicable everywhere, said Gartner. “We need to do a better job of prioritizing where it makes sense,” he said.

Gartner suggests doing this by integrating metrics like WRI’s Aqueduct tool with its Global Forest Watch instrument to determine shared water risks and stakeholder impacts when assessing potential partnerships and investments.

Engaging investors early and often is also good, Gartner said, as is working with major players in the financial sector like JP Morgan Chase or Goldman Sachs that have divisions dedicated to sustainability matters. “We need to get better at helping them help us,” Gartner said.

And as much as the challenges are present, so are opportunities, which are evident in the existing public private partnerships noted. The growing urgency of the global water crisis, which the World Economic Forum made clear when it listed water atop its Global Risks 2015 report, is a major motivator for private investors and companies to get involved.

Impact investing, where investors are looking to make a social and environmental impact alongside a financial return, is on the rise. These investors would potentially have interest in watershed restoration projects that restore degraded waterways while building sustainable livelihoods for marginalized people. The market for conservation impact investing grew to $23 billion between 2009 and 2013 with projections it will increase to nearly $40 billion over the next five years, according to a TNC and Eco-Asset Management report.

There are also quality standards and certifications, familiar to the carbon world, trickling over to water which can reduce the risk for investors. These protocols such as the Gold Standard’s Water Benefit Standard allow investors to easily track and recognize good water projects.

In short, panelists recognized the complexities and difficulties in establishing public private partnerships but also saw great potential.

Kelli Barrett is a freelance writer and editorial assistant for Ecosystem Marketplace. She can be reached at kbarrett@ecosystemmarketplace.com.

Copyright © 2006, The Ecosystem Marketplace, http://www.ecosystemmarketplace.com.

Greenbiz: When beer and water mix: ABInBev teams up on conservation

News source: Greenbiz

In a world of water stress and scarcity, a company’s sustainability can be measured in its use and conservation of water — an analysis of which often yields surprising insights.

When Belgian brewer Anheuser-Busch InBev (AB InBev) examined its own water footprint, for example, it found that barley growers are responsible for 90 percent of the company’s water usage. In response, it launched several pilot projects to test water management practices and knowledge-sharing networks in agriculture production.

By engaging with its agriculture supply chain, AB InBev is already thinking outside its operational walls. Now the company is collaborating with public entities and environmental NGOs to build sustainable management systems in various watersheds.

In Brazil’s drought-stricken Jaguariúna region, which supplies greater Sao Paulo with water, it joined forces with the Nature Conservancy (TNC) and public-sector entities such as the Jaguariuna Bureau of the Environment and the Brazilian National Water Agency and others in a watershed restoration program that aims to use large-scale green infrastructure to ensure a clean and steady supply of water for all stakeholders in the Jaguari and Jundiai watersheds.

This includes elements of reforestation and soil conservation techniques. The collaboration was the beginning of a unique public-private partnership that now includes other national and regional stakeholders.

“By engaging with its agriculture supply chain, AB InBev is already thinking outside its operational walls. Now the company is collaborating with public entities and environmental NGOs to build sustainable management systems in various watersheds.”

AB InBev isn’t the only company engaging in such private-public partnerships. South African energy and chemical company Sasol formed a partnership with a local municipality and GIZ, Germany’s premier development agency, in an effort to reduce shared water risk through improving urban water infrastructure and plugging leaks. SABMiller, another brewery, partnered with South Africa’s government, WWF and GIZ to identify and reduce watershed risk to hops growers.

And in India, a consortium of national institutions, governments and irrigation companies crafted a program that provides thousands of farmers with credit to upgrade their irrigation systems. Governments benefit from the increase in efficiency and farmers benefit from a larger yield and higher revenues. According to Alastair Morrison, a senior operations officer at 2030 Water Resources Group within the International Finance Corporation, the partnership builds trust between the different parties.

“The public-private alliance isn’t traditional. But each party benefits from working together,” Morrison said during a World Water Week event last week.

