IDB - Water and Sanitation Division CCB Region Overview BAHAMAS, BARBADOS, GUYANA, JAMAICA, SURINAME, TRINIDAD & TOBAGO EU seminar on water and energy.

IDB - Water and Sanitation DivisionCCB Region Overview

BAHAMAS, BARBADOS, GUYANA, JAMAICA, SURINAME, TRINIDAD & TOBAGO

EU seminar on water and energy in the Caribbean

May, 2015

CHAPTERS1.IDB Institutional Strategy Update

2.WSA in LAC

3.WSA in CCB

4.Cooperation for Development

CHAPTERSWSA in LAC

• 34 and 110 million people without access to safe water and improved sanitation.• To achieve universal coverage by 2020: US$22 billion to be invested in drinking water

and US$43 billion in improved sanitation.

• 219 million inhabitants receive intermittent service (60%).

• Less than 50% are connected to sewerage.• Wastewater treatment coverage less than 15%.

The Problem of Sanitation in LAC

Source: Own elaboration with information from ECLAC 2004 and 2005

Water Supply Sanitation

The utilities’ still lack of efficient operational managementHigh levels of unaccounted-for waterExisting infrastructure is not properly maintained Low service quality

Insufficient tariff Strengthening governanceIncrease the political priority of the sector Create / strengthen institutions with executive power and clear mandateLack of sufficient and stable financial resourcesExtensive decentralization of services

There is a need for appropriate practices in corporate governance, with the adoption of autonomous business schemes and corporatization

New focus on sanitation solutions in rural communities

Governance and Utilities' management

WSA in the LAC Region

Comparative Advantages Innovation and Technologies:

• Condominial Sewerage Systems (Brazil, Peru and Paraguay)

• Energy Efficiency (Guyana, Surinam, Jamaica, Barbados, El Salvador, Nicaragua and Panamá)

• Rural Sanitation Strategy (individual vs collective services)

• Pilot Projects (microfinance and individual solutions)

• NRW (Performance based contracts)

Knowledge Products:• AquaRating• HydroBID• WOP-LAC • Crew (GEF) Including Pilots

AQUAFUND OC: • Developing an active agenda of knowledge,

knowledge exchange and public policy• Increasing the loan portfolio• Improving portfolio’s performance,

disbursements, and reducing the risk of cost increases supporting project preparation

• Strengthening sector institutions Donors mobilization:

• Spanish Fund: US$580M • AQUAFUND (Switzerland, PepsiCo, Austria):

US$66M• LAIF: US$18M• CIF: US$15M • INWAP: US$10M

SDG - Goal 6: Ensure availability and sustainable management of water and sanitation for all

CHAPTERSWSA in CCB

(Bahamas, Barbados, Guyana, Jamaica, Suriname, Trinidad and Tobago)

Number of Projects12 active projects

18% of the total IDB projects in CCB.

Amounts of ProjectsAbout MUS$600 Portfolio,

30% of the total IDB projects.

WSA in the Caribbean Region

The IDB Country Strategy with The Bahamas (2013-2017) include:(1) Public Finances and Management(2) Citizen Security and Justice(3) Energy(4) Private Sector Development; and(5) Coastal Risk Management and Climate Change Adaptation.

Operations in these sectors will contribute significantly to stemming the erosion of per capita incomes by protecting public investment space and promoting growth.

The IDB assists the Government of Barbados in restoring sustainable growth in Barbados’ economy by supporting greater private sector competitiveness and enhancing efficiency in service delivery by the public sector. Priority sectors (2014-2018) include: (1)Tourism; (2)Transportation and Logistics;(3)Energy; and (4)Integrated Coastal Zone Management and Climate Resilience (ICZM).

The IDB Country Strategy with Guyana (2012–201) is designed to help Guyana achieve continued economic growth, while at the same time promoting the sustainability of the country’s natural resource endowments.

The strategy focuses on (1) sustainable energy, (2) natural resource management, (3) private sector development, and (4) public sector management.

The IDB Country Strategy with Suriname 2011-2015 proposes an increase in lending. The priority areas include: (1) agriculture, (2) energy, (3) education, (4) financial sector development, (5) public investment management, (6) social protection, and (7) transport. Dialogue will continue to be strengthened in water and sanitation, disaster risk management, tax administration, health, private sector development, and natural resources and environmental management with a view to possible additional lending support.

The IDB Country strategy (2011-2015) with Trinidad and Tobago proposes a significant increase in lending. The priority areas include: (1) financial sector regulation and supervision; (2) public sector management; education; (3) social protection; (4) climate change; (5) energy; (6) water and sanitation; and (7) transport. Trinidad and Tobago’s development challenges are addressed in a cross-cutting manner, with a special focus being given to the priority areas of energy, climate change, and water and sanitation.

