Water sector market survey Holland and Colombia

COLOPHON Assignment: Colombia – Water sector Market Survey 2012 Client: Kingdom of the Netherlands Royal Netherlands Embassy Carrera 13 No. 93 – 40 Piso 5 Bogotá – Colombia Submitted by: Antea Group Monitorweg 29 1322 BK Almere PO Box 10044 1301 AA Almere-Stad The Netherlands www.anteagroup.com Antea Group is ISO-9001 certified Project Identification number: 2108993011 v 17 Date: 18 May 2012 Release: Business manager: dr. ir. W. H. Kloezen

Contact: dr. ir. Ivan Rocabado Tel: +32 (0)92616337 / +32 (0) 492594854 E: [email protected] dr. ir. W. H. Kloezen T: +31 (0)570 679474 / +31 (0)6 514 28 055 E: [email protected] Antea Group 2012 Prior written permission of Antea Group is required for the reproduction of parts or extracts of this text, for the storage in an electronic database and for any form of photocopying and multiplying.

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Colombia: a river of opportunities

Colombian government invests in partnerships in the water sector

According to the World Bank the Colombian business climate belongs in the top three of South America. The economy is growing at a stable rate of approximately 5% per year, both the inflation rate and the national debt are low. This is why the Dutch government sees Colombia as a middle-income country with prospects for economic collaboration rather than as a developing country. Within the EU the Netherlands, after Spain, is the most important investor in Colombia. Several large Dutch businesses have gained a foothold in the country, but it is the small to medium-sized businesses which really need an extra helping hand. The market survey report 'Colombian - Water Sector Market Survey 2012' brings together all of the possibilities and helps businesses take the first important steps.

Cooperation

The 2010-2011 winter season caused unprecedented flooding in large areas of Colombian territory. The Government of Colombia asked the Netherlands to help with improvements to their water management in four regions of the country. This is mostly due to Dutch expertise being viewed as being of the highest standard by the Colombian government.

This resulted in the establishment of the Colombia-Netherlands Water Partnership CNWP (June 2011) aimed at stimulating Dutch companies to enter the Colombia water market. This creates opportunities for both the large as well as the medium-sized businesses within the Dutch water sector.

Doing business

Colombia has taken positive steps in improving its business environment and open up its market for further foreign investiture, for example: an investment of US$9 billion on the construction and reinforcing of public infrastructure (e.g. water infrastructure) is being considered by the Colombian government as part of its climate change adaption program. The experiences of Dutch companies, currently or previously, involved in the water sector in Colombia reflect this positive mood.

Seize the day, take the chance

The Dutch government has committed itself to a partnership in the Colombian water sector. With a view to collaboration, the Dutch government supports businesses with a variety of trading and investment inducing instruments. Thus making entry into the Colombian market, for Dutch businesses, of all sizes, a feasible option. Development of water infrastructure is taking place across the board from government policy level to the supply of clean water in rural areas. This opens up opportunities for all types of water-related businesses with particular emphasis on the following areas:

• Flood Risk Management

• River Basin Management

• Institutional Development and Water Governance

• Navigation and ports development.

In particular, noteworthy and prestigious projects, with investments totaling several billion Euros, include:

• Early warning systems for the Cauca and Bogotá rivers

• Improvements of Canal de Dique

• Magadalena - Cauca Basin Management plan and erosion control plans

• La Mojana: resilience to climate changes plan

• Improvement of inland navigation and transport systems for the Magdalena, Atrato and Cauca rivers.

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The value of these projects is not only measured in Euros but also has an environmental and social value. By being involved in these projects, the Dutch water sector can demonstrate both its market expertise and make an important difference to a country dealing with a changing social and environmental climate.

Roadmap to partners and business

For any company making enquiries or make their interest known in wanting to get involved in the Colombian water sector, the first port of call in the Netherlands is NWP. For additional information or follow-up enquiries the Holland Water House in Bogotá is an important first point of contact for the exchange of information, make new contacts or seek advice from other businesses already active in Colombia.

More information

When you want to find out more about becoming involved, or simply learn more about the Colombian water sector, then read 'Colombian - Water Sector Market Survey 2012', or send an email to the NWP in The Hague, or the Holland Water House in Bogotá:

• NWP: Mr. Peter van der Kolk (email: [email protected] and telephone: +31 70 304 3700)

• Holland Water House: [email protected] and telephone: +57 1 6218221).

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CONTENTS

LIST OF ABBREVIATIONS ............................................................................................ 5

SUMMARY ................................................................................................................. 7

MARKET SURVEY READERS GUIDE ............................................................................ 11

PART A. ANALYSIS OF THE WATER SECTOR IN COLOMBIA ......................... 12

1 INTRODUCTION AND SCOPE .............................................................................. 12

2 NATIONAL GOVERNMENT FRAMEWORK ............................................................ 12

2.1 NATIONAL ....................................................................................................... 12 2.2 REGIONAL ....................................................................................................... 13 2.3 LOCAL ............................................................................................................ 13 2.4 SPECIFIC INSTITUTIONS BY SUB-SECTOR .......................................................... 13 2.5 DESCRIPTION OF REGIONS OF INTEREST TO THE WATER SECTOR ...................... 16 2.6 LEGISLATIVE FRAMEWORK - WATER ................................................................. 19 2.7 FINANCING OF THE WATER SECTOR ................................................................. 19 2.8 DIFFICULTIES AND RISKS RELATED TO ENTRY INTO THE COLOMBIAN MARKET ..... 21 2.9 IMPORTANT ADDITIONAL INFORMATION CONCERNING MARKET ACCESS ................ 22 2.10 TARIFF RATES AND CUSTOM DUTIES ................................................................ 22 2.11 REGULATIONS ................................................................................................. 22

3 PUBLIC SECTOR.............................................................................................. 23

3.1 OVERVIEW OF GOVERNMENT POLICY PROGRAM FUNDING ................................. 23 3.2 PUBLIC INVESTMENT IN THE COLOMBIAN WATER SECTOR FOR THE PERIOD 2011-

2015 .............................................................................................................. 23

4 PRIVATE SECTOR ............................................................................................ 24

4.1 DESCRIPTION OF THE PRINCIPAL MARKET SUPPLIERS AND ASSOCIATED PORTFOLIOS ................................................................................................... 24

4.2 IDENTIFYING POTENTIAL PARTNERS.................................................................. 28 4.3 MULTILATERAL FUNDING SOURCES ................................................................... 30

PART B. DUTCH WATER EXPERTISE FOR COLOMBIA.................................... 32

5 DUTCH WATER MANAGEMENT ......................................................................... 32

5.1 WATER POLICY IN THE NETHERLANDS ............................................................... 32 5.2 WATER MANAGEMENT PROGRAMS IN THE NETHERLANDS ................................... 33 5.3 INNOVATION PROGRAMS IN THE NETHERLANDS ................................................. 33 5.4 WATER GOVERNANCE AND ITS ACTORS IN THE NETHERLANDS ............................ 34 5.5 INTERNATIONAL COOPERATION AND RELATION WITH COLOMBIA .......................... 35

6 INTEREST BY THE DUTCH WATER SECTOR TO ENTER COLOMBIA MARKET........... 36

6.1 INTRODUCTION ................................................................................................ 36 6.2 KEY EXPERTISE AREAS .................................................................................... 36 6.3 CURRENT MARKET ENTRY ................................................................................ 37

7 SUPPORT FOR DOING BUSINESS IN COLOMBIA .................................................. 39

7.1 INTRODUCTION ................................................................................................ 39 7.2 NL AGENCY/NL EVD INTERNATIONAL............................................................... 39 7.3 ASSOCIATION OF WATER BOARDS PROGRAM .................................................... 41 7.4 TOP SECTOR WATER AND INNOVATION CONTRACTS .......................................... 41 7.5 TRANSITION FACILITY (FROM AID TO TRADE)...................................................... 42 7.6 DUTCH DEVELOPMENT BANK FMO.................................................................... 43

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7.7 CONDUCTING BUSINESS IN COLOMBIA............................................................... 43

PART C. MARKET POSSIBILITIES FOR DUTCH WATER MANAGEMENT IN

COLOMBIA ....................................................................................... 44

SUMMARY ............................................................................................................... 44

8 COLOMBIAN REQUIREMENTS FOR DUTCH WATER EXPERTISE ............................. 44

8.1 INTRODUCTION ................................................................................................ 44 8.2 WATER BASIN AND FLOOD RISK MANAGEMENT ................................................. 44 8.3 NAVIGATION AND PORTS .................................................................................. 45 8.4 DRINKING WATER AND SANITATION .................................................................. 46 8.5 IRRIGATION AND DRAINAGE .............................................................................. 46 8.6 SUB-CONCLUSION ........................................................................................... 47

9 DUTCH ENTRY INTO COLOMBIAN WATER MARKET .............................................. 47

9.1 DUTCH OPPORTUNITIES IN COLOMBIA ............................................................... 47

10 BUSINESS OPPORTUNITIES............................................................................... 48

10.1 MARKET - PRODUCT COMBINATIONS (MPCS).................................................... 48 10.2 TOWARDS BUSINESS CASES: INTRODUCTION ..................................................... 52 10.3 BUSINESS CASES ON 5 SELECTED MAJOR PROJECTS.......................................... 52 10.4 THEMATIC BUSINESS CASES AND MARKET OPPORTUNITIES ................................. 53

11 RECOMMENDED STRATEGIES AND ACTIVITIES.................................................... 56

11.1 INTRODUCTION ................................................................................................ 56 11.2 ON GETTING INVOLVED .................................................................................... 56 11.3 ON DEVELOPING PARTNERSHIPS....................................................................... 58 11.4 ON PROJECT FUNDING AND TENDERING ............................................................ 58 11.5 ON RULES AND REGULATIONS........................................................................... 58 11.6 ON DEVELOPING BUSINESS CASES .................................................................... 59

12 REFERENCES .................................................................................................. 60

ANNEXES 62

ANNEXES

ANNEX 1 INVESTMENT PLAN COLOMBIAN WATER SECTOR

ANNEX 2 EVENTS RELEVANT TO THE COLOMBIAN WATER SECTOR

ANNEX 3 DETAILED DESCRIPTION OF PRINCIPAL INVESTMENTS

ANNEX 4 GROUPS AND RESEARCH CENTERS

ANNEX 5 ORIO COUNTRY SPECIFICS OF COLOMBIA

ANNEX 6 PSI COUNTRY SPECIFICS OF COLOMBIA

ANNEX 7 INTERVIEWS HELD IN COLOMBIA AND THE NETHERLANDS

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List of abbreviations

AF Adaptation Fund

ANDESCO National Association of Public Service Companies and Communications, Asociación Nacional de Empresas de Servicios Públicos Domiciliarios

ANDE National Association of Entrepreneurs, Asociación Nacional de Empresarios

ASOCARS Association of CARs trade guild leader, Asociación de Corporaciones Autónomas Regionales

CAF Andean Development Corporation

CAR Regional Autonomous Corporation, Corporaciones autónomas regionales

CNWP Colombia Netherlands Water Partnership

CONPES National Council of Economic and Social Policy, Consejo Nacional de Política Económica y Social

COP Colombian Pesos

CORMAGDALENA CAR for the Magdalena river basin, Corporación Autónoma Regional del Río Grande de La Magdalena

CRA Comisión de Regulación de Agua Potable y Saneamiento Básico

CSR Corporate Social Responsibility,

CVC CAR for the Cauca valley, Corporación Autónoma Regional del Valle del Cauca

DANE National Administrative Department of Statistics, Departamento Administrativo Nacional de Estadística

DBO Biochemical oxygen demand, Demanda bioquímica de oxígeno

DIMAR General Maritime Directorate, Dirección General Marítima

DNP National Planning Department, Departamento Nacional de Planeación

DQO Chemical oxygen demand, Demanda química de oxígeno

ESPs Public Services Companies, Empresas Prestadoras de Servicios Públicos

FAO Food and Agriculture Organization (United Nations), Organización para la alimentación y la agricultura

FINDETER Territorial Development Finance Organ, Financiera de Desarrollo Territorial S.A.

GDP Gross Domestic Product

GIRH Integrated Management of Water Resources, Gestión integral del recurso hídrico

GWP Global Water Partnership

IADB Inter-American Development Bank

ICA Water quality index, Índice de calidad de agua

IDEAM Institute of Hydrology, Meteorology, and Environmental Studies, Instituto de Hidrología, Meteorología y Estudios Ambientales

IGAC Geographic Institute Agustín Codazzi, Instituto Geográfico Agustín Codazzi

INCODER Colombian Institute for Rural Development, Instituto Colombiano para el Desarrollo Rural

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INVEMAR Institute of Marine and Coastal Research "José Benito Vives de Andreis", Instituto de Investigaciones Marinas y Costeras “José Benito Vives de Andreis”

INVIAS National Institute of Roads, Instituto Nacional de Vías

IWRM Integrated water resource management

MADR Ministry of Agriculture and Rural Development

MADS Ministry of Environment and Sustainable Development

MIGA Water Governance Mission, Misión Gobernanza del Agua

MOU Memorandum of Understanding

MPC Market Product Combination

NBW National Administrative Agreement on Water, Nationaal Bestuursakkoord Water

NGO Non-governmental organisation

NWP Netherlands Water Partnership

PDA Departmental plans for water and sanitation, Planes departamentales de agua y saneamiento

PES Social Entrepreneurship Program, Programa Empresariado Social

PGAR Regional environmental management plan, Plan de gestión ambiental regional

PND National Development Plan, Plan nacional de desarrollo

POMCA Management Plan and Watershed Ordinance, Planes de ordenación y manejo de cuencas hidrográficas

POT Land Zoning Plan, Plan de ordenamiento territorial

PPI Multi-Year Investment Plan

RAS Technical regulation for drinking water and basic sanitation, Reglamento técnico de agua potable y saneamiento básico

RNR renewable natural resource

SGP Small Grants Programme

SIAC Environmental Information System of Colombia, Sistema de información ambiental de Colombia

SIGOB System for the management and monitoring of gouvernemental goals, Sistema de gestión y seguimiento a las metas de gobierno

SINA National Environmental System, Sistema Nacional Ambiental

SSPD Superintendent of Public Services, Superintendencia de Servicios Públicos Domiciliarios

STOWA Foundation for Applied Water Research, Stichting toegepast onderzoek waterbeheer

TF Transition Facility

WB World Bank

WGC Water Governance Center

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Summary

Introduction

The 2010-2011 winter season caused unprecedented flooding in large areas of Colombian territory. The Government of Colombia asked the Netherlands to help with improvements to their water management in four regions of the country. This resulted in the establishment of the Colombian-Dutch Water Partnership (June 2011). Although a great deal of progress has already been made in the cooperation between the two countries, Dutch companies and other stakeholders require concrete information about the opportunities that the water sector in Colombia offer. Therefore, the Royal Netherlands Embassy Bogotá commissioned this market survey in order to create an information platform for interested parties in Colombia and the Netherlands.

It is Colombia's emerging presence on the world market place as a vibrant and growing player which makes it so attractive to new foreign businesses. This growth requires support in many ways. For the Dutch water sector this growth and opportunity is realized in the new drive by the Colombian government to re-develop its water sector both on a technical and a structural institutional level.

Challenges of the water sector in Colombia

The challenges faced can be grouped into several different specialist areas, these being: river basin management; flood risk management and early warning; navigation and ports; drinking water and sanitation; irrigation and drainage; and institutional development. Each challenge falls under the jurisdiction of one or more (national or local agencies) or institutions. These institutions in turn are responsible for dealing with the challenges particular to their region, while also attempting to meet national policy guidelines.

The scale of the projects and the commitment by the Colombian government can best be described by giving a few examples of a number of different multidisciplinary projects:

Infrastructural projects such as the Magdalena – Cauca Basin Management Plan (12 year plan with a budget of US$500 million). This project involves large scale engineering of dikes and hydraulic structures. A similar project, the Bogotá river, has been allocated US$2,7billion, as part of its decontamination and infrastructure program. In the upper Cauca and Upper Bogotá regions plans are in place for early warning flood systems. The budgets for these projects might sum up to almost US$500K. These projects require integrated hydrological monitoring and sensing technologies. Other types of projects include structural improvements to the Canal de Dique (US$570 million), improvement study to the Agua Blanca dike in Cali (US$150K), analysis on the navigability of the river Meta with an estimated budget $US4 million.

What is apparent from these examples is the integrated scope and scalability of the projects. The commitment by the Colombian government cannot be questioned.

What is required is the expertise and input from Dutch partners, with their knowledge and skills on all aspects of water management. Tackling policy implementation problems is an area that Dutch consultancy, engineering and construction businesses and institutions are well equipped and experienced to deal with. Such issues exist within all areas of the Colombian water sector. For Dutch companies entering this market it is good to see that there are virtually no entry barriers; most sub-sectors are still open to foreign businesses. However, it takes good knowledge of both current developments in several sub-sectors, and of the most important stakeholders involved. A few examples illustrating this, are described as follows.

First, for those companies interested in offering expertise on river basin management it is paramount to contact the Regional Autonomous Corporations (CAR). These CARs are in the best position to promote community participation in river basin management, which is essential in its development. In Colombia, basin management and successful environmental handling depend on the solution of other social issues. The combination of a legal framework and structured development program can aid in establishing a strategy which permits local leaders, with the support of local environmental authorities, to better manage the river basins in accordance with national policy.

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Similarly, flood risk management is also high on the agendas of the DNP, the Ministry of Environment and Sustainable Development, the Adaptation Fund, IDEAM, the regional CARs, and other agencies and organizations. Colombia is still in the eve of developing a flood management framework that includes and combines technical and institutional measures that might help to both prevent flooding and mitigate potential flood damage. This offers good business opportunities for those Dutch companies who enjoy a worldwide renowned expertise in these fields.

Although new efforts appear to be taking place, navigable rivers and ports are clearly underdeveloped. Transportation by ship makes up less than 2% of the transport sector's GDP. Climate change generates increased natural sedimentation making river navigation difficult, especially in the lower basins. Structural solutions to keep the ports and rivers open are essential for Colombia's internal transport sector. The plan to develop 5 water highways is dependent on the rivers being properly managed and maintained. Dutch expertise could be very beneficial in this endeavor.

Although potable water coverage is high in the major cities, the same is not true with respect to basic water treatment. At the treatment end of the system, sanitation equipment and facilities are technologically obsolete, which creates a need for new short-term solutions and projects. Colombia is aiming to extend its potable water network extensively. Expertise in this field, but also in the development of containment areas as well as the upgrading of its current reservoirs is essential. However, as this sub-sector is dominated by private water companies, it might take more local effort to establish the necessary business relationships with local partners.

Irrigation and drainage present a major opportunity for Dutch irrigation specialists. The sub-sector is consolidated with the implementation of the proper institutional agreements among regional environmental authorities geared toward the harmonization around planning and construction of the irrigation districts, as well as drainage systems intended to mitigate flooding. Plans for new irrigation districts in the Magdalena-Mojana, Cauca and the Magdalena basins requires extensive monitoring, modeling and drought forecasting expertise.

What is clearly illustrated here is the diversity and scale of available business opportunities. The commitment by the Colombian government to the water sector is evident in the amount of funding being allocated to major large scale projects, designed to have an impacting effect on the country now and in the future.

Opportunities for entering the Colombian water market

In order to gain insight into the current level of interest and investment from the Dutch water sector in working together and with Colombia, an online survey and series of interviews were carried out. The results of this survey showed a general consensus that most of those businesses who had not yet conducted business activities in Colombia, would like to do so. One reasoning for not pursuing this further was due to logistical, legal or language concerns. Other reasoning included uncertainty about where to begin and who to contact, as the institutional landscape is perceived to be very complex.

When considering these reasons, it soon becomes clear that none of these issues are insurmountable and are easily outweighed by all of the positive reasons for working in Colombia. Those with previous experience reported very positively and stated that given the opportunity they would return. Furthermore, the survey respondents unanimously agreed on the scale of market opportunities and would want to find out more.

One of the spearheads of the Dutch-Colombian cooperation (Colombian-Netherlands Water Partnership launched in 2011 - CNWP) is water governance in order to improve sustainable water management and to confront current governance challenges such as lack of cooperation, articulation, enforcement of regulation and mutual trust. In addition,

On 19th November 2011 a Memorandum of Understanding (MOU) for cooperation on Integral Water Management was signed by Colombian and Dutch authorities.

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As for financial project support, the Facility for Infrastructure Development ORIO contributes to the development, implementation (construction and/or expansion), operation and maintenance of public infrastructure in developing countries (like Colombia). The Private Sector Investment program PSI is a subsidy program that supports innovative investment projects in emerging markets (like Colombia). The new Partners for International Business program PIB supports groups of companies and eventually knowledge institutes which together want to enter a foreign market. The Partners for Water program (PvW) is a subsidy program for Environmental feasibility projects, Knowledge enhancement projects or Pilot projects. Finally, the new Transition Facility (2012-2016) is a country-specific instrument for middle-income countries (like Colombia), enabling the transition from a bilateral development relationship to a mutually profitable economic partnership.

Fundamental to the Transition Facility (TF) is Corporate Social Responsibility (CSR). The Dutch government stipulates that all (Dutch) companies operating both home and abroad are able to demonstrate programs of CSR. Any Dutch company operating in Colombia has to show the same commitment to this program as they would in the Netherlands.

The commitment, by the Dutch government, to the Transition Facility comes in the form of Holland Water House. A visible center for information, support and excellence in Colombia for Dutch businesses. This meeting centre will after its launch serve as a focal point for both Dutch and Colombian partners.

This commitment is further reinforced by its upcoming inclusion in the Dutch Partners for Water Program (run by the NWP). This program, designed to assist Dutch companies and organizations working in collaboration in the water sector, is targeted at specific types of projects (environmental, knowledge enhancement, pilot or a combination of all three).

Recommendations

Moving forward from a market analysis to real business cases requires good mediation between all of the relevant partners. For a Dutch business entering the Colombian water sector this means having a central point of reference that provides adequate assistance and support. For any company making enquiries, the first port of call in the Netherlands is NWP and NL Agency/NL EVD International. For additional information or follow-up enquiries the Holland Water House in Bogotá, with its local CNWP representative at the Embassy in Bogotá, is an important first point of contact for the exchange of information, make new contacts or seek advice from other businesses already active in Colombia. Last but not least, Dutch companies should make their interest known in wanting to get involved in the Colombian water sector, by contacting organizations such as the Netherlands-Latin American Business Council (NLABC/NCH).

