This week in Marrakesh I'll have water very much on my mind as my colleagues and I join experts and partners from the world's development banks and international financial institutions to pin down just how we are going to put the Paris Agreement into practice and to assess our progress since last year.
The European Investment Bank (EIB), the EU's bank owned by its 28 member states, is the world's largest multilateral provider of climate finance as well as one of the largest lenders to the water sector worldwide, with around €90 billion and €20 billion of loans signed from 2011 to 2015 respectively. And that comes with a huge responsibility.
Ahead of COP21 last year we approved a new climate strategy at the EIB that focused on maximising the impacts of our climate finance, considering climate change in everything we do and stepping up our support for countries, communities and economic actors in their efforts to adapt to climate change. Increasing finance for adaptation, and especially getting the private sector on board, is not an easy proposition and it takes a certain ingenuity from our innovative climate finance team in designing the right kind of products to do the job, not to mention the expertise from the bank's climate action and sector experts to help our clients and promoters identify and prepare the investment and other actions needed on the ground.
For the Mediterranean, MENA (Middle East and North Africa) region and the African continent as a whole, water is literally a life or death business. It affects health, livelihood and economic wellbeing. Land degradation and food insecurity are inextricably linked with increasing water scarcity, but water availability is crucial in all sectors, including electricity generation, and viable water and sanitation services are essential in the region's growing cities. In the MENA region, where we are aptly meeting for COP22 this week, water shortages alone could reduce the region's GDP by 14%. At the other end of the spectrum, the region is also experiencing extreme rainfall episodes, river floods and flooding in its cities. The onset of a sea level rise will affect all low-lying areas, including many key urban areas in the region, and in an especially dramatic fashion, the Nile Delta. Climate change will exacerbate environmental, economic, social and security challenges in the region and may over time affect human displacement both from MENA to Europe and from even harder hit sub-Saharan countries into MENA.
For the MENA region, water-related adaptation is clearly a priority. This calls for an increased focus in strengthening the region's water security in terms of improving the quality and resilience of water supply and wastewater services, diversifying water sources, also including treated wastewater for reuse in agriculture/industry or recharge of ground water, and especially increasing water productivity in agriculture.
Take Morocco where this year's COP is taking place. Water accounts for virtually all the country's EIB-supported adaptation projects. The Bank recently signed a loan of €75 million for a water and wastewater project with Office National de l'Eau et de l'Electricité (ONEE) that consists of small-sized schemes aiming at upgrading, rehabilitating and optimising water production, distribution and wastewater management infrastructure throughout Morocco.
Elsewhere in the region the need is just as acute - exacerbated by other factors.
In Jordan, EIB funding blended with EU grants is supporting the Wadi Al Arab Water System II project, which aims to address water scarcity in the fourth most water-scarce country in the world. The EIB loan, in cooperation with Agence Française de Développement (AFD) and the EU Neighborhood Investment Facility (NIF), is making a difference in an area of the country where water resources are further strained by the significant influx of Syrian refugees in the country.
No less under strain, are those living in the Gaza Strip - the most densely populated place on the planet. Subject to a permanent blockade, the available water for the population in the Gaza Strip is inadequate, due to the over-exploitation of the diminishing natural aquifer, high levels of contamination and sea water intrusion. This means that water quality falls far below the accepted international guidelines with a real health risk to its population of two million. This is having a significant impact on food production and the day to day life of the population. In response to this, the EIB has been supporting preparations for a large-scale desalination facility in Gaza.
With a grant from EIB-managed EU FEMIP Trust Fund – financed under EIB's CAMENA Climate Action window – it has also been possible to incorporate the design for renewable energy sources for part of the project's operating needs.
That means that while the project uses an energy-intensive technology to produce the water so as to adapt to the impacts of climate change, it also attempts to mitigate its greenhouse gas emissions. EIB is thus helping to demonstrate the scalability in the use of renewable energy to address water scarcity in vulnerable areas.
International finance for climate action is increasing, as indicated by the most recent OECD report. However, the investment needed to meet the COP21 objectives will require a massive increase in the mobilisation of private finance.
To increase support for water security and adaptation, we must therefore also support innovative financial instruments and partnerships. Their pay off can be huge; economically, environmentally and politically too. I'm proud for example that we've been able - as the EU bank and with a number of European and other partners - to support a unique water sharing initiative between Israel, Jordan and the Palestinian territory: the Red Sea Dead Sea, desalination project. The landmark desalination project is expected to produce 65 million cubic metres (MCM)/year of desalinated water for the people Aqaba (Jordan) and Eilat (Israel) and discharge up to 235 MCM/year of mixed brine and sea water to the Dead Sea. EIB is mobilising the EU's Neighborhood Investment Facility to carry out three final, preparatory studies.
In the run up to Paris, the EIB pledged to increase its share of climate finance to 35% in developing countries by 2020. We are well on track to meet that target with a portfolio of projects that seek to mitigate greenhouse gas emissions and support countries in adapting to the effects of climate change. The Paris Agreement has entered into force faster than expected. This is welcome and encouraging. But meeting the challenge of its implementation demands much more.
We at the EIB, alongside all other development banks and financial institutions need to keep pushing ourselves to increase our funding, demonstrate and scale up new solutions, support technology development and transfer, work together to increase our coordination and help mobilise both private finance and private sector expertise to avert the very real disaster facing all of us and especially those on the frontline of climate change.
Monica Scatasta is head of environment, climate and social policy at the European Investment Bank from COP22