1

Eastern Nile Technical Regional Office(ENTRO)

Eastern Nile Multi-Sectoral Investment Opportunity Analysis (EN MSIOA)

Azeb Mersha

5th Nile Basin Development Forum

October 24th , 2017

Kigali, Rewanda

2

ENSAPNile Basin Initiative

ENSAP

NBI – Evolving Programs

Nile Basin

Initiative

(NBI)

Launched

Strategic

Action

Program

(SAP)

Shared Vision Program (SVP)

Nile Equatorial

Lakes SAP

(NELSAP)

Launched

Eastern Nile

SAP (ENSAP)

LaunchedIDEN

Fast Track

Multipurpose

Track (incl.

JMP)

Natural Resource Projects

Power Projects

1998 2002 2006

Scaling-up

Strategy

E

N

T

R

O

N

E

L

S

A

P

C

U

2001 2016

3

ENSAP / IDEN EN Watershed Management

Nationally Identified Projects

CRA: 13 Hotspots of Regional Significance

EN Regional Power Development

EN Power Trade Study

Ethiopia Sudan Interconnection

EN Irrigation and Drainage Development

First Round of Irrigation Investment

CRA: Efficient Water Use, Productivity

EN Flood Preparedness and Early Warning

Joint Multi Purpose - JMP

Eastern Nile Planning Model - ENPM

Baro Akobo Sobat Multi Purpose Project

Nile Cooperation for Result - NCORE

Fast tracking: Advancing

Preparation of Investment Projects

CRA: Longer Term Development Plan

JMP : Jointly Prepared and Implemented

Jointly Identified , prepared & Nationally

Implemented

4

IDEN delivered initial results that demonstrate the potential forlarger benefits from Cooperation. However, the experience alsoidentify the following :

1. IDEN was a first-ever attempt at promoting Eastern Nilecooperation, didn’t attempt to emerged from planning…together … i.e. from a regionally optimized and configuredinvestment portfolio!

2. Single-country, single-sector projects, or even multi-country but-single sector projects, as the CRAs were, will result in sub-optimal results in the long-run.

The IDEN Experience

5

Development and management on the basis of larger hydrologic units (such as ENB)promise more win-win results for all countries: Why? Because planning on a sub-basin scaleand multi-sector would enable:

Addressing sub-basin specific challenges and exploiting unique opportunitiesmore efficiently subsidiarity principle

Aggregating demands and conducting a no-borders analysis to gain broad, high-level overview of the river system and its functions . . . What if .. Scenarios

Aggregating impacts – to understand the carrying capacity of the basin – todetermine how much development can the EN system accommodate, beyondwhich further investment would impair the system?

Better optimizing water allocation across sectors; across countries; across usesand thereby increase water use efficiency – and system gains!

Enhancing collective adaptive capacity and resilience to Climate Change Impacts (Africa is the continent to be worst affected by CC impacts; unpredictability andscarcity of water supply; extreme events!)

Maintaining safety and integrity of the river system (water quality; reliability) andthus sustaining critical ecosystems (wetlands; biospheres-wildlife habitats;biodiversity) and environmental service

The need for MSIOA

EN MSIOAObjective:The overall objective of the MSIOA is to develop a regional water Investmentstrategy for the EN region that broadly supports socio-economic development,poverty reduction, and the reversal of environmental degradation.

Builds on past ENTRO positive achievements in preparing cooperativeprojects under IDEN, while making best use of lessons of experience toadvance it one step ahead

To ultimately work toward coming out with a regionally optimized andconfigured investment portfolio that gives win-win benefits to all countries

Overall, MSIOA is establishing that EN countries cannot continue with theBusiness-as-Usual approach

Situation Analysis (Status of the basin)

• Aggregate sectoral and country demand

• Identify planned investments

Determine Water availability

(Current and future )

• Schematizing the basin

• Water resources modeling

• Scenario analysis

Finding optimum

(win- win solutions)

• EN stakeholder consultation

• Identify national interest

• Identify indicators

• Multi-criteria analysis

Pathways•Win-Win options

•Concept Note

No boarder analysis Integrated

sectoral

Strategic planning

Methodology

8

• Document review, gather data andinformation

• Key issues identified

• Nationally identified projects, withshort term and long term plans

• Highlight study approach andmethodology

Country Consultation - Ethiopia, South

Sudan and Sudan, May- Jun 2014

• Collect and update data on existing Water

Resource Development

• Identify potential projects

• Identify countries priority

• Key challenges and opportunities

1. Task 0: Inception and Country Consultation

9

2. Task 1: Situation Analysis

• Inventory, review and characteristics of existing water resources

management and development projects This provides the

necessary context for understanding which interventions are

the priority ones

• Baseline mapping of the physical resource base (climatic, hydrologic,

geographic, hydro geological, environmental, & Scoio-economic

conditions; review the existing water related policies & strategies)

