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"ADB focuses on financing and building sustainable solutions with partners and clients"

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The Asian Development Bank has set as a priority building water and sanitation resilience and security in Asia and the Pacific. Amid pressing climate challenges, innovative financing and scaling innovation stand out to meet the regional water sector needs.

The Asian Development Bank established the Water and Urban Development Sector Office in June 2023 as a part of the ADB’s new operating model, to support a vision of liveable and resilient urban areas where water security is paramount. With projects dealing with water and sanitation, and urban flooding among other issues, ADB finances infrastructure at the same time as it works towards robust water governance and social inclusion, while fostering technological innovation. In an exclusive interview, Norio Saito, Senior Director of the Water and Urban Development Sector Office, shares insights into ADB's strategic initiatives aimed at enhancing water security, promoting sustainable urbanization, and tackling climate change across the region.

Published in SWM Print Edition 23 - September 2024
SWM Print Edition 23

Could you share a bit about your background and your role at the Asian Development Bank?

I’m currently the Senior Director of the ADB’s Water and Urban Development Sector Office (SG-WUD), where I lead strategic directions and operations in the water and urban development sector. The team is focused on upstream policy dialogue, impactful projects, effective implementation, knowledge sharing, and capacity development for our clients. I’ve held various roles in ADB in the past 16 years, including as Director of the Urban Development and Water Division of the South Asia department, working extensively on urban and water projects in South Asia, including Bangladesh, India, Nepal, and Sri Lanka.

 ADB does not only finance infrastructure and service improvements, but also helps strengthen policies, institutions, and regulations

I was born and raised in Tokyo, Japan, where my interest in development and the environment began -- I majored in Geography at the University of Tokyo, before pursuing a master’s degree in environmental management from Duke University in the United States, and later, a PhD in environmental sciences focusing on urban climate change adaptation from Ibaraki University in Japan. I feel extremely lucky that I’ve been able to work in development for over 30 years now.

What are the lines of work of the Water and Urban Development Sector Office?

Over 500 m and 1.14 bn people still lack access to basic water supply and safely managed sanitation, respectively, in Asia and the Pacific

The ADB Water and Urban Development Sector Office, which was newly established in June 2023 as a part of the ADB’s new operating model, supports ADB’s 49 developing member countries in Asia and the Pacific in making cities and towns more water-secure, liveable, and resilient.

Our projects are specifically aimed at achieving the relevant UN Sustainable Development Goals, particularly SDGs 6 and 11 – ensuring the availability and sustainable management of water and sanitation for all, as well as making cities and human settlements inclusive, safe, resilient and sustainable. Our projects support improved water and sanitation services, solid waste management based on circular economy principles, and urban flood management, among others. We are also strengthening support for affordable housing and sustainable tourism. In all projects, we strive to offer integrated solutions to our clients. We do not only finance infrastructure and service improvements, but help strengthen policies, institutions, and regulations as well as gender equality and social inclusion. This helps make our interventions more impactful, inclusive, and sustainable.

How is the Asian Development Bank currently addressing water and urban development challenges in the region? Can you highlight some recent initiatives?

Despite our great progress in the region, there’s still a lot of work to be done. Over 500 million and 1.14 billion people still lack access to basic water supply and safely managed sanitation, respectively, in Asia and the Pacific, worsened by the impacts of climate change primarily felt through water. Given the urgency in achieving water security and resilience amid pressing climate challenges, ADB’s approach to water operations is guided by five principles, 1) building resilience and adaptive capacity, 2) promoting inclusiveness and gender equality, 3) embracing environmental sustainability and circular economy, 4) improving governance and catalysing finance, and 5) fostering innovation and technological advancement.

We’ve dedicated significant resources to this support. From 2014-2023, ADB’s water sector committed a total of $23.5 billion to our developing member countries.

$12.84 billion was dedicated to water supply, sanitation, and wastewater management; $3.97 billion to flood management; $3.20 billion to irrigation and agricultural drainage; $2.13 billion to water-based natural resource management; and $1.40 billion to hydropower. These investments are supported by other Sector Offices in ADB too, including teams in Agriculture, Food, Nature, Rural Development, and Energy.

As mentioned previously, we focus not only on financing, but on building sustainable solutions together with our partners and clients. ADB operates the Water Financing Partnership Facility (WFPF), for example, which is supported by the governments of the Netherlands, Austria, and Spain, along with the Bill and Melinda Gates Foundation. The WFPF supports project design and implementation; strengthening policies, regulations, and institutions; and developing capacity and knowledge. WFPF has catalysed more than $9.5 billion in innovative and sustainable water investment, benefitting 122 million people in the region.

WFPF has catalysed more than $9.5 billion in innovative and sustainable water investment, benefitting 122 million people in the region

Another exciting initiative is ADB’s Water Organizations Partnership for Resilience (WOP4R), a programme that pairs utilities across the globe to learn from each other. This programme has engaged over 81 utilities across 21 countries. This peer-to-peer learning is critical for water utilities in our developing countries to learn from international best practices. For example, Dhaka Water Supply and Sewerage Authority is learning from the Bureau of Sewerage of the Tokyo Metropolitan Government in areas including smart and resilient sewerage services, energy efficiency, climate change adaptation and mitigation, compact sewerage treatment plant design, and sludge management. We have just paired Singapore’s PUB and India’s Chennai Metropolitan Water Supply and Sewerage Board, with a spotlight in areas such as energy-efficient desalination plants.

What do you see as the key opportunities for improving water management and urban development in Asia over the next decade?

