$80 – $180 billion for investment in environmental facilities and services.70% of which is needed for:Wastewater treatment,Pollution abatement,Nutrient reduction,Water reuse/recycling.
2. TThhee NNeeeedd
$80 – $180 billion for investment
in environmental facilities
and services
70% of which is needed for:
• Wastewater treatment
• Pollution abatement
• Nutrient reduction
• Water reuse/recycling
3. TThhee SSiittuuaattiioonn
Public sector has:
• legal authority
• law-making power
• monitoring and
regulatory function
• mandate
…but lacks
• funding
• technical resources
• business skills.
Private sector has:
• experience
• expertise
• technology
• business skills
• access to financing
…but faces
• a conflict between
making long-term
investments and
reporting on short-term
financial cycles.
4. TThhee SSiittuuaattiioonn
NGOs have:
• an understanding of local needs
• ability to work with and influence people,
including poor communities
• credibility
• organizational and communication skills
…but lack
• sufficient and predictable funding
• staff and technical capacity
• experience in partnership arrangements.
5. BBuuiillddiinngg SSuussttaaiinnaabbiilliittyy
PPrriinncciipplleess ooff mmuullttii--sseeccttoorr
ppaarrttnneerrsshhiippss
Set within a policy, regulatory and
investment environment that is conducive
to business participation
An alternative delivery mechanism…not the
only one
6. BBuuiillddiinngg SSuussttaaiinnaabbiilliittyy
PPrriinncciipplleess ooff mmuullttii--sseeccttoorr
ppaarrttnneerrsshhiippss
Bringing together government, private
sector and civil society to better tackle the
challenges of providing water and
sanitation services, as well as other
services to communities
Recognizing two separate but related
issues, namely:
Partnership development and
sustainability
Project development and sustainability.
7. Constraints to PPrriivvaattee SSeeccttoorr PPaarrttiicciippaattiioonn
Political risk
Regulatory risk
Commercial risk
• Financial risks
• Design fault
• Construction and operational risks
Revenue risk
• Tariff system
• Demand forecast/willingness to pay
Failure to identify or lack of sound projects
Bias against projects in small- and medium-sized
urban and rural areas
10. PPoolliittiiccaall RRiisskk
The implementation of ICM programs provide local
governments with:
a management framework
institutional arrangements and mechanisms
long-term vision and strategies
action programs addressing priority concerns
local community participatory process
climate for investment.
12. PEOPLE’S COMMI TTEE OF DANANG CI TY
CCooaassttaall SSttrraatteeggyy ooff DDaannaanngg CCiittyy
Manila Bay Coastal Strategy
October 2001
Danang - 2001
13. Political RRiisskk:: CCoommmmuunniittyy ssuuppppoorrtt
Community awareness/participation
• Information dissemination
• Consultation/communication
• Issues, causes and effects
• Shared vision, roles and responsibilities
14. RReevveennuuee RRiisskk:: AAffffoorrddaabbiilliittyy
Scoping the Needs/Capacities
• Socioeconomic considerations (services to poor
communities)
• Community mobilization – as a partner in the
project
• Expectations/benefits to be derived
• Willingness and ability to pay
• Monitoring and evaluation
15. RReevveennuuee RRiisskk:: TTaarriiffff SSttrruuccttuurree
Information and
education campaign
‘Full-cost’ pricing
public’s attitude regarding
‘public services’
Implications on the poor and
disadvantaged sectors of the
population
Efficiency of existing
bureaucracies with regard to
collection of fees and taxes
Increasing block
structure
Lifeline price for the
poor
Strengthen local
governance
17. Delineation of responsibility:
• authority of local governments in the investment
area
• mandate local governments to form partnerships,
raise funds and impose tariffs for environmental
facilities and services
• stipulate standards against which performance can
be measured.
RReegguullaattoorryy RRiisskk
18. RReegguullaattoorryy RRiisskk
Capacity building to fully implement delineated
responsibilities by strengthening:
• technical/scientific skills
• regulatory and economic instruments
• monitoring and evaluation
• enforcement
19. CCoommmmeerrcciiaall RRiisskk
Financial risk
• Exchange rate fluctuations
• High interest rates
• High inflation rates
Construction and operational risk
Start-up delays
Construction and
operating cost overruns &
delays
Actions
• Access to
domestic funds
• Innovative
financial
structures
• Financial
commitment
• Performance
standards
• Licensing/permit
approvals
21. CCoommmmeerrcciiaall RRiisskk
Capacity building is a major bridge for overcoming
barriers to private sector participation in
environmental investments.
Strengthening:
• capabilities in local governance (ICM)
• project development and management
• technical/scientific skills and support
• regulatory and economic instruments
• financial management
• monitoring and evaluation
• enforcement
22. CCoommmmeerrcciiaall RRiisskk
Financial Risk
• accessibility to multiple
sources of financing
• project portfolio that is
affordable, self-sustaining
and attractive to private
sector
AAccttiioonnss
• Creation of innovative
financial mechanism to
meet the needs and
capacities of local
governments and their
partners.
25. Is this a good time for environmental investments?
5 ICM sites and 2 hotspots:
• more than 40 investment opportunities identified
• priority environmental concerns screened
• 15 projects proceeding through pre-feasibility
studies, lead by local stakeholders
• more than $600 million in capital investments
• local governments and local stakeholders
providing concrete commitments
26. Is this a good time for environmental investments?
Contingent valuation surveys:
• overall willingness to pay for environmental
services
• correlates with household income
• <1% of monthly household income
• ability to pay is a factor, as is education and age
of respondent
• unwillingness to pay <1% of respondents
27. What about the private sector?
Challenges:
• Trust, transparency and confidence in the
process and the other ‘partners’
• Goals, expectations, verification of viability
• Roles and responsibilities
• Governance structure of partnership
• Communication
28. What are the critical features?
Critical features:
• leadership
• concrete commitments of local government and
local stakeholders
• private sector awareness and confidence
• innovative financial mechanism accessible by
local governments and their partners