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Three for the price of two, 30% off, special offer – the importance of capital efficiency

Bill Kingdom's picture



In our daily lives we are bombarded by offers to get more for less.  And we respond accordingly as we strive to balance our household budgets. This saves us a few dollars here and there, perhaps hundreds of dollars on a big-ticket item, and we get to feel good about ourselves and our financial skills.

But when it comes to the millions of dollars invested in infrastructure around the world, do we have the same attitude towards buying more for less? This is a question that is difficult to answer.

As practitioners we often focus our attention on operational efficiency. What were this year’s costs compared to last year’s?  Is efficiency increasing or decreasing? There are suites of tools to give technical comfort to back up such assessments – from simple ratio analyses through to more sophisticated approaches such as econometric modeling and Data Envelope Analysis.

But what about capital efficiency? The assessment is not so simple as, in most cases, this is a prospective assessment – that is to say, a comparison of what was spent compared to a hypothetical of what might have been spent. It is rare to have a side by side comparison. Yet in the water sector, annualized capital costs can be equal to the annual operating costs. So, when we focus on operational efficiency, we are in fact only looking at half the story.

At the same time, we talk about mobilizing more finance to fill the gap between historic investment levels and projected investment needs. Yes, there will always be a financing gap in all countries around the world. However, whilst thinking about bridging that financing gap (“Maximizing Finance for Development” comes to mind), shouldn’t we also be thinking about how to reduce the financing gap by being more efficient in our use of capital?

Picture this – what it takes to create a calendar every year on water issues

Martin Craig Hall's picture


It’s often said that a picture paints a thousand words. If that’s true then, 18 years since its inception, the Water Cartoon Calendar has produced enough material for an epic series of novels. A fixture of our water and sanitation products every year since 2000, it features cartoons combining humor with serious messages about important issues.
 
The calendar began at the start of this millennium under the auspices of the Water and Sanitation Program (WSP). Last year, ten partner agencies and the World Bank’s Water Global Practice launched the new Global Water Security & Sanitation Partnership (GWSP), an integrated platform for working alongside countries as they rise to their next water challenge. The GWSP builds on the foundations of the WSP as well as its other predecessor, the Water Partnership Program (WPP), and the calendar continues this legacy.

A WASH response to Yemen’s cholera outbreak

Naif Abu-Lohom's picture

Editor's Note: 
The global water crisis is a crisis of too much, too polluted and too little. At the World Bank, our job is to find and implement solutions to tackle this crisis. In the “Water Solutions” blog series, you’ll read about World Bank-supported projects in different countries which demonstrated solutions to the world’s most pressing water issues, to fulfill our vision for a water-secure world.


 
Since 2015, when armed conflict began, Yemen's water and sanitation infrastructure has suffered significant damages. Direct attacks on the infrastructure have been exacerbated by the lack of energy (electricity and fuel), spare parts, operation and maintenance funds, and three years of unpaid salaries of civil servant staff. This confluence of factors has undermined the robustness of water and sanitation systems in Yemen and contributed to the worst cholera outbreak in history. According to the World Health Organization, as of November 11, 2018, 1,300,495 suspected cholera cases and 2,609 deaths have been reported.
 
The upsurge of cholera cases is attributed to several risk factors, including a disruption of basic water and sanitation services, contaminated water sources in affected communities, an inability to treat sewage due to non-functional wastewater treatment plants, and the absence of garbage collection systems. More than 70 percent of the population (22 million people) requires assistance to access safe drinking water and sanitation. Basic water supply, sanitation and hygiene (WASH) infrastructure is on the verge of total collapse, and many internally displaced persons (IDPs) are at a particularly high risk, due to overcrowded shelters and settlements with inadequate water and sanitation facilities.

A bird’s eye view: supervising water infrastructure works with drones

Pierre Francois-Xavier Boulenger's picture
Aerial drones have zoomed their way into almost every aspect of the modern world, and the development sector is no exception. In Kinshasa, the capital of the Democratic Republic of Congo, drones have become an indispensable part of a major water project supported by the World Bank.

Time to adapt to changing climate: what does it mean for water?

Greg Browder's picture

As COP24 in Poland reaches its mid-point, it is becoming distressingly obvious that reaching the Paris Agreement goal of limiting global warming to well below 2 degrees Centigrade will be extremely challenging.  Recognizing that millions of people across the world are already facing the severe consequences of more extreme weather events, the World Bank Group’s newly announced plan on climate financing for 2021-2025 includes a significant boost for adaptation.

Numbers (and Alessandro Volta) don’t lie: Anaerobic digestion as a potential solution towards sustainable wastewater re-use and renewable energy for Mexico

Christian Borja-Vega's picture
Example from part of a biogas plant
By Bertold Werkmann via Shutterstock

In one of Mexico City’s most populated areas, Iztapalapa, there is a street named Alessandro Volta. With little knowledge about who this man was, we researched a bit and found that Alessandro Volta concluded, in 1776, that there was “a direct correlation between the amount of decaying organic matter and the amount of flammable gas produced”. Sir Humphry Davy determined 32 years later (in 1808) that methane was present in the gases produced during the anaerobic digestion (AD) of cattle manure. The first digestion plant was built at a leper colony in Bombay, India in 1859 (just 83 years later!).

Anaerobic digestion (AD) as a renewable resource has been growing since, in the international context, and has the potential to be a sustainable, affordable solution for wastewater management. In the 21st century, we are still fascinated with the idea of the benefits of biogas production. In modern times, AD is being used as a reliable energy source, and sludge resulting from AD processes can be used as fertilizer. Countries like the UK are producing enough biogas to power 1 million homes, 210 years after Sir Humphry Davy’s discoveries. In fact, according to a new report from the Anaerobic Digestion & Bioresources Association (ADBA) of the UK, in 2017 the total energy generation from anaerobic digestion plants reached 10.7 Terawatt-Hour (TWh) / year.

Rewarding water-responsible companies is key to success in addressing global water security

Karin Krchnak's picture

Over the past fifteen years, I have seen a rapid evolution in corporate actors in recognizing water risks to their operations. In response, some have taken measures to ensure that all water is returned to its originating watershed while making sure that returned water is as clean or cleaner than it was before. But to keep the momentum going, we need to think about how we can encourage and motivate companies that will push them to collaborate more with governments, other companies, and civil society toward realizing the Sustainable Development Goals (SDGs). Equally as important, we need to bring forward those companies that unfortunately have yet to prioritize water.

The positive feelings that come from rewarding good behavior are natural in humans. In fact, such feelings can do wonders. I see it every day with my own daughter; when she does well and gets recognition, she feels like she wants to, and can, do more.

In 2016, the 2030 Water Resources Group (2030 WRG) and its partners created the Blue Certificate, an initiative that is one of the workstreams of Peru 2030 WRG’s multi-stakeholder platform (MSP).

Continue to read the full blog on the 2030 Water Resources Group website. 

The Global Water Security & Sanitation Partnership: Working at the cutting edge of water policy and practice

Jennifer J. Sara's picture

Over the past 12 months, the world has seen water in its extremes. In the same year, the City of Cape Town, announced “day zero,” the day on which it was predicted the city would run dry, and a million victims of massive flooding were evacuated from Kerala, India.  Floods, droughts, infrastructure shortfalls, poor quality and poor water resources management all made global headlines. Countries are facing a new normal where water is either “too much, too little, or too polluted.”

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