World Bank will provide 16.5 million dollars to Pakistan for "water resources planning and management", which will support capacity building of and support to Federal institutions involved in Water Resources Planning, Management and Development.
According to the Ministry of Water and Power (MoWP) sources, this proposed project includes, among other things, support for building human resources and institutional capacity in Federal institutions, and support for preparing studies, strategies, and plans for improving water resources planning and management.
Commenting on the "constrained investment climate in the sector", the World Bank project study report revealed that returns to investment in the water sector - irrigation, hydropower, domestic and industrial uses as well as for environment -) were very high in Pakistan.
Despite large needs for investments in the sector to expand water supplies to improve water management and control and to upgrade and modernise the century-old system, the required investments were not forthcoming, resulting in its continued stagnation and deterioration, it said. The report said the lack of investments was becoming a major constraining factor to developing vibrant water and hydropower sectors.
Many of the multipurpose reservoirs, though primarily constructed for meeting water demands for irrigation, actually recovered their cost from hydropower sales, it observed.
It stressed the need for evolving the financing strategy for multi-purpose storage. "So far, the Pakistan government has tapped only public resources for investments in the water and hydropower systems and currently owns major assets in these sectors," the report said. It said hydropower generation provided substantial financial flows and could be of great interest to the private sector if these investments were structured properly.
The WB report pointed out that the extent of the investment required demanded expanding the range of options to include, for example, non traditional methods for financing these infrastructure and involving the domestic and foreign private sector, and perhaps, even privatising the existing assets and/or building public private partnerships (PPPs).
"The main challenge is to structure a water and hydropower investment programme in a manner that would enable the mobilisation of financing from non-traditional sources so that the system investments can keep pace with the growing demands in the immediate future.
"The water sector issues are enormous and complex, and addressing them would require a series of investments and long-term commitment on the part of the government," the WB report said.
The report said the new proposed project would help the government to address issues related to water resources management in the main river system, allowing a transparent way for water flow forecasting, availability, distribution and accounting, and thus building trust.
To help address water policy, technical issues necessary for the investment programme and to assist in developing a financing strategy and a strategic social and environmental assessment framework necessary for the large investment programme the government was planning, it said. Some support would be provided under the project to provinces to develop better linkages between the Federal and provincial systems, the report said.
The support to provinces was being provided under several ongoing and provincial operations such as the development policy loans (DPLs) to Punjab and Sindh water sector improvement project (WSIP) and it would be scaled up under the Barrage Rehabilitation Programmes in Punjab and Sindh and possibly new operations in Balochistan and North-West Frontier Province (NWFP).
According to the WB sources, the bank has a long history of partnership and collaboration with Pakistan, in particular in the water sector. The bank is seen as the trusted partner, co-ordinator for international financing institutions and other development partners.
As a key partner and principal donor, it has provided support to several main interventions in the development of the IBIS. Therefore, the government is seeking support from the World Bank for its knowledge, expertise and experience in the sector, in addition to its financing. This is particularly the case for this project. The bank is, however, expected to play a key role in providing support for:
-- Strengthening water resource management institutions at the Federal (main system level) and continuation of the measures for institutional strengthening already under way in provinces.
-- Support in developing financing strategies for investment programme in water and hydropower sectors. -Strengthening project planning, development and management, ensuring appropriate technical designs, implementation and environmental and social features.
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