Financing a Paradigm Shift in Resilience acrossAsia & The PacificThursday 27 August

Tom PanellaChief of Water Sector GroupAsian Development Bank

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Sponge City Construction

• Sponge city construction involves a series of investments, which can mitigate impacts from floods and droughts through artificial and natural based solutions for storing and timely releasing excess rainfall

• In the PRC, 30 pilot sponge cities including Shenzhen are under implementation

• Sponge cities in the PRC were first financed though ADB’s sovereign operations - the client moved from public to private finance

PRC: Climate-Resilient and SmartWater Infrastructure Project (private/commercial finance)

Climate-resilient Techniques

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(Left) Separated drainage system for storm water collection from sewerage system for wastewater collection. (Right) Aquifer recharge management. Both techniques will absorb urban runoff and enable urban areas to adapt to climate change.

Financing Structure and ADB Value Addition

Key financial terms:

• Tenor 10 years – ADB Private Sector Group• Local currency loan (CNY)• Additional $200 million commercial and SZWG

financing through 2023

Subproject-by-subproject disbursement

Conditions to disbursement include:

• Environmental and Social Management Systems upgrade before disbursement

• Subproject safeguard requirements

ADB Value Addition• Gender mainstreaming and safeguards • Sponge cities or advanced water and

wastewater technologies• Technology requirements for water

management and climate resilience • Knowledge transfer to 3rd and 4th tier cities all

through the private sector7

SZWG SZWEICGuarantee

ADB

$200m loan disbursement including co-finance

3 Project Companies3 Project Companies

Subprojects3 Project Companies

3 Project Companies3 Project Companies

3 Project Companies3 Project Companies

Subprojects

subproject-equity or shareholder loan

Municipal Governments(concession agreement/license)

Contingent Disaster Financing for Natural Hazard and Health Emergency

• August 2019: ADB approved the Contingent DisasterFinancing (CDF) mechanism under policy-based lending.

• April 2020: ADB expanded the CDF mechanism to includehealth-related emergencies, in addition to disasters fromnatural hazards

• August 2020: 8 Pacific countries have used CDFarrangements, all of which have disbursed, two inresponse to tropical cyclones and six for COVID-19

• $1 billion in new CDF financing under preparation

Key features of Contingent Disaster Financing (CDF)

• Funds immediately available in the event of apre-agreed triggering disaster; provides rapidfinance for government to respond

• Helps ensure prior policy and risk mitigationmeasures are in place to enhance resilience inaddition to disaster response

• Takes a programmatic approach to ensurefinancing and develop long-term resilience

Flood Risk Management and Pandemic Response in Chennai, India

Proposed ADB Loan “Integrated Urban Flood Management for the Chennai-Kosasthalaiyar Basin Project” Proposed Grant for “Integrated Pandemic and Disaster Risk Management for the Urban Poor in Chennai”

PROJECT FEATURES:• Upgrade and expand climate-resilient, urban flood protection infrastructure in the Kosasthalaiyar River Basin• Develop capacity of local authorities and communities to plan urban integrated flood management• Strengthen WASH services and provide disease prevention training and personal protective equipment to 30 primary

and secondary schools, 3 community health centers, and 19 primary health centers in flood-prone, urban low-income communities

• Improve COVID-19 surveillance and infection prevention and control in flood-prone, urban low-income communities• Develop combined flood-related disaster and epidemic response plans for future simultaneous disasters• Define a new, more integrated project type with expanded resilience to address multiple threats

Source: Resilient Chennai Strategy 2019 Source: GCC Disaster Management Plan 2017

Thank you

tpanella@adb.org

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WATER FOR THE FUTURE

WATER SECURITY STRATEGYFOR LAC

Raul Munoz CastilloSr. Water Specialist INE/WSA

SIWI, Aug 2020

“Hydrocentrismo” Vision Holistica – Seguridad Ambiental

198 million people without access to safe water

326 million people without access to safely managed sanitation

The water figures in LAC

88% of households without wastewater treatment

In 2025, 11 countries in the region will suffer deficits in water storage infrastructure

30% Of global water supplies are in LAC

22.000 m3 average availability of water per capita every year in LAC

Global level: 6.100 m3

What is the situation of Water Security in LAC?

ABUNDANCE OF RESOURCES, INEFFICIENT MANAGEMENT

WATER QUALITY IS DETERIORATING

LACK OF LAWS AND INSTITUTIONS OF GOVERNANCE

AND MANAGEMENT

WATER INFRASTRUCTURE NEEDS

CLIMATE CHANGE: VARIABILITY AND EXTREMES

TRANSBOUNDARY BASINS

Our value proposition: Innovation for WS in LAC

What is needed for a paradigm change towards WS in LAC?

Close the gap: Invest in water and sanitation supply.

Invest in efficient infrastructure, designed with a nexus approach.

Modernize management, with legal frameworks and efficientinstitutions to implement water security strategies at all levels.

Pollution prevention agenda.

Generate the necessary knowledge on Nature Based Solutions.

Develop innovative and flexible financing models.

Create adequate framework for transboundary basins.

Support knowledge development for science and technology.

THANK YOU!

Thank you for our attentionQuestions?

Stay tuned #GreenReset #GreenInfraMarkets#ClosingtheImplementationGap

Mónica A. Altamirano, PhD

Program Manager Finance for Adaptive Planning, Department of Water Resources and Delta Management

Email: monica.altamirano@deltares.nl | Twitter: @AltamiranoCAFF

Financing a paradigm shift in development models