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ADB Grant to Improve Water Resources, Enhance Productivity in Afghanistan

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The Asian Development Bank (ADB) has approved a $348.78 million grant to help in the development of water resources in Kandahar province through the expansion of Dahla Dam, the country’s second largest dam.

The project will help improve Afghanistan’s agricultural productivity, water resources management, energy generation, and growth outlook.

Stable, reliable, and well-managed water resources are essential for Afghanistan, where water is scarce and highly seasonal, greatly affecting the agriculture sector. The sector is Afghanistan’s major source of livelihood, employing 62.2% of the country’s labor force in 2017—two-thirds of employed women in the country work in agriculture—and contributing over 21% to the national economy. The lack of well-managed integrated water resources, especially of reliable irrigation water, hinders the sector’s huge potential and further contribution to the economy.

“Afghanistan has a water availability and management issue, with frequent and worsening droughts affecting the country’s agriculture outputs, people’s living standards, and economic productivity,” said ADB Principal Natural Resources and Agriculture Specialist for Central and West Asia Mr. Hans Woldring. “Addressing the country’s water resources issue will not only improve agricultural production in Afghanistan, particularly in high-value crops, but also provide security, both in water and energy, improving the country’s economic prospects.”

The Arghandab Integrated Water Resources Development Project will improve the availability and management of water resources in Kandahar province by rehabilitating and increasing the storage capacity of Dahla Dam, which was originally built in 1952. Construction works will include raising the main dam, six saddle dams, spillways, and other associated structures to increase the full reservoir level by 13.6 meters and storage capacity from 288 million cubic meters (mcm) to 782 mcm, while also realigning 9.6 kilometers of road that will be affected.

Increased storage capacity of the dam will provide the possibility of hydropower generation, which will be undertaken by the private sector, and additional urban and industrial water supply to Kandahar City and its surroundings, with the help of a $230 million grant from the World Bank.

The project will also increase reliable irrigation water supply by upgrading canals and structures, as well as introducing monitoring and control systems that will allow water on demand services in the province. Climate-smart irrigation and agricultural technologies and practices will be adopted to improve production and sustainability. Female farmers, in particular, will be empowered through increased training opportunities, scholarships, technology transfer, and advisory services.

Since 1966, ADB has invested about $545 million in water resources in Afghanistan, mainly for irrigation. ADB operations have so far resulted in 350,000 hectares (ha) of improved irrigated land, with more than 250,000 ha under development.

Key areas of ADB’s assistance to the sector include irrigation and water resources, agriculture market infrastructure, value chain development, integrated water resources management, institutional strengthening and reforms, and increased participation of women in agriculture.

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ADB to Help Improve Rural Water Supply, Sanitation in Kyrgyz Republic

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The Asian Development Bank (ADB) has approved a $27.4 million financing package to provide safe and reliable water supply and sanitation services to more than 64,000 people living in a mountainous rural area of the Kyrgyz Republic.

The program supports the government’s national goal of increasing access to safe water supplies from current levels of 40% to 90%, and for sanitation services from 10% to 70%, by 2026.

ADB’s assistance, comprised of a $13.7 million results-based loan and a $13.7 million grant from the Asian Development Fund, will improve water supply and sanitation infrastructure and facilities in the province of Naryn, where 29% of the population was living below the poverty line in 2017.

“Access to safe and reliable water supply and sanitation services is a basic human right and integral to the growth and development prospects of a developing country like the Kyrgyz Republic,” said ADB Senior Urban Development Specialist for Central and West Asia Mr. Jude Kohlhase. “We are committed to helping the people of the Kyrgyz Republic, especially in the province of Naryn, lead healthier and more productive lives.”

Access to safe drinking water and sanitation services in the Kyrgyz Republic’s rural areas remain minimal. Most of the country’s water supply and sanitation infrastructure is outdated, while poor water quality and sanitation costs the country over $100 million annually. Only about a quarter of rural households had piped water connections in 2014, while about 73% suffered from intermittent water supply. Only 10% of rural households have access to sanitation facilities.

The Naryn Rural Water Supply and Sanitation Development Program will include safe water sources, water storage, and treatment and disinfection systems; distribution networks for all 31 program villages; and gender-sensitive safe water and sanitation facilities in selected education and health facilities. The program will also pilot non-networked household sanitation solutions for remote areas.

The program will likewise strengthen institutional capacity of utility providers for better service delivery such as better financial management, while introducing gender-specific measures in their operations, including ensuring at least 20% female employment.

The total cost of the program is $32.9 million with the Government of the Kyrgyz Republic contributing $5.5 million in financing. ADB is also providing a $225,000 technical assistance grant for the program, which is expected to be completed by the end of 2026. ADB will also provide an additional $2.5 million grant from a small expenditure financing facility to support program implementation, including verification of the program results.

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IRENA Facilitates Investment and Renewable Projects on Ground in Africa

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Boosting renewable energy projects on the ground requires scaling up investment. IRENA’s state-of-the-art analysis of enabling policy frameworks and finance mechanisms channel public and private investment in markets like Africa, Latin America, Asia, South-East Europe and the Small Island Developing States (SIDS). Now, IRENA is taking its work one step further by increasing the Agency’s on-ground impact with 15 regional and sub-regional platforms which aims at scaling up renewables deployment and investments.

One step in this new direction is the event that took place in Johannesburg as part of the Africa Investment Forum hosted by the African Development Bank. It facilitated renewable energy deal-making in Sub-Saharan Africa in partnership with Power Africa and the African Trade Insurance Agency. The event corresponds to IRENA’s new direction and way forward ensuring an acceleration of the renewable energy transformation globally.

