Presentation at the 7th Annual High Level Ministerial Forum of the Global Water Partnership-Caribbean (GWP-C). Presentation by Mr. Matthias Krause, Water and Sanitation Senior Specialist at the Inter-American Development Bank (IDB).

1. IDB’s Water and Sanitation
Initiative:
Financing opportunities for
water and sanitation in the
Caribbean
Matthias Krause
Water and Sanitation Senior Specialist
Inter-America Development Bank

2. INDEX
1. THE INTER-AMERICAN DEVELOPMENT BANK
2. WATER AND SANITATION IN LAC
3. IDB’S W&S INITIATIVE:
FINANCIAL & NON-FINANCIAL PRODUCTS

3. WATER AND SANITATION INITIATIVE
THE INTER-AMERICAN
DEVELOPMENT BANK
(IDB)

4. WHAT IS THE IDB?
• TYPE OF ORGANIZATION: Multilateral
• MISSION: support efforts by LAC countries to reduce poverty and inequality
• HISTORY: Established in 1959. Largest source of development financing in LAC
• MEMBERSHIP: 48 countries represented by a Board of Executive Directors
• APPROVED LENDING-GRANTS IN 2009: $15.5 billion (6% W&S)
• EMPLOYEES: About 2,000
• OFFICES: Headquarters in Washington, DC, with country offices in 26
borrowing countries, plus a regional office in Asia and in Europe
• CLIENTS: Central governments, provinces, municipalit., private firms and NGOs

5. WATER AND SANITATION INITIATIVE
WATER AND SANITATION
SECTOR IN LAC

6. ACCESS & INVESTMENT NEEDS
• MDGS FOR 2015:
 Extend access to water to 36,8 M people
 Extend access to sanitation to 68,6 M people
 Required investments: US$17 billion (not including WWT)
 Water: US$5.5 B
 Sanitation: US$ 11.5 B
• UNIVERSAL ACCESS 2020:
 Extend access to water to 112,2 M people
 Extend access to sanitation to 193,5 M people
 Required invest.: US$ 49.1 B
 Water: US$16.7 B
 Sanitation: US$32.4 B (including WWT: US$50 B)

7. OTHER SECTOR INDICATORS
• MORE THAN 219 MILLION RECEIVE INTERMITTENT SERVICE
• LESS THAN 50% CONNECTED TO A SEWERAGE SYSTEM
• 10% IN SITU DISPOSAL (39 MILLION)
• LESS THAN 15% OF WASTEWATER IN URBAN AREAS RECEIVES SOME
TYPE OF TREATMENT
• 15 DEATH ZONES IN THE REGION
• 100 CHILDREN UNDER 5 DIE EVERY DAY
DUE TO WATER/SANITATION RELATED
DESEASES (38,000 PER YEAR)

8. SECTOR CHALLENGES
• GUARANTEE QUANTITY & QUALITY OF WATER RESOURCES
• ATTRACT MORE INVESTMENT
• REDUCE TECHNOLOGY COSTS
• STRENGTHEN INSTITUTIONS RESPONSIBLE FOR:
 PLANNING
 REGULATION
 CONTROL
• IMPROVE WATER OPERATORS’ EFFICIENCY

9. CHALLENGES FOR THE CARIBBEAN
REGION
•Declining amount of fresh water
• Discontinuity of water service
• Low coverage of sewerage networks and/or waste water treatment
• High non revenue water (45-50%)
• High inefficiency on energy consumption (30% of operational
budget)
• Water tariffs do not cover production costs
• Inefficiencies in the management of WS utilities/ weak corporate
governance of utilities

10. WATER AND SANITATION INITIATIVE
W&S INITIATIVE: FINANCIAL &
NON-FINANCIAL PRODUCTS

11. GOAL AND PROGRAMS
• GOAL
 Launched in 2007 to achieve universal access to sustainable,
reliable, and good quality W&S services
• FOUR PROGRAMS
 100 CITIES
 3,000 RURAL COMMUNITIES
 WATER DEFENDERS
 EFFICIENT AND TRANSPARENT UTILITIES

12. SUPPORT MODALITIES
• SOVEREIGN & NON-SOVEREIGN GUARANTEED LOANS
 Investment Loans
 Performance Driven Loans
 Policy Based Loans
• INVESTMENT GRANTS & TECHNICAL ASSISTANCE
 Spanish LAC Water and Sanitation Fund
 AquaFund
 Energy Efficiency in Water Companies (SECCI)
• WATER OPERATORS PARTNERSHIP (WOP)
 Corporate Governance
 Non-revenue water, …

13. LOAN APPROVALS
(2000-2010 in US$ million)
PRE-INITIATIVE (2000-2006) POS-INITIATIVE (2007…)
$1,840
$2,000 (17)
$1,800
$1,418
$1,600 (15)
$1,400
$979
$1,200 $960
(13) $885
(11)
(19)
$1,000
$800
$600
$340 $375
$400 $206 $197 $175
$96 $99
$200
$0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
 Water Initiative: approvals for US$ 1 billion per year
 More than US$ 4.6 billion approved since 2007 (60 operations)

