APPLICATION OF THE FINANCING

ASSESSMENT TOOL

FINANCING WATER MANAGEMENT

Effie Fachouridou

MSc Environmental Sciences

WAGENINGEN UR

PRESENTATION CONTENTS

1. Research Design

2. Research results

3. Conclusions

4. Comparison of additional cases

5. Prospects of FAT application

RESEARCH DESIGN

UK

Serbia

Colombia

-Different political, administrative

and economic contexts & water

management issues

-Primary & secondary data

-Interviews with experts &

practitioners

SERBIA FLOODING INCIDENTS, MAY 2014

THE INCIDENTS

Total damages & losses: €1.5 billion

Impact on Real economic growth: -0.4%

(€ 268 million) 1,6 million affected; 32,000 displaced 51 causalities

Annual spending in

water sector:

€ 300-350 million

Local

Regional

Ministerial

Governmental

Government Budget

Ministry for Local

Governance

Municipality Municipality

Ministry of Agriculture &

Environ. Protection

Republic Water Directorate

Public Water Management

Company Srbijavode

Public Water Management

Company Vode Vojvodina

Public Water Management

Company Belgrade

SERBIAN INSTITUTIONAL FRAMEWORK

1st order water

bodies

2nd order water

bodies

FINANCING SYSTEM

0 20 40 60 80 100

Coherence

Equity

Efficiency

Effectiveness

Cost recovery

Stability

Sufficiency

Summary of scores for Serbia (%)Financial & Personnel,

High dependence on

government

Targets not achieved &

lack of long-term targets

EU legislation (WFD &

FD) acts as a driver!

COLOMBIA FLOODING INCIDENTS, 2010-2011

Economic damage: $5.1 billion (2% of GDP)

THE INCIDENTS

Impact: 301 dead, 2.2 million displaced

FRM spending in 2007: $282.465 million

COLOMBIAN INSTITUTIONAL FRAMEWORK

Local

Regional

National

National Republic Presidency

IDEAM (National Institute for

Hydrology and Environmental

Studies

Ministry of Env., Housing and

Territorial Development

(MAVDT)

Autonomic Regional Authority

(CAR)

Municipality Municipality

Integrated water

management

Implementation

of water

management

plans

Economic

instruments

Economic

instruments

ASSESSMENT RESULTS

0 20 40 60 80 100

Coherence

Equity

Efficiency

Effectiveness

Cost recovery

Stability

Sufficiency

Colombia, Summary of scores (%)

Insufficient & discontinuous,

high competition

UK FLOODING INCIDENTS, JUNE-JULY 2007

FLOODING INCIDENTS 2007

Impact: 13 fatalities; thousands evacuated Total economic costs: ₤3.2 billion

Annual spending: ₤521 million (2011)

£1 of capital

investment in FRM

£8 long-term benefit

in reduced damage.

Local

National

Governmental Department for

Environment, Food & Rural Affairs (Defra)

Environment Agency

Lead Local Flood Authorities

District and Borough Councils

Internal Drainage Boards

UK INSTITUTIONAL FRAMEWORK

Devolved

administration

of Scotland

Devolved

administration of

Northern Ireland

Flooding from main rivers,

estuaries, sea & reservoirs

Surface water, groundwater &

ordinary watercourses

Supervising land drainage

& flood defence

Beneficiaries

Predominance of

Government funding

Communities expect

defence project will be

funded eventually

Unrealistic & undermines

incentives for local action

ASSESSMENT RESULTS

0 20 40 60 80 100

Coherence

Equity

Efficiency

Effectiveness

Cost recovery

Stability

Sufficiency

UK, Summary of scores (%)

Competition & expected

increase of needs

CONCLUSIONS

FAT IN FLOOD R ISK MANAGEMENT

The adoption of common

frameworks (e.g. WFD & FD)

can act as driver for

improvement.

Respondents found

relation between

financing system &

incidents, with Focus on

sufficiency & stability

Respondents consider to

apply cost recovery &

beneficiary pays, but current

application is limited &

improving financing is not a

priority

FRM Beneficiaries &

services not explicitly

defined, thus Costs

difficult to be defined &

recovered.

Finance new projects & not

maintenance is more salient &

accessible, leading to

Deterioration of Investments/

Maintenance balance

Respondents’ recommendations for the

financing system include:

- Quick implementation of current legal

frameworks & plans

- More targeted/efficient spending

- Increase Public-Private partnerships to cover

future needs

ADDITIONAL CASES

COMPARISON

Sufficiency Stability Cost

Recovery Effectiveness Efficiency Equity Coherence

Amsterdam

UK

Romania

Serbia

Bangladesh

Ethiopia

Bur. Faso

Nicaragua

Colombia

PROSPECTS OF FAT APPLICATION

Start discussion and

Increase awareness

Government & society to

acquire problem’s

ownership

First indicative picture of

financing system

Continue with in-depth

assessments

Create a database of

paradigms

Communicate models and

examples

Overcome local

opposition, demand for

protection or legislative

constraints

THANK YOU!

ANY COMMENTS OR QUESTIONS?