Water is at the Center of Economic and Social Development

Could you tell us about the mission and vision of the World Bank’s Global Water Practice?

World Bank Group’s “Twin Goals” call for ending extreme poverty and promoting shared prosperity in a sustainable way; and improving water access and management plays a pivotal role in achieving these two goals. This is because water is at the center of economic and social development; it is vital to maintain health, grow food, generate energy, manage the environment, and create jobs. Water availability and management impacts whether poor girls are educated, whether cities are healthy places to live, and whether growing industries or poor villages can withstand the impacts of floods or droughts. As the world’s largest multilateral source of financing for water in developing countries, the World Bank is working closely with partners to achieve “A Water-Secure World for All,” by sustaining water resources, delivering services and building resilience. With a portfolio of water investments of almost US$30 billion and a staff of hundreds of water experts across the world, the Water GP is uniquely positioned to address these themes, developing and sharing global knowledge while amplifying the impact of lending through technical assistance on the ground.

In your opinion, what role should play the private sector to put this vision into practice?

Member countries use our technical advice and analysis to sustain development over the long term by designing or implementing better policies and development strategies and by strengthening their institutions.

According to best estimates available, we require a significant investment of US$6.7 trillion by 2030 and US$22.6 trillion by 2050 for water-related infrastructure to ensure water security. However, current investments fall short of addressing risks and achieving Sustainable Development Goals. To bridge this gap, we need to mobilize public, concessional, and private financing that aligns with sector objectives. Although there are obstacles hindering private investment, we can overcome them by expediting reforms in policies, institutions, and regulations, addressing the creditworthiness of water utilities, and designing viable projects with innovative financing mechanisms. The collective evidence suggests that the private sector has an important role to play not only in providing the muchneeded capital investment, but also in providing innovation, know-how, and expertise, with the aim of enhancing operational efficiency, lowering operating costs, raising revenues, conserving and recovering scarce resources, and increasing resilience to climate risks, among other areas. Where seen as a public service, it is possible to enable efficiency in water delivery, with cost reflective remuneration that encourages private investments. The Water practice has recently developed a framework for “Scaling Finance in Water” to help our teams and their clients develop the enabling environment for making the water sector conductive for private sector participation.

What are the instruments that the Bank has at its disposal to support enterprises and public institutions operating in the water sector?

The Bank has a multitude of instruments at its disposal to support both the private and public sectors. This support is provided through the various institutions under the World Bank Group umbrella, with the International Development Association and the International Bank for Reconstruction and Development (IBRD) supporting public institutions, the International Finance Corporation (IFC) supporting private entities, and the Multilateral Investment Guarantee Agency (MIGA) providing political risk insurance. The World Bank Group has used and continues to use these instruments, individually or combined, to support desalination and reuse projects globally. Some examples of supported projects are the financing of the associated works for the Central Gaza desalination plant and the construction of a desalination plant in Kiribati, IBRD’s support to a recently approved circular economy and wastewater reuse project in Türkiye, IFC’s transaction advisory service to the Egypt desalination PPP program, IFC’s investments in ACWA Power, Metito, and Aqualia Capital, MIGA’s provision of political risk insurance for a desalination project in Ghana, and joint-support by IFC and MIGA for Aqualyng Holding AS in China.

Building capacity and strengthening institutions is just as important as closing the funding gap to achieve the Sustainable development goals set for water. Is the Bank equipped to deliver more than financial support?

Indeed, beyond finance, advisory services and analytics are a vital part of how the Bank contributes to development. Member countries use our technical advice and analysis to sustain development over the long term by designing or implementing better policies and development strategies and by strengthening their institutions. At the country level, these activities underpin partnership frameworks, government programs, and projects supported by Bank lending and guarantees. At the global and regional level, they contribute to public goods and inform important policy debates. For example, under the Central Gaza Desalination Program, the perceived by the different sector stakeholders are not aligned, and some understand that, while desirable for the broader society and needed to achieve sustainability, a change in the status quo may be negative for their particular interests. This makes it difficult to

World Bank is providing technical assistance to the Palestinian Water Authority to set up a bulk water supplier that will be in charge of managing all water resources in the Gaza Strip, including the Central Gaza Desalination Plant. The Water Practice also provides standalone non-reimbursable technical assistance to its country clients, like the ongoing support to the Libyan Government to revamp its desalination operations; and reimbursable advisory services to higher-income countries like those of the Gulf Cooperation Council, where we have a very strong partnership with the Government of Saudi Arabia. At the global level, also as an example, our Practice is currently developing guidelines and tools to help governments across regions improve their regulatory and institutional frameworks and enhance their appraisal capabilities to mainstream unconventional water resources in their water mix. The Bank also hosts the 2030 Water Resources group, a unique public, private, civil society partnership that convenes 1,000 partners globally, performs analysis and consultative dialogue that has a transformative impact in water and other sectors.