14. TCs APPROVALS
(2000-2010 in US$ thousands)
PRE-INITIATIVE (2000-2006) POS-INITIATIVE (2007…)
$16,943
(37)
$18,000
$13,797
$16,000
(28)
$14,000 $11,313
(23)
$10,000
$12,000 (23)
$10,000
$8,000 $5,381 $5,461
(22) (18) $4,304
$6,000 $2,931 (11)
$2,717 (7)
$2,236 (12)
$4,000 (9) $846
$174 (8)
$2,000 (2)
$0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
 US$ 46 million approved since 2007 (99 opertions)

15. PIPELINE SUMMARY CARIBBEAN
INE/WSA 2010/2011 PIPELINE: US$ 218 M (Guyana, Suriname, Bahamas,
Barbados, Jamaica and Trinidad & Tobago)
PROJECTS IN EXECUTION: US$88.5 M (Barbados, Guyana and Jamaica)
PREPARATION EXECUTION
GU: Georgetown Sanitation Improvement Program /
BA: Water and Sanitation Systems Upgrade / US$50 M
US$9.5 M
SU: Water Supply Infrastructure Rehabilitation /
GU: Georgetown Solid Waste Manag. / US$ 13.5 M
US$12M
JA: Kingston Metro Water Supply Rehabilitation /
BH: WSC Support Program / US$30 M
US$ 25 M
GU: Linden Water Supply Rehabilitation Program /
US$ 12 M
TT: Wastewater Infrastructure Rehabilitat. Program /
US$26 M
JA: Water Rehabilitation / US$ 128.5 M

16. PROJECT CHARACTERISTICS
• All operations include institutional component to address:
organizational efficiency, financial sustainability improvement, and
non revenue water and asset management
• Majority of operations with energy efficiency component
• The Global Environment Facility (GEF) in partnership with the IDB
and UNEP are seeking to use GEF resources to help mobilize greater
investments in wastewater management facilities in the Wider
Caribbean Region (CREW): US$ 18.0 for 2010 for projects in Jamaica
and Guyana.
• Water Operators Partnership (WOP) which supports the exchange of
information and practices among water operators
• Knowledge products in waste water and solid waste

17. Corporate Governance Toolkit
• Support an assisted self-assessment of the
practices applied by the WSE in the area of CG
• Assess the practices applied by comparing them
with four levels of development (from “basic” to
“state-of-the-art”)
• Give an orientation to develop action plans in
order to improve practices

18. Context for CG
Legal/ Regulatory/ Policy Framework
Ownership/ Contract. Arrangement
Corporate Governance
Management

19. Benefits from strengthening CG in state-
owned WS Enterprises
• That the WSEs may pursue their purpose (provide
good quality services to all at affordable rates) thanks
to their sound business model and financial health
• That WSEs may not drain scarce public resources
• That the CG structure of WSEs protects them against
the main risks
– Loss of value of the capital invested
– Abuse from well-connected interest groups
• That the State develops ownership policy for WSEs
– Differentation between ownership policy and social policy
– Differentiation between the political and the business-like.
 WSE’s should generate value, be efficacious, sustainable, and
efficient.

20. Thank you!
MATTHIASK@iadb.org

21. SPANISH WATER AND SANITATION FUND
• NON-REIMBURSABLE RESOURCES FOR INVESTMENT PROJECTS:
 US$561 M for 2008-11
• BENEFICIARY COUNTRIES:
 IDB borrowing member countries (except English Caribb.)
• PRIORITY INVESTMENT AREAS
 Rural
 Periurban
• 19 PROJECTS (US$561 M) IN 13 COUNTRIES
 14 projects approved by IDB Board
 5 projects under preparation

22. AQUAFUND
• MULTI-DONOR FUND FOR WATER AND SANITATION SECTOR
• NON-REIMBURSABLE RESOURCES
 Technical assistance
 Project preparation
 Pilot investment projects
• SUPPORTS SG & NSG LENDING
• US$50 MILLION IDB OC FUNDS
 28TCs approved (US$16 million)
 Third-party co-financing: almost US$8 million
 US$10 million programmed for 2011

23. AQUAFUND
• MULTI-DONOR FUND FOR WATER AND SANITATION SECTOR
• NON-REIMBURSABLE RESOURCES
 Technical assistance
 Project preparation
 Community Projects / Pilot investment Projects
• SUPPORTS SG & NSG LENDING
• US$50 MILLION IDB OC FUNDS
 28TCs approved (US$16 million)
 Third-party co-financing: almost US$8 million
 US$10 million programmed for 2010