There is an expressed need for more detailed information both concerning the water sector, and conducting business and doing projects in Colombia. The NWP, the NL Agency/NL EVD International, the Holland Water House and the Royal Netherlands Embassy Bogotá should play an active role in generating and disseminating this information, for instance by means of a newsletter. Moreover, they could play an important role in stimulating the development of partnerships by setting up a showcase project in Colombia, by organizing match-making meetings in Colombia, and by inviting Colombia representatives to visit Dutch river and flood management projects in the Netherlands.

The currently available match funding and subsidy mechanisms, such as ORIO, PSI, PIB, PvW and the Transition Facility (TF), require additional promotion. These funding mechanisms can assist Dutch partners to either start (pilot) projects, or activities, as well as aid entry into the Colombia water sector. Still, few people are aware of those possibilities that exist, or require assistance in accessing them. Hence, it would be good if the NL Agency/NL EVD international coordinates and disseminates all relevant information concerning these funding possibilities to the members of the CNWP. Furthermore, it would help Dutch companies if Colombian agencies could be encouraged to accept proposals in English.

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The identified market-product combinations and business cases should be seen as indicators of possible business scenarios. Development of specific business cases is only possible if there is a real match between needs and offers. The NWP, the NL Agency/NL EVD International, the Holland Water House in Bogotá and The Royal Netherlands Embassy could play an important role in the further development of business cases by organizing match-making sessions (preferably in Colombia) between Colombian and Dutch potential partners.

To conclude, for any Dutch business not yet decided, the message coming from current participants in the water sector, the analyses, the MCPs and most importantly the Colombian government, is a positive one. Serious consideration should be paid to this growing market.

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Market survey readers guide

This Water Market survey is written so as to build a picture of the opportunities, strengths and weaknesses for a Dutch water related business considering working in Colombia. Much of the information is gathered from interviews with both Dutch and Colombian businesses, agencies, knowledge institutes and NGOs making this document an important source of information, as it brings together the views and experiences of real businesses in a real international market place.

This market survey is broken down into three parts. Each part providing insight into one side or the other of the potential markets, the available expertise and support, insight and suggestions into governmental frameworks and legislation; and, most importantly real market entry opportunities.

• Part A (Chapters 1 -4) gives an analysis of the water sector in Colombia and specifies its technical and institutional characteristics. It describes the local conditions or factors that may stimulate or hinder market entry. Also, information is given on the institutional framework, main stakeholders and partners, recent plans and developments, investment programs, project opportunities and marketing facilities in the water sector. The results of Part A are essentially an 'Needs Assessment'.

• Part B (Chapters 5 - 7) gives an analysis of the Dutch capabilities and expertise that may be relevant for the Colombian water sector. The presented information is mainly based on the results of an online survey and some interviews with stakeholders. It also contains information on water policy and development programs, innovation programs, as well as water governance in the Netherlands. Most importantly the actual perceptions of Dutch businesses, entering the Colombian water sector, concerning the opportunities for and barriers to market entry are highlighted and discussed. Furthermore, information is given on international cooperation and relations with Colombia and on any financial support mechanisms. The results of Part B are essentially an 'Offers Assessment'.

• Part C (Chapter 8 -11) starts with a SWOT-analysis of both the Colombian and the Dutch water sectors. Which serves as an aid for any company currently weighing up some of the pros-and-cons of investing in Colombia. This is accompanied by a "needs" and "offer" assessment: a market-product combination analysis (MPCs) of potential Dutch services and products that can be offered based on real Colombian market needs. All of the information is then brought together in a final chapter (11) in which a series of recommendations are made for both businesses and supporting authorities. This end chapter makes important recommendations aimed at bringing agencies and businesses on both sides of the border closer together and aiding Dutch businesses in making carefully considered and informed decisions; as well as, to create real forums with real people and real opportunities for Dutch businesses.

For you as the reader, the important question remains, to invest or not to invest. The recommendations made in this document are designed to help you approach the right people, take any required preparatory steps and eventually to take the plunge into what is a challenging but exciting Colombian business opportunity.

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Part A. Analysis of the water sector in Colombia

1 Introduction and scope

Part A of this study is dedicated to the identification and delimitation of the water sector market in Colombia.

The Institutional landscape is described in chapter 2 with special attention to the regional features, technical and financial aspects. Chapter 3 deals with the Public Sector; after providing a global view of the sector the study goes in more detail on ongoing investment plans. Chapter 4 concentrates in the Private sector; the study comprises a general description of the private sector with the identification of potential key partners; in addition, ongoing and planned projects, with important private component, are revealed and relevant market information is provided.

Part A provides the reader with a broad insight into the many facets of the Colombian water market.

2 National Government Framework

2.1 National

From the perspective of the water management related sectors, the authority of the respective Ministries and Administrative Departments (supported by IDEAM, the CRA, the SSPD and FINDETER) to administer the implementation of national policy and plans comes directly from the country's President.

The Ministry of Environment and Sustainable Development (Ministerio de Ambiente y Desarrollo Sostenible) and the President of the Republic formulate national environmental and renewable natural resource (RNR) policies.

The Ministry of Housing, City and Territory (Ministerio de Vivienda, Ciudad y Territorio) has jurisdiction over territorial and urban development, efficient and sustainable land usage and housing services.

The National Planning Department (Departamento Nacional de Planeación) (DNP) is responsible for developing long-term plans: State organization, territorial planning, environmental and sustainable development policies, and public services.

The Ministry of Health and Social Protection (Ministerio de Salud y Protección Social) has a responsibility towards the population in ensuring that basic requirements for good health are met, such as good sanitation and access to clean drinking water.

The Ministry of Finance (Ministerio de Hacienda) is responsible for economic and fiscal policies of the State, foreign trade and the General Budget of the Nation.

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Ministry for Transport. (Ministerio de Transporte): National government agency responsible for formulating and adopting policies, plans, programs, projects and economic regulation of transportation, transit and infrastructure, between road, sea, river, rail and air.

Ministry for Agriculture. (Ministerio de Agricultura y Desarrollo Rural): The Ministry for Agriculture and Rural Development has as main objectives the formulation, coordination and adoption of policies, plans, programs and projects of the Agricultural Sector Development and Fisheries Rural.

Additionally, but not included in the figure above is: The Institute of Hydrology, Meteorology and Environmental Studies (Instituto de Hídrología, Meteorología y Estudios Ambientales) (IDEAM), manages knowledge, data and environmental information at a national level.

2.2 Regional

Regionally, the CARs are responsible for the environmental monitoring, evaluation and control of water usage, soil, air and other renewable natural resources. This includes the discharge, emission or introduction of substances, either liquid, solid or gaseous into the environment. Additionally, they have the authority to issue and revoke environmental licenses, permits, concessions and authorizations.

In December 2011, an amendment regarding the reorganization of the CARs was drafted. It suggested a reorganization of the 32 CARs (currently operating under the jurisdiction of the various regions) into 16 regional authorities. The regional responsibility would be divided more in accordance with the nature of the major water basins.

2.3 Local

The responsibility for the integrated management of water resources principal authority rests with the municipal authorities (mayors), which must ensure the implementation of designed plans.

2.4 Specific Institutions by Sub-sector

2.4.1 Potable Water and Sanitation

The institutional structure is divided into three levels: National, Regional and Local, as shown in Figure below.

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Authorities and institutions: Two ministries1 are involved: the Ministry of Environment and Sustainable Development (water as a natural resource) and the Ministry of Housing, City and Territory (potable water as an input). Also, the Committee for Regulation of Water and Sanitation (Comisión de Regulación de Agua Potable y Saneamiento Básico) (CRA), is dedicated to regulating monopolies that provide public services2, it is appointed to the Ministry of Housing.

The Superintendent of Public Services (Superintendencia de Servicios Públicos Domiciliarios) (SSPD) establishes the information and accounting systems that public service providers must apply.

The Territorial Development Financial Company (Financiera de Desarrollo Territorial S.A.) (FINDETER) is a corporation of national order, subject to the regime governing Industrial and Commercial State Companies attached to the Ministry of Finance. It is responsible for discounting loans to Territorial Entities, to its decentralized entities, to metropolitan areas, to municipal associations, and to regions and provinces to enable them to carry out programs or projects for public services, environmental and transportation amongst others.

Local Authorities: ESPs (Empresas Prestadoras de Servicios Públicos) Public Services Companies (whether public, mixed or private) must ensure proper delivery of services. The control of ESPs is exercised by the Secretariats for the Environment (or the entity to which it delegates its functions).

2.4.2 Water Basin Management

National Authorities: The President, the Ministry of Environment and Sustainable Development and IDEAM.

Regional Authorities: The CARs are responsible for developing the Management Plan and Watershed Ordinance (POMCAS), irrigation, drainage, flood control, regulation of streams and waterways, and land reclamation3, and monitoring concessions of water.

Local Authorities: Municipal authorities, establish management and control systems defined in the Territorial Plans (POT) and should be articulated with the POMCAS.

1 Al the time of this document was drafted (December 2011), the separation of the former Ministry of Environment, Housing and Territorial Development (MAVDT) into the Ministries of Housing, City and Territory, and the Ministry of Environment had just taken place. It is important to stress this point because in the past the Ministry of Economic Development had policy making powers for the potable water sector which were given to MAVDT and now lie with the recently spun-off Ministry of Housing, City and Territory. 2 The functions of the Commission are established by Act 142 of 1994, Art 73 3 Excerpt from"Objectives and Functions of the CAR" in http://www.car.gov.co/?idcategoria=1186

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2.4.3 River Navigability

CONPES document (National Council for Economic and Social Policy) 3611, 2009, "Port Expansion Plan 2009-2011, Ports Competitiveness and Sustainable Development", provides guidelines focused on the convenience of port facilities to enable foreign trade and growth, and monitor the impact of port costs on international competitiveness.

National Authorities: The National Government, the Ministry of Transportation, and Inland Water Transport Department. The Superintendence of Ports (applicable to river ports and terminals that are located a maximum of twenty miles, measured from its mouth to the sea, that engage in foreign trade and maritime tourism ports and harbors).

Regional Authorities: The Regional Autonomous Corporation of Rio Grande de la Magdalena, CORMAGDALENA, advised by and subject to the Ministry of Transport has great relevance to one of the regions of interest.

The Technical Secretariat of the Cauca Basin is responsible for the coordination of development plans in the Water Basin with CORMAGDALENA and the University of Medellín.

Local Authorities: The control of water transportation activity and regulations regarding operations is coordinated with the municipal authorities of the jurisdiction corresponding to each river.

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2.4.4 Irrigation and Drainage

National Authorities: The Ministry of Agriculture and Rural Development is responsible for the development of sustainable land management, agriculture, forestry and fishing.

The INCODER (Instituto Colombiano para el Desarrollo Rural) (Colombian Institute for Rural Development) attached to the Ministry of Agriculture and Rural Development is responsible for the technical and financial auditing of projects, and the operation and maintenance of irrigation districts

The IDEAM (Instituto de Hidrología, Meteorología y Estudios Ambientales de Colombia) (Institute of Hydrology, Meteorology and Environmental Studies of Colombia).

Regional Authorities: On a regional level, INCODER supports the Municipal Rural Development Councils and Sectional Councils Agricultural Development (Concejos Seccionales de Desarrollo Agropecuario) (CONSEA).

Local Authorities: Local authorities establish control and management systems defined in the Territorial Plans (Planes de Ordenamiento Territorial) (POT).

2.5 Description of Regions of Interest to the Water Sector

In Colombia, the largest rivers in the watershed area are the Magdalena and the Cauca Rivers. The cities with the highest demand for (potable) water resources in Colombia are Bogotá, Cali, Medellín, Barranquilla and Cartagena, due to their population and industrial density. These cities account for almost 30% of Colombia’s total population.

2.5.1 Magdalena River Basin

The Magdalena River is the main waterway of Colombia. It is 1,540 km long and the basin area is 257,438 km2. Its main tributary is the Cauca River and it is navigable from its mouth in the Caribbean Sea (Bocas de Ceniza near Barranquilla) to Honda.

Its basin occupies 24% of the continental territory, encompassing 18 of Colombia's departments, 80% of Colombia's total population in Colombia and where 85% of Colombia's GDP is produced4. A key project involving the Magdalena is the development of a Multimodal harbor at La Dorada taking advantage of shallow draft vessels. More recently a project for improving navigability hast been started.

4 Source: Cormagdalena

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Issues: The Magdalena as a main navigation artery. River overflow during the rainy season, settlements on the banks, levee instability (channel dam), sedimentation from runoff and deforestation, high pollution in the middle and lower basin and inadequate infrastructure to treat rainfall water.

Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Agriculture, INCODER, CORMAGDALENA, CARs, Governments and Municipal Authorities of coastal populations.

2.5.2 Cauca River Basin

The Cauca River is 1,350 km long, of which a little over 634 km are navigable (by sections). Its basin area is 63,300 km2 and flows into the Magdalena River. It is located between the central and western mountain range, and flows through 9 departments of Colombia. It is the main tributary of the Magdalena River and contributes an average of 2,275 m3 / s corresponding to 32% of flow at the mouth of the Magdalena River into the Caribbean.

Issues: During the winter season of 2010 urban settlements like Versalles, Ginebra and La Victoria were flooded; the stocks deposited in “zona franca”, nearby Cali, were severely affected; automobiles, machinery and most of the products that were in transit were lost. Besides processes of land degradation, inadequate farming techniques, floods, wastewater discharges and illicit crops, segregation of leachate (Navarro Landfill) in Cali, high sedimentation due to deforestation.

Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Agriculture, INCODER, Technical Secretariat of Cauca, CARs, Governments and Municipal Authorities of coastal populations.

2.5.3 Bogotá

Bogotá, officially Bogotá Capital District (D.C.), is the capital city of the Republic of Colombia. It is organized as a Capital District and enjoys autonomy in the management of its interests subject to the limitations imposed by the Constitution and applicable law. The Bogotá River is one of the largest rivers in the department of Cundinamarca despite not being a navigable river or particularly abundant. It is the main source of pollution of the Magdalena River. Contaminants such as Cadmium, Chromium, Mercury, Zinc, Arsenic and Lead are found in the Bogotá River.

Issues: The Bogotá River overflows during the rainy season, heavy pollution from the river upstream, sedimentation in middle and low basins, urban and rural settlements, agricultural crops and livestock on the bank, damming in the lower basin.

Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Housing, City and Territory, CARs, EAAB, Secretary of Environment of Bogotá.

2.5.4 Medellín

Medellín is the capital of Antioquia, one of Colombia’s departments. It has a population of 2.3 million people, and is recognized as one of the most important financial, industrial, commercial and service cities in Colombia. It is also home to numerous national and international companies, mainly in the textile, apparel, metalworking, electrical and electronics, telecommunications, automotive, food and health sectors. The Medellín River is the primary water source. Its contamination is one of the major concerns of the local municipalities. The mayor of Medellín, with the help of the Metropolitan Area, has planned a contingency plan.

Issues: pollution of the Medellín River from upstream.

Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Housing, City and Territory, CORANTIOQUIA, EPM, Environmental Secretary of Medellín.

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2.5.5 Cali

Cali (officially, Santiago de Cali) is the capital of Valle del Cauca department in Colombia and the third most populous city after Bogotá and Medellín. It has a population of 2.2 million. EMCALI is responsible for its water and sewage services.

Issues: Cities’ most critical risk issue is related to the Cauca’s dike stability nearby the Agua Blanca district (jarillon del rio Cauca); in an event of a dike failure more than 800000 inhabitants would be affected and the drink water provision for 70% of the city would be contaminated. Other issues are: high pollution of the Cauca River and Cali River by sewage, river overflow during the rainy season of Cali River, pollution in the Cauca River by leachate from the dump of Navarro.

Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Housing, City and Territory, CVC, EMCALI, Administrative Department of Environmental Management (DAGMA).

2.5.6 Barranquilla

Barranquilla is located on the west bank of the Magdalena River, 7.5 km from its mouth in the Caribbean Sea.

Issues:

Efficient access to the Port of Barranquilla is difficult due to the massive deposition of sediment carried out by the Magdalena river. In addition, coastal erosion, which is the dominant process along most of the Colombian Coast, has a devastating impact in landscape and tourism of urban areas like Barranquilla and Puerto Colombia

All surface waters of the water system of Barranquilla, the Magdalena River, the Mallorquín swamp, the eastern system of springs and streams are subject to water contamination from landfills, sewage and solid wastes.

Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Housing, City and Territory, Cormagdalena CAR Atlantic Triple A, Technical Administrative Department of the Environment of Barranquilla (DAMAB).

2.5.7 Cartagena

Cartagena de Indias, Cartagena is the capital of the department of Bolivar and is located along the Caribbean Sea and is the second largest urban center on the Caribbean Coast, after Barranquilla. It is an area of marine and river confluence due to the presence of the mouth of the Canal del Dique which generates delta formations in the bay of Cartagena and Barbacoas.

Issues:

Current sedimentation along Canal del Dique difficult inland water transport which is vital for the economic development of Cartagena. Besides, the different environmental functions of the canal like: source of water and nutrients for the neighboring wetlands, natural control of salt intrusion, vital source of drinking water for the different settlements, etc. require of an integrated approach. Cartagena bay is known to have problems involving sedimentation and eurotrification. Urban planning is required to organize settlements along the canal. The Cerro de la Popa suffers of landslides.

La Mojana sub region has undergone an accelerated process of environmental degradation comprising the desiccation of wetlands, the alteration of the natural hydrological regime (construction of canals and in filling of natural channels), severe deforestation, critical habitat alterations and remarkable loss of biodiversity. Agricultural and fishing production is affected by negative effects of illegal mining practices responsible for the sedimentation and contamination with mercury and other highly toxic heavy metals.

Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Housing, City and Territory, Cormagdalena CARDIQUE (Bolivar), Acuacar, Public Establishment (EPA).

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2.6 Legislative Framework - Water


The technical regulation, Potable Water and Sanitation Sector (RAS-2000)5 is the applicable regulatory framework.

The National Development Plan 2010-2014, established an outline for the efficient allocation of resources, opportunities and responsibilities among the sectors.


Decree 1729 of 20026 regulates the management of watersheds and provides the framework for planning sustainable use of the basin and the implementation of programs and specific projects to conserve, preserve, protect or prevent deterioration and/or restore the watershed.

The National Development Plan 2010-20147 defines that watersheds will be the key instrument for progress in environmental planning, organization and management. Some of the strategic guidelines for environmental sustainability and risk prevention of disasters include: Environmental management for sustainable development, Disaster risk management, Response to the monsoon flooding (humanitarian aid, rehabilitation, reconstruction and prevention)


Law 1242 of 20088 establishes the National Code for River Navigation and Port Activities.

The National Development Plan 2010-2014 includes prescriptions for inland waterway transportation9 (freight and passenger). Within the strategic guidelines incorporates the development of logistic strategies to promote multi‐modal transportation through: alternate modes of transportation (waterway and railway corridors), transfer nodes (ports, airports, border crossings, logistic centers outside of city limits), logistic broker management, and logistic platform pilot programs.


Law 41 of 199310 (land suitability) defines aspects related to the suitability of land and construction of irrigation, drainage and flood protection.

The National Development Plan 2010-2014 includes requirements related to the provision of services for productivity and social infrastructure with respect to land irrigation and drainage11.

2.7 Financing of the Water Sector

The following funding resources are generally applicable to the water sector. More specific information (like available funds in each of these funds) are detailed in the following links (http://www.dnp.gov.co/PND/PND20102014.aspx).

• General Participation System12

(SGP): These resources correspond to the participation the local authorities (municipalities and departments) are entitled to receive from overall National resources.

5 Technical Regulations. The regulations are available at: http://www.cra.gov.co/vigentes.shtml 6 Decree 1729 of 2002, http://www.secretariasenado.gov.co/senado/basedoc/arbol/1000.html 7 National Development Plan 2010-2014, DNP, 2010, http://www.dnp.gov.co/PND/PND20102014.aspx 8 Law 1242 of 2008, http://www.secretariasenado.gov.co/senado/basedoc/ley/2008/ley_1242_2008.html 9 Inland waterway transportation, http://www.dnp.gov.co/LinkClick.aspx?fileticket=zbyPnvJTgW0%3d&tabid=1238 10 Law 41 of 1993, http://www.secretariasenado.gov.co/senado/basedoc/arbol/1000.html 11 Irrigation and drainage, http://www.dnp.gov.co/LinkClick.aspx?fileticket=zbyPnvJTgW0%3d&tabid=1238 12 General Participation System, http://www.dnp.gov.co/Programas/DesarrolloTerritorial/FinanzasP%C3%BAblicasTerritoriales/SistemaGeneraldeParticipaciones.aspx

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• Royalties13 are the resources companies pay to the Colombian State for mining

exploitation activities (oil, gold, coal, etc.). The local authorities for those geographic areas with production are the recipients of the royalties.

• Public Hearings (General National Budget)14

: These are direct resources from the general national budget.

• Multilateral Banks and Commercial Banks: Resources that are acquired with both international credit institutions (World Bank15, Inter-American Development Bank16, Andean Development Corporation17 (CAF)) and local institutions (Findeter).

• Regional Autonomous Corporations18

: CARs raise resources by way of environmental taxes and collection charges applied to projects that use water resources.

• Colombia Humanitarian (Calamity Fund)19

: This organization was created as a response of the Central Government to natural disasters caused by the rainy season of 2010. The Calamity Fund was created to further public interest and social assistance. It is dedicated to addressing the needs that arise in situations of disaster or calamity or of a similar nature.

• Adaptation Fund20: The purpose of the Adaptation Fund is the recovery, construction

and reconstruction of areas affected by the phenomenon of "La Niña", with legal, financial and budgetary autonomy under the Ministry of Finance and Public Credit. This purpose of this Fund is to identify, structure and manage projects, implement contractual processes, and transfer available resources.


Additional resources are raised by tariffs. These are the payments made by the subscribers to domestic water supply services from utility service providers.

The use of the resources earmarked for this sector are organized as follows:

SGP funds, tariffs, royalties and the national budget are spent on subsidies, public works plans and investments, service costs and business modernization. According to the SGP, 5.4 % of the total resources should go to safe drinking water and basic sanitation.

Funds from multilateral banks and the CARs may be assigned to feasibility, infrastructure and operations studies.

Resources from the Calamity Fund and Adaptation Fund are assigned to the recovery, construction and reconstruction of water supply and treatment infrastructure.


