Session FT 4.08

Financing water for agriculture

 

 

 

 

Conveners

• World Water Council
• Global Water Partnership

Opening: The session presented a progress report on the consultations of the Working Group on Financing Water for Agriculture as part of the Gurria Task Force. The findings were derived from three recent workshops. The keynote speaker described financing as a diverse and complex issue. He touched on the different sources of finance and on the future needs for finance in order to reach the MDG on Hunger (U$ 47 billion rising to $67 billion annually) Different sources of finance needs to be adopted and used for different purposes: user charges, government budgets, ODA, loans (private and IFI) and self financing. Unconventional sources must be further developed through PPP’s, micro finance, improved banking terms, new co-financing structures and smart mitigation of risks.

 

Lessons learnt and key messages

 

1. Partnerships between public-private and community are a key to success. A transparent participatory approach is needed to get ownership and an optimum approach.
   
2. Risks relating to financing have to be addressed and agreement must be reached on how to allocate risks amongst partners in a partnership.
   
3. The government has a key role in creating an enabling environment in terms of policies, legislation and institutional development – in order to make such models a success - but the classic model of central government controlling the whole process is not viable.
   
4. Demand based approaches and involvement of stakeholders is a prerequisite for success.

 

Recommendations for action

 

1. Financiers (including donors) and governments have to view improved financing options as a route for addressing MDGs – and should be more sensitive to these kinds of approaches.
   
2. Integrated approaches to financing water for agriculture entail addressing the requirements of other sector than water and agriculture – such as watershed management and environmental protection policies.
   
3. Improved cost recovery has to go hand-in-hand with improved services for the users – to guarantee stakeholders commitment to recover costs.
   
4. Financing water for agriculture is only at the beginning of a long process and there is an urgent need to understand better the issues and find innovative solutions.

Local Actions presented

 

Chilean experience with new instruments to finance water for agriculture

Humberto Pena

Financing Water for Agriculture: Addressing the challenge in Zambia

Priscilla Musonda

Programa Agua para Siempre y Grupo Cooperativo Quali

Raúl Hernández Garciadiego

Esquema de Financiamiento para la Proyecto Picachos

Óscar Lara Aréchiga

Guerdane: De l’Approche Classique a La Mise En Oeuvre du Partenariat Public-Privé

Mehdi Arrifi, Morroco