The African Market for water innovation

Perspectives on the African market for water innovation

Francisco Nunes CorreiaPresident

Portuguese Water Partnership (PWP)

5 November 2014

Barcelona, Spain

Francisco Nunes CorreiaPresident of the Portuguese Water Partnership (PWP)

Perspectives on the

African market for

water innovation

EIP Water Conference 2014 November 5th | Barcelona

Key Topics

• Introduction What is the PWP and what is the content of this presentation

• Water challenges in Africa

• Zoom-in on four important African markets: Algeria, Angola, Morocco, Mozambique

• Final remarks

Portuguese Water Partnershipa solid and mature cluster of private and public institutions

dedicated to water at the global scale

Governmental agencies

Public and private companies

Universities and R&D centers Professional associations and civil society

Why is it a “partnership” ?

Africa

54 countries with varying degreesof economic and socio-political circumstances

The only region in the world in whichGDP is directly proportional to annual rainfall

Most population relies on rain-fed agriculturebecause that is a great lack of infrastructure

Variation in annual precipitation vs variation in GDP per capitain Sub-Saharan Africa

(Source: Cobos et al. 2008)

A reasonable share of world water, but …

On the average Africa uses less than 4% of water resourcesthis is 5 times less than US or Europe!

Africa has the lowest withdrawal per capita in the world1/4 of world average, 1/2 of second lowest

(South East Asia)

Africa loses: 5 % of its GDP because of poor coverage of water supply and sanitation

2 % of its GDP because of power outagesBetween 5 % and 25 % because of droughts and floodsAdditional 5 % with future impacts of climate change

Africa

87% world average

Only 10 countries equal toor above the world average

62% world average

Only 8 countries equal toor above the world average

Climate Change Also Aggravates NaturalWater Related Disasters

Floods Droughts

Africa has very little water storage capacityOnly 200 m3/capita, compared with

> 1000 m3/capita in most developing countries3500 m3/capita in Europe6000 m3/capita in the US

Africa

Summarizing:Extreme hydrological variability, aggravated by climate change, and feeble base of installed infrastructure.

Financial resources are not the main missing link !

Poor governance and the lack of capability are seen, for many, as much bigger problems than the lack of financial resources.

Innovation in Africa

Urban

Robust solutions

Rural

Adapted solutions

African market for water innovation:

A different reality?!

Smart technology

Different... but not so much!EIP framework applies almost entirely

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A triple challenge:

What are the local/regional needs ?

Which technology can we provide?Is it feasible in economic and financial terms?

Is governance appropriate to sustain change?

Project AguaGlobalA join venture of PWP and AEP

The largest Portuguese business association

African target markets selected

MoroccoAlgeria

Angola

Mozambique

Key challenges and opportunities

Algeria

• 4th largest Arab economy• Strong financial resource availability resulting in

revenues from oil • Investment plan (2030) in major modernization projects

and infrastructure construction • Openness to entry of foreign companies• Incentives to create partnerships in the private sector • Information on public procurement is available• Strong possibility of funding from the

Algerian banks • Association agreement with the EU, with total customs

dismantling until 2017.

Angola

• Political stability• Vast natural resources• Rapid population growth• Substantial public investment in the water

sector• Privatization programs in sectors held by the State. • Rebuilding basic infrastructure destroyed by war • Emergence of new "business cities" beyond Luanda

(Lubango, Huambo, Benguela, Lobito, etc.).

Morocco

• 2nd largest economy in the Maghreb and 6th in Africa

• Political and institutional stability• Advanced status agreement with the EU• Extensive programs of public and private works• Extensive modernization programs of infrastructure• Mechanisms of preferential credit• Greater openness to private sector

traditionally public areas (such as the water sector).

Mozambique

• Easy movement of capital• Partnerships to operate in the market not required • Construction sector has capacity to mobilize other

activities• Market growth and diversification • Major investments in infrastructure (water,

energy, construction and public works)• Increasing openness of the water sector to private

operators

Investment plans

Algeria

Investment in the Water Sector 2010- 2014: • Over US$ 23 billion (app. 5.8 billion per year)• Water distribution systems• Sewage treatment • Water pollution control • 32 new dams • 25 new systems of water transfer • Desalination plants • Irrigation and drainage water

Angola

Estimated Investmentin Water Sector 2013-2017:• Wastewater treatment : > US$ 1 000 M• Water Supply: US$ 3 000 M $• 11 new dams: 7 224 MW for hydropower plants• Expansion of water distribution networks• Water supply supported by IFI´s: US$ 400 M• Irrigation: only 4% of irrigation exploitedUS$ 1200 M annual investment (2013-17)

Morocco

Estimated Investmentin Water Sector 2013- 2016: • Over € 1.9 billion• Water supply: US$ 1300 M• Water supply in rural populations 500 M• Wastewater treatment: US$ 530 M• Improved performance: US$ 140 MUS$ 625 M annual investment in the water sector (2013-16)

Mozambique

Estimated Investmentin Water Sector 2015-2020:• 5 new dams : US$ 320 M• Increasing capacity of the systems : US$ 61 M• Rehabilitation of treatment systems: US$ 46 M• Water distribution networks: US$ 59 M• Acquisition of material: US$ 64 M• Consulting and training: US$ 17 MUS$ 150 M annual investment (2015-20)

Areas of opportunity

Algeria Angola Morocco Mozambique

PLANNING AND MANAGEMENT OF WATER RESOURCES

WATER SERVICES

HYDRAULIC DEVELOPMENTS

COASTAL MANAGEMENT

INTITUTIONS AND GOVERNANCE

Legend:Large business opportunities

Medium business opportunities

Low business opportunities

ChinaOther Asiancountries India

Final Remarks

• Very specific relationship between people and institutions• Importance of local communities and leaderships

• Adapt to different realities (urban/ periurban / rural)• Understand local policy makers viewpoints / priorities• Find suitable solutions to different contexts

• Water-energy-food nexus• Water-sanitation-health (WASH) dimensions

• Innovation beyond technology• Technology is not enough to solve structural problems• Innovation in governance is also important

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Portuguese Water PartnershipCentro Empresarial Torres de LisboaRua Tomás da Fonseca, Torre G, 8º piso1600-209 LisboaPortugal

www.ppa.ptTelephone: (+351) 210052200E-mail: [email protected]

Thank you !