National Governments and local water sector authorities are in the best position to understand the water governance needs of their citizens. However, often incentives adopt policy reforms in sensible areas, such as those related to water allocation regimes that may be required to ensure that scarce water resources are dedicated to uses with higher social and economic returns; or tariff and subsidy reforms to be adopted so that scarce fiscal resources are used to safeguard access to water to those that are more in need. The Bank helps country clients address these and other challenges with knowledge and policy advice; and providing financial support using lending instruments that facilitate said incentive alignment, such as “Program for Results” and “Development Policy Financing”, under which disbursements are made based on results achieved, and not against inputs purchased by the different project participants.

Recently, the United Nations recognized explicitly non-conventional water resources as an emerging opportunity to narrow the water demand-supply gap. What is the position of the World Bank on this regard?

The impacts of climate change are primarily channeled through the water cycle. Growing populations, rising incomes, and expanding cities will converge upon a world where the demand for water rises exponentially, while supply becomes more erratic and uncertain. In this context unconventional sources, such as desalination and reuse, provide a weatherproof source of water that, when added in the right amount to the mix, can contribute to deal with uncertainty and improve the reliability of the system. However, volumes mobilized from these unconventional sources cannot be increased indefinitely without creating environmental and fiscal concerns. The use of unconventional sources as a water augmentation and diversification strategy should come along significant efforts to improve water distribution and use efficiency and to reallocate scarce resources to activities with higher social and economic value. Unconventional water sources are also more expensive to mobilize than conventional ones, and this means that mainstreaming their use requires rethinking financial policies to ensure the long-term sustainability of the sector.

Going deeper into IDA’s areas of focus, could you tell us more about the World Bank’s vision on desalination and wastewater reuse?

Water reclamation and reuse is essential not just as a water source augmentation and diversification strategy, but also to improve the efficiency of the system and mitigate the climate impact of water management activities. We see reuse as the center piece of the circular economy principles applied to the water sector, as opposed to the current unsustainable linear model of “take, make, consume, and waste”. The Bank has been working in establishing a common understanding of circular economy principles and resilience in the urban water sector and to support countries to implement those principles. For this, the Water Practice has developed the “Water in Circular Economy and Resilience (WICER) Framework” to guide practitioners who are incorporating the principles in policies and strategies, planning, investment prioritization, and design and operations.

The Bank has also a long history working in the desalination front, but mainly though interventions led by the IFC with a focus at the project or transaction level. However, in recent years installed desalination capacity is growing fast in countries across regions, transforming sectors and calling for reconsidering governance structures that were designed for conventional water sources. In response to this need, the Bank has established a Desalination Community of Practice that aims at generating, capturing and disseminating knowledge on desalination governance and economics among WBG institutions and clients, partnering with

Mr. Saroj Kumar Jha is the Global Director for the World Bank Group’s Water Global Practice (GP). In his current assignment, Mr. Jha is a core member of the GP’s senior management team, which drives the policy direction of the GP, oversees a portfolio of $24 billion in water- related investments, analytical work,multi-donor trust funds and global partnerships. Mr. Jha supports an integrated approach to water security and inclusive service delivery, accelerated climate action and food security through Bank’s Global Water Strategy, and providing policy advice and operational support in response to specific country needs.

Before this appointment, Mr. Jha was World Bank’s Regional Director of the Middle East Department, Senior Director for the Fragility, Conflict and Violence Global Practice at the countries that are ahead of the curve in this domain and with the industry through platforms like the International Desalination Association. We plan to present officially to the public this Community of Practice and the work it is doing during the up coming Seville Water Summit, and we hope to see you all there.

World Bank Group, the World Bank’s Regional Director for Central Asia based in Almaty. In addition, Mr. Jha served as the Bank’s Global Manager for the Disaster Risk Management Practice and as Head of the Global Facility for Disaster Reduction and Recovery (GFDRR), which he founded in 2006.

Mr. Jha, an Indian national, joined the World Bank in 2005 as a Senior Infrastructure Specialist in the Sustainable Development Network, after working for the Government of India (1990-2005) and United Nations agencies (1999-2004) as a senior executive in the field of public sector management, infrastructure financing, natural resources management, natural disaster prevention, and environmental sustainability.

“IDA has a proven advocacy and knowledge-sharing program for desalination and water reuse technologies. However, we want to go further and reach new stakeholders so that IDA can actively participate and advise on non-conventional water resources to ensure global water security. Here is where the World Bank can contribute as a partner of the IDA.

In 2019 we created several board advisory committees, titled the (1) IDA Multilateral Agencies and Financial Institutions, (2) Legal Frameworks, (3) Public and Private Sector Utility, and the (4) IDA Industrial Water Reuse and Desalination Advisory Committee. The aim is to share similar experiences in other markets, industries, or between countries that lead innovative initiatives showcasing success stories that can be replicated.

The engagement of these committees has brought IDA closer to new stakeholders interested in bringing added value to the market through the IDA.”