As part of the ongoing institutional reform in Peruvian water resources management and, in particular, from the Legislative Decree #1185 (August 2015), the Empresas Prestadoras de Servicios de Saneamiento (EPS) (water utilities, responsible for providing drinking water and sanitation services), will now be in a position to implement and administer a new groundwater management and monitoring services tariff (GWMMT) for non-agricultural users with their own wells.
The 2030 WRG have supported SUNASS, the water services regulator, responsible for determining the tariff to be levied by water utilities, in developing the methodology for the design and implementation of the GWMMT.
Incentives for behavioral changes
Albeit initially conceived of as a cost-recovery instrument for water utilities to support their activities in managing and monitoring groundwater resources, the GWMMT, through establishing prices for groundwater-related services, also provides incentives for behavioural changes so as to move away from unsustainable patterns of groundwater withdrawal countrywide.
The tariff will be initially levied within 2016 by two water utilities: SEDAPAL, responsible for water services operation in Greater Lima, and SEDALIB, in Trujillo. The remainder of utilities will qualify for the implementation of the tariff within the next few months with technical support from SUNASS.
Provided institutional arrangements and complexities can be overcome – the 2030 WRG is also co-working with key stakeholders towards that aim –, especially the legal powers of SUNASS and the coexistence of SUNASS (as water services regulating entity) and the ANA (as the governmental body responsible for the regulation of water resources management, levying a water abstraction fee) then the GWMMT, as an incentive pricing mechanism, may convey information about opportunity costs of using groundwater, whilst inducing lower groundwater consumption.
Through internalizing the opportunity cost of groundwater and making non-agricultural groundwater users accountable for their water use, the incentive pricing features of the Peruvian GWMMT not only provide a means to reduce pressures on groundwater-dependent ecosystems (such as wetlands in the valleys of rivers Rímac and Chillón) but also help mitigate pressures over surface water resources, using groundwater as a buffer resource, especially in the Pacific watersheds (1.8% of surface runoff, more than 60% of the country’s population and 80% of national GDP).
Although there are examples of groundwater tariffs in other countries, the Peruvian GWMMT can arguably be considered as quite unique because the way the tariff structure is designed, it links to ground water management plans which reflects a best practice that can be replicated in other countries.
By reducing excess demand, the GWMMT also reduces the need for further investment in grey infrastructure, something that may be especially relevant within the current macroeconomic context of economic downturn and fiscal consolidation. 2030 WRG is playing a key role both in supporting the water services regulator and also in creating the right incentives for sustainable water use, whilst promoting wide alliances to recognize that water is a limiting factor but also an opportunity for development in Peru.
Each quarter we highlight specific case studies from the 2030 WRG online catalogue of case studies. The catalogue showcases best practice solutions to addressing the growing water scarcity challenge. To submit a case or to view our other case studies, see www.waterscarcitysolutions.org.
Basin based approach for groundwater management – Neemrana, Rajasthan, India
SABMiller India partnered with local stakeholders in Alwar to implement a basin-wide groundwater management initiative which ensures the security and sustainability of the local deep aquifer. The deep aquifer is the only reliable source of water supply for the agricultural, industrial and municipal sectors in the semi-arid region. The seasonal monsoon rainfall is the only other source of water supply. A plan was launched to increase groundwater recharge through the construction of six recharge structures. Scheduled training programs for local farmers on water efficiency practices were also implemented to reduce withdrawal for agricultural purposes.This is benefiting more than 4 000 farms on a regular basis. In addition, water efficient agricultural practices were showcased by 136 knowledge farms covering 105 ha in 68 villages. The project was financed by SABMiller India. The initiative has improved the management of the local deep aquifer and the security of supply for the Roches Brewery in Neemrana.
Rustenburg Innovative Financing Arrangements – South Africa
In the last two decades Rustenburg in South Africa has experienced a rapid population growth due to the expansion of mining operations in the region. This significantly increased both municipal and industrial water demands and overwhelmed the capacity of the existing wastewater treatment works. The water services provider, Rustenburg Municipality, was rated as the 3rd most distressed in South Africa and thus unable to raise the finance required to address the problems.To address this challenge, a joint initiative was undertaken between the mines and the municipality to establish a Special Purpose Vehicle (SPV) with a 22-year concession to finance, upgrade and operate water infrastructure. The key to the success of the SPV was the signing of a long term off-take agreement with the mines for the provision of non-potable treated waste water which forms 75% of the SPV’s revenue.The mines previously relied on freshwater that was imported from neighboring catchments. The move to the use of non-potable has enabled the re-allocation of the imported freshwater to the municipality thus increasing the overall freshwater resource that is available in the catchment. Partial improvements in downstream water quality have also been made through better waste water treatment.
