Guidelines On Irrigation Investment Projects

ixAcronyms and abbreviationsaAA Analytical and Advisory AssistanceADB Asian Development BankAfDB African Development BankAWM agricultural water managementBDAbilateral development agencyBoQ bill of quantityCBA cost-benefit analysisCDD community-driven developmentCFS Committee on World Food SecurityCRisTAL Community-based Risk Screening Tool – Adaptation and LivelihoodsDA development agencyEFA economic and financial analysisEIB European Investment BankEIRReconomic internal rate of returnET evapotranspirationFAO Food and Agriculture Organization of the United NationsGEO global environment objectiveGHG greenhouse gasGIS geographic information systemGWP Global Water PartnershipIBRD International Bank for Reconstruction and DevelopmentICIDInternational Commission on Irrigation and DrainageICR implementation completion and resultsICT information and communication technologyIDAInternational Development AssociationIFAD International Fund for Agricultural DevelopmentIFI international financing institutionISR implementation status and resultsIWMI International Water Management InstituteIWRM integrated water resources managementM&E monitoring and evaluationMASSCOTE Mapping System and Services for Canal Operation TechniquesMIS management information systemO&M operation and maintenanceORCHID Opportunities and Risks of Climate Change and DisastersPAD project appraisal documentPCN project concept notePDO project development objectivePDR project design report

xPES payment for environment servicePIM participatory irrigation managementPLD project legal documentPMU project management unitPPP public-private partnershipPROCA Participatory Rapid Opportunity and Constraint AnalysisPTR project termination reportRAI Principles for Responsible Investment in Agriculture and Food SystemsRAP Rapid Appraisal ProcedureSCADA Supervisory Control and Data AcquisitionSDG Sustainable Development GoalSHARP Self-evaluation and Holistic Assessment of climate Resilience of farmers andPastoralistsSOM service-oriented managementSWOT strengths, weaknesses, opportunities and threatsTCI Investment Centre Division, FAOTCP Technical Cooperation ProgrammeTTLtask team leaderUNEP United Nations Environmental ProgrammeUNSD United Nations Statistic DivisionVGGT Voluntary Guidelines on the Responsible Governance of Tenure of Land,Fishery and Forests in the Context of National Food SecurityWAA water accounting and auditingWAc water accountingWAu water auditingWHO World Health OrganizationWSA water spread areaWSI water-saving irrigationWUA water users’ associationWUO water users’ organization

1IntroductionI. Background and purposewithdrawal – cannot repeat old modes of development.Irrigation has been much appreciated for its significantInnovations are needed to promote productive,contribution to global agricultural production and foodequitable and sustainable water management whilesecurity over the past 50 years. Currently, more thanimproving water services to agriculture and rural40 percent of global agricultural products are produceddevelopment. Numerous approaches and tools haveon irrigated land, which constitutes close to 20 percentbeen developed and practiced by various partners inof the total global arable land. However, irrigation hasrecent years to improve irrigation practices, whichalso been criticized for inefficient water use, poorcould be further disseminated in future irrigationsystem performance and some negative externalities,investments. Useful experiences and lessonsincluding irrigation-induced soil salinization, groundwaterhave also been learned from irrigation investmentdepletion, water-borne diseases and water pollution. Tooperations in recent years, especially those of FAOmeet the requirements of the world population, whichInvestment Centre Division (TCI) staff and consultants.is projected to be more than 9 billion by 2050, foodThese could also be summarized and documentedproduction needs to be increased by 70 percent globallyto provide a reference for future irrigation investmentand by 100 percent in developing countries, and irrigationoperations.is expected to be a major contributor (FAO, 2012a).The Guidelines for Planning Irrigation and DrainageFurther development and improvement of globalInvestment Projects, published by FAO TCI inirrigation will involve multiple challenges and emerging1996, have provided good guidance to TCI staffneeds, including: (i) increasing water scarcity andand consultants as well as other practitioners incompetition, which calls for more efficient andirrigation investment planning for the past 20 years.productive water use; (ii) rapid agriculture restructuringHowever, they mainly cover the project identificationand transformation, which requires more reliable,and preparation phases and need to be extended toflexible and diversified agriculture water services;cover all phases of the project cycle. After 20 years(iii) adoption of agribusiness and value chainof application, some of the contents in the Guidelinesapproaches, which implies a shift from single-headedneed to be updated in accordance with the latestirrigation to integrated agricultural water managementdevelopments in the irrigation sector and the recent(AWM); (iv) the shift from the first generation “greeninsights gained from irrigation investment operations.revolution” to sustainable agriculture intensification,Furthermore, the 1996 Guidelines, which specificallywhich highlights social and environmentalaimed to provide guidance to TCI work on Worldsustainability; and (v) increasing pressure to meetBank-funded projects, could be further developedgrowing demand for meat and dairy products linkedfor broader application by various practitioners into a combination of population growth, rising incomesdiversified investment projects.and urbanization. In addition to all these, climatechange has brought and will bring more impacts,requiring adoption of a climate-smart approach.In this context, TCI led the formulation of theGuidelines on irrigation investment projects during2014-2017, through the work of a joint team, includingIn view of the above, irrigation, as the biggest watermembers from FAO, the World Bank, the Internationaluser – accounting for 70 percent of global freshwaterFund for Agricultural Development (IFAD), the