• Sectoral review – identify various development and management

projects with their issues, challenges and opportunities

• Water resources analysis to see the current water resource status of

the basin

10

3. Task 2: Strategic Scoping of EN Multi-Sectoral Investment

• To move the study forward from a list of potential investments

(SA) to the identification of the regionally significant projects

that could eventually be at heart of the investment programe,

• For the water resources development projects, to get a better

understanding of the potential environmental and socio-

economic implications of the development

• To narrow the scope of analysis for the next step of the study

by arriving at a number of strategic orientations with respect to

socio-economic and environmental orientations

11

Regional Significance Project of regional significance from Impactand Benefits point of View

Social Importance Social hotspots

Environmental Assessment Environmental hotspots

Water Availability Constraint Principle of No Significant harms

Economic Indicators NPV; IRR; and B/C

Poverty Reduction Indicators Employment generated

Equity Indicators Equity in benefit sharing

Alignment with regional and national policies

Water productivity IWRM Principles

Scoping Selection Criteria

12

4 development trajectories are proposed:

• Current situation (CS) current level of development, reference situation;

• Improved situation (IS) Irrigation modernization, rehabilitation of current irrigation

schemes and schemes under implementations;

• Large development irrigation (LDI) All identified projects advanced either to pre-

feasibility or feasibility level

• Potential irrigation (FDP)All irrigation potential that is either identified as part of country

master plan, ENIDS, etc

Exploratory Scenarios

13

Weighting Indicators

14

4. Task 3: Multi-Sectoral Analysis of Investment Opportunities

• Undertake a strategic analysis to prioritize and sequence

potential investment projects

• Highlight potential opportunities associated with high economic

returns, investment viability, and those that contribute to, or

are enabled by, regional cooperation

• Use the analytical tools and stakeholder inputs (as possible) to

scope impacts, benefits, and trade-offs of various investment

scenarios.

Methodology• Enhance the Analytical Framework

• Evaluate projects benefits and cost per sub-basin and per countries

• Apply Multi Criteria Analysis(MCA)

• Analyze priority pathways

15

The Analytical Framework The analytical framework is not to evaluate individual projects

but its designed to look at the overall impacts of differentcombinations of water resources management anddevelopment trajectories in different sectors and different sub-basins.

Impacts on water resources (availability); Impact on poverty reduction (economic returns, employment creation) ; Impact the social and biophysical environments.

16

Water Management and Development

• Scenario 1 – Baseline

• Scenario 2 – IS (improved situation)

• Scenario 3 – IS + stor + FDH (IS + stor + Full Development Hydropower)

• Scenario 4 – IS + FDPI (IS + Full Development Potential Irrigation)

• Scenario 5 – IS + stor + Large Hydro Potential

• Scenario 6 – IS + Large Scale Irrigation

• Scenario 7a – IS + Large Hydro + Large Irrigation (BAS+TKZ)

• Scenario 7b – IS+ Large Hydro + Large irrigation (BAS +TZA and Sudan)

• Scenario 8a – IS + Large Hydro + Moderate Irrigation

• Scenario 8b – IS + Large Hydro+ Moderate Irrig + cropping pattern changes on Main Nile

• Scenario 8c – IS + Large Hydro+ Moderate Irri + cropping pattern changes on Main Nile + HAD reduced operating level

• Scenario 9 – IS + Large Hydro+ Managed Irrigation Growth

17

Scenario Analysis

18

Scenario AnalysisBase Case

10.67 Million Ha Irrigation

21,721 Gwh Hydropower

209 BCM storage

89 BCM/Yr Water Uses

Flow US Aswan= 78.7 BCM

Water Prod. Hydro.=8 Cents/m3

Water Prod. Irrig. = 5 Cents/m3

Eth RSS Sud. Egy. Total

230 0 589 833 1,652

20 0 525 3,007 3,552

18 0 162 1,195 1,375

9 16 9 16 50

278 16 1,285 5,051 6,630EN-Total

Total Annual Benifits Excluding PT (MUS$/Yr)