A start of a new partnership with the Government of Maharashtra, NGOs and Industries with the launch of the Maharashtra Cotton Water Platform
2030 WRG recently launched the Maharashtra Cotton Water Platform to enhance and de-risk the livelihoods of more than 500,000 cotton farmers by delivering coordinated solutions for sustainable agricultural practices and water security in the Marathwada and Vidharba regions of Maharashtra. High dependency on rainfall (87% farmers in Marathwada region), unsustainable water use (only 4% of cotton in the Marathwada and Vidharba area is irrigated) and low cotton productivity aggravated due to climate change is driving cotton farmers to suicide.
The platform addresses the present situation by convening key representatives of the government, private sector and civil society which includes a senior official of the Ministry of Agriculture, Government of Maharashtra, and representatives from the state’s Water Resources Department and Water Conservation Department, Jain Irrigation, Syngenta Foundation, C & A Foundation, H & M, Council on Energy, Environment and Water, and WWF India.
The initiative seeks to integrate government schemes, on-farm technology and leverage market resources through the Public Private Partnership for Integrated Agricultural Development (PPP-IAD) framework, making cotton production more sustainable and enabling cotton farmers to be a part of the global sustainability initiatives in cotton.
Currently, the platform is creating a dynamic network of organizations active in Maharashtra in the cotton sector, sharing lessons and good practices for accelerated collective learning on ongoing initiatives and finalizing new initiatives at the farm, community and watershed level. The first formal Sounding Board Meeting was held in December 2015.
Lima, Peru, 11 February, 2016 – A recent media workshop, led by the Institute for Peruvian Studies (IEP) in collaboration with 2030 WRG and other partners, was held to position water as a key topic in the electoral debates as part of the upcoming presidential elections in Peru. Over 40 media professionals from various organizations attended the workshop. They learned about key issues and players, and how to place the stories on the public agenda.
IEP also developed a policy brief on water jointly with the Swiss Development Cooperation (SDC or COSUDE in Spanish) with specific guidelines and recommendations for adequate water resources management addressed to presidential candidates and journalists.
The workshop also provided journalists with innovative tools to manage key information on social media channels. The event furthermore helped water and policy professionals, as well as key decision makers develop a closer relationship with key media influencers in Peru.
>>Click Here to download the IEP Infographic (in Spanish)
This blog post has been written by Fernando Momiy Hada/Chairman of the Board of Directors of the National Inspection Office for Sanitation Services (Superintendencia Nacional de Servicios de Saneamiento SUNASS).
Steady urban population growth, the effects of climate change, the risks posed by natural disasters, and the impact of water source and reservoir contamination are calling for greater effort in the area of regulatory management and the involvement of water and sewage service operators in this process. However, many more institutions are also involved, including the people themselves, whose commitment and active participation will be necessary for the sustainable provision of this vital service.
SUNASS, as the sanitation regulatory entity in Peru, is cognizant of the fact that if we do not tackle these challenges comprehensively, policy or regulatory improvement or economic and financial models will not be able to guarantee the sustainable provision of water and sewage services in the country. Our effort to implement Compensation Mechanisms for Ecosystem Services (Mecanismos de Retribución de los Servicios Ecosistémicos (MRSE)* in order to ensure that sanitation service providers can finance projects that help preserve the consistency, quality, and quantity of the water sources reveals the need for comprehensive management of water resources.
We therefore commend the Ministry of Housing, Construction, and Sanitation—the sector’s governing body—for approving the regulatory framework for the use of groundwater by turning over its infrastructure (wells and underground tunnels) to the sanitation service providers for maintenance and conservation and tasking SUNASS with responsibility for approving rate-setting methodology. This progress is being made in the context of the challenges arising from the ground water depletion being observed in Lima and Callao, which runs the risk of leaving the population without water reserves, should changes in the water cycle occur in the watersheds that supply water to the cities.
SUNASS approved the implementation of the system revolving around rate subsidies for potable water, which will pave the way for optimization of the incentives for the development of the service by residents.
Taking stock of water resources in the design of the country’s development strategy is the first step to guarantee future growth. Water is critical to all economic activities. For this reason, if we do not approach our development taking water into account—how we will use it and distribute it and how much we will develop it—we will not be able to lay the groundwork for sustainable development in the future.