The IDB Country Strategy with Jamaica (2013 - 2014) includes: (1) Fiscal Sustainability(2) Social Protection & Safety and,(3) Financial Sector and Business Climate

Country Strategies CCB Countries

The Global Environment Facility (GEF) funded (MUS$20) Caribbean Regional Fund for Wastewater Management (CReW) is implemented by the UNEP and the IDB. It is an integrated and innovative approach to reducing the negative environmental and human health impacts of untreated wastewater discharges. At the regional level, it has catalyzed a unique partnership between the IDB, UNEP and the Secretariat for the Cartagena Convention (Caribbean environment Program). At the country level, project implementation is further supported by partnerships between water and wastewater utilities, Ministries of Environment, Finance, Health, Education, and local communities.

It aims to:•Provide sustainable financing for the wastewater sector•Support policy and legislative reforms, and•Foster regional dialogue and knowledge exchange amongst key stakeholders in the WCR.

There are three interlinked components:•Investment and Sustainable Financing [4 pilots; GY, JA, TT and BE]•Reforms for Wastewater Management•Communications, Outreach and Training.

Antigua & Barbuda, Barbados, Belize, Costa Rica, Guatemala, Guyana, Honduras, Jamaica, Panama, Saint Lucia, Saint Vincent & The Grenadines, Suriname, Trinidad & Tobago.

CHAPTERSCooperation for Development

A few examples Water Sector

Latin America Investment Facility (“LAIF”)

Peru 2013

Lima Water supply, wastewater treatment and reuse / Sector Reform

KfW, IDB Water & Sanitation 133.0 3.0

Regional 2012Spanish Cooperation Fund for Water and Sanitation

AECID, IDB(FECASALC)

Water & Sanitation 615.0 15.0

Caribbean Investment Facility (“CIF”)

Guyana 2014

Water Supply and Sanitation Infrastructure Improvement Program

IDB (GLM) Water & Sanitation 25.50 10.67

IDB Grant leverage mechanism (GLM)This pilot mechanism leverages grant resources from bilateral and multilateral donors with resources from the Ordinary Capital of the IDB to finance operations in shared priority areas for some of the poorest countries in Latin America and the Caribbean region. Participants: Bolivia, Guyana, Honduras, Nicaragua

Example of GY-L1040 Water Supply and Sanitation infrastructure Improvement Program (WSSIIP)

Project Objective/Description: The general objective of the program is to improve efficiency, quality and sustainability of the potable water services and improve sanitation infrastructure in the program areas. 4 Components: •Construction, rehabilitation and expansion of WTPs. •Reduction of Non Revenue Water. •Institutional strengthening of the Water Operator GWI. •Improved access to sanitation.

WSSIIP* GLM 3242/OC-GY 7,500,000.00 50/50 3243/BL-GY 9,338,250.00

1.39 GRT/EX-14520-GY 10,675,000.00Equivalent USD GY-X1003 14,838,250.00

Concessional financing is offered to the IDB’s most vulnerable member countries. At present Bolivia, Guatemala, Guyana, Honduras, Nicaragua and Paraguay qualify for some form of concessional financing that is provided via blended loans. Note: Haiti benefits exclusively from grants.Blended loans result from the combination of highly concessional financing terms from the Fund for Special Operations (FSO) and “market-based” terms from the Ordinary Capital (OC) that are disbursed pari-passu from a predetermined mix of FSO and OC funds that varies by country based on its debt sustainability.The introduction of the blended loan approach—after the IDB participated in the largest debt relief initiative for Latin American and Caribbean countries in 2007—allowed it to extend concessional financing for additional years.

• Preparation Support 500,000 IDB-AQFD Technical Cooperation• Consolidation of the support to GWI – Georgetown sanitation Improvement MUS$ 9.5, and Linden Water Supply Rehabilitation MUS$12

Blending and Concessionality

What makes a project right for blending?- i.e. why is a grant element in the loan needed and what additionally will the blending bring (better quality design, a chance to influence policy, more affordable for users, addresses market failures or externalities such a climate change) – examples are always good. How do you decide on the level of concessionality ?- i.e. the size of the grant and the particular blending option (TA, grant, IRS; guarantee, risk capital etc) Do you have examples of concrete results from blending projects - where there are convincing reasons to believe that a pure loan would not have delivered those results (generally but especially if possible from CIF) – there is a counterfactual here which is difficult of course.The strategic relevance of blending in the evolving development cooperation landscape- (more countries becoming richer, infrastructure needs growing, the need to reinforce rather than substitute local/regional market mechanisms for SME access to finance) – where do you see blending as an aid modality going?

THANK YOU!

Yvon MellingerWater and Sanitation Lead Specialist Tel: (246) 627-8500 • Direct: (246) 627-8567

Fax: (246) 629-8869 • E-mail: [email protected]

Inter American Development BankHythe Welches Maxwell – Christ ChurchMain Road BB17068 – Barbados WIwww.iadb.org