2 Guidelines on Irrigation Investment ProjectsInternational Commission on Irrigation and Drainageexisting norm or manual for specific system design,(ICID) and individual consultants. The new Guidelinesconstruction, operation or management. They canwere formulated based on evaluation of current trendsbe used by international and national professionalsand developments in the global irrigation sector andinvolved in irrigation investment projects, includingthe experiences and lessons learned from recentstaffs of IFIs, development assistant agencies,irrigation investment operations. They complement thegovernment departments and consulting firms, and1996 Guidelines in the following ways:freelance consultants. They can also be used asOOThe scope of the new Guidelines is extended.It covers all phases of the project cycle, froma reference by professionals of relevant research,education and extension institutes.project identification to preparation, appraisal andnegotiation, to implementation and evaluation, andincludes step-by-step guidance for each phase.OOThe contents of the new Guidelines are updated.They provide guidance on incorporating goodII. Structure of the guidelinesThe Guidelines are structured into three major partsand seven annexes.innovations and lessons into each phase of thePart 1, Trends, Lessons and Issues, provides a briefproject cycle and available information sources.introduction on sector development trends andSpecific innovations incorporated include: watermultiple challenges faced, major lessons learnedgovernance and land tenure; water accounting andfrom recent investment operations and key issuesauditing; AWM under the framework of integratedto be addressed in future irrigation investments. Itwater resources management (IWRM); irrigationcomprises three sections: 1.1 Trends in the irrigationmodernization; evapotranspiration (ET)-based water-sector; 1.2 Lessons learned from recent investmentsaving; advanced economic evaluation; principles foroperations; and 1.3 Issues to be addressed.responsible investments; climate-smart approaches;and modern information and communicationPart 2, Processing Investment Projects, introducestechnology (ICT). Major operational experiencesthe key steps and phases of a typical investmenthighlighted include: avoiding implementation issuesproject cycle, elaborates irrigation-specific issuesthrough better project identification and preparation;to be handled, suggests suitable innovations thatconducting strict feasibility studies and economic andcould be incorporated at each step and phase andfinancial analyses (EFAs); applying a programmaticpossible ways of incorporation, and provides sourcesapproach to enhance flexibility and relevanceof practical tools and information. It comprisesof project design; ensuring project readinessfive sections: 2.1 Project identification; 2.2 Projectbefore commencing implementation; adopting apreparation; 2.3 Appraisal and negotiation; 2.4 Projectparticipatory approach from the outset; enhancingimplementation; and 2.5 M&E.water measurement and water accounting (WAc);making better use of project restructuring; improvingPart 3, Innovative Approaches and Tools, provides aprocurement management, capacity developmentbrief introduction on selected innovative approachesand project monitoring and evaluation (M&E); andand tools. It comprises seven sections: 3.1 Waterensuring a proper exit strategy.governance; 3.2 Water accounting and auditing (WAA);OOThe applicability of the new Guidelines is3.3 Irrigation modernization planning and design;broadened. They take into account the requirements3.4 Agricultural water management investmentof various international financing institutions (IFIs)planning; 3.5 ET-based water saving; 3.6 Advancedand development partners, have generalized theapproaches and methods for economic evaluation;procedures and formats of project processing andand 3.7 Adoption of the Committee on World Foodare applicable to all types of irrigation investmentSecurity’s Principles for Responsible Investment inprojects funded by different funding sources.Agriculture and Food Systems (CFS-RAI) in irrigationprojects.The new Guidelines are a practical tool for guiding theprocedures and processes of investment operations.The seven annexes comprise samples of projectThey neither repeat the technical details of anyprocessing documents and templates and lists ofparticular irrigation innovation, nor substitute for anypractical tools and sources.