In our quest for sustainable water resources, we have received support from such key institutions as the 2030 Water Resources Group (WRG), which included us in working groups and opened the doors of its Board of Directors so as to seek consensus among national authorities, NGOs, private enterprises, and international assistance entities, all assembled as one group with the aim of contributing to crafting a joint vision and model for water use, which Peru needs.
*Compensation mechanisms for ecosystem services are financial mechanisms intended to conserve, recover, or use, in a sustainable manner, water source ecosystems through the provision of incentives to residents to carry out these activities.
The Mexican Consejo Consultivo del Agua (Water Advisory Council) and the 2030 Water Resources Group in collaboration with CONAGUA, have recently signed a memorandum of understanding to design and implement various initiatives that will ensure a more sustainable and productive use of water in Mexico.
Karnataka, India, February 17, 2016 – 2030 WRG has facilitated the establishment of a Committee to promote the reuse of treated municipal wastewater, particularly by industry, through the development of the requisite policy framework. The Committee includes the Urban Development Department, Government of Karnataka, as well as representatives from industry, civil society organizations, and academic experts.
In the State of Karnataka, a key Hydro-Economic Analysis facilitated by 2030 WRG shows that the State will require twice as much water by 2030 as is consumed today, and that a business-as-usual approach will help meet only half of this requirement. The incremental cost of wastewater reuse is becoming more economical than primary supply augmentation from fresh surface water sources, when wastewater network systems and treatment plants are planned and designed for reuse and alternative fresh water sources are declining or unavailable.
The policy framework aims to address key constraints for the reuse of wastewater. In addition to lack of awareness on the opportunities and benefits of reuse, current pricing of water does not reflect economic externalities. It fails to account for the range of external costs associated with the conventional water cycle of abstraction, purification and discharge. Moreover, private sector initiative is crucial for supporting innovation, professional management, and improved operation and maintenance, which the policy aims to support.
The stakeholder deliberations are addressing regulatory, institutional and financial policy options needed to grow the market share of treated wastewater. The policy framework will be supplemented with institutional capacity for the implementation of concrete reuse projects.
Creating a Sustainable Water Future for Karnataka- Urban and Industrial Sectors, Deloitte and 2030 Water Resources Group,2014
Ulaanbaatar, Mongolia, February 4, 2016 – The 2030 WRG in a consortium with IFC and partners, successfully brokered a new voluntary code of practice (VCP) for common water management and reporting for the mining industry in the South Gobi region. This collective effort will safeguard water resources and promote the efficient and transparent use of water. The VCP is a critical step towards building trust among local stakeholders, including government authorities, local communities, civil society organizations, and the media. Other partners include the Government of Canada, Australian Aid, the European Bank for Reconstruction and Development and the International Council of Mining and Metals.
Mining is the backbone of Mongolia’s economy. The arid Gobi region is set to experience a major mining boom. However, lack of long-term management and resolution of water issues could derail mining and significantly impact the country’s future growth. Exploration and mining companies need water for operations and are increasingly aware that it needs to be managed as a shared resource.
A statement issued by the VCP’s signatories signed says, “The VCP is a powerful display of corporate accountability. It is necessary to balance mining sector development with the human need for water in the Gobi region. We have made a statement of intent; now we have to deliver on it.”
“The VCP provides the framework for a positive impact on water management by conserving ecosystems, strengthening communities, and committing to specific operational practices,” said B. Byambasaikhan, CEO, Erdenes Mongol, Mongolia’s largest investment holding company and one of the signatories to the VCP.
“In Mongolia, water is a shared resource requiring common awareness and joint management approaches,” said Tuyen D. Nguyen, Resident Representative for IFC in Mongolia. “The mining industry’s comittment to the VCP shows its willingness to take a sector-wide approach to address a national challenge.”
IFC has engaged the mining sector in the South Gobi (SG) region since 2013 with the overall goal of improving the water management and stakeholder engagement practices. IFC and the South Gobi Water and Mining Industry Roundtable worked together with over ten companies to developthe VCP, which is based on leading international practices on community engagement, participatory water management, and monitoring.
VCP Signatories: Erdenes Mongol, Oyu Tolgoi, Energy Resources, Erdenes Tavan Tolgoi, Erdene, South Gobi Sands, Xanadu, Terra Energy, Gobi Coal and Energy.
