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ADB Planning $100 Million Facility for Water Projects

News Release | 22 December 2006

MANILA, PHILIPPINES - ADB is launching an innovative Water Financing Partnership Facility aiming to raise $100 million in support of its water financing program by 2008.

"The facility will accept grants from bilateral, multilateral and individual sources, such as companies and foundations, to boost ADB's water financing program in its developing member countries," says Bindu Lohani, Director General, Regional and Sustainable Development Department.

About 70% of the funds will be used to support demonstration projects in ADB's developing member countries. The remaining 30% would help boost program quality by supporting knowledge, capacity, and innovation building activities, as well as engaging civil society and harnessing regional cooperation.

"The facility will bring additional financial and knowledge resources to projects to achieve the targeted outcomes of ADB's water financing program and help realize the Millenium Development Goals," says Arjun Thapan, Chair of ADB's Water Committee. "Through the facility, we can demonstrate that better collaboration among governments, communities, the private sector, and civil society can boost the efficiency and impact of projects."

Demonstration projects would be supported in three key areas of ADB's water financing program: rural water services to improve health and livelihoods among rural communities, urban water services to promote economic growth in cities; and integrated management of water resources in river basins.

The facility can provide assistance for project preparation, financial structuring and implementation, reforms and capacity development in project organizations, and policy and institutional reforms, as well as funding goods, works, and services for parts of projects.

"It is a new multi-partner cooperation platform," says Werner Liepach, Principal Director of ADB's Office of Cofinancing Operations. "Resources from the facility may be provided for water projects through grants, concessional loans, guarantees, or other forms of assistance under framework agreements."

All of ADB's developing member countries are eligible for support for activities prioritized under the water financing program.

Activities under the trust fund component of the facility could be made available to central and local governments, government agencies, and other entities, including nongovernment organizations.

The water financing program 2006-2010, launched at the March 2006 4th World Water Forum in Mexico, comprises a strong portfolio of loan and technical assistance projects supported by knowledge and innovation services, and regional cooperation.

The program aims to provide safe drinking water and improved sanitation for about 200 million people, better irrigation and drainage services about 40 million people, and reduced flood risk for about 100 million people. The program will also help to introduce integrated water resource management in 25 river basins across the Asia-Pacific region.