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ADB to lend India $3.80 bn for water sector during 2017-19

Yokohama, Japan : The Asian Development Bank (ADB) held the 50th Annual Meeting of its Board of Governors in early May in Yokohama, Japan, where it announced an expansion in annual lending to the crucial water sector in Asia to $4.2 billion this year. Next year, the figure will go up to $4.8 billion.

Last year, ADB had lent $2.4 billion to the region’s countries. This year, ADB will also combine lending operations of its concessional financing with its ordinary capital resources.

India Water Review Editor & Publisher Girish Chadha spoke to ADB Deputy Director General Amy Leung on the Manila-based lender's plans to scale up and expand water projects in India.

The ADB has announced that funding in the water sector would be ramped up during 2017 to $4.2 billion and further to $4.8 billion in 2018 in the APAC (Asia-Pacific) region. What kind of investments will flow into India from the overall corpus and how will it pan out over 2017 and 2018 in the water sector?

The predominant focus of the ADB's three-year programme for India will continue to be infrastructure development. Based on the Country Operations Business Plan 2017-2019, ADB lending in India for the water sector will be about $3807 million or about $942 million for agriculture and natural resources and $2865 million for water and other urban services.

India has been one of the largest recipients of ADB funding, including in the water sector over past several years. Though there is need for huge investment in water infrastructure, clearly multi-lateral funding has not been as much as desired. What has been the pattern of funding in the past decade or so?

Based on approved projects from 2005-2016, ADB has provided about $4088 million in lending support for India's water sector. This includes about $3117 million for water supply, sanitation and wastewater management, $310 million for irrigation and drainage, $238 million for flood management and $423 million for hydropower generation and water resources management.

What will be the of focus areas for ADB in India in coming years? India is taking up several flagship programmes for expansion of urban water supply - through AMRUT, Smart Cities initiative besides the Ganga rejuvenation programme, or Namami Gange. Where does the ADB see a role for itself in these programmes?

ADB is prepared to provide increasing support to the Government of India in developing its urban and water sectors, in response to these major initiatives. ADB's core areas of expertise in this sector generally include introducing innovation and technology for improving asset management, smart water delivery with 24x7 supply, non-revenue water reduction, water use efficiency improvement, and water reuse.

We also provide capacity building support for institution building, regulation, and conservation of both surface and groundwater.

India, like rest of the Asian countries, has been facing challenges in the water sector - there are competing demands from several sectors, water shortages are growing and the gap between demand and supply is expected to expand further. What are the lessons that ADB can bring to India in managing the country’s water resources?

Business as usual is not possible anymore. While demand is projected to grow by 30–40 per cent, in general, existing water resources in many areas in the region can be considered already fully utilized due to rapid groundwater depletion.

The point is that increasing demand cannot be met by simply developing new water resources. Rather, it will be met by a combination of improving water productivity (through water use efficiency in agriculture and significantly reduced urban non-revenue water), improved water management (such as rainwater harvesting), reuse, and desalination.

Overarching is the need to also monitor groundwater resources and actually start managing these more sustainably. This will require more thought beyond the water sector, given that power subsidies also contribute to groundwater overuse.

With increased climate variability, we enter a period of uncertainty. The math tells us that business as usual, even if fully and uniformly implemented across Asia and the Pacific, will simply not suffice due to limited water resources. Strengthening governance is undeniably the major requirement for effective resource management and sustainable development.

The agriculture sector in India, like elsewhere, is saddled with inefficiencies. What has been ADB’s engagement in India to increase water use efficiency in agriculture and what plans are afoot to expand this engagement?

ADB has provided $310.35 million in lending support for irrigation from 2005 to 2016. ADB has been working through several projects in view of increasing water productivity in agriculture, namely, Chhattisgarh Irrigation Development Project (2005- 2013), Odisha Integrated Irrigated Agriculture and Water Management Investment (Tranche 1, 2008-2015) and Karnataka Integrated and Sustainable Water Resources Management Investment Programme (Tranche 1 ongoing from 2014).

At the request of the National Planning Commission and the Union Ministry of Water Resources, from 2011, ADB supported two studies including (i) the national water use efficiency programme scoping study and (ii) RDTA-7967 Innovations for More Food with Less Water Study to help the National Water Mission (NWM) to improve water use efficiency in irrigation by 20 per cent. The study takes stock of water use efficiency issues in major and medium irrigation (MMI) schemes and proposed a framework and tools, such as, benchmarking, remote sensing water productivity measurement, etc, for modernizing irrigation and achieving greater irrigation water use efficiency and water productivity.

Discussions are ongoing for ADB to further support the implementation of the National Water Use Efficiency Improvement Support Programme (NWUEISP) in India. Several states have expressed interest to join the programme. ADB is assisting the Madhya Pradesh Government to develop the Madhya Pradesh Irrigation Efficiency Irrigation Project (MPIEP), which will include the development of a highly efficient 125,000 ha pressurized irrigation system. This is for approval in 2018.

One of the roles of multilateral lenders like ADB is assisting recipient countries in policy framework along with lending support. How has been the Indian experience considering that there is a clear demarcation between the Federal Government and the state Government’s role in the water sector? Is India perceived to be more receptive than other Asian countries towards policy interventions and learning from the experience of multilateral agencies like ADB?

ADB has been having policy dialogue with the Central Government in India in view of supporting the implementation of the NWUEISP. This will finance capacity building technical assistance at Central Government level and investment projects at state levels.

Although, we have started to work with Madhya Pradesh Government on a specific project, the establishment of NWUEISP has been a challenge for us. On the other hand, projects assisted at the state-level have included a component to build policy and institutional framework and capacities to promote irrigation water management by farmer water user associations, and integrated water resources management.

We tend to face various challenges when introducing policy interventions in any countries. From our experience, we do not believe that India is more receptive about learning from our experience.

Lastly, the close relationship between economic growth and water availability is now being underlined and several countries are poised to trip up on maintaining strong GDP numbers in the absence of abundant water. Climate change is also impacting this equation. What are the imperatives for India in this regard. Which areas should it focus on to maintain water security in the future?

Investments in institutions and infrastructure for effective water resources management and introduction of new technologies and low-carbon solutions will be essential to maintain rapid economic growth while enhancing rural and urban liveability and environmental sustainability in India.

ADB will help demonstrate solutions to the challenge posed by water scarcity and climate change. ADB will promote efficient and sustainable water management in agriculture, cities, and industry, with a focus on investment projects to build necessary infrastructure, but including advice on policy and institutional reforms in water resources management and service delivery.

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