Analysis and Publication on Latin American Public Water Utilities: Challenges of Financing Energy Efficient and Low Energy Resilient Infrastructure, Latin America and the Caribbean

The UNDP Climate Change and Energy Regional Programme and the United Nations Environment Programme (UNEP), under the auspices of the Regional Gateway for Technology Transfer and Climate Change Action in Latin America and the Caribbean (REGATIA), have identified public water utilities in Latin America and the Caribbean (LAC) as high energy consumers and a significant source of greenhouse gas emissions. Moreover, these utilities face increased serious vulnerability risks in the current climate change context.   Water and power utilities must now transition to a new paradigm in which environmental, economic and social sustainability, as well as resilience to serious disasters, chronic challenges, exponential population growth, climate change, peak demand and other global factors are paramount. Current challenges go beyond providing safe, reliable and available resources, and now include considerations such as energy use, scarce resources, water pollution, population growth, climate change risks, among others. Additionally, water utilities are among the most energy intensive consumers in typical countries around the world.   ln this context, the UNDP and UNEP commissioned Econoler to draft a study and publish a practical guide for decision makers in LAC public utilities. The study presents the potential viability of both resilience measures and energy efficiency (EE) in public water utilities. It also analyses barriers that could prevent EE investment, as well as provides an overview of existing technical resources and financing options for such projects.

The mandate proceeded under the following premise: “In spite of the tangible benefits of energy efficiency improvement in the supply and use of water in urban areas of Latin America, water utilities (or governments) are not actively implementing such strategies”. The commissioned study and a systematic bibliographical review were intended to determine whether this statement is true.   Thus, available literature was analysed to understand the current context of the water sector in LAC. Reviewed literature included: (1) Best practice projects in LAC and the world; (2) Statistical data of countries in LAC; (3) Public and private water distribution and treatment utility websites; (4) Practical guides to EE projects, water loss reduction, increasing resilience, and sustainable management; (5) Reports on legislative frameworks, laws and regulations; and (6) Websites of related institutions – ministries, municipalities, water agencies, etc. This information was gathered to obtain a clear understanding of current issues, as well as regulatory and institutional frameworks that influence the design and implementation of resilient, efficient solutions.   Thereafter, further research was conducted to identify detailed experiences and analyses of EE and resilience projects implemented in the LAC. Persons involved in the design and implementation of these activities were contacted to obtain accurate data about the context, description of process, financing, problems, objectives, results, barriers and lessons learned.   Based on all the information gathered, major barriers were identified and recommendations to overcome these were developed. Potential mitigation strategies were outlined to support decision makers. Furthermore, mechanisms for the implementation and financing of projects adapted to the regional context were elaborated.   The study intended to confirm the feasibility and advantages of implementing modernisation measures in water utilities to decrease carbon footprints and improve resilience to climate change, while satisfying the needs of growing populations and economies and improving the services for populations lacking access to drinking water.   The publication includes:

• An overview of existing studies, experiences and works to improve demand-side and supply-side efficiency in drinking water supply systems in the LAC;
• Case studies of successful and unsuccessful experiences in the area to validate or reject the initial premise;
• Identification of:
• Barriers to the adoption of EE and resilience measures in Latin America and the Caribbean by decision makers;
• Potential strategies to mitigate these barriers to help water utilities overcome issues to presenting bankable projects.

  The study is published as a joint effort of UNDP/UNEP for wide dissemination to stakeholders at national and regional levels. Nonetheless, the study should be useful for debate beyond the purposes for which it is originally intended. UNPD and UNEP expect the study to be used as a practical guide for decision makers relative to efficient management of water and energy utilities in LAC, helping them understand the factors that give rise to implementation barriers.   The publication was officially launched on September 29, 2016, during a side event of the 2016 Latin American and Caribbean Carbon Forum (LACCF) that took place in Panama from September 28 to 30. It can be downloaded at: http://www.latinamerica.undp.org/content/rblac/es/home/library/environment_energy/retos-de-las-empresas-publicas-de-agua-en-america-latina-.html