The financing of the management plans of river basins enjoy the following additional resources:

• Remunerative, compensatory and water usage rates. • Contributions from valorization. • Internal or external loans taken out by the government or environmental authorities. • Donations made by environmental authorities, individuals or corporations, domestic or

foreign. • Proceeds from the 1% referred to in the Paragraph of Article 43 of Law 99 of 1993. • Proceeds from transfers from the electricity sector. 13 Royalties, http://www.dnp.gov.co/Programas/Regalías.aspx 14 Public Hearings (General National Budget), http://www.minhacienda.gov.co/MinHacienda/haciendapublica/normativa/presupuesto 15 World Bank, http://web.worldbank.org/ 16 Inter-American Development Bank, http://www.iadb.org/es/paises/colombia/colombia-y-el-bid,1026.html 17 Andean Development Corporation, http://www.caf.com/view/index.asp?ms=19 18 Regional Autonomous Corporations, http://www.asocars.org.co/ 19 Decree 1547 of 1984, Humanitarian fund created on the passing of this decree. http://www.colombiahumanitaria.gov.co/ 20Adaptation Fund, http://www.fondoadaptacion.gov.co/.

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Act 105 of 1993, states that the construction and maintenance of transportation infrastructure will be carried out using: a) national budget resources and b) charges collected from the use of transportation infrastructure.

Additionally, it is expected the Nation and territorial entities may finance all or part of the construction of transportation infrastructure through the collection of valorization contributions.


The program “Analysis, Design and Construction of Irrigation and Drainage Districts Nationwide” (Fonat - Law 41 of 1993) aims to finance all activities required to provide irrigation and / or drainage infrastructure, or improve such existing infrastructure, in those areas identified as priorities by the National Government.

The Financing Fund (FINAGRO) provides credit for investment in land improvement, construction, rehabilitation, complementation and expansion of the irrigation and drainage districts.

2.8 Difficulties and Risks Related to Entry into the Colombian Market

Entry into any new market is not without its concerns and requires careful planning. This planning is itself dependant on high quality information. The following points are identified as being relevant to Colombia for any Dutch company:

2.8.1 Difficulties

As a whole, the principal difficulties for the development of the sector in the country can be characterized according to the following environments.

Political environment

According to Colombia's democratic model, elections for governing officials are held every four years (national, departmental and municipal). It is the same for control and legislative bodies. Such changes in administration may induce delays and discontinuities in management.

Another element is that reaching agreement among the diverse institutions involved may cause schedule delays.

Economic Environment

The Colombian economy has been growing steadily over the past years and, although the use of resources is clearly defined, the disbursement of resources is not swift. The problem of corruption should be considered. According to the WEF (World Economic Forum) corruption is the main issue affecting Colombia’s competitiveness.

Social environment

The armed conflict that Colombia has endured for over half a century appears more intense in some regions. One of the aspects that can hinder business development is the presence of outlaw groups.

Technological environment

The sector’s technological state is characterized by delay in certain subsectors (e.g. in treatment plants), which complicates achieving regulatory compliance.

Natural environment

Although environmental phenomena are becoming more predictable, the presence of increasingly severe rainy seasons, accompanied by phenomena such as "La Niña" or longer dry seasons accompanied by phenomena such as "El Niño", call for the development and activation of contingency and preventative plans, articulated among all government and control agencies.

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Acceptance of foreign business into local market

The World Bank carries out assessments of different countries (183 in total) and rates them according to its Doing Business indicator. This rating indicator takes into account the regulations that enhance business activity and those that constrain it. Current indicators show that Colombia is making in-roads in the world market, and is increasingly becoming more accessible to foreign businesses.

2.8.2 Internal Risks

Liquidity risk (by the SGP, or when grants and contributions cannot be closed). Late payment of transfers from the municipalities. Financial constraints of the entities financing the water market.

Continuity risks due to regular changes in the country’s administration. Plans established at the national level do not always develop locally. This translates to uncertainty over funding of long term projects.

2.8.3 External Risks

International cooperation in the sector has involved, amongst others, Spanish, Canadian, and French companies. They have been increasing their participation in the country (AAA presence, Acuacar, etc.).

These processes have been developed within a technical framework of cooperation, as well as financial cooperation frameworks, through which they have purchased shares in local companies.

This can pose a problem in the form of closed market doors, protectionism and a preference for companies from their own country of origin.

2.9 Important additional information concerning market access

Access to the water market in Colombia is a viable option for both local and foreign companies due to there being no restrictions to the creation of subsidiary companies or to operating within Colombia (so long as all operational terms and conditions are met). Although it should be noted that there are challenges related to the management of water resources, including:

1. water is widely regarded as an abundant resource, which affects the implementation of certain policies,

2. the responsibilities for managing water resources are fragmented and there is no coherent national strategy,

3. coordination between the Ministry of Environment and the CARs is inadequate,

4. regional level management is inadequate,

5. deforestation, illegal crops and urban sprawl make compliance with existing laws difficult to comply to.

2.10 Tariff Rates and Custom Duties

Knowledge of tariff rates and custom duties required to market existing products and services in the country is required when doing business in Colombia. Depending on the nature of service, the subject of importation, the final use, etc. tax exemptions may be awarded for IVA or sales taxes, or even income tax deductions.

2.11 Regulations

In order for a business to operate in Colombia a number of conditions must be met. The detailed procedures are available via Proexport (http://www.proexport.com.co/) – a national agency responsible for promoting tourism, foreign investment and non traditional exports. The most important regulations for the investment process in Colombia include are to do with: procedures to create a company in the country; taxes and import regulations.

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3 Public Sector

3.1 Overview of Government Policy Program Funding

The implementation of policies and program development is managed by The National Policy for Integral Management of Hydric Resources (La Política Nacional para la Gestión Integral del Recurso Hídrico (GIRH)).

GIRH

The National Policy for GIRH has a twelve-year projection (until 2022). It is based on eight premises and six specific objectives, each of which has its own strategies and directives. One of the main achievements of the National Policy for the GIRH is not only the National Hydric Plan, but also the formulation of programs and specific projects, defined goals and detailed indicators. This Plan consists of three phases: short term (2010-2014), medium term (2015-2018) and long term (2019-2022). The CONPES document related to the Integral Management of Hydric Resources is also relevant to the implementation of the policy.

¨Project Water¨

Within the framework or the National Development Plan 2010-2014, Integral management of Hydric Resources is a fundamental priority. Through ¨Project Water¨, the government is looking to develop programs related to:

• Improving knowledge of supply and demand

• Environmental planning and organization within the territory

• Preventing water pollution and improving water quality

• Optimizing the efficient use of water and instruments

All of these national projects and plans receive funding from one or more sources. The table below gives an idea of the type of programs and scale of funding. For a detailed overview of the expected investment for the development of all of the programs and projects, see Annex 3, this includes a breakdown into the different regions and water industry sectors.

Institution Project Value M$us

World Bank Water Sector and Sanitation Support Program 70 Interamerican Development Bank

Preparation of Water Sanitation Program in rural and areas

1

Interamerican Development Bank

Demonstrative Programs for a Sustainable Supply System

0.7

World Bank Bogotá River– Environmental Recuperation and Flood Control

250

World Bank Flood management in urban areas of Barranquilla

150

World Bank First stage of a loan structured for programs to reduce vulnerability to natural disasters

260

Latin American Development Bank

Technical Assistance Program for Territorial Entities

11.5

3.2 Public Investment in the Colombian Water Sector for the period 2011-2015

The National Development Plan (Plan Nacional de Desarrollo (PND)) 2010-2014 determines the Multi-Year Investment Plan (Plan Plurianual de Inversiones (PPI)) and collects estimates for the resources required to implement the pillars, objectives and strategies of the Development Plan. The PPI amounts to $564 billion pesos in 2010 (equivalent to USD 282 billion).

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The sources that finance the PPI are: The National Budget (Presupuesto General de la Nación) in the amount of 52%, the budgets of decentralized national sectors in the amount of 1%, territorial entities in the amount of 6% and the private sector with an investment in the amount of 40%.

The following table illustrates the investment projections for the agricultural and cattle sector. This includes everything related to irrigation districts and the entire rubric of environmental sustainability and risk prevention. The figures for the period 2011-2014 are consolidated. The figures for each year are shown individually. The figures are in USD taking into account a TRM of 2.000 COP.

Multi-Year Investment Plan , 2011-2014

(M$us)

Source /Sector 2011 2012 2013 2014

Agricultural / Cattle and Rural Development 1.384 1.588 1.652 1.688

Environment Sustainability and Risk Prevention 4.771 3.839 4.329 5.240

Environmental Management for Sustainable Growth

1.008 1.034 1.067 1.099

Disaster Risk Management 28 12 16 20

2010 Winter Calamity Response Fund 3.734 2.793 3.245 4.122

TOTAL 6.155 5.427 6.974 6.928

4 Private Sector

4.1 Description of the Principal Market Suppliers and Associated Portfolios

The private sector tends to be made up of companies with particular market sector specialisms. The following sections summarize the major participants and provide links to company/project websites for the sectors: Potable water and sanitation; Water basin management; River navigability; and, Irrigation and drainage. Additionally, associated knowledge and research centres are mentioned with a more detailed overview included in Annex 4.

4.1.1 Summary of current and planned projects

In 2008, 22% of investment in wastewater projects came from the private sector and 45% of investment in water projects came from private investors. The figures are based on gathered information from the 69 largest companies (35 private and 34 public) in the water and wastewater sector. Reported investment in wastewater activities reached 619M US$ while investment in other water activities in 2008 reached 412M US$. The analysis showed that in 2008 60% of investment in the sector was directed to wastewater activities. In total 91% of all investment in wastewater is concentrated in 10 companies.

The sector is also open to international private investors. Recent projects will be offered in international competitive bidding processes (see project information below).

Various projects are listed in the table below, by sector. For information on matters relating to the adaptation and improvement of irrigation and drainage districts, please refer to their description within public sector projects (not included in this section).

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Sector Region Project and Description Private Financing

Cost ($us)

Bogotá Construction of the PTAR Canoas:

14% 1100 M.

Bogotá Expansion of the PTAR of El Salitre

280 M

Cali Expansion of the PTAR of Cañaveralejo

200 M

Potable Water and Sanitation

Medellín Construction of the PTAR Bello 377,1 M.

Navigation and port activity 50% 252,5 M

hydroelectric utilization of the River:

281 M

Magdalena Basin

Erosion control and flooding 40% 302 M

Reduction of pollution in Cali’s water bodies

100 M

River navigability and treatment of basins

Cauca Basin

SAVER Program 291 M


The private sector’s participation in water supply and sanitation in Colombia has been more stable and successful than in other Latin American countries. The following list indicates the chief players in this market, of which more information can be found using the respective links.

In this sector, the main players are:

• Sociedad de Acueducto, Alcantarillado y Aseo de Barranquilla S.A. E.S.P. AAA (www.aaa.com.co) Portfolio: a) Water Supply: Collection, Conveyance, Treatment, Storage, Distribution, Marketing. b) Sewage: Conveyance, Collection, Disposal, Marketing.

• Aguas de Cartagena S.A. E.S.P. ACUACAR S.A. (www.acuacar.com) Portfolio: a) Water Supply: Collection, Conveyance, Treatment, Storage, Distribution, Marketing, b) Sewage: Conveyance, Collection, Treatment, Disposal, Marketing.

• Conhydra S.A. E.S.P. (www.conhydra.com) Portfolio: a) Water Supply: Collection, Handling, Treatment, Storage, Distribution, marketing, b) Sewage: Conveyance, Collection, Treatment, Disposal, Marketing.

• Hydros Mosquera S en C.A.E.S.P. (www.caudalesdecolombia.com.co) Portfolio: a) Water Supply: Collection, Conveyance, Treatment, Storage, Distribution, Marketing, b) Sewage: Collection, Conveyance, Treatment, Disposal, Marketing.

• Proactiva de servicios integrales S.A. E.S.P. (www.proactiva.es)

Additional information regarding size, turnover, margin, etc. can be found in the provided links and CRA (http://www.cra.gov.co/index.shtml).

The figures and financial indicators in recent years for parties involved in the water supply and sanitation sector indicate that this sector is profitable for both public and private sector operators, or a combination of both.

According to data of La Nota Económica21, for the year 2010 top companies within the sector performed according to following:

Company Sales 2010 (million $us)

Increase compared to 2009

Empresa de Acueducto y Alcantarillado de Bogotá (EAAB) 653 2.2

Empresas Públicas de Medellín (EPM Aguas) 359 2.7

EMCALI 217 0.17

21 Lanota.com, Colombian Water Supply and Sanitation Company Rankings for 2010.

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Company Sales 2010 (million $us)

Increase compared to 2009

Sociedad de Acueducto, Alcantarillado y Aseo de Barranquilla (Triple A) 149 2.1

Grupo Ethuss22 (not mentioned in the current study since it is not a part of the studied regions), falls Aguas de Cartagena (Acuacar)

60 4.4

Proactiva 18 -

Conhydra 11 -

Hydros 4.5 -

The sector shows a moderate but clear growth. Lider firms EAAB, EPM Aguas, Emcali Acueducto and Triple A did show a modest lift up compared to 2009. Grupo Ethuss distinguished due to its higher increase but its impact in the sector remained minor.


This sector includes businesses providing dredging services as well as those specialized in the construction of dams and dikes. All of whom, together, have the highest market share. For more information on these companies please refer to the links provided in the following list:

• Consorcio Canal del Dique

The consortium was created to solve the problems of sedimentation that occurs in the Canal del Dique affecting the Bay of Cartagena. The total project extends over a 36 month period (including preparation and construction phases) and involves an investment exceeding USD 91,000 MIO. The consortium consists of the following companies: Conconcreto S.A. (conconcreto.com), Noarco S.A. (noarco.com/principal.php), Mapesa de Colombia S.A., Valores y Contratos S.A (valorconsa.com), Inacol Ltda. Which in turn are advised by the specialist in design Moffat & Nichol

• Dragados Hidráulicos Ltda. (www.dragadoshidraulicos.com) Portfolio: Dredging, Hydraulic fills, Navigation, Port and Docks, Geotubes.

• Servicios de dragados y construcciones Ltda. (www.serdraga.com) Portfolio: Hydraulic and Mechanical Dredging, Environmental Sanitation, Ports and Docks, Hydraulic Fills


In the area of river navigability, there are key parties; Cormagdalena, as the management entity for river navigation on the Magdalena River, has an exhaustive inventory of all water enterprises.

Dredging companies (Dragados Hidráulicos Ltda. y Servicios de dragados y construcciones Ltda) also work on the improvement of waterways.

Due to the emerging participation of river navigation within Colombian transportation, the intra-sectorial statistics are not relevant. However, it is important to highlight that in accordance with DANE data, the transportation sector GDP is comprised of land transportation services, (road and railroad), river, air, and other services complementary to transportation and auxiliary services. In these statistics, river transportation appears as having a minor share.

22 not mentioned in the current study since it is not a part of the studied regions), falls under Aguas de Cartagena Acuacar)

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land 71,8

air 12,7

river 1,83

other 13,67

It is necessary to highlight the high participation of land transport for 2008, which was approximately 71.8 %, followed by air transportation, which has maintained a share fluctuating between 12.7 % and 11.9% for the last year of analysis.

In short, river transportation reports the smallest share at 1.83% in 2008 and demonstrated a tendency to improve during the period of 2000 -2008.23


According to world development indicators, in 2007 900.000 hectares (24% of total agricultural land), were regularly irrigated. The private sector financed approximately two-thirds of the irrigation systems. The remaining third corresponds to public investment. For more information links are provided (where available).

Major irrigation Districts:

• Usocoello (www.usocoello.com)

• Located in the central Tolima Department, irrigation infrastructure comprising of 25,600 hectares, which include 2,577 farms and 1813 users

• Usosaldaña (www.usosaldaña.com)

• In the southern Tolima Department, 37,700 hectares, of which 25,000 are capable of being irrigated

• Roldanillo –La Unión –Toro: RUT

• Northern Valle del Cauca, 10,750 hectares, 1,800 farms 1,200 users,.

• Recio River

• Ambalema and Lleida Municipalities, 23,000 hectares, 497 farms 396 users,.

The various irrigation sectors described above demonstrate the large terrain that must be conquered with respect to technical irrigation and drainage. Calculations made in accordance with the FAO24 demonstrate the large and medium public and medium system projects that could be developed in the mid-term, (identification and pre-feasibility, feasibility, design and construction phases) are estimated in to cover a total surface of close to 1,06 million hectares.

23 Economic Regulation Office, Ministry of Transportation, 2010 24 Extracted from: http://www.fao.org/nr/water/aquastat/countries_regions/colombia/indexesp.stm

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4.1.6 Groups and Research Centers

Another important sector is that consisting of water resource research groups and centers. They are distributed into three categories:

• University research groups Research group associated to an academic institution (university) and recognized by Colciencias

• National research centers Research group associated to a public (non academic) institution

• Private research groups. Research group associated to a private institution

Relevant research institutions are summarized in Annex 4.

4.1.7 Showcasing - Exhibitions and Fairs

The most representative existing fairs and exhibitions in Colombia, for the water sector are referenced in Annex 2.

One of the most important is Expoagua. This is a national fair for businesses and institutions specializing in water related products and services and is part of the national congress of rural aqueducts and hydrographic basins.

4.1.8 Promotion and Advertising (Trade Publications)

Revista Andesco, published by Andesco, compiles subjects developed from the optics: legal and technological that record public services, and ICT, contributing to updating knowledge and improvement of the sector nationally.

Regulacion is a publication of the Potable Water Regulation Commission. Integral regulation of the potable water sector and basic sanitation in Colombia; definitions contained in laws and decrees regarding the subject matter. Additionally, this document compiles general character resolutions issued by the CRAs for water, sewage and waste management services.

CATORCE: Environmental magazine, intended to share news, investigations, comments and images of fauna and flora.

Revista del Agua - Water Magazine specialized in subjects related to hydric resources.

Revista Anadesco – Anadesco Magazine. Public Services pulse and TIC

Gestión y ambiente - Environment and Management; a publication of original articles based on research results and essays related to ecology and environment.

Observatorio del Medio Ambiente - Environment observatory; digital notebooks from the Group of Studies in Political Economy and Environment of the Observatory of Environment on the economic subjects and their consequences in terms of environmental matters.

4.2 Identifying Potential Partners

Local partnering can have a dramatic effect on the scale and ease with which a Dutch company enters the Colombian market, Knowing the importance of a partner within a particular sector, and the plans and programs they administer, is thus very important. These partners can come from both the public or private sector. Combinations of both is not uncommon.

Knowing the right people is an important factor in Colombia. The adage "it's not what you know, but who you know" is of particular importance in Colombia. In the public sector, having the right contacts or partners can be an advantage in gaining access to the market place. Below is a comprehensive, but by no means exhaustive list, of potential partners, coupled with the relevant sectors.

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Sector Possible partner Importance

IADB25 – Inter-American Development Bank Extends loans to develop environmental projects

CRA26 - Comisión de Regulación de Aguas Water Regulatory Commission

Regulator of market rates for water and sanitation

ANDESCO27 - Asociación Nacional de Empresas de Servicios Públicos y Comunicaciones National Association of Public Service Companies and Communications

They have high impact on the sector and its affiliates

WB28 - World Bank Extends loans for the development and promotion of environmental projects

EAAB29 - Empresa de Acueducto de Bogotá Water Supply for Bogotá Company

For prospective projects

EPM30 - Empresas Públicas de Medellín Public Companies of Medellin


EMCALI31 * Empresas Municipales de Cali Municipal Companies of Cali


Principal private players in private sector For prospective projects

IDEAM32 - Instituto de Hidrología, Meteorología y Estudios Ambientales de Colombia Colombian Institute for Hydrology, Meteorology and Envirnomental Studies

For prospective environmental monitoring

INVEMAR33 - Instituto de Investigaciones Marinas y Costeras Institute for Marine and Coastal Research

Ally for research in the Pacific with extensive experience

Instituto SINCHI34 SINCHI Institute

Research related to the biological, social and ecological fields in the Amazon

Water and Sanitation

IIAP35, Instituto de Investigaciones Ambientales del Pacifico Environmental Research Institute of the Pacific

Environmental research in the Pacific

WB - World Bank Extends loans for the development and promotion of environmental projects

IADB – Inter-American Development Bank Extends loans to develop environmental projects

CINARA36 - Universidad del Valle Research ally in the Pacific given its long history

IDEAM - Instituto de Hidrología, Meteorología y Estudios Ambientales de Colombia Colombian Institute for Hydrology, Meteorology and Envirnomental Studies


MADVT37 - Ministerio de Ambiente y Desarrollo Sostenible Ministry of Environment and Sustainable Development

Sector Regulator

River basin Management

CORMAGDALENA38 Entity responsible for navigability and management of the Magdalena River basin

25 IADB, http://www.iadb.org/es/paises/colombia/colombia-y-el-bid,1026.html 26 CRA, http://www.cra.gov.co/ 27 ANDESCO, http://www.andesco.org.co/ 28 WB, http://www.bancomundial.org/ 29 EAAB, http://www.acueducto.com.co/ 30 EPM, http://www.epm.com.co/ 31 EMCALI, http://www.emcali.com.co/ 32 IDEAM, http://www.ideam.gov.co/ 33 INVEMAR, http://www.invemar.org.co/ 34 SINCHI, http://sinchi.org.co/ 35 IIAP, http://www.iiap.org.co/ 36 CINARA, http://www.cinara.univalle.edu.co/ 37 MADVT, http://www.minambiente.gov.co/ 38 CORMAGDALENA, http://www.cormagdalena.com.co/

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Sector Possible partner Importance

ASOCARS39 Association of CARs trade guild leader

IIAP - Instituto de Investigaciones Ambientales del Pacífico Institute of Environmental Research in the Pacific

Ally for research in the Pacific

INVEMAR - Instituto de Investigaciones Marinas y Costeras Institute for Marine and Coastal Research

Ally for research in the Pacific with extensive experience

CORMAGDALENA Regulator of varied aspects of the seaworthiness and management of the Magdalena River Basin

Asoportuaria40 Association of port concessions along the banks of the Magdalena River

Ministerio de Transporte41 Ministry of Transportation

National Transportation Regulator

INVIAS42 - Instituto Nacional de Vías National Roadway Institute

Entity responsible for roadways, including riverways

River Navigation

Subdirección Marítima y fluvial Maritime and River Subdirectorate

IDEAM - Instituto de Hidrología, Meteorología y Estudios Ambientales de Colombia Colombian Institute for Hydrology, Meteorology and Envirnomental Studies


SAC43 - Sociedad de Agrigultores de Colombia Colombian Society of Farmers

Important relationship with rural farmers and the Government

INCODER44 Sector regulator

WB - World Bank Extends loans for the development and promotion of environmental projects

IADB – Inter-American Development Bank Extends loans to develop environmental projects

FNC45 - Fondo Nacional de Calamidades National Calamity Fund

A short and medium term source of funds

Irrigation and Drainage

FDA46 - Fondo de Adaptacion National Adaptation Fund

Institution in charge of coordinating projects for risk prevention and mitigation

4.3 Multilateral funding sources

4.3.1 World Bank (WB)

The World Bank is a major source of development assistance worldwide. It focuses its efforts in Colombia through the Colombia Development Plan and supports other programs developed by institutions such as the IDB, International Monetary Fund (IMF), CAF47 (Andean Development Corporation) and NGOs.

