Promoting investment in climate change, adaptation and integrated water resources management

Latin America is one of the worlds´s richest regions in terms of water resources. However, its inhabitants do not enjoy ensured access. In the Latin America and Caribbean region, 222 million people do not have access to safe drinking water (and 25 million live without access to basic water services). Related to sanitation, the figures are even worst: 495 million lack safe sanitation, and there are still almost 89 million people in the region without basic sanitation services. The challenges on the continent remain many. Inequality in the right to water and sanitation is evident: between urban and rural areas, between men and women, or between non-indigenous and indigenous populations.

There is definitely a need to increase investments, but also the development and implementation of alternative water and sanitation paradigms at national and local levels that include, for example, basin perspective, condominial solutions, and climate change adaptation measures in water resources management policies, plans and investments, based on sound analysis of the hydrological cycle and its vulnerability to the effects of climate change.

The project

Since 2013, the European Union Latin America Investment Facility (LAIF) has contributed to the program for ‘Promoting Climate Change Adaptation and Integrated Water Resources Management Investment for the water and sanitation sector in Latin America’, within the framework of the Spanish Cooperation Fund for Water and Sanitation (FCAS). The beneficiary countries are: Argentina, Bolivia, Brasil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and  Venezuela.

This program and its funds are complementary to the Cooperation Fund for Water and Sanitation, which is the Spanish Cooperation instrument created in 2008, for institutional strengthening, community development, and promotion of water and sanitation services in 18 countries in Latin America and the Caribbean. Its interventions are focused on rural and peri-urban areas, with the aim of fulfilling the UN Sustainable Development Goals of reducing povertyand inequality, and guaranteeing the human right to safe, clean, and affordable water and sanitation.

Both initiatives, the LAIF program and the FCAS, are built on the partnership created between the Spanish Agency for International Development Cooperation (AECID) and the Inter-American Development Bank (IDB). The involvement of the European Union in this partnership – through LAIF – represents a unique opportunity to have a greater impact on the countrie´s development agenda.

Through LAIF blending operation with funding of 15 million euros, the programme provides seed capital for the initiation of projects that support the inclusion of climate change adaptation measures in both policies and investments related to the water and sanitation sector; and for the development of policies and investments in Integrated Water Resources Management (IWRM) tailored to the needs and capacities of community members.

These actions are developed by:

• Carrying out pre-investment (planning, studies and designs) and post-investment actions to improve resource management and services associated with specific investment projects, mostly belonging to FCAS grants and IDB loans.
• The development of ‘Lines of Knowledge’, which includes regional analysis, support for the implementation of pilot projects that serve as examples for other interventions, review of regulations, capacity building and development of methodologies, tools and manuals that will have a clear impact on future investments in a more strategic way. These products are intended to be taken into account in investment plans, strategies and policies, that is, in the framework in which investments are inscribed.

Featured actions

Specifically, LAIF funds are being executed through 37 projects, mostly related to technical assistance cooperation, of which 23 have concluded their execution. These projects are associated with an investment portfolio of more than € 1.000 million, € 367 million related to FCAS programs and € 640 million with IDB loans.

This regional LAIF programme plays a key role in addressing the challenges of the sector in the region, not only as a specific support for pre-investment and post-investment processes, but also by developing innovative products and knowledge platforms and increasing institutional capacity at all levels to respond to these emerging needs. In turn, these activities provide support in modernisation and institutional strengthening, as well as in strategic planning processes.

Examples of projects focused on the preparation of investments related to the management of extreme events, are the drainage plans of the San Salvador metropolitan area, the Arroyo Medrano in Argentina or the Borbollón basin in Nicaragua, where work has been carried out on flood management as a key element of adaptation to climate change. Along these lines, the analysis of climate scenarios has been important for the design of projects . Another relevant aspect in this area has been the work on flood modelling through support for the development of specific tools such as Hydrobid Flow, and the commitment to green solutions and sustainable urban drainage systems (SDUS).

