NDF - Financing for climate change and development projects

NCF6: Encouraging Climate Adaptation and Mitigation Investments through Private Sector Engagement in Decentralized Wastewater Treatment Systems (DEWATS) and Small­scale Water Infrastructure in Laos

Photo: NDF
Photo: NDF
The project aims at improving climate adaptation through supporting the development of locally owned and managed small-scale water supplying and sanitation infrastructure systems

Encouraging Climate Adaptation and Mitigation Investments through Private Sector Engagement in Decentralized Wastewater Treatment Systems (DEWATS) and Small­scale Water Infrastructure in Laos
Ref: NDF C83

Nordic Partner: Stockholm International Water Institute (SIWI)
Local Partner: UN-Habitat
Other Partner: NPSE Attapeu and NPSE Sekong
Total Project Cost: EUR 941,810
NCF Financing: EUR 489,138
Agreement Signed: 12 June 2018
Project type: combination
Duration: 30 months

Project objective
The aim of this project is to invest in Decentralised Wastewater Treatment Systems (DEWATS) and small scale water Infrastructure (rainwater harvesting) to improve climate resilience and provide a better base for sustainable livelihoods and green growth. DEWATS is community based and treats wastewater in a low-cost, low-maintenance way. It enables water reuse and provides biogas production, thus contributing to climate mitigation through reduced methane emissions. The project will share learning at national and provincial level; demonstrating benefits to policy and decision makers and facilitate scaling up.

Main results/outputs
1. Baseline assessment for climate adaptation and mitigation measures, and the business case established in the target communities.
2. Two DEWATS built and operational in 2 provinces in Laos (one in each province) benefitting at least 100 households. Twenty-three small-scale water supply infrastructure systems operational benefitting at least 6,000 people.
3. Water Supply Public Private Partnership Consortium established and operational by Nam Papa State-Owned Enterprise (NPSE) staff in Sekong and Attapeu provinces.
4. Business case and lessons-learned of the present project are documented and shared with decision- and policy-makers. The latter are informed about and take into consideration the pilot projects lessons learned and success.

In Laos social and economic loss and destruction following extreme climate change-related hydro meteorological events, particularly floods and droughts, is hampering socio-economic growth and sustainable development. In order to strengthen resilience in the country, and particular vulnerable communities, efforts working towards increased community resilience are important. Water supply, wastewater sanitation and access to energy are preconditions to development and climate change events resilience.

The project has the multiple ambition to provide tools to local Laos' communities to adapt to the negative impacts of climate change, to provide them a secured access to water, sanitation and energy, and also to reduce GHG emissions (particularly methane) caused by anaerobic digestion of organic waste (human faeces included). The construction and operationalization of DEWATS and the introduction of improved local water supply infrastructure will provide the backbone in this strive for mitigation and adaptation.

Relevance for climate change
In Laos extreme events related to heavy rainfall are increasing.  The project aligns with the Laos PDR National Adaptation Programme of Action (NAPA) where water is a priority area:
• Awareness raising on water and water resource management.
• Strengthen institutional and human resource capacities related to water and water resource management.
Four of the six guiding principles of the 2010 National Climate Change Strategy are international partnerships, capacity building, innovative financial instruments and awareness, education and communication. The proposed project incorporates all of these components. Laos' Intended Nationally Determined Contribution (INDC) highlights water resources as a main adaptation priority area. Within this priority area, Increasing Water Resource Infrastructure Resilience to Climate Change is a key sub-theme.

Innovation aspects
DEWATS are recently introduced to Laos. They provide an innovative opportunity to combat impact of climate change through empowering local communities to improve human health and wellbeing by treating wastewater locally. Paired with investments in small-scale water infrastructure, it becomes a powerful way to improve community climate resilience and gain gender improvements. The Public Private Partnership (PPP)
investments in DEWATS offer an innovative approach to mobilize local business and create jobs for green growth