• Types of cooperation:

o Small Grants Program (PDP)

o Trust Funds

o Technical Cooperation

o Refundable Financial Cooperation

39 ASOCARS, http://www.asocars.org.co/ 40 Asoportuaria, http://www.asoportuaria.com/ 41 Ministerio de Transporte, http://www.mintransporte.gov.co/ 42 INVIAS, http://www.invias.gov.co/ 43 SAC, http://www.sac.org.co/ 44 INCODER, http://www.incoder.gov.co/ 45 FNC, http://www.colombiahumanitaria.gov.co/ 46 FDA, http://www.fondoadaptacion.gov.co/ 47 CAF, http://www.caf.com/view/index.asp?ms=19&pageMs=61502

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The World Bank currently assists with the funding of three water related projects in Colombia (http://web.worldbank.org/external/default/main?menuPK=324992&pagePK=141143&piPK=141103&theSitePK=324946).

Project number Name

P111479 Bogotá River Environmental Recuperation and Flood Control Project

P096965 La Guajira Water and Sanitation Infrastructure and Service Management Project

P101279 Solid Waste Management Program Project

4.3.2 Inter-American Development Bank (IADB)

The Inter-American Development Bank’s strategy with the nation targets three fundamental objectives that establish the bank’s reference framework: a). Establish the necessary foundations to invigorate and revamp the economy; b). Promote social programs geared towards development, and protect less favored and more vulnerable social classes; c). Improve state governance and support the nation’s modernization.

Types of cooperation:

• Technical cooperation

• Non-refundable financial cooperation

This translates into more than 46 water industry related projects approved, financed or co-financed by the IADB in Colombia. The most recent among them being:

Project number Name

CO-T1269 Sustainability for supply and sanitation systems

CO-T1262 Water and sanitation preparation for rural and semi-urban zones

CO-L1028 Potable water and sanitation program for the Municipality of Pasto

CO-T1203 Development of a Business Model for the Economical Consolidation of Recycling

CO-L1034 Medellín River Sanitation Program - Phase II

CO-T1136 Pre-investment for the Preparation of the Water Sector Reform Program CO-L1066

CO-L1066 Program to Support Consolidation of Reforms in the Water and Sanitation Sector I

CO-T1077 Power Efficiency in Potable Water and Sanitation Companies

CO-T1069 Pre-investment Studies Preparation of Water and Sanitation Program

CO-T1022 Strengthening Capacities in the Water and Sanitation Sector

For more information on IADB loans visit

http://www.iadb.org/en/resources-for-businesses/doing-business-with-idb,6300.html

4.3.3 Andean Development Corporation -Corporación Andina de Fomento (CAF)

CAF is a multilateral financial institution that promotes sustainable development and Latin-American integration by efficiently mobilizing international financial resources and other strategic activities aimed at benefiting its members.

Types of cooperation: currently there are three available mechanisms for financing:

• Non-refundable:

• Refundable:

• Contingently Refundable:

Currently CAF is not financing any water related projects in Colombia.

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Part B. Dutch water expertise for Colombia

5 Dutch Water Management

The backbone of Dutch water management is the cohesion between water policy and water management, flood protection and delta development plans and programs. These policies, plans and programs have been developed over many years based on centuries of accumulated experience and planning. Chapter 5 demonstrates the features which give the Dutch water sector its strong position, relevant for water management in Colombia. With a long-term and integral focus, cooperation (between knowledge, government and business), water governance, CSR and innovation, the Dutch water sector is able to solve large and complex problems in the Netherlands and abroad.

Drawing on the private sector for support in a national program means that the acquired knowledge and expertise becomes a marketable product. Furthermore, it encourages innovation. For Colombia, this is invaluable if it is to meet its goals and successfully carry out its various projects (both now and in the future; see Part A). In effect creating a win-win situation for both parties.

As with any market, gaining entry is not without its pitfalls or external assistance. Chapter 6 looks at the current market penetration in Colombia by Dutch businesses, on the basis of interviews and an online survey, and the positive effect an increased market presence could have for Colombia. From the survey a number of hindrances to working in Colombia are identified. Chapter 7 describes the available mechanisms or assistance available in order to overcome some of the perceived problems. Finally, those countries still undecided whether or not invest in Colombia can seek specific information at a number of suggested sources.

5.1 Water policy in the Netherlands

The Netherlands, in anticipation of predicted sea level rises and greater fluctuations in river discharge due to climate change, has implemented several water management, flood protection and delta development programs and plans. These are generally long term programs and plans with a broader scope than previous programs which facilitate a more integral cooperation between the various Dutch water authorities. They often include legislative and administrative changes, the defining of common working frameworks and goals, and a greater involvement of the private sector.

The National Administrative Agreement on Water (2003): This policy supports the objectives of sustainable and integrated water management. In contrast to the past, it is no longer acceptable to drain excessive water out to sea, but instead to retain it at a naturally reached location. If retaining is not an option, water can be stored in allocated (retention) areas. Over 250 projects will create additional space for water storage. (http://www.rijksoverheid.nl/documenten-en-publicaties/besluiten/2008/06/25/het-nationaal-bestuursakkoord-water.html)

The Water Act (2009): This Act contains provisions for the management and use of water systems. The Water Act highlights integrated water management based on the ‘water system approach’ addressing all relationships within water systems. Integrated water management is also characterized by its relationship with other policy areas such as nature, environment and spatial planning. The Water Act is framework legislation that is implemented by means of secondary legislation i.e. by governmental decree (the Water Decree) and ministerial regulation (the Water Regulation). (http://www.rijkswaterstaat.nl/water/wetten_en_regelgeving/waterwet/).

The National Water Plan (2009): This is the official government water policy plan for the period 2009-2015 and is based on the Water Act (2009). For the purpose of integrated water management, the National Water Plan is enacted by the Minister of Infrastructure and Environment, together with the Minister of Economic Affairs, Agriculture and Innovation. A key focus is ‘sustainable water management’. The underlying principle is to ‘go with the flow of natural processes where possible, offer resistance where necessary and seize opportunities to foster prosperity and well-being’. With respect to spatial planning this plan

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also functions as a framework vision based on the Spatial Planning Act (2008). The Plan focuses on flood protection and the provision of sufficient clean water, as well as on various types of water use. The National Water Plan includes measures which have to be taken. Furthermore, it contains an initial elaboration of the Delta Program mentioned below, which is focused on sustainable safety and freshwater supply. (http://www.rijksoverheid.nl/documenten-en-publicaties/rapporten/2009/12/01/nationaal-waterplan-2009-2015%5B2%5D.html)

The Delta Act (2012): This Act mandates that an annual Delta Program (the new-style Delta Plan) be drawn up in order to protect the Netherlands and its future generations from high water, and guarantee a sufficient supply of freshwater. The Act provides a legal basis for the Delta Program, as well as a Delta Fund to finance the Program. (http://www.rijksoverheid.nl/nieuws/2011/06/28/tweede-kamer-neemt-deltawet-aan.html)

Delta Program (2010-2050): With this Program the Dutch Cabinet aims to keep future generations safe from water encroachment and ensure a sufficient supply of fresh water for the coming century. The Delta Program is a national program and requires a collaborative effort between central, provincial and local government and the water boards. Public interest organizations also have a role in the program. The Delta Program has nine sub-programs: Safety, Freshwater, New urban developments and restructuring, IJsselmeer Region, Rhine Estuary-Cities in the 'Drecht-area', Southwest Delta, Rivers, Coast, Wadden Region. The Delta Program uses a cohesive approach to find solutions. There is also a strong relationship with spatial planning and construction works in The Netherlands. The Delta Program is organized around five key Delta Decisions, which have a great impact on the future of The Netherlands: Water safety, Freshwater strategy, Management of the water level of the IJsselmeer region, Rhine-Meuse-Scheldt Delta and Spatial adaption. (http://www.rijksoverheid.nl/onderwerpen/deltaprogramma)

5.2 Water management programs in the Netherlands

Living With Water (2004-2010): This research and knowledge program is based on the National Administrative Agreement on Water (NBW). Its initiators (the Association of Dutch Water Boards, the Ministry of Infrastructure and the Environment, WL|Delft Hydraulics, TAUW, DHV, Grontmij, TNO, Alterra, STOWA, InnovatieNetwerk and CURNET) established a foundation which was responsible for the execution of the program. The total budget of the Living With Water program was €50 million of which €22 million was granted by the Dutch government. The largest part of the budget (€44 million) was spent on research projects and knowledge transfer. About one hundred projects were executed with a grant (including activities on knowledge transfer and knowledge anchorage). (http://www.levenmetwater.nl/)

Room for the River (2007-2015): Instead of continuously increasing the height and size of dikes, more room for water has to be created. Therefore, Dutch rivers will be given more room at 39 locations by lowering the floodplains, relocating dikes further inland, lowering groynes in the rivers and deepening the summer beds. Besides improving flood safety, the measures will be designed in such way that they improve the quality of the immediate surroundings as well. Room for the River, with a total investment of approximately €2.1 billion, accelerates the pace of work by encouraging innovation on cooperation, dual aims, approach and new techniques. (http://www.ruimtevoorderivier.nl/)

The Flood Protection Program (2007-2015): The objective of the Dutch Flood Protection Program is to maintain a safe flood protection. At 92 locations primary flood defenses will be improved by Rijkswaterstaat, the implementing agency for the Ministry of Infrastructure and the environment, and water boards. (http://www.rijkswaterstaat.nl/water/veiligheid/bescherming_tegen_het_water/organisatie/hwbp/)

5.3 Innovation programs in the Netherlands

Weak Links on the Coast (2007-2015): For the period up until 2015 the Dutch government has allocated €742 million to improve the coastal defenses at ten so called ‘weak links’ along the Dutch North Sea coast for both flood safety and spatial quality. Despite the successful coast refurbishment programs, designed to hold the coastline at the 1990 position, these

2108993011/iro page 34

locations are expected to fail to meet the existing safety standards in 2020. For the majority of the weak links seaward-directed strengthening solutions have been chosen in combination with large scale sand re-nourishment. (http://www.rijksoverheid.nl/onderwerpen/water-en-veiligheid/een-sterke-kust)

Building with Nature (2008-2012): This 5-year applied research program is co-initiated by the Dutch Dredging Industry and research institutes in the Netherlands. The aim of Building with Nature is to integrate knowledge of ecosystem dynamics with the understanding of natural processes and high-tech modeling and engineering expertise into the design and implementation of dredging and reclamation works. Instead of working against the forces of nature, the aim of the program is to seek innovative new approaches to avoid adverse environmental impacts, create new opportunities for nature development and incorporate ecological objectives into freshwater maritime infrastructure developments, the so-called 'ecodynamic design'. (http://www.ecoshape.nl/)

Sand Motor (2011-): This is an innovative method for coastal protection. It consists of a huge volume of sand (21.5 million cubic meters) that has been applied along the coast of South-Holland at the town of Ter Heijde in 2011. Wind, waves and currents will spread the sand naturally along the coast of South-Holland. The Sand Motor will gradually change in shape and will eventually be fully incorporated into the dunes and the beach. The coast will be broader and safer. (http://www.sandengine.nl/)

The Flood Control 2015 program (2007-2012): Until now, current flood protection is primarily concerned with strong dikes. However, the greatest gain lies in making the total system smarter: the dike, the decision-maker, and the socio-economic environment. The Flood Control 2015 program, a Dutch public-private cooperation, integrates these three aspects in advanced forecasting- and decision-supporting systems. Also, the Program uses new sensors that provide information 24 hours a day. By ensuring that better information reaches the right place more quickly, safety increases and the damage and the number of victims decrease. (http://www.floodcontrol2015.com/)

The IJkdijk (2006): This is an international test facility in the province of Groningen. The IJkdijk optimizes the inspection, management, and maintenance of water systems. It helps to support efficient decision-making in the event of imminent flooding. The levee of the future is being designed and tested by the IJkdijk. The IJkdijk is an initiative of the research institutes TNO ICT and Deltares, the Dutch national water board research foundation (STOWA), and the regional development agencies NOM and IDL. (http://www.ijkdijk.eu/)

5.4 Water governance and its actors in the Netherlands

Government agencies: The tasks and powers of the central government (Ministry of Infrastructure and the Environment and the Ministry of Economic Affairs, Agriculture and Innovation), 12 provinces, municipalities and 24 water boards are laid down in the new Water Act of 2009, the Water Boards Act of 1995 (Waterschapswet) and the Environmental Management Act of 2004 (Wet Milieubeheer).

Knowledge institutes: The Netherlands has developed a coherent knowledge infrastructure in the water sector, comprising government and private research centers (like the Water Governance Center, STOWA and engineering and consultancy agencies), technological, research and educational institutes (like Delft University, Deltares, Wageningen University and Research Center, UNESCO-IHE, University of Twente, ITC Enschede and DDA). Both the offer of, and demand for knowledge are matched by so-called Knowledge Agendas of the most important programs, such as the Delta Program. These institutes carry out a broad range of fundamental, strategic and applied research, both in the Netherlands and abroad.

Business: The private Dutch water sector comprises companies involved in hydraulic engineering, dredging, manufacturing and construction, water supply, engineering and consulting, and banking. NLengineers (http://www.onri.nl/cms/showpage.aspx) the Dutch association of consulting engineers. Many of NLengineers' members are active in projects abroad. Dredging and marine contractors are organized in the Institute for Water Engineers (http://www.waterbouwers.nl/), the members of which generally operate worldwide.

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Non-governmental organizations: Many Dutch NGOs engaged in the water sector have a solid institutional and financial base, as well as an international focus. They participate in UN organizations, sessions of the Global Biodiversity Forum (with inputs from the International Union for Conservation of Nature), the Ramsar Bureau and Convention, and the World Water Forum.

Water Governance Center: The Association of Dutch Water Boards (http://www.uvw.nl/) has taken the initiative to start the Water Governance Center in The Hague (http://www.watergovernancecentre.nl/). Supported by the Ministry of Infrastructure and the Environment, the Ministry of Economic Affairs, Agriculture and Innovation, and the Ministry of Foreign Affairs, the Centre aims to make better use of the Dutch knowledge on water governance, both in the Netherlands and abroad. The Centre acts as an (inter)national expertise network on water management (70%) and water supply and sanitation (30%) and focuses on scientific research (40%), practical applications (40%), helpdesk and dissemination (20%).

5.5 International cooperation and relation with Colombia

5.5.1 CNWP and Holland Water House in Bogotá

For more than 10 years, the Netherlands Water Partnership (http://www.nwp.nl) has been a comprehensive unifying network for Dutch water expertise. The partnership (consisting of members from private companies, government, knowledge institutes and NGOs) stimulates cooperation and synchronization of all parties that comprise the Dutch Water Sector. It acts as a centre of information on water expertise, policy developments and market opportunities. However, NWP is more than an information source, since it also initiates, coordinates and implements projects and events for its members.

NWP Associate Mr. Peter van der Kolk (e-mail: [email protected] and telephone: +31 70 304 3700) can provide information on NWP. The Floods in Colombia in 2010 made clear that something had to change in water management to prevent such extreme events in the future. Colombia’s President Mr. Manuel Santos asked the Royal Netherlands Embassy Bogotá for support in this process of change. This resulted in the organization of the Colombian-Netherlands Water Partnership (CNWP) launched at a Water Forum in Bogotá on 29th June 2011. One of the spearheads of this partnership is water governance in order to improve sustainable water management and to confront current governance stumbling blocks, such as: lack of cooperation, articulation, enforcement of regulation and mutual trust.

The Holland Water House in Bogotá is an initiative designed to meet the requirements of the Transition Facility (TF) which is described in section 7.5. Providing a physical presence in Colombia, this initiative will bring together a number of services under one roof. It will not provide any direct funding or subsidies but rather serves as a service point or central meeting point. Representation of the CNWP and Solidaridad-IDH48, plus facilities such as a Business Support Center, a Water Expertise Center and a CSR49/Sustainability Excellence Center will be housed within this one building. There are also plans for an information provider for Biomass, Waste management and Agriculture.

Contact for information regarding the Holland Water House:

Holland Water House Dutch Water Program Carrera 11A No. 93A-80 Oficina 405 Bogotá - Colombia

48 Solidaridad is an international network organization which focuses on creating fair and sustainable supply chains from producer to consumer. IDH is the Dutch Sustainable Trade Initiative. IDH cooperates with Solidaridad in the Tea program, the Cocoa program and the Soy program. 49 Corporate Social Sustainability (CSR) means that companies fully integrate fair social policies and care for the environment in their operational processes. See section 7.4 for more information on CSR.

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Tel: +57 1 6218221 Cel: 301 5893315 E-mail: [email protected]

5.5.2 Water Governance Center

The Water Governance Center has been asked to support Colombia on water governance aspects in general and in particular on the first phase of setting up a national dialogue on water governance called "Misión Gobernanza del Agua" (MIGA). The Water Governance Center worked intensively with the Ministry of Environment, the National Planning Department and the Royal Netherlands Embassy Bogotá to develop a methodology for MIGA and specifically for the first workshop which took place on 17th November 2011 in Medellin, Colombia.

5.5.3 MOU for Cooperation between Colombia and the Netherlands

On 19th November 2011, Mr. Hernando José Gómez Restrepo, director of the National Department of Planning of Colombia, and Ms. Marion Kappeyne van de Coppello, representative of the Dutch government, signed a Memorandum of Understanding (MOU) for cooperation on Integral Water Management. The purpose of the MOU is to establish the basis for cooperation and assistance between the Dutch government and the National Department of Planning from Colombia, while at the same time consolidating a platform for international experts to meet, discuss and reflect upon the integral management of water resources. The MOU aims to improve the cooperation between both countries, in strengthening knowledge development, education and business on integral water management and climate change adaption. Both countries have specific interest in cooperation on river basin management (e.g. Magdalena, La Mohana and Cauca river), for example on early warning systems, flood defense and water governance. Signing the MOU means an important step in establishing a Colombian Netherlands Water Partnership (CNWP) which is being developed by the Transition Facility Colombia, the Netherlands Water Partnership and the Royal Netherlands Embassy Bogotá.

6 Interest by the Dutch water sector to enter Colombia Market

6.1 Introduction

An online survey has been conducted aimed at the Dutch water sector in order to obtain information about the interest in and possibilities to support Colombia in their aim to improve the resilience of the country against climate changes and its effect on water. Moreover, the survey aimed at identifying interest in and opportunities for Public Private Partnership (PPP) and collaboration between Colombian-Dutch partnerships. More than 150 potential respondents were approached based on an address list provided by the NWP. Some of the respondents turned out to work for the same organization. Representatives of in total 44 organizations responded.

6.2 Key expertise areas

Of all of the respondents that reacted, about two thirds were private companies, such as consultancy and engineering firms, dredging companies and small business with specialized products. This shows the potential interest of the Dutch private sector in working in Colombia.

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Kind o f o rganiza tionKind o f o rganiza tionKind o f o rganiza tionKind o f o rganiza tionPrivate: Consultancy

and/or engineering firmPrivate: Construction

firmPrivate: Drinking water

supply or sanitationPrivate: modeling,

remote sensingPrivate: other

Government: Water

boardGovernment: other

NGO

Knowledge Institute

Respondents have expertise and experiences in a wide range of integrated water related market activities. All consultancy and engineering firms have multiple expertise and experiences, ranging from feasibility studies to detailed engineering. Only a few - much smaller - companies offer a single product or service, such as geo-information services, or products related to erosion control and protection of embankments. Some smaller companies have expertise and experiences in matchmaking and business support with regard to international tender procedures, financial and institutional development, PPP-development and program planning.

6.3 Current market entry

6.3.1 Current involvement

Over the past 5 years a little more than 50% of the respondents did business with Colombia. Most of them - mainly private companies - worked in Colombia (almost 30% of the respondents) and/or run successfully business development activities (almost 20% of the respondents) and/or exported products and services (more than 10% of the respondents). Nearly 20% of the respondents - mainly private companies - who did business with Colombia run business development programs which have not resulted in any work yet.

Of the respondents who did do business with Colombia more than 30% were involved in integrated water management and almost 25% in river basin management. The nature and the size of the activities varied a great deal.

If you have worked in Colombia, exported products/services to Colombia, or run business

development activities, please, indicate in which area(s)

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2108993011/iro page 38

6.3.2 Planned Business Initiatives

6.3.2.1 Perceived barriers to enter the market

In general the experiences related to doing business in Colombia were positive. However, some respondents mention that it is difficult to develop real projects and programs. The main reasons given for not having developed or planned any project activities yet fall under four chief categories: market entry, the business landscape, government related/influential issues and government related processes/effects. These points are explained below in a little more detail.

Market entry: Market entry appears to be hampered by the lack of a supporting network (such as the lack of a physical presence in the country), difficulties in establishing, maintaining and building of personal relationships with local players and the lack of any direct link, or bridge, between The Netherlands and Colombian water related projects or programs. Other pertinent points are possible cases of flag protection and the lack of opportunities to showcase skills and products.

Business landscape: Upon entering the marketplace the lack of transparency or unwillingness to want to commit can frustrate any attempts to penetrate the market. This can permeate itself in the form of closed tender procedures, lack of (or inadequate) cooperation with local authorities and provision of required information on and failure to keep to agreements. Added to this are the financial considerations (such as the relative high Dutch fees), financial auditing restrictions and difficulties in arranging overseas (tax) payments.

Government: The influence of the Colombian government on a business's decision to operate in Colombia can be thwarted by a ponderous decision making process, which itself can be prone to tangential changes in policy (after elections, for example). Also, ineffective organizational capacities of governmental departments coupled with possible conflicts of interest by officials, can adversely affect the chances of market penetration by external players.

