- ADB’s latest announcement of its huge investment in private equity fund in water infrastructure is clear cut evidence of how it plans to hand over out water future to the private sector.
- Our government must critically analyze ADB’s investment game plans before succumbing to its IWRM mantra
- We once again urge upon the government of Odisha to plan our water future with our people and not with external consultants hired by ADB and other such ambassadors of the private sector.
Wednesday, November 17, 2010
Private equity funds, the new enemies of our common water future.
Greetings from Water Initiatives Odisha !
Please find below Water Initiatives Odisha's response to ADB's latest water investment game plans that going to give away all our water resources to corporates and private sector investors.
Thanks and regards,
Water Initiatives Odisha: Fighting water woes, combating climate change... more than two decades now!
Private equity funds, the new enemies of our common water future
Sambalpur, 17th November 2010 – In pursuance with its aggressive water sector reforms agenda intended to help private sector and corporates seize control over water resources of our region, the Asian Development Bank (ADB) has just announced a huge investment of up to $20 million for its first-ever investment in a private equity fund solely focused on supporting the development of water-related infrastructure in the People’s republic of China and Southeast Asia.
We at Water Initiatives Orissa (WIO) expected this especially after going through the recent evaluation report of the ADB’s water sector programmes, which has advocated that the bank should aggressively push through reforms in the water sector through all such measures. Today, on 17th November 2010, when the ADB announced that it is going to invest in the first fund on Water Infrastructure in Asia, our apprehensions came true. According to a release from ADB, Robert van Zwieten, Director of ADB’s Private Sector Operations Department has said that "By taking part in the fund, ADB will catalyze more private investment in mainstream water sector development in Asia, which in turn will help spur sustainable growth and improve living standards in the region." This is going to promote direct control of private sector over our water resources and restrict the welfare role of the nations and provinces, we allege.
The ADB release reveals that the fund, to be managed by AmInvestment Group, is targeting investments in municipal, industrial and rural water and wastewater treatment plants, and water rehabilitation. The target fund size is $100 million, with an anticipated first closing of $40 million this year. It will inject around $5 million to $10 million per investment. "The fund will aim to mitigate risks through geographic and sector portfolio diversification, by contracting reputable engineering groups, by investing in companies with high corporate governance and financial management standards, and by seeking a majority ownership stake in each investment," said another representative M. Shin Kim, Head of Private Equity in ADB's Private Sector Operations Department. The release also says that the fund will seek out projects that engage engineering companies with strong proven track records in the sector and a willingness to invest their own equity, helping to generate both strong returns and greater private sector participation. The opportunity for increased private involvement in water has increased over the past 2 years with government finances strained by the global crisis, and the regulatory environment in Asia gradually moving towards full-cost recovery, making such investments more cost-effective. In this new era of global control over water resources poor states like Odisha will fall easy victims of such designs and in the coming years the private sector players will emerge as masters of our water future, WIO apprehends.
These are dangerous game plans of the ADB and will supplement to the evil designs of the corporate biased Integrated Water Resources Management (IWRM) plan that are being pushed through in undemocratic ways in the state of Odisha and elsewhere. We are opposed to this.
On 11th of November we had urged upon the government of Odisha to scrap the technical report submitted by consultants of ADB as it has not consulted the major stakeholders of water resources in the state; is technically flawed in assessing the water availability situation at present and in a climate change regime; and as it is biased towards the corporates. We apprehend that with such new game plans, which is just going to add to the current evil designs, the people of Odisha are going to have a doomed water future as most of water resources will go into the hands of private sector investors and corporates which are eying on the water resources meant for irrigation and other uses for their own profit.
We therefore once again urge upon the government of Odisha to scrap the technical report submitted by ADB’s consultants and critically review its engagement with ADB. In water management let the people of the state matter and not any external agency especially the ones who propagate corporate control of water resources in the name of private sector investment.
Thanks and regards,
Convenor, Water Initiatives Odisha
Water Initiatives Orissa (WIO) is a state level coalition of civil society organisations, farmers, academia, media and other concerned, which has been working on water and climate change issues in the state for more than two decades now.