This collective approach could be the wave of the future in terms of managing shared and limited water resources. The U.N. Global Compact CEO Water Mandate notes sustainable water management is effectively tied to engagement (PDF) among all the parties with a stake in a water source. And working together often means developing or tapping into new sources of funding.

But don’t be fooled by these success stories into thinking crafting and implementing public-private partnerships for water management is easy.

“It’s a complicated and difficult task,” said Morrison. The event focused on the issue of collective action in the water space from a financial perspective looking specifically at aligning finance for watersheds, agriculture and development. Along with Morrison, panelists from the World Resources Institute, AB InBev and Ecosystem Marketplace publisher Forest Trends were present.

Why is this so hard?

“It’s difficult for most private companies to think long-term. Most are focused on profits and next quarter sales,” said Ezgi Barcenas, a global manager in AB InBev’s Better World, its corporate social responsibility group.

That’s one of several challenges, which range from communication issues to political reasons, in mobilizing the private sector to engage in water stewardship on a grand scale. This grand scale means engaging with an entire supply chain as well as all parties in a watershed as AB InBev appears to be doing.

Outside of the short-term mindset of private-sector actors, the space is relatively data-sparse and that forms another challenge. AB InBev’s pilot projects and information platform on barley-growers is a good example of what’s needed.

“It’s early days with this and there are a lot of unknowns, which to companies, means risk,” said Todd Gartner, a senior associate at WRI.

“The public-private alliance isn’t traditional. But each party benefits from working together.”

Morrison noted the lack of knowledge and experience regarding public private partnerships can affect decision-making.

The role of government is also tricky. Governments are a key stakeholder that, ideally, establishes the governance and regulatory measures that allow for a fair playing field for companies to engage, Morrison said. However, Barcenas said that governments can come to the table with their own notions about the role of the private sector which doesn’t necessarily coincide with a business perspective.

Reeling in the investors

But the overarching key problem lies in project design, according to Gena Gammie, a manager in the Water Initiative of Ecosystem Marketplace publisher Forest Trends. Project developers and organizations shape their projects and products to appeal to the traditional philanthropic modes of funding. “They don’t have investors in mind,” Gammie said.

Jan Cassin, director of the Water Initiative, agreed, noting institutional investors want short-term returns. And watershed restoration projects do deliver short-term returns despite the typical belief that they don’t. The hydrological benefits take a long time to develop but there are immediate results in the form of improved operational efficiencies or cost savings from less dredging because of the reduction in sedimentation, Cassin said.

“We need to demonstrate these short-term benefits while we wait for the long-term return on investments,” she said.

Gammie noted an investments in watershed services project (PDF) in Peru’s Jequetepeque watershed was stalled after failing to secure $40 million more. Further analysis, however, showed the project was capable of generating returns outside of a watershed benefit that could attract investors. Agroforestry and silvopastoral interventions, which the project implemented, generate the financial return investors are looking for.

Those involved in the project learned a significant lesson: “In order for these mechanisms to work, we really need to understand the goals and criteria of each actor,” said Gammie.

Smart investments for smart projects

Although most in the water space agree and believe in collective action, it isn’t applicable everywhere, said Gartner. “We need to do a better job of prioritizing where it makes sense,” he said.

Gartner suggests doing this by integrating metrics such as WRI’s Aqueduct tool with its Global Forest Watch instrument to determine shared water risks and stakeholder impacts when assessing potential partnerships and investments.

“The market for conservation impact investing grew to $23 billion between 2009 and 2013 with projections it will increase to nearly $40 billion over the next five years.”

Engaging investors early and often is also good, Gartner said, as is working with major players in the financial sector such as JP Morgan Chase or Goldman Sachs that have divisions dedicated to sustainability matters.

“We need to get better at helping them help us,” Gartner said.

And as much as the challenges are present, so are opportunities, which are evident in the existing public private partnerships noted. The growing urgency of the global water crisis, which the World Economic Forum made clear when it listed water atop its Global Risks 2015 report, is a major motivator for private investors and companies to get involved.