Introduction 3III. Key elements and typologies ofirrigation schemesThe water conveyance and delivery part suppliesA typical irrigation scheme normally comprises threewhich mainly include canals, pipelines, buffer storageskey elements – engineering system, information andand associated control structures and equipment.management system, and institutional system.irrigation water from the source to irrigation blocks,The field irrigation and drainage part applies water toThe engineering system normally comprises threeand drains water from the irrigation fields and mainlymajor parts – a water source part, a water conveyanceincludes: (i) for irrigation – canals, pipelines, siphons,and delivery part, and a field irrigation and drainage part.other water distribution and application facilities andThe water source part provides the source of irrigationwater, which may include reservoir dams, ponds,associated structures; and (ii) for drainage – open canals,buried canals and pipes and associated structures.weirs, diverting gates, surface water pumping stations,The information and management system may includewells, tube-wells, pump sets and associated structureswater and engineering monitoring and control facilities,and facilities.data acquisition, transmission and processing facilities,information management and decision-making supportsystems.Table 1. Typologies of irrigation schemesTypologyGroup Large-scale systemsEngineering scale Medium-scale systems Small-scale systems Surface water irrigation systemsWater source Groundwater irrigation systems Combined surface and groundwater irrigation systems Surface irrigation systems, including furrow, border and basin irrigation systems Sprinkler irrigation systems, including set systems and continuous move systemsTechnical model Localized irrigation systems, including drip, spray and bubbler irrigation systems Subsurface irrigation systems, which rely on the raising or lowering of the water table in orderto effect groundwater flow to the root zone Gravity (from diversion weirs, reservoir dams, falls capture) systemsEnergy use Pumping (electricity, fuel, solar pumping from rivers, ponds, wells and tube-wells) systems Combined gravity and pumping irrigation systems Full irrigation systems, with adequate water control/regulating capacity, which can meet thecrop water requirements in respective command areaWater control level Partial/supplementary irrigation systems, without adequate water control/regulating capacity,which can only meet part of the crop water requirements in respective command area,including spate and tidal irrigation systems Publicly owned irrigation systemsOwnership nature Privately owned irrigation systems Public-private jointly owned irrigation systemsSource: Authors.INTRO

