How to develop sustainable irrigation projects with private sector participation

The use of irrigation in the agricultural sector, when combined appropriately with other inputs, has been key to increasing the productivity of agricultural production around the world - a vital factor in helping governments to manage the growing demand for food caused by demographic pressures and changing dietary habits. Governments, increasingly, are seeking to address the complex issue of targeting investments and improving the use of scarce water resources in irrigation for agriculture to achieve growth and rural development. Understanding how to design and manage this sub-sector optimally is necessary if market forces are to succeed in improving the performance and sustainability of irrigation systems. Bringing private participation into this sector is complicated. It is necessary to develop a better understanding of whether and how the private sector can deliver better service. The system needs to be designed in a sustainable manner, no only from an engineering and environmental perspective, but also in terms of operations and maintenance, including linkages (if any) between production and capital investment. Most importantly, the right incentives need to be created for the private sector, farmers, public agencies, and others to perform together to achieve a sustainable scheme for everyone. Critical to the design of irrigation public-private partnerships (PPPs) is the way construction is made, how investment is recovered throughout the life of the scheme, and the manner by which agricultural off take is linked to the scheme. In addition, the challenge of the co-existence between agricultural businesses and subsistence farmers needs careful consideration to ensure long term viability but also to protect those most vulnerable and provide the right conditions for long term sustainability and economic development with equal opportunities for all. Flexibility in bidding to allow financial close and, most importantly, rethinking the manner of government support - both financial and regulatory - will be key to foster the development of PPPs in irrigation.

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