Dhaka, Bangladesh, 30 January, 2016 – The first meeting of the Bangladesh National Steering Board (NSB) was held at the end of January at the Westin Hotel in Dhaka, Bangladesh. The NSB was formed as a result of the Bangladesh 2030 WRG multi-stakeholder partnership that was formally endorsed by the Honorable Prime Minister of Bangladesh. The agreement was announced through a gazette published by the Bangladesh Government Press on December 6, 2015.
The meeting was inaugurated with brief opening remarks by Dr. Zafar Ahmed Khan (Secretary, Ministry of Water Resources and Member-Secretary of NSB) and Mr. Mohammad Shafiul Alam (Cabinet Secretary and Chair of NSB). Several presentations highlighting issues and challenges related to water resources in the different sectors by were made by Bangladesh Water Partnership (BWP), PWC, WWF, SIWI and 2030 WRG.
After the presentations, the acting Co-chair from the private sector Ms. Rokia Afzal Rahman (Vice-President, International Chambers of Commerce) and Co-chair from the Civil Society, Mr. Mushtaque Chowdhury (Vice-Chair, BRAC) made brief remarks endorsing the platform and emphasizing the need for immediate actions and programs to address the challenges.
The NSB made key decisions to establish and operationalize the Bangladesh Water MSP. This included the formation of the three work streams on Water Governance, Greater Dhaka Watershed Restoration and Agri-Water.
The NSB provided the 2030 WRG with a mandate to nominate the members of the work streams in collaboration with the three work stream chairs. Joint work plans for the respective work streams will be developed with special focus on priority areas, whereby the necessary studies will be conducted and reported back to the National Steering Board. Moreover, the NSB agreed to start a process to review laws, regulations and policies in order to improve governance of water resources. It was agreed that the next NSB meeting will be held on April 30th.
About the Bangladesh Water MSP
The Bangladesh Water MSP is dedicated to addressing water sector issues in Bangladesh. The multi-stakeholder dialogue is focused on the identification, design and implementation of ‘Transformative Collective Action’ projects. The transformative projects will aim to make a significant contribution to improving water security by reducing the water supply-demand gap and/or improving the quality of available water resources for agricultural, industrial, domestic use and to ensure sustainability of essential eco-system services.
Structure of the Bangladesh Water MSP:
The High Level Water Forum is under the Prime Minister. The Cabinet Secretary – the highest ranking civil servant in Bangladesh – is the Chair of the NSB. The Bangladesh Water MSP is composed of key policy-makers (from the Ministries of Water Resources, Finance, Agriculture, Local Government, Environment and other government agencies), civil society, distinguished business leaders, industry associations and water sector experts. It is expected that the bilateral and multi-lateral development partners and donor agencies will take an active role in the process through providing expert assistance, advisory services and by facilitating targeted stakeholder engagement on specific issues or thematic areas. The 2030 WRG Bangladesh Secretariat facilitates the Bangladesh Water MSP.
Arusha, 29 January, 2016 – A recent workshop organized by the 2030 WRG took place in Arusha to discuss the concept and gauge potential interest in establishing the Kilimanjaro Water Stewardship Platform. The platform would provide a mechanism to coordinate and scale up interventions and develop solutions to tackle the growing water resources challenges in the basin as part of a wide public, private and civil society partnership. The 2030 Water Resources Group has helped convene a wide range of stakeholders to develop a concept for the Platform.
The Pangani River Basin is of vital importance to Tanzania. It is home to a large number of commercial agriculture producers (coffee and sugar) and has the largest concentration of horticulture and floriculture producers in Tanzania – with over 30 companies in the region identified as exporting to European markets. The Pangani is also globally recognized for its forest and biodiversity resources which generates an estimated US$50 million alone in revenue each year for the Tanzanian economy. The Pangani is already water stressed, and evidence suggests its resources will become increasingly constrained.
The objective of the workshop was to bring together important stakeholders in the Basin; to identify priority actions and milestones for the campaign; to strategize a way forward and to highlight the importance of collective action of major water users in the Pangani as being essential to address risks and provide solutions to tackling water challenges in the Basin.
The workshop was attended by more than 30 participants from 20 organizations from the public and private sectors and civil society organizations. At the end of the Workshop, the stakeholders were able to agree on a number of core focus areas and activities and confirmed their agreement on future collective efforts. 16 organizations confirmed their interest in backing the development of the Kilimanjaro Water Stewardship Platform.