4 Guidelines on Irrigation Investment ProjectsThe institutional system may include governinggoverning bodies to carry out O&M tasks, mainly forbodies and operation and maintenance (O&M)small-scale systems.institutions/teams. The governing bodies may compriserepresentatives of various stakeholders, includinggovernment departments, O&M institutions/teamsand irrigation farmers, and are normally responsiblefor decision-making in system O&M. Typical governingTable 1 summarizes different typologies of irrigationschemes based on their scale, water sources,technical models, energy use, water control level andnature of ownership.bodies include irrigation committees, irrigationassociations and water users’ associations (WUAs).The O&M institutions/teams may be: professionalagencies formed by government departments or hiredby governing bodies to carry out O&M tasks, mainlyfor large or medium-scale systems; professional teamshired by governing bodies to carry out O&M tasks,IV. The project cycleThe phases of the project processing cycle mayvary with different IFIs and types of projects. TheGuidelines adopt a generalized cycle consisting of fivephases. Specific phases and major outcomes fromeach phase are illustrated in Figure 1.mainly for medium or small-scale systems; or nonprofessional teams or groups formed/mobilized byFigure 1. The project cycleIdentification(PCN)Evaluation(ICR or PTR)Implementation(ISR)Preparation(PDR)Appraisal andNegotiation(PAD & PLD)Key reports during the project cycle:PCNProject Concept NotePDRProject Design ReportPAD and PLDProject Appraisal Document and Project Legal DocumentISRImplementation Status Results ReportICR or PTRImplementation Completion Report or Project Termination ReportSource: Authors.

Introduction 5Phase 1: Identification. The IFI and client jointlyPhase 4: Implementation. The client implementsidentify project rationale, scope, developmentthe project. In addition to project financing, the IFIobjective, structure and outcomes, and prepare andprovides needed implementation support to ensureagree on the project concept note (PCN), under thethe compliance of project implementation withframework of relevant IFI and client strategies.relevant donor and client policies and procedures,Phase 2: Preparation. The client conducts studiesand investigations and prepares a project designreport (PDR) based on the agreed concept note andas well as investment efficiency and effectiveness.Implementation progress and achievements areregularly monitored and documented in ISR reports.all stakeholders’ views and expectations. The IFIPhase 5: Evaluation. The IFI and client jointlymay provide needed policy, technical and/or financialorganize self- and third-party evaluation of the projectassistance.preparation and implementation. A project ICR reportPhase 3: Appraisal and negotiation. The IFI assessesthe economic, technical, institutional, financial,environmental and social aspects of the project, andprepares a project appraisal document (PAD) and aproject legal document (PLD). The IFI and the clientprepare, negotiate, agree on and approve the projectand funding agreements, as well as implementationarrangements.or project termination report (PTR) will be prepared toevaluate the performance of both the IFI and the client.INTRO

7PART 1 Trends, Lessons and Issues1.1 Trends in the irrigation sector1.1.1 Status and further needsIrrigation has played a very important role in increasingglobal agricultural production and improving globalfood security in the past decades. From 1961 to 2009,the global area equipped for irrigation increased by117 percent. Currently, more than 40 percent of globalagricultural products are produced on irrigated land,which is less than 20 percent of global arable landarea (FAO, 2012a). In the meantime, irrigation hasalso been criticized for inefficient water use, poorsystem performance and some negative externalities,including irrigation-induced soil salinization,groundwater depletion, water-borne diseases andwater pollution.To meet the requirements of a growing globalpopulation, which is projected to reach more than9 billion by 2050, food production needs to beincreased by 70 percent globally and by 100 percent indeveloping countries. About 91 percent of the globalproduction increase and 79 percent of the productionincrease in developing countries would have to comefrom increases in yields and cropping intensity oncurrently cultivated land. Irrigation is expected toplay an increasingly strategic role in reaching thetargets. By 2050, the global irrigation area needs tobe increased by 6 percent, while the global irrigatedcropping area needs to be increased by 17 percent(FAO, 2012a).scarcity has occurred in many countries and regions,and water competition among various users anduses is spreading. Currently, irrigation is the biggestwater user in the world, accounting for 70 percentof global annual freshwater withdrawal. With currentwater use patterns and wate

1.2 Lessons learned from recent investment operations 10 1.3 Issues to be addressed 12 PART 2 13 Processing Investment Projects 13 2.1 Project . This publication has received financial support from the FAO-World Bank Cooperation Programme and staff time in-kind contributions from FAO TCI, FAO CBL, FAO eST, IFAD PTA, World Bank, ICID and eIB. .