Given that the analysis of hydro-climatic information is essential for the definition of new investments, the hydro-climatic services of Panama and Costa Rica are also being strengthened and support has been given to the development of the Regional Lightning Detection Network for Central America, which will be part of the Virtual Regional Center for Prediction and Surveillance of Severe Hydrometeorological Phenomena for Central America (Panama, Costa Rica, Honduras, Nicaragua, El Salvador and Guatemala). Also, an analysis of the heat wave and how it affects water resource management has been carried out in Central America

Water security is another line of special incidence in the Program. It is worth highlighting the support that is being given to Chile for the development of a national water security plan that can serve as a model for other countries; the analysis of the water-energy-food nexus carried out in Brazil, Colombia, Argentina and Uruguay; the development of the Groundwater Monitoring Platform for Latin America (PASAL), which aims to share information on the main aquifers in Latin America based on satellite information and terrain analysis; and the definition of drought management plans, such as the one carried out for La Paz and El Alto in Bolivia.

In relation to water resources, specific analyses have been carried out, such as the study of the Patiño aquifer in Paraguay and a specific impact is being placed on the management of transboundary basins, where the analyses in the Pilcomayo, Amazonas, Pantanal and Trifinio stand out.

Efforts are also being made to promote sanitation and wastewater treatment. In this area, the master plans for the Katari basin in Bolivia, the sanitation plan for Lake Ypacaraí in Paraguay, the sanitation plan for the Choluteca basin in Tegucigalpa and the sanitation strategy for the Mancomunidad del Sur in Guatemala stand out. Support has been provided for the design of specific treatment plants, such as the Bellavista plant in Paraguay or different plants in Ecuador. Bolivia has been supported in its national wastewater treatment strategy and in the development of strategies to promote connectivity to the sewerage system. And there is an important impact on the way of conceiving optimal sanitation through analysis, tools, guidelines, and where a comprehensive vision is integrated, condominal sewerage solutions and the reuse of treated wastewater are promoted.

In a cross-cutting way, exchange between countries and training are promoted. The coordination with the Ibero-American Water Directors Conference (CODIA) and the support to the RALCEA network in coordination with the Ibero-American Training Program stand out.

Summary of best practices

• Introducing of climate change adaptation measures in new plans, for reducing risks and vulnerability of human or natural systems to the expected increase of extreme events and to improve the availability of water resources under climate change conditions.
• Optimizing investments in sanitation through the introduction of condominial solutions (with lower investment costs and higher initial connectivity than traditional sewage systems) in national policies.
• Strengthening wastewater treatment through low energy demand solutions based on wastewater reuse.
• Improving countries legal framework to strengthen the water sector and governance considering the gender perspective.
• Water interventions have respected and supported the development strategies of indigenous peoples’ and communities, in general, by promoting knowledge transfer, sharing and management.
• Promoting knowledge management and capacity building with AECID's tools, such as Intercoonecta or the Network of Water Experts.
• Coordination with regional networks: RALCEA and CODIA, RIOCC, CIMHET: the Ibero-american networks for General Directors of Water, of Climate Change and of National Hidro-Meteorological services.

Lessons learnt

• While the principles of Integrated Water Resources Management (IWRM) remain appropriate and relevant, the major challenge has been to develop context-specific, prioritised, sequenced, realistic, and climate-change-adapted implementation approaches.
• COVID -19 has meant an increased commitment to virtual work in the areas of training and exchange of experiences among stakeholders.
• IMPACT (KEY FACTS AND FIGURES): 35 projects, mostly technical assistance cooperation, of which 23 have been concluded: 14 projects on the integration of climate change adaptation measures in water and sanitation, 17 projects on integrated water resources management and 4 combining both approaches.
• Leverage ratio: 4000 %
• 17 countries, and approximately 1,6 million people directly benefited l 17 countries where water and sanitation sector has been reinforced.
• 418 studies / designs with more than EUR 177 million of new resilient infrastructure already constructed

SECTOR: Water supply & sanitation

LEAD INSTITUTION: AECID

PARTNERS: IDB and EU-LAIF

TOTAL COST: € 615 300 000

LAIF CONTRIBUTION: € 15 300 000

TYPES OF SUPPORT: Investment grants and technical assistance

DURATION PERIOD: Dec 2013 – Dec 2023

Beneficiary countries: Argentina, Bolivia, Brasil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, México, Nicaragua, Panamá, Paraguay, Perú, Uruguay y Venezuela.