Governance: There is a general perception of a lack of governance, such as inadequate government investment (lack of commitment) in environmental matters coupled with insufficient cooperation between different stakeholders and disputes over land ownership. This results in a lack of confidence of possible investors.

Ancillary reasons: In addition to the views expressed above, businesses may be focused on other regions and countries. Furthermore, businesses have limited resources in terms of manpower, legal and financial span of control, financial investments or have concerns about the language/cultural barrier. Suggestions by some respondents have indicated that the Dutch government and the Royal Netherlands Embassy Bogotá could assist Dutch companies more (e.g. by funding) than they do now. Finally, a number of businesses only operate reactively to offers or invitations to participate in a project or program (e.g. PPP).

6.3.2.2 Reasons for wanting to work in Colombia

Regardless of the barriers mentioned above, more than 60% of the respondents have activities planned in Colombia. The main objectives to wanting to work in Colombia are: market opportunities (since Colombia is an upcoming market), good previous experiences with working in Colombia, networking connections and the wish to expand to South America starting from Colombia. Some respondents mention that their organization has one or more employees from Colombia who like to work with Colombia. Also mentioned were the current activities of the Dutch and Colombian governments developing a cooperation on water aspects. Most respondents would like to be involved in projects with regard to exporting expertise and capacity from The Netherlands to Colombia, knowledge transfer by seminars, workshops and exchange programs, and PPPs with Dutch and Colombian partners. The most interesting working areas are integrated river basin management, water governance, flood protection and evacuation plans, sustainable spatial planning, erosion control and dredging of rivers and ports.

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6.3.2.3 Dutch water offer to Colombia

According to the respondents, the areas in which their organizations work in respond best to the Colombian need for: flood protection and evacuation plans (more than 20%), integrated river basin management (almost 15%), water and sanitation (almost 10%) and other areas (more than 15%), in particular ensuring that ports and waterways are navigable, water and vegetation monitoring and sustainable development. Most of the respondents mention that they use their own experience to classify these areas as most relevant for Colombia. Global developments are also mentioned by many respondents. Furthermore, respondents mention that the market is most open to the kind of services/products in these areas. According to the respondents, the following features of the Dutch water sector could benefit the Colombian water sector: all kind of relevant expertise and experiences, international focus and network and local presence (Colombia/Latin-America).

6.3.2.4 Need for information and support

Most respondents mention that they would like to obtain information on project funding, characteristics of the water related challenges, potential Colombian partners in business (to cooperate with), information on the institutional framework, characteristics of the regions involved in the study, potential product market combinations, and information on possibilities and restrictions in partnering up or merging with local firms in Colombia. Additionally, they ask for information on: project opportunities, demands for cooperation, the real objectives of (potential) Colombian counterparts, contact with the Colombian government, examples of studies and plans already made, NGO's and smaller organizations in the Colombian water sector and which role they (can) play, the necessity of matchmakers and link makers.

7 Support for doing business in Colombia

7.1 Introduction

Colombia has consistently improved its business environment and has been among the top reformers over the last years. The country has made improvements with regard to its tax administration and is starting up a business and resolving insolvency. Also, Colombia scores very well on the protection of investors, inflation and the limited rigidity of employment. Moreover, Colombia is considering an investment of US$ 9 billion on the construction and reinforcing of public infrastructure (e.g. water infrastructure) to adapt to climate change. These developments bring opportunities for the Dutch water sector. Several Dutch funds are available to support innovative pilot projects, joint-investments and transfer of technology, knowledge and skills. This chapter provides information on these funds and a number of references concerning conducting business in Colombia. For organizations (public and private) who would like to invest in Colombia it is recommended to contact the organizations mentioned in this chapter, all of whom provide trade support and funds. More recommendations on strategies and activities are described in chapter 11.

7.2 NL Agency/NL EVD International

7.2.1 Introduction

NL Agency is an agency of the Ministry of Economic Affairs, Agriculture and Innovation that implements government policy for sustainability, innovation, and international business and cooperation. It is the contact point for businesses, educational institutions and government bodies for information and advice, financing, networking and regulatory matters. NL Agency covers five areas of expertise: NL EVD International, NL Energy and Climate Change, NL Innovation, NL Environment and NL Patent Office.

NL EVD International, part of NL Agency, supports various programs in the field of sustainable economic growth in developing countries and emerging markets. These programs focus on innovative pilot projects, joint-investments and transfer of technology,

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knowledge and skills in social and economic sectors. This is achieved through business cooperation and through cooperation between business and training- and knowledge institutes. Local and international private companies are encouraged to invest and to play a role in economic growth and poverty reduction.

7.2.2 ORIO

The Facility for Infrastructure Development ORIO is funded by the Dutch Ministry of Foreign Affairs and executed by NL EVD International to encourage public infrastructure development in developing countries. ORIO contributes to the development, implementation (construction and/or expansion), operation and maintenance of public infrastructure in developing countries (like Colombia). Information on the ORIO country specifics of Colombia in regard to the domain of water can be found in Annex 5 and the webpage:

http://www.agentschapnl.nl/en/onderwerp/orio-country-specifics-colombia

ORIO officer ms. Anna Schilizzi (e-mail: [email protected] and telephone: +31 88 602 8104) can provide specific information on Colombia.

7.2.3 PSI

The Private Sector Investment program, PSI (divided in PSI Regular and PSI Plus) is a subsidy program of the Dutch Ministry of Foreign Affairs/Development Cooperation that supports innovative investment projects in 58 emerging markets (e.g. PSI Regular for Colombia). A PSI project is an investment project, implemented by a Dutch (or foreign) company together with a local company, in one of the eligible developing countries. If this investment meets the criteria, it can be eligible for a grant by PSI. This grant consists of a financial contribution to the costs of the investment. Information on the PSI country specifics of Colombia in regard to the domain of water can be found in Annex 6 and the webpage:

http://www.agentschapnl.nl/en/onderwerp/psi-country-specifics-colombia

PSI project officer ms. Miriam Valstar (e-mail: [email protected] and telephone: +31 88 602 8513) can provide specific information on Colombia.

7.2.4 PIB

With the new Partners for International Business program (PIB) the Dutch government wants to build a partnership with the private sector. The program supports groups of companies and knowledge institutes who seek to jointly enter a foreign market. Moreover, they should have a matched strategy instead of accomplishing separated activities. With economic diplomacy the government will try to take away trade and investment barriers. In doing so, entrepreneurs can capitalize on opportunities. PIB is a demand driven, flexible and decisive program. The contribution of the government is focused on economic diplomacy, promotional activities, government to government cooperation (G2G) and knowledge exchange programs (K2K). PIB focuses on Dutch companies within the Top Sectors (e.g. the Top Sector Water) and on internationalization strategies in a selected number of countries (like Colombia). Information on the PIB program can be found on the webpage: http://www.agentschapnl.nl/programmas-regelingen/partners-international-business-pib

A PIB officer (e-mail: [email protected] and telephone: +31 88 602 8030) can provide information on Colombia.

7.2.5 Partners for Water Program

The Partners for Water Program (PvW), initiated by the Dutch government and implemented by NWP and NL Agency/NL EVD International, is a subsidy program for a selected number of countries including Colombia. It has three main objectives which in brief are: the coordination of government and NGO activities in the Netherlands and abroad, enhancing the position of these organizations, and contributing to solutions to global water issues. The program consists of 2 tendering rounds of €2 million each (the first call was closed in

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February 2012 and the second deadline is 12th September 2012). Projects should fall into one of three categories or be a combination of: Environmental feasibility projects, Knowledge enhancement projects, or Pilot projects. This program is open to consortia of companies, knowledge institutes and NGOs based in the Netherlands as well as abroad. Government agencies are able to participate under certain conditions. Information on the PvW program can be found on the webpages: http://www.agentschapnl.nl/programmas-regelingen/partners-voor-water-pvw, and http://www.partnersvoorwater.nl A PvW officer can be contacted at: (e-mail: [email protected] and telephone: +31 88 602 8058) and can provide specific information on Colombia.

7.3 Association of Water Boards Program

In 2007, the Association of Dutch Water Boards (http://www.uvw.nl/) started their first international water projects in a number of countries. At present, Colombia is not one of the selected countries, but that should change with the inclusion of Colombia in the Partners for Water Program.

The international projects are financed from the solidarity fund of the Nederlandse Waterschapsbank (NWB), the public sector bank that funds the water boards. With the NWB fund, almost all Dutch water boards implement projects abroad and put their knowledge and expertise at the disposal of other countries. Within international projects, water boards cooperate not only with each other, but also with Dutch municipalities which have a city twinned with a municipality in the particular country.

Program Manager Innovation and Public Affairs of the Association of Dutch Water Boards ms. Sonja Timmer (e-mail: [email protected] and telephone: +31 70 351 9751) can provide information on international water projects.

7.4 Top Sector Water and Innovation contracts

The Dutch government has earmarked the water industry as a Top Sector in view of its current strong position and scope for growth. Knowledge, Government and Business (also called the golden triangle) will target investment in the Top Sector Water which consists of the subsectors delta, maritime and water technology. A Top Team Water has been created which advises businesses, scientists and the government on measures to address challenges in the Water sector. Its advice, ambitions, priorities and approach are set out in an action plan. The aim of the Top Team is to turn this action plan into concrete points for action and Innovation Contracts for the three subsectors delta, maritime and water technology. The Innovation Contracts set out arrangements and financial agreements between businesses, scientists and the government. The Innovation Contract Delta Technology consists of three subjects and accompanying business cases:

• Eco-engineering: e.g. Building with Nature

• Water Safety and Smart Dikes: e.g. Flood Control, Digital Delta, Energy Dikes

• Livable Delta: e.g. Sustainable Delta Cities, Living with Salt

More information can be found on the web page:

http://www.rijksoverheid.nl/documenten-en-publicaties/rapporten/2011/06/17/agro-food-de-nederlandse-groeidiamant.html

Information on Innovation Contracts is also obtainable from the TopTeam Water: (http://www.top-sectoren.nl/water/contact)

Since it is important for young professionals to look to foreign markets, a new program is being set up: the Young Expert Program.

Senior Strategic Advisor for Water and Adaptation (SAWA) Mr. Raimond Hafkenscheid (e-mail: [email protected] and telephone: +31 70 348 6486) can provide information on the new Young Expert Program.

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Innovation opportunities are included in government investments, for instance in the Flood Protection Program. All government measures are set out in the "To the Top" policy document. More information can be found on the webpage: http://www.rijksoverheid.nl/documenten-en-publicaties/kamerstukken/2011/09/13/kamerbrief-naar-de-top-het-bedrijvenbeleid-in-actie-s.html

7.5 Transition Facility (from aid to trade)

The new Transition Facility (2012-2016) is a country-specific instrument for middle-income countries (or those that have almost achieved middle-income status), enabling the transition from a bilateral development relationship to a mutually profitable economic partnership. This facility also aims to improve the business climate in sectors with opportunities for Dutch business, and will stimulate the application of Dutch knowledge and expertise. Most importantly, the TF is not a subsidy but a facility for Dutch companies. Colombia is one of the three countries that is eligible for the Transition Facility (besides South-Africa and Vietnam).

A main goal of the Transition Facility is to stimulate both the institutional, social and cultural development of a country and the market positioning of Dutch partners in that country. This is done through matchmaking and knowledge transfer by means of (pilot) projects that benefit the entire sector (i.e. not only one company). The Transition Facility brings a number of existing instruments together to help bridge the transition from development cooperation to economic cooperation. The Ministry of Foreign Affairs, the Ministry of Economic Affairs, Agriculture and Innovation and NL Agency/NL EVD International are closely involved in formulation and implementation. The NWP provides additional support with water related activities. Concrete actions arising from this collaboration include the initiative Holland Water House (see section 5.5.1).

The Transition Facility/Holland Water House will make it possible to support activities that contribute to economic cooperation in a broad sense. Activities with promising commercial prospects in which Knowledge, Government and Business (the so called KGB-formula) cooperate, could be taken into consideration.

Program manager of TF Colombia is Ms. Corina Kerkmans (e-mail: [email protected] and telephone: +31 88 602 80 60) can provide specific information on the Transition Facility with regard to Colombia. Also Agentschap NL and the Royal Netherlands Embassy in Bogotá can provide specific information on the Transition Facility with regard to Colombia. Contacts: The Department of Economic Affairs at the Royal Netherlands Embassy, Bogotá Water Affair Officer, Mr. Maurice van Beers - telephone +57-163894212 Economic Affairs Officer, Mr. Joel Brounen - telephone +57-1-6384206, or e-mail [email protected] Fundamental to the Transition Facility is Corporate Social Sustainability (CSR). CSR means that companies fully integrate fair social policies and care for the environment in their operational processes. In general, it means that a company declares that it has knowledge about, agrees with and obeys the OECD Guidelines for international Enterprises on CSR (http://www.oecdguidelines.nl/guidelines/), the ILO declaration on fundamental principles and rights at work (http://www.ilo.org/declaration/lang--en/index.htm), and the UN Convention on biodiversity (http://www.cbd.int/convention/about.shtml). The Dutch government stipulates that all (Dutch) companies operating both home and abroad are able to demonstrate programs of CSR. Any Dutch company operating in Colombia has to show the same commitment to this program as they would in the Netherlands. Information on CSR regarding to Colombia is written in the publication 'Conflict Sensitivity and the Transition Strategy for Colombia', an analysis written by International Alert50 (2012) at the request of the Royal Netherlands Embassy Bogotá.

50 International Alert, www.international-alert.org

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7.6 Dutch development bank FMO

FMO (Financieringsmaatschappij voor ontwikkelingslanden) is a public-private development bank with the Dutch government and large Dutch banks as major stakeholders. FMO co-invest in ventures in developing countries, not always with Dutch investors, never as a majority holder and only if the commercial prospects of the venture are promising. FMO manages several funds for the Dutch government in order to support higher risk projects promising greater development impact. Water infrastructure is part of the Infrastructure Development Fund (IDF). The IDF fund provides long-term financing for infrastructure projects in low-income countries.

Investment officer ms. Gemma Verhoeven (e-mail: [email protected] and telephone: +31 70 314 9696) can provide information on IDF. Information on IDF can also be found at the webpage: http://www.fmo.nl/idf

7.7 Conducting business in Colombia

For those companies still wanting to decide whether or not to invest or operate in Colombia can consult the following references. These give general information on conducting business in Colombia:

• The Department of Economic Affairs and Private Sector at the Royal Netherlands Embassy Bogotá: E-mail: [email protected] Telephone: (57)(1) 6384206 http://colombia.nlambassade.org/producten-en-diensten/handelsbemiddeling/handelsinformatie-bij-deze-ambassade.html

• The publication 'Transition Strategy Colombia: A preparatory analysis' by Ecorys (December 6th, 2011) written on request of the Royal Netherlands Embassy Bogotá

• The publication 'Doing Business in Colombia' by KMPG (December 2010), http://www.kpmg.com/CO/es/IssuesAndInsights/ArticlesPublications/Documents/Doing_Business_in_Colombia.pdf.

• The publication 'Doing Business in Colombia' from the United Kingdom Trade and Investment Team at the British Embassy Colombia (February 2010), http://www.ukti.gov.uk/export/countries/americas/southamerica/colombia/doingbusiness.html

• The factsheet 'Colombia Tax Alert' by Deloitte (January 18th, 2011) which focuses on two laws and a decree which have been enforced at December, 29/30th, 2010 and affect, in particular, the structuring of new business; http://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Tax/Alerts/dtt_tax_alert_Colombia_180111.pdf.

• The official investment portal for tourism, foreign investment and export promotion of the Colombian promotion agency Proexpert (http://www.investincolombia.com.co/)

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Part C. Market possibilities for Dutch water management in Colombia

Summary

A successful market entry is, amongst other things, dependent on matching requirements with available skills and products. It has been established in parts A and B of this report that Colombia has the "will" while the Netherlands has the "how".

In the following analyses, various opportunities in Colombia are identified from the perspective of a potential business entering the Colombian market. These refer to possible points of market entry. The analyses can assist in identifying any potential threats or weaknesses. Threats are defined as situations or conditions which could hamper market entry investment by Dutch public and private organizations, while a weakness is a situation which may require some additional attention by a business.

Chapter 9 expands this analysis from the viewpoint of a Dutch business considering an investment in Colombia. The purpose of this second analysis is to aid an investor in identifying areas of concern that they may have and to provide a means of separating real threats from those which are simply perceived. In Chapter 10 a number of real projects and programs are paired with skills, expertise and products offered by Dutch companies. This overview not only gives an indication of who the potential clients are (private or public sector), but also gives an indication of the size of the market.

Each chapter finishes with a brief sub-conclusion, all of which are brought together in the final chapter. Here recommendations are made for both Colombian-Dutch and Dutch-Dutch business combinations as well as the creation of marketing opportunities, enabling interested parties to share and explore common ground.

8 Colombian requirements for Dutch water expertise

8.1 Introduction

The following series of analyses identify the various positive and negative factors affecting entry to a number of markets, these being: Water basin and flood risk management, Navigation, Drinking water and sanitation, and Irrigation and drainage.

8.2 Water Basin and Flood Risk Management

Strength Weakness

• High on political agendas; several projects already identified

• Priority in National Development Plan

• Extra funding available

• Lack of Communication between agencies slows release of funds and programs

Opportunity Threat

• Need for technical expertise on flood risk management and basin development

• Need for flood forecasting, early warning systems and risk prevention programs

• Need for technical improvement of flood gates, levees, structures

• Need of toolbox for integral management

• Need for expertise and training on water governance

• Settlement problems require integration of spatial planning, institutional development, and technical solutions

• Climate changes cause flood and water related uncertainties for long term investment in catchment areas

• Unsolved settlement problems in river and flood plains hamper introduction of flood measures

• Inadequate inter-agency cooperation on joint water program remain unresolved

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Sufficient information is available on the problems related to water basins and their management and treatment. The urgency of this issue is recognized by both national and local government with relevant funds allotted and made available to tackle the situation. Furthermore, basin management has been made a priority in the National Development Plan. An inadequate amount of local expertise in river and basin management makes for an interesting and potentially lucrative market opportunity for Dutch companies. Inconsistencies and inadequate inter-agency cooperation to reach agreements among POT and POMCAS could be a cause for concern.

8.3 Navigation and ports

Strength Weakness

• Strategic navigation plans for Magdalena, Atrato and Orinoco rivers being developed

• Priority of National Development Plan

• Cost effective means of transportation

• Deteriorated port infrastructure hampers short term interest for business to invest in Colombia

• Heavy sedimentation of rivers hampers navigation and transportation and hence short term business development

Opportunity Threat

• Local operators leave room for strong international operators

• Multimodal transportation possible

• Deteriorated ports requires technical expertise on port infrastructure

• Optimization of waterway network with 3 corridors: Magdalena, Orinoco and Amazonas

• Heavy sedimentation of rivers require technical expertise on erosion control and dredging

• Lack of knowledge of effect from climate change on river and catchment protection make further investments in navigation ineffective

• Inadequate inter-agency cooperation hampers long term interest for investment in port development

• Fluvial transport represents a small percentage of the total transport

• Negative environmental impacts

• Security issues

A combination of poorly maintained port infrastructure and heavy silting of the navigable rivers is, in the short term, uninviting to new investors. However, the availability of funds to tackle the problem in the short term and to begin managing the basin for the long term is encouraging news. Strategic plans (and resources) are in place to introduce 3 river corridors: Magdalena (Pto. Salgar – Calamar, Canal del Dique and Mojana., Amazonas (Putumayo – Amazonas –Atlántico.) and Orinoco (Meta - Orinoco –Atlántico. Intermodal Corridor Pto. Gaitán - Pto. Carreño). Expertise is required to improve the port infrastructure and introduce long term measures.

Similarly, erosion and rain related processes that generate heavy sedimentation between the middle and higher sectors of the basin, and the lower sector require catchment protection and erosion control measures to reduce these threats. Investments for dredging works and the implementation of civil works (Buenaventura Port, Environmental system of the Canal del Dique) are already allocated. The Dutch water sector is experienced in this sort of work (dredging, erosion control), making river navigation an interesting sector to invest in, both for local and international companies. Without a modal shift in the means of transport, extensive re-development of the water infrastructure could be hampered by insufficient demand from transport companies.

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8.4 Drinking Water and Sanitation

Strength Weakness

• Adequate legal framework

• High service coverage

• Strong private water companies with good management practices

• Weak inter-agency cooperation hampers short term investment

• Difficulties to comply to international regulations and standards

• Market saturation: international competitors have already entered the market

• Outdated technology

Opportunity Threat

• Need for maintenance and replacement of obsolete water treatment equipment

• Wastewater treatment projects and Bucaramanga dam in the pipeline

• Market open to foreign investors

• General lack of information on performances of drinking water and sanitation companies hampers water supply risk prevention measures

In the current situation an adequate service is provided. This service is however restricted in its coverage. Expansion of drinking water services requires both expertise and funding. In order to meet long term plans the infrastructure requires modernizing. Existing drinking water supplies have to be extended to meet the requirements that any expansion will bring with it. The treatment of wastewater is in a similar situation. In order to meet the requirements of current international water standards and any expansion of the system, treatment plants require modernizing as the currently employed systems are near to obsolete. Wastewater Treatment projects in Bello, Canoas, Salitre and Cañaveralejo are currently in diverse stages of bidding and present an immediate opportunity for any Dutch business. The supply of potable water is closely linked with river basin management and as such is constrained by any difficulties arising from inadequate inter-agency cooperation.

8.5 Irrigation and Drainage

Strength Weakness

• High level of participation by private companies

• Strong irrigation management institutions

• Conflict of interest between farmers and institutional framework of POT hamper effective investments in new technologies

Opportunity Threat

• Need for new irrigation technologies

• Need for infrastructure maintenance methodologies

• Need for catchment and erosion management plans

• Inadequate measures allowing for climate change resulting in hillside erosion and sever flooding of farm land, making investment in land improvement ineffectual

This sector enjoys a high participation level from the private sector. The sector requires input for improved management of the various irrigation zones (districts). The sector is also technologically underdeveloped; current infrastructure maintenance is scarce and usually reactive rather than proactive. The introduction of Dutch expertise could support the development this sector in two ways: at a local level, training local managers to more effectively manage individual irrigation zones or districts; at government level assisting with the improved coordination and reform of POT and POMCAS so as to create a uniform approach to the management and development of irrigation zones and districts.