Break down by sub-

basin and country

Hydro

Irrigation

Livestock

Fisheries

Eth RSS Sud. Egy. Total

1,323 0 714 833 2,869

25 13 1,111 3,024 4,172

24 0 175 1,195 1,394

13 16 9 16 55

1,385 29 2,009 5,068 8,491EN-Total

Total Annual Benifits Excluding PT (MUS$/Yr)

Break down by sub-

basin and country

Hydro

Irrigation

Livestock

Fisheries

10.76 Million Ha Irrigation

32,958 Gwh Hydropower

286 BCM storage

93 BCM/Yr Water Uses

Flow US Aswan= 76.6 BCM

Water Prod. Hydro.=13 Cent/m3

Water Prod. Irrig. = 6 Cents/m3

IS

19

Application of MCA • Multi-criteria analysis to analysis the scenario results in a bit more depth and with a

degree of objectivity

20

Scenario Analysis Result Water availability is a major constraint that limit irrigated agriculture

expansion

Water productivity from investment in hydropower is about 0.21 US$ per cubic meters which is almost triple the productivity compared to investment in irrigated agriculture (about 0.06 US$ per cubic meters).

Any trade-off between hydro versus irrigation from economic point of view gives priority to investments in hydro

There is a comparative advantage among the EN sub-basins when such trade-off is assessed in different sub-basin

The Abay Blue Nile is having a higher potential in terms of hydropower,

While the potential for irrigated agriculture is higher in Baro-Akobo-Sobat

21

MSIOA: Key Findings • Business-as-usual is the least attractive solution

• There is scope for new irrigation, but in the longer-term, there is not enough water tofulfill the development plans of all countries

o Improve efficiencieso Examine water requirementso Examine livelihoods, environmental flow, salinity, etc..o Improvement to national planning process

• Regionally planned hydropower development has minimal impact on regional waterresources, once the dams are filled. Hydropower dams can be managed in a trans-boundary context while working to reduce evaporative losses from reservoirs, andcoordinating filling and operation.

o Facilitate power tradeo Establish a coordination mechanism for dam operationo Ensure cascade development is well sequencedo Minimize dam safety riskso Ensure better sediment managemento Reginal level environmental and social impact assessment for potential projects

• Where reservoirs are used for HP and irrigation, water availability may be impacted.However, if well planned, there are win-win development opportunities.

o Multi-sectoral approach to achieve win-win for reservoirs which have multiple use.

o identify the right opportunities, based on a detailed analysis of social, economic and environmental impacts ofproposed investments across sectors

22

MSIOA: Key Findings • Choice of crops, agricultural water use efficiency improvements and a regional approach to

food security and agricultural markets should be explored further and developed .

o Support crop zoning

o Optimize the trade-off between agriculture and livestock

o Develop regional food and agricultural markets

• Other areas to further explored to reach favorable win-win development outcomes for allinclude watershed, flood, power sharing, drought management, coordinated reservoiroperations, etc.

• Multi-sector coordination and analysis are critical. There is thus a need for countries to:

o Basin level hydrological studies to understand the impacts of future water resources use and improved management

o Undertake more multi-sectoral planning at all levels

o Follow a coordinated approach to mange flood and drought

o Prioritize the maintenance of environmental flow. Initiate delta management ..

• Filling the information gaps in the basin in order to improve the basis for decision making on critical resource management issues. Thus countries need to

o Gather and share information that can improve basin wide water resources development, management and use

23

Strategic Implications

Strategic implications: The MSIOA study points to the following:

o Prioritize most deserving (economically feasible, environmentally & socially sustainable) infrastructure projects (hydropower and irrigation) on which there is consensus and prepared for implementation

o Optimize operational rules for reservoirs for synchronized performance

o Take forward ‘no or low regrets’ projects and programs urgently

o Select the most economically-viable irrigation schemes

o Ensure that crops most suitable to the agro-climatic zone are grown

o Take a regional approach to markets and food security

o Continue improving and updating models and tools for the future

24

Strategic Interventions – Development pathwaysProgram 1: Water Resource Planning/Management: management, increase cooperation,increase resiliency

o Cordinated water infrastructure operations

o Environmental and social assessments & safeguards

o Water quality & sediment monitoring & management

o Groundwater monitoring & management

o Climate change adaptation capabilities

o Optimization of water resource use for enhancing win-win opportunities

o Coordination and phasing of win-win-win ENB development packages

Program 2: Water Resource Investment

o EN Power/energy sharing arrangements

o Watershed management to rehabilitate degraded catchments & improve natural resource-dependent livelihoods

o Efficient irrigated agriculture

o Water re-use and salinity management

Thematic areas – Concept Notes

25

Thank You