24. COMMUNITY PROJECTS
• PROJECTS EXECUTED BY NGO OR CIVIL SOCIETY ORGANIZATIONS
 Avina Foundation, CARE, Catholic Relief Services, Millennium Water
Alliance, TEC Monterrey, The Nature Conservancy, Water for People,
Waste pickers cooperatives
• THE BANK MATCHES EVERY DOLLAR
• DONORS OF THE AQUAFUND. IDB is the largest AquaFund donor followed
by the Swiss Government, PepsiCo Foundation and the Austrian Government.
• OTHER PARTNERS THAT HAVE LEVERAGED AQUAFUND FUNDING ON
A PROJECT BASIS
 Femsa Foundation, Kellogg Foundation, The Coca Cola Foundation,
Nordic Development Fund

25. COMMUNITY PROJECTS
NGO PROJECTS
Water Resources Water Supply Solid Waste
Management and Sanitation Management
(WRM) (WASH) (SWM)
WATER FUNDS Social Inclusion of
PROGRAM WATER FOR MICROCREDIT DEMAND DRIVEN
Informal Recyclers
SCHOOLS PROGRAM SUSTAINABLE Program
Partner: TNC
(SWASH) RURAL WSS
Countries: Partners: Water.org Partners:
CO/EC/PE/BR/MX Partners: MWA Countries: Peru Social marketing AVINA/FOMIN
Total : 15.35 M Countries: NI/ES/GU Total : 3M campaigns , circuit Countries: CO/BR
IDB: 0.35M Total : 2M PepsiCo Foundation rider programs. IDB: 6M (0.5 AQF)
GEF : 5 M IDB: 1 M (AQF): 1.5 M External Donors: 6 M
FEMSA Found.: 5 M Coca Cola: 1 M MIF: 1.5 Partners: TBD
TNC: 5 M Countries: CO, HO
Beneficiaries: Beneficiaries:
or DR
23 K students 54 K people

26. COMMUNITY PROJECTS
• ADVANTAGES OF PARTNERING WITH THE IDB
 Bank’s presence in every country in the region
 Knowledge of its water sector specialists (engineers, economists, social
specialists and hydrologists) in HQ and 26 country offices
 Extensive portfolio of water and sanitation projects (largest donor, 83%
of multilateral sector funding in the region)
 Facilitates project identification and preparation, supervision of project
execution and impact evaluation
 Ensures more coordinated and more upstream mechanisms of aid
delivery

27. ENERGY EFFICIENCY
• PARTNERSHIP WITH SECCI TO REDUCE ENERGY CONSUMPTION IN
WATER OPERATORS THROUGH:
 Energy Audits & Energy Efficiency Plans
 Water recovery and water recycling
 New operation & maintenance practices
 Equipment modernization
 Methane use for electricity production at waste-water treatment plants
• CURRENT EXPERIENCES:
 CO: EA & EE plans for 14 operators
 Caribbean: EA & EE plans for 7 operators
 Other EA & EE plans in execution (2 TCs) :
 6 operat.: EMPAGUA (GU), COSANPA (BR), COPASA (BR), ANDA (ES), CAASD (DR) & AySA (AR)
 3 operat. in Central America: AYA (CR), SANAA (HO), IDAAN (PN)

28. WATER OPERATORS PARTNERSHIP
• COLLABORATION BETWEEN IDB + UN-HABITAT + IWA + AIDIS
• PROMOTES COOPERATION BETWEEN WATER OPERATORS
 15 COOPERATIONS (examples)
 EPM (CO) & ENACAL (NI) → information systems
 SABESP (BR) & SEDAPAL (PE) → e-procurement
 AGUAS ANDINAS (CH) & SEDAPAR (PE) → management efficiency
 DIGAP (CH), EMAC (EC) & COSMOL (BO) → solid waste
 SADM (ME) & EMAAPQ (EC) → reduction of water consumption
 SABESP (BR) & AyA (CR) → framework agreement

29. PROGRESS SINCE APPROVAL
• MORE THAN US$ 4.9 BILLION FOR SECTOR FINANCING
• MORE THAN US$39 MILLION FOR TECHNICAL ASSISTANCE
• 146 CITIES (TARGET 100)
• 2600 RURAL COMMUNITIES (TARGET 3,000)
• 31 MICRO WATER-SHEDS (TARGET 20)
• 90 WATER OPERATORS

30. TYPICAL INFRASTRUCTURE PROJECTS
• WATER NETWORK EXPANSION/REHABILITATION
• SEWERAGE NETWORK EXPANSION/REHABILITATION
• RURAL WATER AND BASIC SANITATION
• WATER & WASTEWATER TREATMENT PLANTS
• DRAINAGE/FLOOD PREVENTION INFRASTRUCTURE
• SOLID WASTE

31. INVEST. GRANTS APPROVALS
(2000-2010 in US$ millions)
PRE-INITIATIVE (2000-2006) POS-INITIATIVE (2007…)
$268
$300 (10)
$250
$200 $150
$143
(3)
(6)
$150
$100
$50
$0 - - - - - - - - -
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
 More than US$400 million approved since 2007 (13 operations)