By 2013, through our clients, we hope to provide access to water for 100 million people, to save or treat 20 billion cubic meters of water per year, and to invest $1 billion per year in water security projects.
Water is unique in that it has no substitute impacting all aspects of life and business operations be it a thermal power plant, a food processing plant or an oil refinery. Water scarcity in many parts of the world is increasing and is exacerbated by climate change, population growth and rapid urbanization, increased food production requirement, increasing energy demands and more water intensive fuel sources and increasing pollution of surface waters. Businesses are faced with a myriad of risks from these impacts including security of supply, reputation risk, financial and regulatory risk.
Water related risks are local and solutions to the problems need to be addressed at the local water shed. IFC takes into account the nexus between water and energy in providing investment advice to clients on sourcing new supply sources or using water more efficiently.
With this in mind, IFC provides advisory and investment assistance to help clients identify and adapt to water-related risks exacerbated by climate change, making projects more resilient to existing and potential adverse impacts. This includes input on project design or new technologies – such as drought resistant seeds or more efficient water desalination systems – for clients operating or planning to operate in water-stressed areas. Advisory tools like the Water Footprint Assessment can help clients understand the volume of water consumed in their operations and supply chain, while Cleaner Production assessments can identify water-saving opportunities in our client’s operations through processing improvements, waste water treatment and re-use, and better irrigation techniques.
An IFC supported assessment of two JK Paper plants in India, identified over 15 measures to reduce water usage, including measures eliminating water leakages, changing once-through water systems to closed loop systems and replacing fresh water with recycled water. As part of a package of energy and water-saving projects financed with an IFC cleaner production loan, these measures are expected to save 3.4 million m3 of water p.a., representing 17% average savings for the two plants.
Universal Enterprises Private Limited (Universal) is one of the largest integrated tourism companies in the Maldives, a water-stressed country. With support of an IFC cleaner production loan, this client implemented projects to improve energy and water efficiency, including measures to improve the specific energy consumption of sea water pumps and reverse osmosis systems; install an efficient reverse osmosis system and improve system efficiency through a maintenance program; reduce overall water consumption and replace inefficient bore well pumps. This project is expected to result in annual savings of around 21,000 m3 of water, implying 4.7% reduction in average water consumption per room in four resorts.
In India, IFC and its client Jain Irrigation Ltd, a major Indian producer of dried fruits/vegetables and of micro irrigation systems, are conducting a water footprint assessment of onion and mango farms in Western India to identify the best irrigation technologies to deploy throughout Jain’s supply chain. IFC’s US$60 million in investments, which supported increased production of the company’s micro irrigation systems, is expected to result in annual water savings of 700 million m3 in the agriculture sector.
Although the risks of food security are well known, those of water security could grow even more severe over time. But they don’t have to - Solutions exist. This is the conclusion of Charting Our Water Future, a new report published by the 2030 Water Resources Group, a consortium led by IFC, the World Bank, McKinsey and Co., and other thought leaders from the business, finance, government, and nonprofit worlds.
To find a new approach, the report’s authors assessed the water needs of China, India, Brazil, and South Africa. They applied McKinsey’s highly regarded earlier work that produced a “carbon abatement curve,” a new microeconomic tool that helps policymakers choose the best ways to cut greenhouse gas emissions. The result is a call for an integrated, workable solution in water—one requiring a concerted effort from all who see it as a foundation of development. Governments and civil society will be critical players, as will private agriculture, industry, financial institutions, and technology providers.
IFC's water-focused partnerships
IFC is a founding partner of the Water Footprint Network, which currently has more than 100 members, including the Coca-Cola Company, Unilever, and IFC client Jain Irritation Systems Ltd. IFC is leading the development of a simple method and related software to assess the sustainability of corporate water footprints within the network. The group’s new open source methodology helps members assess their overall water use with precision, and then revise strategies accordingly.
IFC and partners launched the Water Resources Group (WRG), an innovative, multi-stakeholder partnership that aims to improve water security,. Politicians, leading business figures, and development agency heads from across the globe recently convened at a private session to discuss the WRG’s progress and impact and to chart the entity’s next steps. The WRG is housed at IFC and is currently supporting six countries seeking to transform their water sectors. The group approaches transformation in three stages:
Scoping and preparations for engagement;
Developing a database for individual water basins and analyzing the cost curve; and
Establishing countries’ capacity to implement the transformational measures.