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8.6 Sub-conclusion

In brief, many opportunities exist for Dutch companies. The chief threat to any investment reliant on governmental funding is a lack of coordination between the various agencies and national development programs. Privately funded and initiated schemes are open to investment. These projects are more likely to be in direct collaboration with local private companies. For any Dutch company wanting to explore market opportunities (both private or public sector) an information exchange platform is required to obtain information on the market, policy, tenders and funding.

9 Dutch entry into Colombian water market

9.1 Dutch opportunities in Colombia

Entry into another country for any company is a daunting experience. Based on the results from the online survey and interviews, a number of important factors have been identified which can encourage or restrain such an investment. This chapter sorts the potential opportunities and risks from such a venture. This chapter is a precursor to Chapter 10, which further elaborates on matching Dutch expertise with real Colombian programs and projects, The following analysis is relevant to the 4 analyses detailed in Chapter 8.

Strength Weakness

• Provision and integration of technical expertise with water governance issues

• Provision and integration of water management expertise, at all levels, with all relevant disciplines and stakeholders involved

• Experience with international PPP innovation programs and R&D experiences

• Internationally renowned research and training institutions on water

• Top sector water: provide international innovation contracts and business cases on water

• Lack of knowledge about institutional framework and potential business partners make Dutch companies hesitant to enter the market

• Few companies with Spanish language skills

• Companies are generally request driven

• Limited bilateral match-funding NL-COL

Opportunity Threat

• Need for virtually all disciplines that Dutch companies can provide

• Need for expertise on water governance and institutional training that Dutch organizations can provide

• Match-funding from ORIO, PSI, Transition Facility and some other (minor) programs

• Existing Dutch companies in COL or the region can function as a hub for other Dutch companies

• Bilateral policy commitment to invest in Colombia: CNWP and Transition Facility (TF)

• Integrated water and flood management have high priorities in National Development Plan and hence provide potential funding for Dutch activities in Colombia

• Low perception and negative press on Colombian politics and institutional stability make companies reluctant

• Market saturation: high market entry rate of international engineering and consultancy firms might hamper entry of Dutch companies

• Liquidity risks resulting in delays in payments make Dutch companies reluctant to do business in Colombia

The Netherlands has a well organized network of both public and private sector organizations and businesses with a focus on water related issues (national platforms such as NWP and TopTeam Water have been set-up to facilitate this network), who are further interested in working in Colombia. In turn, the demand from the Colombian water sector for input, and thus available business opportunities, is high. The available Dutch water expertise

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includes all necessary consultancy and engineering disciplines related to water management required by Colombia: water governance, river and coastal modeling (e.g. hydrology, hydrodynamics, morphology), delta engineering (engineering and construction of dikes, levees, sluices etc.), flood risk management (flood forecasting, safety and evacuation plans, risk mapping), integrated water and river management (e.g. decision support systems, river basin simulation), drinking water and sanitation technology (e.g. split sewage technologies, membranes), maritime technology, and dredging. The strength of the Dutch approach rests in the combination of water related technologies and other disciplines, required to assist in solving the integrated problems in the Colombian water sector. The most requested non-water disciplines include spatial planning (rural and urban developments, landscape, procedures, Environmental Impact Assessments), ecology (e.g. wetland conservation), economics (e.g. feasibility studies, Cost-Benefit analysis), geo-information (e.g. field surveying, remote sensing, GIS and mapping), information technology and ICT.

Furthermore, the Colombian government recognizes the sense of urgency that exists within their water sector. The political will and commitment to tackle critical problems related to floods, navigation, integral catchment management and urban drainage is present. On top of all this, Colombia has been earmarked as one of the three Transition Facility (TF) countries and substantial match-funding for projects can be provided by ORIO, PSI and the new TF.

It should be noted that the Netherlands already has a presence in Colombia as well as in a few neighboring countries. These businesses are involved in a variety of water related activities, e.g. engineering and maritime contracting companies. Several companies already have established partnerships with, amongst others, local Colombian companies, government agencies, universities and NGOs. Moreover, several companies already have established long lasting working relationships in other Latin American countries (bilateral of through multilateral programs), which could be expanded towards Colombia.

Although generally Dutch companies are interested in entering the Colombian water sector, they are hampered by access to accurate information on doing business in Colombia, on funding possibilities for projects in Colombia and on transparency of tender and funding procedures. Another hindrance to market entry comes from fast growing international competition. Particularly Spanish, American, Canadian, French and Japanese companies have an established reputation for conducting water projects in Colombia, offering excellent expertise, often backed up by bilateral funding. Also, internationally major water engineering and contracting firms acquire smaller companies, hence enhancing their economics of scale. This makes it more difficult for smaller Dutch companies to compete on their own on Colombian tenders (no level playing field).

In conclusion, the strength of any Dutch involvement lies with a unified national and business commitment to support new investments in this growing, but extremely competitive market. Consolidating experiences, expertise, information and local contacts is crucial in ensuring a greater foothold for Dutch investment.

10 Business opportunities

10.1 Market - Product Combinations (MPCs)

Knowledge of a market and being able to match specialist skills with real projects is essential information for any company contemplating a new market place. Previous analyses have considered the potential and problems associated with entering such a market. The following section looks at Market - Product Combinations (MPCs). The following tables give an overview of known projects, coupled with products and services that could be provided by the Dutch water sector . This shows where potential business opportunities are. Funding information (if known) is indicated, for which type of client or funding organizations, and (estimated) available budgets (for the years 2012-2015).

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Market demand (COL) Product and services offer (NL)

Integrated water and river basin management: Integrated water and river basin management:

Impact of climate change needs to be included in risk management plans:

1. La Mojana (MADS, DNP and IDEAM):

• resilience to climate impacts

• improvement of hydro-environment information system (IDEAM)

• IWRM pilot demonstration project (DNP, MADS, MT)

Total estimated budget for La Mojana from UN Adaptation Fund:US$9.8 million

2. Reclaim space for water retention at river Cauca (CVC/MADS). Estimated budget € 435.000

3. World Bank loan to reduce vulnerability to natural disasters (see section 3.1)

Remote sensing techniques to assess Colombia's water need and its vulnerability to flooding

Satellite based flow forecasting system

Monitoring drought, forecasting of crop yield, drought and excessive precipitation crop insurance

A well Integrated River Basin Management framework is required:

1. Magdalena - Cauca Basin Management Plan (Cormagdalena)

• includes o.a.: Plan Macro Cuenca Magdalena river (MADS)

Total estimated budget (12 years) for Magadalena river projects $US 500 million.

2. IWRM in upper basin of Bogotá river (CAR-Cundinamarca and municipality of Bogotá and MADS)

3. Diagnostic study for IWRM in the Alti-Llanura area ( MDA, DNP)

4. Bogotá River decontamination program. Infrastructure (DNP and CAR-Cundinamarca) Total estimated WB and IADB loans: $US 2.75 billion

Engineering of dikes and hydraulic structures

Software and models for strategic and operational water, river and coastal management

Eco-hydrology management and environmental assessment

Catchment erosion and landslides deteriorate soils in the upper catchment and clogs downstream reaches:

1. Magdalena, Cauca catchment areas (MADS)

• Including monitoring and management of erosion control in the Magdalena basin (Cormagdalena) Estimated budget of $US 300 million

Flood risk and integrated river management. Engineering of dikes. Hydraulic and hydrologic engineering. Erosion control measures. River modeling. Morphology modeling. Catchment run-off modeling. Geo-information, remote sensing and GIS. Urban water management. Spatial planning.

Water quality & quantity framework and tools need to be developed:

1. Water quality and quantity management of the Ubate Suarez basin (Car Cundinamarca. Estimated budget of € 33.2 million

2. all rivers (no further information available)

Integrated and innovative systems in clean water and energy

Water supply systems

Water quality management

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Flood risk management: Flood risk management:

Flood Management framework and early warning systems need to be developed:

1. Early warning systems in upper Cauca river (DNP and IDEAM). Estimated budget: € 240.000

2. Early warning systems in upper Bogotá river (DNP and IDEAM). Estimated budget: € 280.000

3. Elaboration of hydrological modeling (IDEAM)

Water modeling. Hydro meteorological information. Flood forecasting and warning.

Spatial information on meteorological variables in locations with few or no meteorological information. Flood monitoring and forecasting tool based on real time data sets. Information on the magnitude of the disaster in rural areas in order to facilitate the payment of damages or distribution of subsidies to farmers.

Flood risk assessment. Coast benefit analyses.

Emergency plans working procedures

Integrated information chains including earth observation and other remote sensing data. Sensor networks. GIS. Agricultural and hydrological models. DSS and ICT.

Structural improvements of flood protection structures:

1. Study on improvement of the Agua Blanca dyke in Cali (Adaptation Fund). Estimated budget: € 150.000

2. Improvement of Canal del Dique (Adaptation Fund )

Estimated budget: $US 570 million

Urban drainage control:

1. Bogotá DC: sustainable urban drainage projects, include solid waste management (CAR, EAB Bogotá)

2. Several flood management in urban area programs funded by World Bank and IADB (in different stages of implementation, see section 3.1 and Annex 3)

Maintenance plans for water infra-structure works such as dikes, weirs, dams, waterways (dredging) to ensure sustainable solutions for flooding problems

Drinking water and sanitation: Drinking water and Sanitation:

Inadequate technology for contaminated water purification

1. Several private companies (see sections 4.1.1 and 4.1.2)

2. Several Sewage Water Treatment Plants are in different stages of implementation: Canoas, Bogotá ($US 775 million) , El Salitre, Bogotá ($US 280 million), Cañaveralejo, Cali( $US 200 million) and Bello, Medellin ($US 377 million).

Industrial & domestic wastewater treatment plants

Improvement of sanitation and sustainable water supply systems

1. Several World Bank and IADB support programs (in different stages of implementation see section 3.1)

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Irrigation and drainage: Irrigation and drainage:

Irrigation and drainage technology is outdated and poorly maintained

1. Design & construction of several new irrigation districts in Magadalena-Mojana basins (FONAT). Estimated budget: $US 194 million (until 2014)

2. Design & construction of several new irrigation districts in Magadalena and Cauca basins. Estimated budget: $US 23.6 million (until 2014)

Remote sensing techniques and spatial information on water and vegetation for tailor made applications with regard to water use for agriculture, precision agriculture, irrigation and drainage performance

Navigation and ports: Navigation and ports:

Port infrastructure is deteriorated

1. inland navigation and transport systems for the Magadalena, Atrato and Orinoco rivers (MT, DNP)

2. La Mojana, Construction of different fluvial piers for multi-modal transportation at Majagual, Guaranda, Piza, Cecilia, Sehebe y Sucre (DNP, FAO)

3. Three-years Plan (PAT) for infrastructure and maintenance (Cormagdalena) Estimated budget: $US 460 million (2012-2014)

4. Analysis on the navigability of the river Meta (outside survey regions) (INVIAS). Estimated budget $US 4 million.

Dredging of ports

Port development, next to development of railroads to guarantee better access to these ports

Constructing roads with geo textile

Engineering of hydraulic structures

Maintenance strategies based on RAMS, probabilistic maintenance and life cycle management

Bed sedimentation creates navigation difficulties

1. Magdalena and Cauca rivers require regular dredging

2. Rehabilitation and improvement projects for navigation in La Mojana (Cormagdalena)

Dredging of rivers

Erosion control range to protect river embankments from erosion

Water governance and institutional development:

Water governance and institutional development:

Weak (local) institutional coherence requires stronger water governance:

1. Development of Water Governance curricula at various (water related) universities:

• training programs

• workshops

• joint research projects on stakeholders and conflict resolution

Water governance expertise of water boards and WGC

Stakeholder analysis and training

Collaborative programs between Dutch water boards and Colombia water agencies

Training/workshops on stakeholders participation. Methodologies of conflict resolution and intervention strategies.

Complex institutional relations between different agencies and regions need to be optimized

1. MADS and CARs with Holland Water House and WGC

2. pilots in selected basins (e.g. river Pamplonita). Estimated budget: € 2.000.000

Water governance expertise. Training on stakeholder participation, accountability and intervention strategies in the water sector.

There are clearly a great deal of potential business opportunities for any Dutch business wishing to enter this market place. Many of the projects are linked in with government schemes in some form or other. In this case it is recommended that a platform be made available enabling a business to come into contact with the relevant agency, charged with the implementation of such a project. Sections 10.2 to 10.4 describe more specifically a

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number of business cases in terms of the required expertise as well as detailing potential 'roadmaps' in entering these specific markets.

10.2 Towards business cases: Introduction

In the following sections potential business cases are divided into two sorts of projects. In each case the potential input from Dutch businesses is described.

The large multi-disciplinary integrated projects (described in section 10.3) are established projects. This does not mean that they are closed to new input but further investigation would be required to establish which disciplines are still open to bids.

The second, regionally based business cases (described in section 10.4) are less well defined. This is due in many cases to the situations not yet being translated into real projects. This is by its very nature thus an open market for new business entry.

In most of these cases it has not been possible to link real budgets. This is due to inconsistencies in the supplied budget information. What is important is that this market is by no means a closed one. The chances for Dutch businesses are numerous. With a world-wide reputation in this field, there is little reason why Dutch businesses should fail to secure a foothold in this market.

10.3 Business cases on 5 selected major projects

Business case: Reducing the risk and vulnerability to climate change in the region of La Depresión Momposina in Colombia

Executing entity: MADS

Relevant Components:

• Strengthening of the existing hydro-climatological and environmental information system (HEIS) comprises the development of numerical models, climate change scenario’s, data management, early warning system. Potential Dutch involvement: consulting firms and knowledge institutions specialized in modeling, data management, forecasting systems, remote sensing.

• Rehabilitation of wetlands comprises hydraulic works, infrastructure, dredging, ecosystem rehabilitation. Potential Dutch involvement: consulting firms and knowledge institutions specialized in management of ecosystems, engineering, design; construction firms.

• Climate change-resilient agro ecological practices comprises the implementation of structural and non structural measures. Potential Dutch involvement: consulting firms and knowledge institutions specialized in climate change, agro ecology, participative implementation.

Business case: Restoration of degraded ecosystems in Canal del Dique

Executing entity: Cormagdalena (Adaptation Fund)


• studies and designs comprising design of regulation works and locks. Potential Dutch involvement: consulting firms and knowledge institutions specialized in, modeling, engineering.

• Construction. Potential Dutch involvement: construction and dredging firms.

Business case: Triennial Action Plan Cormagdalena (2012 – 2014)

Executing entity: Cormagdalena

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• basin management comprises flood/drought risk assessment, pilot project on ecosystems management, elaboration of Master plan, water governance. Potential Dutch involvement: consulting firms and knowledge institutions specialized in hydrological modeling, risk assessment, eco-hydrology, governance.

• navigation comprising, infrastructure and maintenance works. Potential Dutch involvement: engineering, construction and dredging firms.

Business case: Río Bogotá Environmental Recuperation and Flood Control Project

Executing entity: CAR Cundinamarca


• Upgrading and Expansion of the Salitre WWTP, Potential Dutch involvement: Engineering and construction firms.

• Flood Control and Rio Bogotá Environmental Restoration Works. Potential Dutch involvement: Engineering and construction firms.

Business case: Wastewater Treatment Projects

Executing entity: DNP (D Polania C.)


• Construction and enhancement of 3 Waste Water Treatment Plants (Bello, Canoas and Cañaveralejo) Potential Dutch involvement: Construction, instrumentation, process control.

10.4 Thematic business cases and market opportunities

The previous section describes a number of specific project related business cases. Additionally, in part A of this report, respondents in all regions mentioned local specific problems which as yet have not been translated into concrete projects. These can be grouped together as market opportunities.

The following sub-sections describe these opportunities, reasons for a successful entry to the market based on identify the relevant players and set out potential 'roadmaps' to enable companies to elaborate on these business cases further. These sub-sections are in order of market potential and summarize with a list of first, second and third contacts (where relevant). Priority is decided on the basis of both the commitment of the local government (in terms of funding) the current

Business cases on flood risk management and early warning

The recent flooding has been instrumental in motivating the various Colombian government agencies (the DNP, the Ministry of Environment and Sustainable Development, the Adaptation Fund and IDEAM and the regional CARs) alongside various other agencies and organizations, in placing flood risk management high on their agendas. However, Colombia is still in the eve of developing a flood management framework that includes and combines technical and institutional measures that might help to both prevent flooding and mitigate potential flood damage (see section 10.1 for current projects).

For Dutch companies this translates into a high potential market chance developing new business cases and gaining entry to existing projects. Several CARs are (or will be) implementing environmental recuperation and flood control projects with major World Bank funding. CAR Cundinamarca manages just such a project for the Bogotá river; similarly Cormagdalena is implementing projects for flood and erosion control for municipalities along the Magdalena river. In addition, IDEAM is interested in further development of hydrological forecasting and early warning systems.

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Dutch companies have a legacy of dealing with flood risks and are experienced with working according to programs (such as the Room for the River program), or implementing new policies (e.g. Delta Plan). This experience is required and invaluable to Colombian organizations and local companies learning how best to manage flood risks with a thorough and integrated approach. Virtually all survey respondents (government, knowledge institutes, business and NGOs) have (international) experiences with one or more activities related to similar policies and programs. Moreover, most of them have been involved in innovation and research activities to explore the development of new techniques, often adapting them to local circumstances and water management practices.

Dutch companies and government agencies that seek to enter this market will find virtually no entry barriers, but will need to build relationships with the CARs involved.

Potential High

First point of contact Holland Water House Second point of contact IDEAM and DNP

Business cases on integrated water and river basin management

In Colombia, basin management and successful environmental handling depend on the solution of other social issues such as, maintaining public order, social security, education and health. Hence, organizations involved in these issues should be included as well. The Regional Autonomous Corporations (CARs) are in the best position to provide information to Dutch companies on regional needs and project potentials on IWRM. They actively promote community participation in basin management, which is essential in its development.

In this sector there is demand for expertise in virtually all areas, including institutional development, spatial planning, river modeling and engineering, erosion control, remote sensing and geo-information management.

This market currently misses a centralized strategy to allow for a quicker and more efficient allocation and channeling of funds. This would speed up the definition and implementation of environment protection and restoration projects. Also, basin management should be included in the Municipal or Departmental Development Plans, and in turn must be endorsed by CARS to facilitate access to national and foreign resources.

This subsector is readily accessible for Dutch companies and other organizations seeking to enter a market with virtually no entry barriers. However, this market has not yet been significantly penetrated or developed by any such company.

The establishment of long-term relationships with e.g. DNP, IDEAM, the Adaption Fund and the authorities of the CARs within this study is paramount. As is the development of partnerships between Dutch companies and local Colombian firms, alongside universities, research institutes and local NGOs that operate in these areas.

Potential High

First point of contact Holland Water House Second point of contact Specific CARs Third point of contact DNP and Adaptation Fund

Business cases on institutional development

Inter-agency cooperation to reach investment agreements and coordination remains one of the important hurdles Colombia has to tackle, for instance among POT and POMCAS.

Similarly, there is an institutional gap between the development of policies at a national level and the execution of programs and activities at the regional and local levels. This can severely hamper the speed of selecting and executing flood risk prevention projects, measures to protect catchment from deforestation and erosion, desilting and dredging of major rivers, river bank protection measures, as well as stopping the further physical deterioration process of many water treatment plants and obsolete sanitation equipment.

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The exclusion of local stakeholders from the development of locally applied measures can cause further delays..

The Dutch water sector has ample experience with linking technical development with institutional development and water governance. Coordination of institutions, services and local populations are the essential ingredients to rapid development. The Dutch experiences could help Colombia to develop its integrated water management policy frameworks.

Combining the skills and knowledge of Dutch organizations, such as the Water Governance Center, consultancy firms, NGOs and universities, will help Colombian agencies and CARs to develop the inter-agency frameworks by providing conceptual and methodological tools, training of stakeholders and participation workshops.

Potential Medium

First point of contact NWP Second point of contact Water Governance Center Third point of contact DNP

Business cases on navigation and ports

River navigation and port development are important to Colombia's economic development. However, this subsector is still clearly undeveloped. This means of transportation contributes less than 2% of the transport sector's GDP. Logistic costs are among the highest in the region, due in part to the high price of transporting goods, which are for the most part transported over land. Climate change has had a speeding up effect of the natural sedimentation processes by causing hillside erosion, in addition to deforestation of all basin levels. This makes the rivers more difficult to navigate, especially in the lower basins.

Sedimentation processes could be dealt with in an integral manner if water related and basin treatment sectors work together to develop remediation programs. The current condition of river port infrastructure is a concern amongst many major players who otherwise would be interested in developing or using this means of transportation.

Dutch maritime and port development expertise would be of a great help to enhance the development of river transportation, port infrastructure, logistics of ports and dredging of rivers and harbor-mouths. DNP, the Ministry of Transport and several CARs are implementing several projects that might be of interest for Dutch partners. Section 10.1 details these projects alongside their related individual investment value.

These organizations can benefit greatly from Dutch (international) experience with the development of river and port plans in a timely and adequate manner, as well as the experience with inter-organizational co-ordination of funding and planning.

This is a subsector with few or no entry barriers for Dutch companies. Yet, it lacks any sort of robust development by any companies to-date. Dutch dredging, maritime, engineering and consultancy firms could establish long-term relationships with both national and regional government agencies, as well as with port authorities. Both bilateral and multilateral institutions may provide funding to such cooperatives.

Potential Medium

First point of contact Holland Water House Second point of contact NWP (Partners for Water Program)

Business cases on drinking water and sanitation

Although potable water coverage is high in the major cities, the same is not true with respect to basic water treatment. Service providers have demonstrated to be efficient in providing the service, as well as in business management. Government work in the field has helped companies employ measurement data to engage in self-improvement processes that have demonstrated economic sustainability in both private and public ventures. Yet, sanitation equipment and facilities are technologically obsolete, which creates a need for new short-term solutions and projects. Moreover, the aqueduct and sewerage systems of the

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municipalities within the departments that discharge their waters into the tributaries of the Cauca and Magdalena basins is also an area requiring attention.

The National Development Plan for 2010-2014 demonstrates that the National Government’s policy relating to development and investment in the sector is strong. Therefore, it is reasonable to anticipate that the resources required for the projects have already been estimated and taken into account within the national budget. Yet, there is still room for Dutch companies to enter into this sector, particularly in the fields of renovation of water treatment plants, asset management (inducing efficiencies) and water quality modeling. However, it is essential to establish long-term relationships with private water companies in the sector, as well as bilateral and multilateral institutions that may provide funds to such entities.

