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Water Resources Management Financing in Lao PDR


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Water Resources Management Financing in Lao PDR

  1. 1. Study on Sustainable Financing Mechanism for Integrated Water Resource Management in Lao PDR Department of Water Resource Ministry of Natural Resource and Environment Lao PDR
  2. 2. Outlines 1. Introduction 2. Laws and Regulations and Lesson learnt of Fee Collection on IWRM in Lao PDR 3. Financing Source and Current Implementation 4. Future Plan
  3. 3. 1. Introduction • Laos is a natural resource abandon country, especially a great wealth in water resources. The northern region captures a rainfall of approximately 1,300 mm/yr and the southern region 3,000-3,700 mm/yr. • 35% of all water in the Mekong River originates from watersheds within Lao PDR. • The government also emphasizes the important role of water resource on SocialEconomic Development, especially revenues generation from sector development project and livelihood improvement of the poor NGPES, NSEDP 5, 6, 7). • Therefore, it is required to have fund for financing the recovering cost of IWRM.
  4. 4. 1. Introduction Cont. The cycle of water resource utilization Water resource Utilization Wastewater Water resource utilization in Lao PDR: – Agricultural sector – Industrial sector: mining, hydropower, commercial water production, heavy and light industry – Service sector: tourism, transport, and others. – Household sector
  5. 5. Costs of water related services provision Investment cost operating and maintenance debt services coordination, administration, and labor cost, and researches Managing natural and man made environment to deliver sufficient water quantity, quality, and timing Water resource management Abstracting , storing, treating, and distribution Water distribution Capturing, retaining, treating, re-releasing sewage and other liquid wastes Waste water management
  6. 6. Influential Factors Affecting Availability of Water Resources  The decline in forest cover in to in in Laos  An increase in demand of water utilization: Impacting to environment  GDP Growth Hydropower mining industry, service, agriculture, and other economic activities  Water resources surface and underground water  quantity  quality  An increase of population  Climate change  Other factors source draft Water Resource Strategy from present to and action 2011-2015
  7. 7. different mandates, funds & funding sources mandates fund types funding sources coordination & planning public budget govt & donor funds special account/retention fund service charges & user fees operation of utilities & regulation of activities provision of ecosystem services & public benefits users’ contributions autonomous earmarked fund public donations 7
  8. 8. Laws and Regulations on WRM & Fee Collection in Lao PDR a. Review of Laws and Regulations:  Existing laws and regulations established the responsibility of water users and developers to protect water resources and the natural environment, and enable the use of various charges and funds relating to environmental protection.  Apart from the Law on Water and Water Resources (1996), it does not however deal explicitly with funding for WRM. Nevertheless, They provide an enabling legal basis for developing kind of water resource fee. b. Lesson Learnt of Fee Collection in Laos:  Although well-established water supply tariff and wastewater charge systems exist in Lao PDR for piped water users, they neither factor in the costs of WRM nor generate revenues for IWRM.
  9. 9. Laws and Regulations on WRM & Fee Collection in Lao PDR (cont.) • Hydropower and mining developments are already subjected to a variety of fees, taxes and royalties. These payments are not however explicitly concerned with, or allocated to, water resource management and protection. – Although developers are additionally required to provide funding to support environmental protection and community development activities, it is not clear to what extent revenues are used to directly support IWRM
  10. 10. Government budget  Service fees and user fees ? Royalties  Fines ? Payments for watershed services  Payments for other ecosystem services ? Carbon finance Fiscal transfers ? ? Contributions from water developers  Biodiversity offsets  Other corporate sponsorship  International development grants Interest from investments  ? 10
  11. 11. Water Resource Fee Rate Draft-Possible Options) No. Sector Fee Rate Remark I. Natural resource fee for hydropower project 1.1 Hydropower for export Hydropower for domestic utilization 1.2 Medium and large scale capacity generation from MW up Hydropower for domestic utilization 1.3 Small scale capacity generation below MW 5%- 15% II. Water resource fee for each sector calculated in m 2. Water use in industry and handicraft 1-100 m3 kip 101-500 m3 8 kip 501-1000 m3 10 kip 1001-5000 m3 kip 5000 up m3 kip Source Draft Presidential Decree on Natural Resource Fee, MOF detailed rate of each project indicated in the agreement
  12. 12. 2.2 Water use in mining Fresh water use for production 1-100 m3 101-500 m3 501-1000 m3 1001-5000 m3 5000 m3 Up 0 kip kip kip 0 kip kip Water use in commercialized 2.3 agricultural production (concessionaire projects) a. Water use for crash crop and industrial trees Water use fishery and livestock b. Direct Indirect 1 m /5 kip 1 m /10 kip 1 m /5 kip Source Draft Presidential Decree on Natural Resource Fee, MOF Detailed collection methodology will be mentioned in implementation manual
  13. 13. 2.4 a. 2.5 Water use in tourism Water use in resort, hotel, guest house, restaurant, entertainment places and others (surface and ground water not including connected to pipes Urban water users (connected to piped water/water supply) 1-100 m3 101-500 m3 501-1000 m3 1001-5000 m3 >5000 m3 kip kip 0 kip kip kip 1 m / 0 kip Source Draft Presidential Decree on Natural Resource Fee, MOF Revenue collection from this sources will be centralized through the National Treasury
  14. 14. Source: Public Investment Law (2009)
  15. 15. 6. Future plan and challenges  Future Plan: – Create or study on water resource fee calculation method for all sectors: hydropower and others. – Piloting payment for ecosystem services – Fund mobilization from international communities for water resource management activities and capacity development  Challenges: – Lack of skilled technical staff at provincial and district levels. – Lack of fund to implement water resource management activities at local level. – The detailed method for fund collection and using (need more details)
  16. 16. References • Nation Growth and Poverty Eradication Strategy • National Social-Economic Development Plan 5th 6th and 7th • Draft water resource strategy from present to 2020 and 12 action programmes 2011-2015 • State Budget Law updated version, 2 • Public Investment Law (2009)
  17. 17. Thank you for your kind attention Email: Tel: +856-21 241 744; Fax: +856-21 218 737