Speaking at the Investment Forum in South Africa, IRENA’s Director-General Francesco La Camera underlined the importance of renewable energy to meet sustainable economic growth and Africa’s climate and development ambitions. “Now more than ever, renewables have become a compelling investment proposition”, said La Camera. “With renewable energy technology prices set to decline, the cost-competitiveness of renewables will strengthen further. IRENA’s analysis shows that nearly a quarter of Africa’s energy needs could be met from indigenous and clean renewable energy sources by 2030. This would result in a wide array of socio-economic benefits in terms of economic growth, welfare, employment and energy access. It’s Possible”.

IRENA has been committed to supporting African governments in their quest for a sustainable energy future. The Agency has supported countries in building attractive investment frameworks for renewables to strengthen institutional and technical capacity. It has also supported the development and financing of renewable energy projects through project facilitation tools. 
“A lot remains to be done to address the key risks and barriers that hinder the scale-up of renewable investment in the region”, La Camera continued. “There is no shortage of renewable energy project proposals which are competing for investor capital. But they are not always financially viable. Many proposals fail to materialize due to high cost of capital, limited access to risk mitigation solutions and long delays in projects”.

By building on its extensive project pipeline in Sub-Saharan Africa with over 90 renewable energy projects, the Agency has showcased 10 renewable energy projects at the Investment Forum. Projects from Cameroon, Cote D’Ivoire, Kenya, Mali, Senegal, Sierra Leone and Togo which have a total capacity ranging from 6 MW to 70 MW – covering technologies like wind, solar, bioenergy and hydropower – were presented.

IRENA’s project facilitation platform provides project owners and developers with increased visibility for their projects among financiers and other market players. Project owners have access to wide range of financial instruments provided by multiple investors from development finance institutions, private companies, utilities, private equity funds, donor and multi-donor facilities, commercial banks and more, as well as access to different services for example legal and financial advisory, environmental, project development and Engineering Procurement and Construction contracting.

More information about IRENA’s project facilitation.

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Africa-Europe Alliance: Two new financial guarantees under the EU External Investment Plan

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Today in the margins of the 2019 Africa Investment Forum in Johannesburg, South Africa, the European Commission signed two guarantee agreements with two Member States’ development finance institution: the Dutch ‘Financierings-Maatschappij voor Ontwikkelingslanden N.V’ (FMO) and the Italian ‘Cassa Depositi e Prestiti’ (CDP). These guarantee agreements are part of the implementation of the EU External Investment Plan, the financial arm of the Africa-Europe Alliance for Sustainable Investment and Jobs.

Commissioner for International Cooperation and Development, Neven Mimica said: “The agreements signed today, worth €70 million, will help us to unlock more than €500 million in new investment in Africa and the EU Neighbourhood. These guarantees aim at mitigating and sharing the risk with other private investors in countries where otherwise these investments would not be as attractive. They will help to boost access to finance for small businesses, notably in the tech sector – and create up to 175,000 jobs directly and indirectly.”

Two guarantees, one goal: more investment in partner countries

The two guarantees will significantly boost investment and access to finance for small businesses (MSMEs), especially in the technology sector, in the countries covered by the Plan.

FMO Ventures Programme
This €40 million guarantee agreement is a partnership with FMO, the Dutch development bank. It targets Sub-Saharan Africa and the EU Neighbourhood. It will guarantee venture capital provided by FMO to start-up companies, in particular led by young entrepreneurs. The companies will use technology to lower the costs of making or supplying products and services that were previously unaffordable to many people. The guarantee will target companies offering digital solutions in a wide range of areas, from agriculture, access to energy and financial services to education, healthcare, transport and logistics. It will support up to 125,000 new jobs, directly and indirectly.

Archipelagos One4A – One Platform for Africa
The €30 million Archipelagos guarantee agreement is a partnership with Cassa Depositi e Prestiti (CDP), the Italian Development Bank, and the African Development Bank (AfDB). It will support access to finance across Africa for high potential small businesses. In order to help their growth, the programme supported by the guarantee will provide financing through innovative capital markets solutions. It will also enable financing partners to share the risk of investing in projects. By doing so it will generate up to 50,000 jobs, many for young people, and benefit about 1,500 small businesses in 10 African countries.

These guarantees are part of the External Investment Plan, which, by investing €4.5 billion, is set to leverage €44 billion in total investment. Out of the total budget, the EU has already allocated €4.2 billion.

Background

The EU External Investment Plan is using €4.5 billion in public funds to leverage €44 billion by 2020 in public and private investment for development in countries neighbouring the EU and in Africa.

The plan has three pillars. The first is finance. Through financial guarantees, the EU mitigates the risk in countries with difficult environments so that private investors and development banks will lend to entrepreneurs or finance development projects.

The plan’s second part is technical assistance. This funds experts who help develop new projects, to the benefit of will authorities, investors and companies. Technical assistance may include, for example, market intelligence and investment climate analysis, targeted legislative and regulatory advice, support to partner countries in implementing reforms, chains and identification, preparation, and help to carry out necessary investments.

The third part is investment climate support. The EU works closely with governments in partner countries to help them improve the conditions which investors consider when making their decisions. These include the business environment and a country’s political and economic stability. The EU also brings together governments and business to discuss investment challenges.

The External Investment Plan is a key part of the Africa-Europe Alliance for Sustainable Investment and Jobs, launched by European Commission President Jean-Claude Juncker in September 2018. The Alliance aims to boost investment which creates jobs and promotes sustainable development.

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