Private drinking water and sewage companies dominate this subsector. For Dutch companies to enter this sector, good contacts with these companies is essential. Entry into this market would have to take place at a local level.

Potential Low

First point of contact Holland Water House Second point of contact Individual water companies in Colombia

Business cases on irrigation and drainage

This subsector is highly integrated in the development plans related to river basin and flood control management, as irrigation districts are generally located in important catchment areas or along rivers. For Dutch companies and NGOs it presents an opportunity that may be consolidated with the implementation of the proper institutional agreements among regional environmental authorities geared towards the harmonization around planning and construction of the irrigation districts, as well as drainage systems intended to mitigate flooding.

Development of irrigation facilities generally form part of larger development regional development projects, such as the diagnostic study for IWRM in the Alti-Llanura area by the MDA and DNP. Sugar cane farmers represent a sizeable influential stakeholder group, focusing on increasing yields and reduction of loss due to drought and flooding. This sector is readily accessible for Dutch companies, as well as universities and NGOs, seeking to enter a market with virtually no entry barriers. However, this has not yet been thoroughly penetrated or developed by any such organizations.

The development of relationships with local CARs and the local population is essential.

Potential Low

First point of contact Holland Water House

11 Recommended strategies and activities

11.1 Introduction

The results of the surveys, questionnaires, analyses and matching all come together in this chapter. This is by no means an all conclusive end conclusion; but, instead a series of recommendations, pointers and ideas all intended to give any business the tools to put together a serious plan to launch themselves onto the Colombian market.

The one conclusion that can be conclusively drawn is that Colombia is most certainly a viable market and not one to be overlooked.

11.2 On getting involved

The Colombian water sector offers opportunities for all kind of organizations (private and public) from the Dutch water sector. Many respondents have already been involved in water related projects in Colombia (Chapter 6) and are members of the CNWP and/or NLABC/NCH. For other Dutch organizations (public and private) interested in Colombia the following recommendations are made:

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Accessing business information

• Collect relevant information by visiting websites mentioned in this survey.

• Contact the following organizations to show your interest in getting involved in the Colombian water sector and to obtain more information on newsletters, activities, market access, (potential) partners, tenders etc.:

o the NWP (mentioned in section 5.5.1): Mr. Peter van der Kolk (e-mail: [email protected] and telephone: +31 70 304 3700)

o the Holland Water House (mentioned in section 5.5.1) at: Carrera 11A No. 93A-80, Oficina 405, Bogotá, Colombia, e-mail: [email protected] and telephone: +57 1 6218221

o The Department of Economic Affairs at the Royal Netherlands Embassy, Bogotá

Water Affair Officer, Mr. Maurice van Beers - telephone +57-163894212 Economic Affairs Officer, Mr. Joel Brounen - telephone +57-1-6384206, or e-mail [email protected]

o the Embassy of Colombia in The Hague, The Netherlands: Commercial Attaché (e-mail: [email protected] and telephone +31 70 361 4545)

• Join the CNWP (via NWP in The Hague or Holland Water House in Bogotá) to keep informed, participate in activities and meet (potential) partners.

• Subscribe to a (digital) newsletter of the NWP, the NL Agency/NL EVD International and the Holland Water House.

• Participate in activities and events organized by the NWP, the NL Agency/NL EVD International, the Holland Water House and the Royal Netherlands Embassy Bogotá, such as social media groups, trade missions, meetings and match-making sessions.

Funding

Contact the following organizations to obtain more information on funding if you would like to invest in Colombia:

• the NL Agency/NL EVD International for information on ORIO (mentioned in section 7.2.2): ORIO officer ms. Anna Schilizzi (e-mail: [email protected] and telephone: +31 88 602 8104)

• the NL Agency/NL EVD International for information on PSI (mentioned in section 7.2.3): PSI project officer ms. Miriam Valstar (e-mail: [email protected] and telephone: +31 88 602 8513)

• the NL Agency/NL EVD International for information on PIB (mentioned in section 7.2.4): PIB officer (e-mail: [email protected] and telephone: +31 88 602 8030)

• the NL Agency/NL EVD International for information on the Partners for Water Program(mentioned in section 7.2.5): PvW officer (email: [email protected] and telephone: +31 88 602 8058)

• the Association of Dutch Water Boards for information on international projects (mentioned in section 7.3): Program Manager Innovation and Public Affairs of the Association of Dutch Water Boards ms. Sonja Timmer (e-mail: [email protected] and telephone: +31 70 351 9751)

• the TopTeam Water for information on Innovation Contracts (mentioned in section 7.4): (http://www.top-sectoren.nl/water/contact)

• the Ministry of Foreign Affairs for information on the Young Expert Program (mentioned in section 7.4): Senior Strategic Advisor for Water and Adaptation (SAWA) Mr. Raimond Hafkenscheid (e-mail: [email protected] and telephone: +31 70 348 6486)

• the NL Agency/NL EVD International for information on the Transition Facility with regard to Colombia (mentioned in section 7.5): Program manager TF Colombia ms. Corina Kerkmans (e.mail: [email protected] and telephone: +31 88 602 80 60)

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• the FMO (mentioned in section 7.6) for information on IDF: Investment officer ms. Gemma Verhoeven (e-mail: [email protected] and telephone: +31 70 314 9696)

11.3 On developing partnerships

Developing business cases (mentioned in section 10.2) and jointly conducting projects require the establishment of long lasting partnerships: public-public, public-private and private-private. The survey (Chapter 6) revealed that many respondents already have or are eager to establish these relationships. To further stimulate the development of partnerships it is recommended:

• That the NWP, the NL Agency/NL EVD International, the Holland Water House and the Royal Netherlands Embassy Bogotá set up a showcase/exhibition in Colombia where Dutch expertise on water management is presented (based on the sub-sectors mentioned in Chapter 10).

• That the NWP, the NL Agency/NL EVD International, the Holland Water House, the Embassies of The Netherlands and Colombia and the Dutch (water) companies in Colombia organize meetings (preferably in The Netherlands and in Colombia) at which potential partners can meet and get informed on the developments in the sub-sectors and regions (mentioned in Chapter 10).

• That representatives from the most important Colombian government agencies, IDEAM and CARs, as well as CEOs of interested water related companies, are invited to The Netherlands to learn about institutional development and governance of major flood protection programs. The NWP, the NL Agency/NL EVD International, the Holland Water House, the Embassies of The Netherlands and Colombia and the Water Governance Center (WGC) could play facilitating roles in this. Dutch government agencies and research institutes should be involved as well. The upcoming Delta Congress (November 2012) would be an appropriate occasion to showcase the Dutch expertise in the water sector.

11.4 On project funding and tendering

Besides match funding and subsidy mechanisms, such as ORIO, PSI, PIB, PvW and the Transition Facility (TF), there are few funding mechanisms that could assist Dutch partners to either start (pilot) projects, or activities, that could aid entry into the Colombia water sector. Still, few respondents are aware of those possibilities that do exist. Furthermore, most projects are funded through loans by development banks and hence often open to international bidding. However, only a few of the survey respondents have direct access to information on these tenders. It is therefore recommended:

• NL Agency/NL EVD International coordinates and disseminates all relevant information on the TF, ORIO, PSI, PIB, PvW and other funding possibilities to the members of the CNWP.

• That Dutch companies allocate more R&D funds for innovative projects in Colombia, if possible with support from TF, ORIO, PSI, PIB, PvW or FMO.

• That the Royal Netherlands Embassy Bogotá explores the feasibility of creating bilateral funding, or promote the creation of trust funds in the World Bank and the IADB.

• That the Holland Water House and the Royal Netherlands Embassy Bogotá encourage Colombian agencies to accept proposals in English. Additionally, they should regularly inform the members of the CNWP on the announcement of (international) calls to tender for projects.

11.5 On rules and regulations

The survey (Chapter 6) revealed that some respondents mention that it is difficult to develop real projects/business cases in Colombia due to national protectionism, financial considerations (such as relative high Dutch fees), financial auditing restrictions and difficulties in arranging overseas (tax) payments. To stimulate the development of real projects/business cases it is recommended:

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• That the Holland Water House and the Royal Netherlands Embassy Bogotá negotiates on these business landscape-issues with the Colombian government.

11.6 On developing business cases

The described MPCs and possible business cases (Chapter 10) should be seen as indicators of possible business scenarios. Development of specific business cases is only possible if there is a real match between needs and offers. Not only in technical terms (which was analyzed in this survey), but also, and most importantly, in terms of mutual interests and commitment to invest in such developments. Therefore, the following recommendations are made:

• That the NWP, the NL Agency/NL EVD International, the Holland Water House and the Royal Netherlands Embassy Bogotá organize match-making sessions (preferably in Colombia) between Colombian and Dutch potential partners (knowledge organizations, governmental agencies, businesses and NGOs) for each of the sub-sectors (e.g. Integrated water and river basin management, Flood risk management, Drinking water and sanitation) and regions (e.g. Magdalena Catchment, Cauca Catchment, Bogotá) in order to:

o Validate, prioritize and detail out the required expertise and projects/business cases in Colombia and the Dutch expertise presented in this report.

o Explore upcoming projects/business cases, possibilities for PPPs, funding (public and private) and (published) project tenders for which joint proposals can be submitted.

o Determine which Colombian and Dutch partners would like to cooperate/invest in specific (cross-sectoral) projects/business cases within specific sub-sectors and/or regions.

• After the match-making sessions between Colombian and Dutch partners, who want to cooperate/invest in a specific sub-sector and/or region, meet each other as much as needed to jointly develop a project/business case (including proposals for funding/ tendering). Additionally, they determine what kind of specific support they need from e.g. the NWP, the NL Agency/NL EVD International, the Holland Water House and the Royal Netherlands Embassy Bogotá.

• That the NWP, the NL Agency/NL EVD International, the Holland Water House and the Royal Netherlands Embassy Bogotá support the match-making process in the way Colombian and Dutch (potential) partners prefer.

• That Dutch companies work closely with Colombian and Dutch knowledge organizations and NGOs in order to stimulate involvement of generic and local expertise and best practices in their projects/business cases.

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12 References

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2. BANCO MUNDIAL, Diego Fernández, 2004. Colombia: Desarrollo Económico Reciente en Infraestructura, Balanceando las necesidades sociales y productivas de infraestructura, Informes de Base, Sector Agua Potable. Washington D.C.

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básico. Bogotá, Colombia. 20. DNP, 2011. Plan Plurianual de Inversiones 2011‐2014. Bogotá, Colombia. 21. EAFIT, Juan D. Restrepo, 2011. Erosión en el río Magdalena (1970-2000): Causas

naturales y humanas e implicación en las inundaciones de la Depresión Momposina. Medellín, Colombia.

22. FAO, Aquastat, 2011. Cálculo de recursos hídricos renovables por país (en km3/año, media), Colombia.

23. Francisco Piedrahita Díaz, 2005. La gestión de aguas en Empresas Públicas de Medellín y la sostenibilidad del recurso hídrico. Sevilla, España.

24. Global Water Intelligence, 2011. Global Water Market 2011: Colombia, A chapter from Global Water Market 2011, (under permission to CESA – ANTEA Group). Oxford, UK.

25. Global Water Intelligence, 2012. Market-Leading Analysis of the International Water Industry, Volume 12 / Issue 12 / December 2011. Oxford, UK

26. IDEAM, 2008. Guía técnico científica para la ordenación de las cuencas hidrográficas en Colombia, Segunda versión. Bogotá, Colombia.

2108993011/iro page 61

27. Instituto Colombiano de Desarrollo Rural (INCODER), Ministerio de Agricultura, 2008. Plan Estratégico 2008 – 2010, Actualizado.

28. Instituto Colombiano de Desarrollo Rural (INCODER), Ministerio de Agricultura, Plan Estratégico 2010-2014, 2011.

29. Ministry of Environment and Sustainable Development, Project Proposa:l “Reducing risk and vulnerability to climate change in the region of La Depresión Momposina in Colombia” (UNDP PIMS 4805; Atlas IDs – Proposal 00062507, Project 00080029, COL10)

30. Ministerio de Ambiente Vivienda y Desarrollo Territorial, IDEAM, 2010. Estudio nacional del Agua, 2010. Bogotá, Colombia.

31. Ministerio de Ambiente, Vivienda y Desarrollo Territorial, Viceministerio de Agua, 2010. Política Nacional para la Gestión Integral del Recurso Hídrico. Bogotá, Colombia.

32. Ministerio de Desarrollo Económico, Viceministerio de Desarrollo Urbano, Dirección de Servicios Públicos Domiciliarios, 1999. Inventario Nacional del sector de Agua Potable y Saneamiento Básico. Bogotá, Colombia.

33. Ministerio de Transporte, 2011. Anuario estadístico del sector Transporte. Bogotá, Colombia.

34. Programa de las Naciones Unidas para el Desarrollo, 2009. Mapeo Institucional, Actores relacionados con el abordaje del cambio climático en Colombia. Bogotá, Colombia.

35. Reunión de Expertos IMTA-OCDE, 2008. En búsqueda de esquemas apropiados de participación del sector privado en el suministro de agua potable y saneamiento, experiencias recientes en América Latina. México D.F., México.

36. Revista Academia Colombiana de la Ciencia, 2010. Relaciones demanda-oferta de agua y el índice de escasez de agua como herramientas de evaluación del recurso hídrico colombiano. Bogotá, Colombia.

37. Superintendencia de puertos y transporte, 2010. Informe de seguimiento de caracterización de 16 ríos navegables y la actividad portuaria. Bogotá, Colombia.

38. The World Bank, 2011. Charting a New Course: Structural Reforms in Colombia’s Water Supply and Sanitation Sector. Washington D.C.

39. The World Bank, 2011. The IBNET Water Supply and Sanitation Performance Blue Book. Washington D.C.

40. The World Bank, Philippe Marin, 2009. Public-Private Partnerships for Urban Water Utilities. Washington D.C.

41. Universidad de los Andes, Revista de Ingeniería, 2010. Towards a Paradigm Shift in Urban Drainage Management and Modelling in Developing Countries. Bogotá, Colombia.

42. WWF (World Wide Fund for Nature) Colombia, Juan Carlos Espinosa, 2008. Papel del sector privado: ¿Cómo y por qué incrementar su participación en esquemas de Pago por Servicios Ambientales? Sao Paulo, Brasil.

2108993011/iro page 62

Annexes

ANNEX 1 INVESTMENT PLAN COLOMBIAN WATER SECTOR

ANNEX 2 EVENTS RELEVANT TO THE COLOMBIAN WATER SECTOR

ANNEX 3 DETAILED DESCRIPTION OF PRINCIPAL INVESTMENTS

ANNEX 4 GROUPS AND RESEARCH CENTERS

ANNEX 5 ORIO COUNTRY SPECIFICS OF COLOMBIA

ANNEX 6 PSI COUNTRY SPECIFICS OF COLOMBIA

ANNEX 7 INTERVIEWS HELD IN COLOMBIA AND THE NETHERLANDS

2108993011/iro Annex 1

Annex 1 Investment Plan Colombian water sector

The following table sets forth the investments to be made in the water sector, broken down in accordance with the profits generated by the hydric resources.51

COLOMBIA 2.010 2.011 2.012 2.013 2.014 2.015 2.016

Utility water capital expenditure

Water network rehabilitation 131,5 148,0 168,8 191,1 210,9 222,6 247,6

New water networks 156,2 171,0 189,9 209,5 225,6 232,4 252,7

Water treatment plant 194,2 217,6 246,9 278,2 305,7 321,2 355,8

water resources excluding desalination 150,3 166,5 186,8 208,1 226,3 235,2 257,7

Seawater and brackish water desalination

0,0 0,0 0,0 0,0 0,0 0,0 0,0

Total drinking water utility capex

632,2 703,1 792,4 886,9 968,5 1.011,4 1.113,8

Utility wastewater capital expenditure

Wastewater network rehabilitation

91,1 99,7 112,6 128,3 144,9 159,3 170,1

New wastewater networks 146,4 161,3 184,5 214,1 247,2 278,7 297,8

Wastewater treatment plants 150,9 166,4 190,0 219,0 250,0 277,6 299,4

Other wastewater 54,2 59,7 65,9 72,2 77,1 78,6 84,3

Total wastewater utility capex 442,7 487,1 552,9 633,7 719,3 794,3 851,7

Industrial water capital expenditure

Power generation 3,3 3,6 3,7 3,9 4,1 4,3 4,5

Oil and Gas 1,9 2,4 2,9 3,8 5,1 6,1 7,2

Refining 3,3 3,5 3,7 3,9 4,1 4,4 4,7

Mining 0,9 1,1 1,3 1,2 1,1 1,1 1,1

Chemicals 1,1 1,2 1,3 1,3 1,3 1,4 1,5

Metals 0,3 0,4 0,5 0,5 0,6 0,6 0,7

Automotive 0,0 0,1 0,1 0,1 0,1 0,1 0,1

Food & Bev 16,4 17,2 18,0 18,9 19,8 20,7 21,7

Microelectronics 0,0 0,0 0,0 0,0 0,0 0,0 0,0

Pulp and Paper 0,4 0,5 0,5 0,5 0,5 0,6 0,6

Textiles 1,5 1,9 1,9 2,0 2,1 2,2 2,2

Pharma 0,4 0,4 0,4 0,5 0,5 0,5 0,5

Other 11,0 11,5 11,9 12,4 12,9 13,4 13,9

Total industrial capex 40,6 43,7 46,4 49,0 52,2 55,3 58,8

Industrial and municipal equipment

Pipes 274,1 299,4 333,9 372,8 409,2 433,6 465,2

Pumps 141,3 155,8 175,1 196,5 216,7 230,7 250,0

Valves 39,5 43,2 48,1 53,7 58,7 62,0 66,6

Disinfection systems 19,1 21,0 23,6 26,5 29,2 31,1 33,8

Sludge management 37,4 43,1 50,7 59,8 69,4 77,9 87,6

Meters 15,1 17,3 19,4 24,8 23,3 27,5 26,8

51 Source: Global Water Market 2011: Colombia, with permission from CESA and ANTEA GROUP™ by Global Water Intelligence

2108993011/iro Annex 1

COLOMBIA 2.010 2.011 2.012 2.013 2.014 2.015 2.016

Control systems / chemical feeds 11,2 12,4 13,8 15,4 16,9 17,9 19,5

Media Filtration 21,6 23,8 26,5 29,5 32,2 33,9 37,0

Standard process equipment 64,4 70,7 79,2 89,0 98,6 105,8 114,7

Intakes/headwork/screens 12,5 13,8 15,4 17,2 19,0 20,4 22,1

Low pressure membranes (Mf/UF)

1,7 2,1 2,5 3,1 3,7 4,3 5,1

High pressure membranes (NF/RO) 1,1 1,3 1,5 14,3 7,1 5,3 2,7

Ion exchange/electro ionisation 0,6 0,7 0,8 0,9 1,0 1,2 1,3

Zero liquid discharge 1,1 1,5 1,9 2,4 3,0 3,8 4,5

Other equipment 41,4 46,3 52,4 59,4 66,2 71,3 78,6

Total equipment 682,2 752,4 845,0 965,3 1.054,2 1.126,7 1.215,7

Other capital items (industrial and municipal

Pipe rehab services 112,9 125,7 142,7 162,0 180,5 193,7 211,8

Site work 233,4 258,3 191,9 329,8 365,9 391,5 425,9

Professional/Other 87,0 97,5 112,1 112,6 139,1 149,2 170,8

Operating expenditure

Water utility 733,5 762,1 791,8 822,7 854,8 888,2 922,8

Wastewater utility 474,7 493,2 512,5 532,5 553,2 574,8 597,2

Total utility opex 1.208,2 1.255,4 1.304,3 1.355,2 1.408,0 1.462,9 1.520,0

Water treatment chemical (industrial)

44,4 46,4 47,8 49,1 50,5 51,9 53,3

Industrial services 2,7 2,7 2,8 2,9 2,9 3,0 3,1

Chemicals (municipal and industrial)

Coagulants & Flocculants 36,4 37,9 39,3 40,7 42,2 43,7 45,3

Ion Exchange 6,4 6,7 6,9 7,1 7,3 7,5 7,7

Corrosion/scale inhibitors 7,6 7,9 8,2 8,4 8,6 8,9 9,1

Biocides 19,0 19,8 20,4 21,1 21,9 22,6 23,4

Activated carbon 9,2 9,6 9,9 10,2 10,6 10,9 11,2

pH and Other 8,2 8,6 8,8 9,1 9,4 9,6 9,9

Total chemicals 86,9 90,5 93,6 96,6 99,9 103,3 106,7

Summary forecasts

Water

Networks 287,7 319,1 358,7 400,5 436,5 455,0 500,3

Treatment plants 194,2 217,6 246,9 278,2 105,7 321,2 355,8

Water resources/other 150,3 166,5 186,8 208,2 226,3 235,2 257,7

Wastewater

Networks 237,5 261,0 297,1 342,5 392,1 438,0 467,9

Treatment/other 205,2 226,1 255,9 291,2 327,1 356,3 383,8

Utility capital expenditure

Water utilities 733,5 762,1 791,8 822,7 854,8 888,2 922,8

Wastewater utilities 474,7 493,2 512,5 532,5 553,2 574,8 591,2

Industrial water

Industrial Capex 40,6 43,7 46,4 49,0 52,2 55,3 59,8

Industrial chemicals 44,4 46,4 47,8 49,1 50,5 51,9 53,3

Industrial services 2,7 2,7 2,8 2,9 2,9 3,0 3,1

2108993011/iro Annex 2

Annex 2 Events relevant to the Colombian water sector

Event Date Location Organizer General information

14º Congreso Nacional y 5º Internacional de Servicios Públicos y

TIC - Andesco

Junio 27, 28 y 29 de 2012

Cartagena, Colombia

ANDESCO The objective of this event is to support the consolidation of public services towards effective, affordable and efficient services. Dr. James Austin, professor at Harvard Business School will be a special guest

Seminario manejo de crisis y emergencia en el sector de Acueducto

y Alcantarillado

Junio 01 de 2012

Bogotá, Colombia

ANDESCO

5th IWA International Conference on

Benchmarking and Performance

Assessment - Pi2013

Abril 9 al 12 de 2013

Medellín, Colombia

International Water

Association

Proposed Themes: Experiences in low and medium income countries Decision support tools based on performance indicators Performance assessment for regulation Assessing beyond performance. Environmental footprint and water and energy interaction Managing service contracts with performance indicators Standardization and performance indicators – ISO 24500 Performance assessment and infrastructure asset management Performance assessment for multilateral organizations

Colombia Investment Summit

19 septiembre

de 2012

Bogotá, Colombia

Terrapinn Colombia Investment Summit brings together leading Colombian and international funds, investors, corporations and officials to cover the key trends and investment strategies in Colombia. Colombian and international investors and fund managers will come together to seek strategy and innovation in the region across infrastructure, mining, energy, oil & gas, agriculture and real estate.