Impact investing, where investors are looking to make a social and environmental impact alongside a financial return, is on the rise. These investors potentially would have interest in watershed restoration projects that restore degraded waterways while building sustainable livelihoods for marginalized people.

The market for conservation impact investing grew to $23 billion between 2009 and 2013 with projections it will increase to nearly $40 billion over the next five years, according to a TNC and Eco-Asset Management report.

There are also quality standards and certifications, familiar to the carbon world, trickling over to water which can reduce the risk for investors. These protocols such as the Gold Standard’s Water Benefit Standard allow investors to easily track and recognize good water projects.

In short, panelists recognized the complexities and difficulties in establishing public private partnerships but also saw great potential.

This story first appeared on:

TriplePundit: PepsiCo states Industry-Led Water Innovation is a Vital Investment in Our Future

News Source: TriplePundit

By Mehmood Khan, PepsiCo

Water scarcity is one of the greatest risks facing humanity and the global economy. Water shortages—from the U.S. to Peru to India—are impacting every facet of our society, including our global food supply. The UN estimates that by 2025, 1.8 billion people will live in countries or regions in which water is scarce, and approximately two-thirds of the world’s population could soon be living under water-stressed conditions. With ratification of the UN Sustainable Development Goals just days away, governments, as well as business leaders must take action to meet these challenges.

Water is a fundamental human right, and water stress has distinct, deep consequences in communities around the world. It is the responsibility of every company, government and public institution to develop solutions that meet acutely local needs, and scale those with widespread applicability to drastically improve water availability and efficiency.

The food and beverage industry, for example, must redouble its focus on innovation and collaboration, to do more with less. This work includes product reformulations, sustainable agricultural practices and manufacturing and operational efficiencies, all of which can lead to water efficiency gains.

This is not simply good for society. Promoting water stewardship is also a strategic investment in long-term business resilience and sustainability. PepsiCo for example, decreased its absolute water use by approximately one billion liters last year and achieved cost saving of approximately $17 million in 2014 alone from reducing our water use per unit of production. Overall, we have reduced our water use per unit of production by 23% since from 2006 to 2014, already exceeding our public target of a 20 percent reduction by the end of 2015. We report on these efforts in our newly released 2014 Sustainability Report and at the sustainability micro-site HowWillWe.com.

All industries are being impacted by the realities taking shape today, including droughts and extreme weather, and we applaud other companies that share our commitment to addressing this issue and contributing to meaningful solutions. Diageo is a great example.  It has recently released its Water Blueprint, a strategy that outlines how the company will protect and manage its water resources globally, especially in the water-stressed areas where a third of its production takes place.

We can also learn from pioneering startups and benefit from cutting-edge technology. PepsiCo is developing an innovative approach to farming potatoes used to make our Lay’s chips and Walkers crisps. Working with farmers and academic partners in the U.K., including Cambridge University, we are deploying technologies through our “50 in 5” program to reduce the carbon footprint and water used to grow potatoes by half over a 5-year period. We have made great progress so far, enabling growers to decrease water use by 31 percent by the end of 2013 and cut their carbon footprint by 42 percent by the end of 2014, and we are on target to reach both our water and carbon footprint goals by the end of this year.

Partnerships are crucial, because global value chains are so large and involve many interconnected players. The public, private and non-profit sectors must work together. We have embraced this spirit of collaboration to reduce water usage in our operations and help to provide access to safe water in communities where we do business. For example, through the PepsiCo Foundation and in partnership with non-profit organizations, such as Water.org, Safe Water Network, Columbia Water Center, the Inter-American Development Bank, China Women’s Development Foundation and 2030 Water Resources Group, among others, we are helping local communities in Brazil, China, Columbia, India, Jordan and Mexico to provide access to safe water for millions of people through initiatives that include water conservation, distribution, purification and hygiene. It is through these kinds of collaborations that we have reached our goal to provide access to safe water to six million people in developing countries one year ahead of our target.