We need to accelerate financing as well as knowledge sharing in water management and urban development. The region needs an estimated annual investment of about $60 billion in capital investment alone for water-related infrastructure and services. Enabling innovative financing involving the private sector and maximizing local resource mobilization is essential to meet the huge regional water sector financing needs.

ADB hopes to expand private sector participation and non-sovereign operations for all aspects of water security and resilience to tap the private sector’s innovation and expertise. We see great potential in digital technologies, including digital twins, in improving design and operational efficiency, customer satisfaction, and sustainability.  

In addition, we aim to provide knowledge that influences and strengthens investments through joint learning and applied research. Lastly, we will promote long-term collaboration on water issues with development partners, knowledge partners, the private sector, and civil society.

Climate change is greatly affecting water resources and urban infrastructure in Asia; what measures are being taken to mitigate these impacts?

Climate change mitigation and resilience are central to ADB’s work, especially for water resources and urban infrastructure in Asia. Cities generate about 70% of the total greenhouse gas emissions and suffer most from climate-related disasters such as floods, because people and assets are concentrated in cities.

First, ADB set its ambition to provide $100 billion in climate financing from its own resources cumulatively from 2019 to 2030 for our developing member countries, including $34 billion for climate adaptation, while targeting that 75% of its operations support climate action.

For the water sector specifically, ADB announced its intention to mobilize $200 million in grants from 2021-2026 to leverage $10 billion in climate change adaptation financing by 2030.

The Water Organizations Partnership for Resilience (WOP4R) is a programme that pairs utilities across the globe to learn from each other

Finally, ADB issued its Climate Change Action Plan 2023-2030 in late 2023, which includes both Bank-wide actions and actions specific to our team at SG-WUD.

Sector-specific actions include strengthening planning and design for low-carbon and climate-resilient urban development, urban policy and governance reform, and promoting financial innovations to mobilize more climate finance. We are already observing substantive progress in increasing climate finance. Climate financing accounted for 51% and 53% of our department’s new commitments in 2022 and 2023, respectively, which are much higher than the 22–28% in 2019–2021.

Upstream climate assessment — that is, a closer look at climate impacts and vulnerabilities in a system - is critical to climate mitigation and adaptation-oriented project design, while meeting development objectives. We will further strengthen these efforts.

Can you highlight some recent initiatives and projects related to water security?

ADB hopes to expand private sector participation and non-sovereign operations for all aspects of water security and resilience

We’re proud to note that we have many new initiatives and projects that aim to achieve a more water-secure future: we will push for accelerated climate adaptation and mitigation financing, public-private sector collaboration, and new financing modalities that derisk water investments. We’re also focused on scaling innovation in key areas.

One example is ADB’s $200 million Rajasthan Secondary Towns Development – Additional Financing project to India, approved in 2023, which aims to improve water supply and sanitation systems in secondary towns in Rajasthan. Notably, it will pilot a Public-Private Partnership for the resource-efficient industrial use of treated municipal wastewater, as well as deepen private sector engagement and mobilize domestic and private sector finance. We intend to support the use of treated wastewater in more projects, and in parallel strengthen regulatory instruments such as cost-reflective tariffs and groundwater extraction control.   

We are also working to reduce non-revenue water (NRW), as the percentage of water lost or unaccounted for in many cities in Asia and the Pacific is 40% or higher, sometimes as high as 70%. ADB was able to help significantly reduce NRW from 40-50% to about 20% in Dhaka, Bangladesh and Colombo, Sri Lanka.  We are now working with India, Fiji, Georgia, Papua New Guinea, and Uzbekistan, to replicate that success. NRW reduction greatly contributes to climate change mitigation, as well.    

It is also important to highlight that ADB has been doing a lot of work around nature-based solutions – we brought together 50 delegates at the Hague for an Asia Netherlands Water Learning Week in April this year. Even simple solutions like rainwater harvesting or recycling stormwater can have an enormous impact.

ADB has also been doing a lot of work around coastal resilience. Sea level rise caused by climate change could lead to coastal erosion and flooding. ADB has several projects, in Viet Nam and India, for example, wherein they use innovative approaches, including stabilizing shorelines and preserving beaches, protecting marine biodiversity, and promoting sustainable ecotourism.   

Importantly, ADB has recently started the Building Adaptation and Resilience in the Hindu Kush Himalayas Initiative, to respond to the rapidly growing glacial melt in the Himalayan region. This glacial melt will impact many countries in the Asia and the Pacific region – first through floods that will threaten the safety of many, especially in vulnerable communities, and then through water scarcity that will impede food production and livelihoods. ADB’s initiative focuses on cutting-edge risk assessment and management tools, such as insurance and risk transfer, to guide investment decisions for large-scale infrastructure projects in the region so that services can withstand and survive this threat.

Looking ahead, what is your vision for the future of water and urban development in Asia, and what role do you see ADB playing in achieving this vision?

ADB will push for accelerated climate financing, public-private sector collaboration, and new financing modalities that derisk water investments

We think access to safe drinking water supply and safely managed sanitation remains a main factor in building a prosperous, inclusive, resilient, and sustainable Asia and the Pacific.

Climate change is a major threat. Rapid urbanization in Asia and the Pacific continues to widen infrastructure and service deficits in our towns and cities, aggravate air and water quality, and challenge inclusivity. These are all being exacerbated by climate change, which affects the poor and the vulnerable the most. ADB has a tremendous role to play. Addressing climate change and supporting development are not one or the other, but we can design projects and programmes that contribute to both.  

Another area we should and will do more is to strengthen sustainability, by building the technical and financial capacity of cities and utilities and strengthening their policy and regulatory environment. I am personally very excited and looking forward to working on these challenges to make our towns and cities more low-carbon, resilient, inclusive, and liveable.