BRUSSELS (IPS) - The European Union has come under fire from non-governmental organisations over a new initiative to fund water resources.
The European Commission, the executive arm of the European Union (EU), adopted a proposal Wednesday to allocate 1.2 billion dollars to improve access to water and sanitation for the Africa, Caribbean and the Pacific (ACP) bloc. The group comprises 79 countries.

Forty of these are considered to be among the least developed countries (LDC). They are economically vulnerable and heavily dependent on EU aid.
The Commission's proposal follows in part a commitment made at the World Summit on Sustainable Development in Johannesburg in 2002 to deliver on the millennium development goal of halving the number of people without access to safe drinking water and basic sanitation by 2015.

About 1.1 billion people lack access to safe drinking water, and 2.4 billion people to sanitation.

Despite progress towards these goals, the Commission says funds remain scarce. Officials say a further 52.2 billion dollars is needed to meet water and sanitation targets.

"Significant amounts of additional funds are needed to deliver access to water and sanitation for the poor," EU commissioner for development and humanitarian aid Poul Nielson said at the launch of the water initiative Wednesday.

"And they are needed now," he added. "I therefore encourage member states to use this opportunity and take a bold and urgent decision on the mobilisation of the proposed 1.2 billion dollars from the ninth EDF (European Development Fund) to increase access to water and sanitation for people in ACP countries."

The Commission had launched the ACP Water Fund last May, but the proposal was rejected by the European Council, which brings together the heads of state or government of the 15 member states of the EU and the president of the European Commission. The council was divided over the source of the funds.

The source remains controversial. Money for the new initiative will be taken from reserve funds of the EDF. ACP countries receive EU development aid through this fund.

In 2000 member states allocated 15.8 billion dollars to the fund over five years, but kept 1.2 billion dollars in reserve pending a mid-term review of the EDF. The review is expected later this year.

The Commission says the new resources being provided through use of this reserve fund can promote new initiatives, provide technical assistance, build research and management capacity and "provide the flexible source of funding which is often the missing link in financing of sustainable water and sanitation- related programmes."

But civil society groups here say the Commission's initiative will harm ACP countries. They say the 1.2 billion dollars used now could be deducted from remaining EDF funds following the mid-term review.

"While we have not questioned the usefulness of the water fund, we are quite concerned about the Commission drawing from the reserve of the ninth EDF for the global water fund," says Guggi Laryea, policy advisor for Eurostep, a Brussels-based umbrella group of relief agencies including Oxfam and ActionAid.

"The use of the reserve for the water fund severely constrains the mid-term review process," Laryea told IPS.

Marc Maes from the Belgian non-governmental organisation (NGO) 11.11.11 has similar concerns. "ACP countries should be allowed to decide where they want the money to go - that it why we have country strategy papers and the mid-term review," he told IPS.

Stefan Verwer from the group Both ENDS which supports environmental organisations in the South says neither civil society groups nor ACP members were consulted over the best way to use this money. "After the last proposal, the Commission said it would be engaging in constructive dialogue with interest groups so we could come to a better agreement," he told IPS. " As far as I am aware this has not happened."

The Commission believes the funding will help developing countries prosper.
It says it is vital that the funds are used for the water initiative.
The Commission says the funds would help leverage significant amounts of funding for water and sanitation infrastructure from other financial sources, including private sector investments.

"We are coordinating efforts and making use of all available funds," spokesperson for Nielson Jean-Charles Ellermann-Kingombe told IPS. "It is extremely urgent that we bring about new funds if we are going to reach our target. The funds proposed for the present initiative have not previously been allocated to specific activities. The decision to mobilise 1.2 billion dollars does not tie us down."

The spokesperson said funds would be invested in measures to build or strengthen institutional and regulatory frameworks, which are seen as a precondition for ability to attract more funds. "It will attract more investors and will act as a catalyst to raise capital funding and reduce the risks involved," he said.

But NGO members fear the Commission will use the fund to force water privatisation in poor countries. "Developing countries can't support projects like this in their public sector," Maes said. "The EU is forcing them into privatisation."

Source: IPS