Systemic changes across sectors and among competitors will encourage innovation and wider adoption of proven tools and practices. To make an impact, we must look at the entire water use system, from end to end and embed sustainable water use into our products from the start. And while business has the ability and the responsibility to do more to address global water issues, governments should also promote and incentivize smart water use with tools such as research and development tax credits, matching funds and regulatory reforms to create a legitimate “enabling environment” that frees capital and stimulates sustainable, holistic water solutions.

Only by working together and rethinking our approach to global water stewardship—just as we have begun to shift our thinking on the issue of carbon emissions—can we enable water to be a resource that is abundant and flexible enough to meet the world’s needs in coming decades.

Dr. Mehmood Khan is PepsiCo’s Vice Chairman and Chief Scientific Officer, Global Research and Development and chair of the company’s Sustainability Task Force.

The Guardian: Water shortage is one of the top global risks, how can we avert it?

News Source: The Guardian

Governments, civil society, corporations, farmers and grassroots organisations must co-operate to avoid the dangers ahead

Growing an economy is very thirsty business. We need to double food production – but we’re already using an average 70% of the world’s fresh water for agriculture. Meanwhile industrialised countries – the US in particular – are diverting 40% of their water to energy production, and that demand will also rise. Unsustainable levels of water are being extracted from many of the world’s fresh water ecosystems: up to 80%-90% of water is already being used in many arid and semi-arid river basins where water is scarce, according to the World Water Council. It is, quite simply and literally, unsustainable.

Such trade-offs have been poorly executed in the past, even in our most developed economies. In 2011 Texas nearly blacked out due to water shortages for its energy sector. Water experts have calculated that 26% of US-installed power-plant capacity is located in areas of water stress, a situation that will only get worse in the coming decades. Utility engineers in much of the US’s west and midwest will tell you how concerned they are.

These experiences offer valuable lessons for everyone, but particularly for emerging economies, where there is a tremendous opportunity to avoid the mistakes that others have made. The dangers of stranded energy or agricultural assets in a few decades can be minimised if water risk is fully accounted for now in development strategies and investment plans.

As recognition grows about the risk that water poses to our economic growth and development (the top global risk in the World Economic Forum Global Risks report this year), there are the demands from politicians, farmers and industry for new models and innovative solutions, new collaborative approaches for action at scale. There is a thirst for a new “water economy” where water really is everyone’s business.

Building the foundations for a new water economy will be difficult. It will require different sectors and specialists to work together. How do we construct an economy that is water-smart enough to secure future food and energy needs, while at the same time ensuring water for people and for nature, reducing greenhouse gas emissions and building resilience to manage the future water stresses?

All this was discussed intensively at the 25th Annual World Water Week in Stockholm, with the takeaway lesson being not that we have an off-the-shelf answer to this challenge (there is none) but that we need new models of cooperation, and that we already have sufficient data to begin redressing this systemic problem.

There is now genuine coalescence around a new, more strategic economic imperative to “get water right”, and it is percolating through the water community and beyond. This is exciting. The water agenda is reshaping. From this year’s Stockholm Water Prize Winner Rajendra Singh, who mobilises communities across India to build water security and resilience using traditional rainwater-harvesting techniques, to high-level discussions involving heads of state, leaders of international organisations and world experts, a call to action for a new global water economy is emerging and we must urgently amplify it.

And the timing is just right. The important international milestones of 2015 – the launch of the sustainable development goals and the focus on reaching a climate change agreement in Paris – will provide an important launch pad for propelling this much-needed new water economy agenda into 2016 and beyond. The risks of not transitioning to a new water economy are simply too great to contemplate.

Dominic Waughray is head of public-private partnerships at the World Economic Forum. Fred Boltz is managing director for ecosystems with The Rockefeller Foundation. Follow @dwaughray on Twitter.

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