Climate Toolkits for Infrastructure PPPs: Water Production and Treatment Sector

Last Updated: 25 Jun 2024

This toolkit contains a set of tools covering the major climate entry points (identification of risks, incorporation of climate considerations in the project selection, and appraisal of climate effects in the project’s economics). Its inputs are preliminary project data as well as readily available climate-related resources and tools produced by the World Bank Group and other international organizations. The outcome should be a project-specific collection of considerations that will need to be further evaluated and quantified in the subsequent phases of project implementation, as well as an improved understanding of the potential needs for advisory services. The toolkit is divided into five modules: module 1 explains the ramifications of the Paris Agreement, national adaptation plans, and other international treaties and national policies for the planning of new water production and treatment infrastructure, and helps users understand what is necessary to ensure a project’s alignment with such frameworks. Module 2 presents a methodology for appraising greenhouse gas (GHG) emissions associated with bulk water infrastructure and identifying mitigation solutions. This is done by identifying the various linkages between the water and energy sectors and understanding the potential for energy savings through appropriate interventions. Module 3 proposes a framework for assessing climate risk and managing climate uncertainty in the planning decisions of water projects. This includes understanding the impacts of climate threats on the availability of water resources and the operations of water systems and setting up adaptation strategies that can perform better given a highly uncertain future. Module 4 guides preliminary economic appraisals of water projects and helps planners recognize how climate considerations may impact the project’s cost-benefit analysis (CBA) and its value for money (VfM) as a PPP. Module 5 proposes a set of output requirements in the form of key performance indicators (KPIs) that can be embedded in the PPP contracts to ensure compliance with the climate objectives and accountability of performance.