A Retrospective of Lending for Irrigation - Reflections on 70 Years of Bank Experience

PublicDisclosureAuthorized PublicDisclosureAuthorized PublicDisclosureAuthorized DISCUSSIONPAPER|MARCH2024 Reflectionson70YearsofBankExperience ARetrospectiveofLending forIrrigation PublicDisclosureAuthorized HervéPlusquellecwiththeassistanceofSanjivaCooke AbouttheWaterGlobalPractice Launchedin2014,theWorldBankGroup’sWaterGlobalPracticebringstogetherfinancing,knowledge,andimplementationinoneplatform.BycombiningtheBank’sglobalknowledgewithcountryinvestments,thismodelgeneratesmorefirepowerfortransformationalsolutionstohelpcountriesgrowsustainably. Pleasevisitusatwww.worldbank.org/waterorfollowusonX:@WorldBankWater. AboutGWSP ThispublicationreceivedthesupportoftheGlobalWaterSecurity&SanitationPartnership(GWSP).GWSPisamultidonortrustfundadministeredbytheWorldBank’sWaterGlobalPracticeandsupportedbyAustralia’sDepartmentofForeignAffairsandTrade,Austria’sFederalMinistryofFinance,theBill &MelindaGatesFoundation,Denmark’sMinistryofForeignAffairs,theNetherlands’MinistryofForeignAffairs,Spain’sMinistryofEconomicAffairsandDigitalTransformation,theSwedishInternationalDevelopmentCooperationAgency,Switzerland’sStateSecretariatforEconomicAffairs,theSwissAgencyforDevelopmentandCooperation,U.K.InternationalDevelopment,andthe U.S.AgencyforInternationalDevelopment. Pleasevisitusatwww.worldbank.org/gwsporfollowusonX:@TheGwsp. ARetrospectiveofLendingforIrrigation Reflectionson70YearsofBankExperience DISCUSSIONPAPER MARCH2024 HervéPlusquellec withtheassistanceofSanjivaCooke ©2024InternationalBankforReconstructionandDevelopment/TheWorldBank1818HStreetNW,Washington,DC20433 Telephone:202-473-1000;Internet:www.worldbank.org ThisworkisaproductofthestaffofTheWorldBankwithexternalcontributions.Thefindings,interpretations,andconclusionsexpressedinthisworkdonotnecessarilyreflecttheviewsofTheWorldBank,itsBoardofExecutiveDirectors,orthegovernmentstheyrepresent. TheWorldBankdoesnotguaranteetheaccuracyofthedataincludedinthiswork.Theboundaries,colors,denominations,andotherinformationshownonanymapinthisworkdonotimplyanyjudgmentonthepartofTheWorldBankconcerningthelegalstatusofanyterritoryortheendorsementoracceptanceofsuchboundaries. RightsandPermissions Thematerialinthisworkissubjecttocopyright.BecauseTheWorldBankencouragesdisseminationofitsknowledge,thisworkmaybereproduced,inwholeorinpart,fornoncommercialpurposesaslongasfullattributiontothisworkisgiven. Pleasecitethisworkasfollows:Plusquellec,Hervé.2024.“ARetrospectiveofLendingforIrrigation:Buildingon70YearsofBankExperience.”WiththeassistanceofSanjivaCooke.WorldBank,Washington,DC. Anyqueriesonrightsandlicenses,includingsubsidiaryrights,shouldbeaddressedtoWorldBankPublications,TheWorldBankGroup,1818HStreetNW,Washington,DC20433,USA;fax:202-522-2625;e-mail:pubrights@worldbank.org. Coverdesign:BillPragluski,CriticalStages,LLC. Photocredits:©HervéPlusquellec/WorldBankunlessotherwisenoted.Additionalcoverphotosarecourtesyofthefollowing:ORMVADoukkala,Morocco(topright),CARPI(lowerleft),andBORISinternational(lowerright). Contents Forewordix Prefacexii KeyPointsxiii Acknowledgmentsxiv AbouttheAuthorxv ExecutiveSummaryxvi Abbreviationsxxii PARTI:HISTORICALREVIEW 1.TheImportanceofIrrigation2 1.1TheDiversityofIrrigationSystemsatLarge3 1.2Partnerships7 Notes8 2.EvolutionofBankLendingforIrrigation9 2.1LendingforIrrigation(1950–2018)9 2.2RegionalDistribution(1950–2018)10 2.3DistributionofGlobalLendingforIrrigationbyDecade10 2.4CountryDistribution(1950–2018)12 2.5LendingforIrrigationafteraRecordLowintheYear200013 2.6OfficialDevelopmentFinancingtotheWaterSectorand IrrigationSubsector15 Notes17 3.EvolutionofPoliciesApplicabletotheIrrigationSubsector18 3.1TheInfrastructurePeriod(1950–71)18 3.2TheAgriculturalExpansionPeriod(1971–82)19 3.3TheConsolidationPeriod19 3.4WaterResourcesManagementPolicyandStrategy21 3.5AGlobalChangeintheCultureoftheWorldBank23 3.6OtherBankInitiativesAimedatRevitalizingtheIrrigationSubsector24 Notes28 4.PerformanceofBank-FinancedIrrigationProjects29 4.1ReviewsofIrrigationandDrainageProjectsConductedbytheOED andIndependentEvaluationGroup29 5.CausesoftheSlowdownofIrrigationLendingsincetheMid-1980s33 5.1StaffingQualificationsandBankProcessReview34 Note35 6.TheRecentSearchforNewIrrigationParadigms36 6.1Public-PrivatePartnerships36 6.2IrrigationServicesDeliveryRevisited:INSPIREandtheIrrigation OperatoroftheFuture38 6.3AJointInitiative:Farmer-LedIrrigationDevelopment39 6.4PolicyLending40 PARTII:LARGE-ANDMEDIUM-SCALEIRRIGATIONPROJECTSINREVIEW 7.ACloserLookatTwoDecades42 7.1AnEngineeringSolutiontotheDualUseofSurfaceWaterandGroundwaterforIrrigation43 7.2ViewpointsofIrrigationStakeholdersandExpertsinthe1990s43 7.3RentSeekingintheIrrigationSubsector:ANeglectedDimension46 Note48 8.TheNeedforaRealisticEconomicEvaluationofProjects atAppraisal49 Note52 9.BothInstitutionalandEngineeringChangesAreNeededto ImproveIrrigationSubsectorPerformance53 9.1QualityofServiceProvidedtoUsers55 9.2ReductionofLossesinIrrigationCanalSystems56 9.3TheThus-FarUnachievableVisionofVolumetricPricing58 Notes58 10.TheNeedforMod