II Congreso Internacional del Agua Expoagua en Pereira

15 al 19 de agosto de

2012

Pereira, Colombia

AGUAS Y AGUAS DE PEREIRA

Tema “Agua y Saneamiento: Desafíos de la prestación del servicio en zonas socio-económicamente vulnerables” Se tiene estimado contar con la participación de 16 expositores en representación de 13 países incluido Colombia, y con una muestra comercial que albergue a 40 empresas

Foro Local del Agua en Tumaco

22 de marzo de 2012

Tumaco, Colombia

CRA Promover el conocimiento, construir compromisos institucionales, comunitarios y políticos para adelantar acciones sobre los problemas del agua a nivel departamental, municipal y comunitario y con el fin de mejorar la gestión y uso del agua en todas sus dimensiones sobre la base de una sostenibilidad ambienta

Colombia Investment Expo

20 al 23 de septiembre

de 2012

Bogotá, Colombia

Corferias The event provides a unique opportunity to meet all the professional form Investment and Real Estate Industry under one roof.

XI Congreso Latiniamericano de Hidrogeología y IV

Congreso Colombiano de Hidrogeología

20 al 24 de Agosto de

2012

Cartagena, Colombia

Asociación Colombiana de Hidrogeólogos

Foro para el intercambio de ideas, de conocimiento, de experiencias y técnicas a través de estudios, investigaciones y aplicaciones relacionadas con el presente y futuro de la mayor riqueza natural...el agua.

2108993011/iro Annex 3

Annex 3 Detailed description of principal investments

Potable Water and Treatment

Zone/Region Program / Project Investment projections Period

Phase I USD $ 325 M 2009 – 2015

Phase II USD $ 775 M Residual Water Treatment Plant - Canoas

TOTAL USD $ 1,100 M Sabana de Bogotá

Salitre Residual Water Treatment Plant Expansion TOTAL USD $ 250 M 2009 – 2012

Treatment and sustainability of domestic residual water for the Valle del Cauca

Unknown amount 2011 with a duration of 5 months

Optimization and start-up for the El Paraíso Residual Water Plant, Palmira, Valle del Cauca

Unknown amount 2011 with a duration of 15 months

Departament of Valle del Cauca

Expansion of PTAR Cañaveralejo USD $ 200 M

Estimations are made for two years. However, the bidding process has not begun. Therefore, an accurate timetable cannot be provided at this time.

Water Basin Management


Upper Basin

Infrastructure COP $ 247,112 MM USD $ 123.556 Operation COP $ 56,355 MM USD $ 28.117 M· Middle Basin (District)

-Direct Investment

Infrastructure COP $ 1,671,322 MM USD $ 835.661 M

Operation COP $ 1,664,697 MM USD $ 832.34 M-Other Investments (DAMA-ACUEDUCTO

Infrastructure COP $ 1,314,570 MM USD $ 657.285 M

Western Middle Basin

Infrastructure COP $ 205,373 MM USD $ 102.687 Operation COP $ 123,455 MM USD $ 61.728 M· Downstream

Infrastructure COP $ 170,768 MM USD $ 85.384 M. Operation COP $ 49,162 MM USD $ 24.581 M

Sabana de Bogotá Bogotá River de-contamination program

TOTAL COP $ 5,502,813 MM USD $ 2.751.407 M

First trimester 2011 (bidding process opens) until 2014 (first phase)

Canal del Dique Program to Restore the Swampland in the Canal del Dique

Continental swampland restoration in the Canal del Dique

From 2007

2108993011/iro Annex 3


Formulation COP $ 400 M USD $ 0,2 M

Concept formulation stage duration: 1 to 2 years (two years have already passed from commencement of the formulation phase but the implementation phase has not begun)

Implementation $ to be calculated

Restoration of Mangrove Swamp Zones and the Marino-Costeras Swamp Zones

Implementation stage in ongoing between 3 and 7 in accordance with the formulation

Formulation COP $ 900 M USD $ 0.45 M

Implementation $ to be calculated

Due diligence detailing the characteristics of the Swamplands of the canal basin

Formulation COP $ 550 M USD $ 0.28 M

Consolidation COP $ 1,250 M USD $ 0.63 M. Development COP $ 2,500 M USD $ 1.25 M

Starting in 2007 Between 2 and 9 years

TOTAL COP $ 4,300 M USD $ 2.15 M

Research for the Sustainable Management and Recuperation of Swamplands

Development COP $ 1,300 M USD $ 0.65 MTOTAL COP $ 1,300 M USD $ 0.65 M

Research, Monitoring and Technological Innovation Program

TOTAL-TOTAL COP$5,600 MM USD $ 2.80 M

Implementation, control and follow up of the integral management plan of the river through the SIG COP $ 1,050 MM USD $ 525 M

Implementation of a monitoring network for the river in coordination with IDEAM and the CAR’s COP$1,000 MM

2010 – 2012

Monitoring and handling of land coverage for the river basin COP $ 910 MM USD $ 455 M

Implementation of the portfolio of basin conservation items and creation of municipal incentives to insure conservation COP $ 700 MM USD $ 350 M

Formulation of River Master Plan COP $ 700 MM USD $ 350 M

Program to Manage the Río Grande de la Magdalena Basin

TOTAL COP $ 4,360 MM USD $ 2.180 M

Shore erosion and flood protection COP $ 180,038 M USD $ 90.02 M

2010 – 2012

Magdalena River

Land Protection Works TOTAL COP $ 180,038 M USD $ 90.02 M

2108993011/iro Annex 3


Promotion and studies for the construction of energy projects on the river COP $ 2,000 M USD $ 1 M

2010 – 2012 Program to Utilize River Energy

TOTAL COP $ 2,000 M USD $ 1 M

Implementation of a system to ensure the optimal utilization of Hydric resources by the basin committees from Brazil, Colombia y Ecuador. WARMI

Amount unknown 2011 for 1.5 years Departament of Valle del Cauca

Dam Construction on the Cauca River USD $ 80 M

Commencement in 2009. Duration: approximately 5 years

INFRASTRUCTURE

PROGRAM: Rehabilitation and maritime transport consolidation in the region.

Projects:·Rehabilitation and improvement of the navigational channels of the Mojana, Pancegüita, Rabón, San Matías, Viloria, Carate Springs and the San Jorge River

Signaling and beaconing of the aforementioned navigation channels

Improvement of the operational conditions and fluvial control of the aforementioned channels. Program to modernize the river fleet. (replacement and renovatation) Creation of a hydrometric measurement system

PROGRAM: Consolidation of a complementary land transportation network

Projects: Improvement of drainage works in line with the hydro biological conditions of the area. Pavement of the San Marcos-Majagual -Achí national highway to serve as the main transportation artery in the region.

La Mojana - Momposina Depression

Improvement of the Sucre-La Sierpa highway, to serve as a land link with the overland axis connecting the sub regional north.

COP $13.680 M USD $ 6,8 M Information Unavailable

2108993011/iro Annex 3


Rehabilitation of the San Jacinto del Cauca-El Portón-Bocas de las Mujeres-La Sierpa highway, in conjunction with the local municipalities to serve as a land link with the overland axis connecting the sub regional south.

Construction and improvement of a network of rural roads with access to the water and land networks by establishing co-management alliances with local communities.

PROGRAM: Transportation equipment procurement program with regional impact.

Projects:·Construction of river docks in Majagual, Guaranda, Piza, Cecilia, Sehebe and Sucre

Improvement and construction of land access to river docks.

Construction of a passenger regional land transportation bus terminal in San Marcos

Feasibility Study for the construction of a community airport in Sucre (Sucre), as part of a national security and accessibility strategy.

Rehabilitation of the Idema warehouses as merchandise aggregation and consolidation centers.

Creation of a regional transportation consortium for La Mojana, priority action. (DNP/FAO)

River Navigability


Maintenance via dredging the depths of the navigational channel of the Magdalena River

Estimated execution value for maintenance and dredging COP$ 9.246 MM USD $ 4.623 M

2010 – 2012

Culmination of the third and last phases of the Puerto Galán works COP $ 3,361 M

2010 – 2012

USD $ 1.68 M

Adaptation, modernization and construction of port facilities at a national level. COP $ 2,000 M USD $ 1 M

Magdalena River

Navigational Program and Port Activities


2108993011/iro Annex 3


Navigational equipment maintenance COP $ 964 M USD $ 0.48 M

TOTAL COP $ 964 M USD $ 0.48 M

Maintenance of navigational channels COP $ 83,808 M USD $ 41.90 M

Environmental restoration of the Canal del Dique COP $ 130,765 M USD $ 65.38 M

Channeling works on the river COP $ 86,400 M USD $ 43.20 M

Purchase of Dredgers COP $ 14,000 M USD $ 7 M

TOTAL COP $ 314,973 M USD $ 157.49 M

Construction of docks and floating board walks for passengers in the municipalities bordering the Magdalena River COP $ 9,200 M USD $ 4.6 M

2010 – 2012 Support Program for the development of urban infrastructure, landscaping and river transportation for passengers TOTAL COP $ 9,200 M USD $ 4.6

M

Irrigation and Drainage Sector


Magdalena-Mojana/Guajira Basin

Analysis, Design and Construction of Drainage and Irrigation System –Fonat

USD$194 2011-2014

Magdalena and Cauca Basin

Administration, Conservation and Operation of Irrigation System Districts.

USD$23.6 2011-2014

Hydric Resource Internal Management


Assimilation of adaptation in Cartagena de Indias to climate change with territorial planning and sectorial management

Formulation Process 2010 - 2015

Respect for the Environment, Construction and Maintenance of the Storm Drainage Network

Formulation Process 2010 - 2015 Cartagena

Macro project for the Integral Recuperation of the Cerro de la Popa

The study has an approximate value of COP $ 2,500 MM USD $ 125 M

2010 - 2015

Maintenance and promotion of exploitation of forest land for commercial wood purposes in the upper, middle and lower Magdalena basin COP $ 1,064 M USD $ 0.53 M


Strategic management of local ecosystem and swamplands of la Mojana and the rest of the Magdalena River COP $ 8,700 M USD $ 4.35 M

Magdalena River Environmental Program

Biological Corridors COP $ 5,000 M USD $ 2.5 M

2108993011/iro Annex 3


TOTAL COP $ 13,700 M USD $ 6.85 M

Decontamination of solid residuals through Bioremediation COP $ 550 M USD $ 0.28 M


Community programs integrating children and young men with the new river culture through the “Eco-Guardian” and “Guardian Families of the Banks Programs” COP $ 520 M USD $ 0.26 M


News Bulletin “Agua y Saneamiento” (Water and Sanitation)

Amount unknown 2012 duration 12 months

Development of a program for schools focused on health and sanitation

Amount unknown 2011 duration of 12 months

Online Diploma in Gestión Integrada del Recurso Hídrico (GIRH)

Amount unknown Duration. Not available

Actualization of uses and criteria for the optimization of hydric resources in Colombia

Amount unknown 2011 duration of 6 months Departamento del

Valle del Cauca

GIRH Project: Development of a model for the Integral Management of Hydric Resources (Gestión Integrada del Recurso Hídrico) that promotes equality, poverty reduction of and national development following the principle of sustainable growth.

Amount unknown 2011 duration 12 months

Opportunities identified by CNWP

Project Possible start Executing Agency

Pilot projects – Early warning systems for the upper basin of the Cauca and Bogotá Rivers

2/2012 DNP/IDEAM

High level expert advice for pilot project about Climate Change in the Cauca River

1/2012 CVC/MADS/CNWP

High level expert advice for diagnosis of dike stability in Agua Blanca (Cali)

1/2012 FDA

High level expert advice for basin development plan Magdalena river 3/2012 MADS

Pilot project Water governance Pamplonita River Basin 2/2012 MADS/CARs

Pilot demonstration projects IWRM La Mojana 6/2012 DNP/MADS/APP/MT/MADR

2108993011/iro Annex 4

Annex 4 Groups and Research Centers

Research Groups

Group Director University

Grupo de Investigación en Patrimonio Hídrico

Research Group for Water Heritage

Nelson Omar Vargas Martínez Escuela Colombiana De Carreras Industriales. Escuela Tecnológica

Grupo de Investigación en Recurso Hídrico

Research Group on Water Resources

Cruz Lorenzo Andrade Moya Universidad Tecnológica del Chocó - Diego Luis Cordoba

Grupo del Estudio del Recurso Hídrico

Study Group on Water Resources

Carlos Humberto Montoya Navarrete Universidad Tecnológica De Pereira - UTP

Grupo de Investigación Desarrollo y estudio del Recurso Hídrico y el Ambiente

Research Group "Development and Water Resource Study and Environmental " - CIDERA -

Gabriel Lozano Sandoval Universidad Del Quindío - Uniquindío

Agua y Desarrollo Sostenible

Water and Sustainable Development

Leonardo Calle Páez Fundación Universidad Central

Agua, Salud y Ambiente

Water, Health and Environment Gustavo Andres Contreras Hernández

Universidad El Bosque

Agua y Sociedad

Water and Society Rosa Yanneth Méndez Martín Universidad Santo Tomás

Abasteciemiento de Agua

Water Supply Luis Darío Sánchez Torres Universidad Del Valle – Univalle

Agua y Saneamiento

Water and Sanitation Diego Paredes Cuervo Universidad Tecnológica De Pereira

- UTP

Agua y Suelo

Water and Soil Duván Javier Mesa Fernández Universidad Manuela Beltrán

Tratamiento de Agua

Water Treatment Tatiana Rodríguez Chaparro Universidad Militar Nueva Granada -

Unimilitar

Grupo de Investigación en Gestión Azanvada del Agua Urbana

Research Group on Advanced Urban Water Management

Fabio Garzón Contreras Pontificia Universidad Javeriana

Grupo de Investigaciones Ambientales Agua, Aire y Suelo

Environmental Research Group of Water, Air and Soil (GIAAS)

Jacipt Alexander Ramón Valencia Universidad De Pamplona - UDP

Desarrollo Institucional y Gestión Comunitaria en Agua y Sanaemiento

Institutional Development and Community Management in Water and Sanitation

Mario Alejandro Perez Rincón Universidad Del Valle – Univalle

Grupo de Investigación en Agua y Medio Ambiente

Research Group on Water and Environment

Alex Mauricio González Mendez Universidad Católica De Colombia - U.C.C.

Ciencia e Ingeniería del agua y ambiente

Science and Engineering for Water and the Environment

Andrés Torres Pontificia Universidad Javeriana

2108993011/iro Annex 4

Group Director University

Agua y desarrollo sostenible en Ingeniería Civil Grupo Aqua

Water and Sustainable Development in Civil Engineering - AQUA Group

Hildebrando Ramírez Arcila Universidad Cooperativa De Colombia

Source: GrupLAC, Plataforma SCIenti, Colombia, 2011

Research Centers

Center Affiliation Description

CINARA Universidad Del Valle - Univalle

Instituto de Investigación y Desarrollo en Agua Potable, Saneamiento Básico y Conservación del Recurso Hídrico

Institute for Research and Development in Potable Water, Sanitation and Conservation of Hydric Resources Develops scientific research and technology, executes transfer projects, organizes training programs and training of human resources at all levels, and networks with national and international public and private sectors.

IDEHA Universidad Del Norte - Uninorte

Instituto de Estudios Hidráulicos y Ambientales

Institute for Hydraulic and Environmental Studies Its purpose is to promote and carry out basic and applied research, provide formal and informal teaching, propose and carry out technical - scientific exchanges, make disclosures, and offer study advice, technical assistance and design in the areas of engineering and river hydraulics and coastal and environmental issues related to the same.

Laboratorio de Hidráulica y Mecánica de Fluidos Hydraulic and Fluid Mechanics Laboratory

Universidad Nacional de Colombia - Seccional Medellín

Maintains equipment for teaching, calibration and measurement services, and experimental fluid mechanics and hydraulics. Recently, acquired equipment for oceanographic and limnological measurements such as a CTD profiler, two profilers and Doppler velocity meter waves.

CIOH General Maritime management

Centro de Investigaciones Oceanográficas del Caribe

Center for Caribbean Oceanography Research

Performs basic and applied research in various disciplines of Oceanography, Hydrography, Protection of Marine Environment and Coastal Zone Management, particularly in the Colombian Caribbean. Has a laboratory for physic -chemical analysis of marine and estuarine waters. Provides specialized marine services, designed to support the activities of national and international institutions related to the study and exploitation of the oceans.

INVEMAR Ministry of Environment, Housing and Territorial Development

Centro de Investigaciones Marinas y Costeras

Marine and Coastal Research Center Provides scientific and technical, conducts basic and applied research on renewable natural resources, environment and coastal and ocean ecosystems.

Source: independent research, 2011

2108993011/iro Annex 5

Annex 5 ORIO country specifics of Colombia

The facility for Infrastructure Development ORIO is funded by the Dutch Ministry of Foreign Affairs and executed by NL EVD International to encourage public infrastructure development in developing countries. ORIO contributes to the development, implementation (construction and/or expansion), operation and maintenance of public infrastructure in developing countries (like Colombia). The Facility for Infrastructure Development ORIO is commissioned by the Ministry of Foreign Affairs.

The ORIO country specifics of Colombia in regard to the domain of water are (http://www.agentschapnl.nl/en/onderwerp/orio-country-specifics-colombia ):

• Total project budget: €2 million to €60 million (including grant and co-financing)

• ORIO contribution development phase: 50%

• ORIO contribution implementation, operation and maintenance phase: 35%

• Remarks: Procurement according to local procurement policy and regulations

• Water:

o Waste water treatment: At the national level only 10% and at the local level only 14% of waste water is treated. The high level of non-treated waste water increases the pollution levels and affects the quality of the natural source. The government implemented the Program SAVER to address this problem and has set the goal of increasing the treatment levels (by year 2010 to 30% and by year 2019 to 50%).

o Strategic megaprojects for environmental sanitation: The government will consider a certain number of strategic megaprojects. These will include the environmental sanitation of Bogotá River and basins of the Chicamocha River, Cauca River (high basin area) and Medellin metropolitan area.

o Portable water supply and sanitation treatment in rural areas: A great percentage of inhabitants from rural areas have no access to water distribution systems, sanitary units, and aqueduct and sewerage systems. Improving the institutional capacity, coverage, quality and continuity of these services in such areas is required.

o Water resources management: Alternative systems for portable water treatment, distribution and sanitation are required.

• Environment:

o Climate change national impact: There is a great concern, as insular areas and the Caribbean and Pacific will be greatly affected. The increasing sea level will cause changes in the natural systems due to erosion and flooding, which will have an impact on housing, health, and economic issues.

ORIO officer ms. Anna Schilizzi can provide information on Colombia:

Agentschap NL ORIO office Telephone: +31 88 602 8104 fax: +31 88 602 9023 E-mail: [email protected] Webpage: www.agentschapnl.nl/en/node/50350

2108993011/iro Annex 6

Annex 6 PSI Country specifics of Colombia

The Private Sector Investment program, PSI (divided in PSI Regular and PSI Plus) is a subsidy program of the Dutch Ministry of Foreign Affairs/Development Cooperation that supports innovative investment projects in 58 emerging markets (e.g. PSI Regular for Colombia). A PSI project is an investment project, implemented by a Dutch (or foreign) company together with a local company, in one of the eligible developing countries. If this investment meets the criteria, it can be eligible for a grant by PSI. This grant consists of a financial contribution to the costs of the investment. The Private Sector Investment program is commissioned by the Ministry of Foreign Affairs.

The PSI country specifics of Colombia regarding to the domain of water are (http://www.agentschapnl.nl/en/onderwerp/psi-country-specifics-colombia ):

• Maximum total project budget: €1.5 million (including grant and co-financing)

• PSI contribution: 50%

• Eligible applicants: Dutch companies

• Preferred sector(s): None

• Preferred region(s): None

• Remarks: None

• Project example: Transport/Infrastructure: Construction of first module of a modular floating dry-dock at Navtech S.A. Shipyard (PSOM07/CO/02)

PSI project officer ms. Miriam Valstar can provide information on Colombia:

Agentschap NL PSI office Telephone: +31 88 602 8513 fax: +31 88 602 9026 E-mail: [email protected] Webpage: www.agentschapnl.nl/en/node/50050

Additionally, several companies are willing to offer an applicant the opportunity for intercompany information on how to write a successful project proposal. Furthermore, PSI offers the opportunity for an intake.

For applicants abroad, PSI also offers the possibility to have the intake via a conference call.

2108993011/iro Annex 7

Annex 7 Interviews held in Colombia and The Netherlands

Colombia

Nr Company/Institution Name

1 Alcaldía de Bogotá William Mahecha – Coordinador Sistema Integrado de Gestión

2 Alcaldía de Cartagena Maria Claudia Páez - Secretaria de Planeación

3 ANDESCO Ana María Pérez – Juan Carlos Fonseca – Director Cámara AyAyA

4 ANDI Ángela Gómez – Gerencia de Desarrollo Sostenible

5 BANCO MUNDIAL LAC Carlos A. Uribe M. - Ingeniero en Agua y Saneamiento Urbano

6 BID José Francisco Manjarrés Iglesias - Especialista Senior Agua y Saneamiento

7 Cámara Colombiana de Infraestructura Carolina Gil – Ingeniera 8 Cañicultores Felipe Navia - Agricultor 9 CAR Henry Javier Palacios - Subdirección de aguas

10 CAR Jairo Rosas – Ex subdirector técnico 11 CINARA / Univalle Inés Restrepo - Directora

12 Comisión de Regulación de Agua Potable y Saneamiento Básico

Julio Cesar Aguilera Wilches Experto Comisionado

13 Holland Water House, Bogotá Fortunato Carvajal

14 CORMAGDALENA Augusto Noel Garcia Rodríguez – Director Ejecutivo Ricardo Rodelo – Jefe de Prensa

15 Corporación Autónoma Regional del Atlántico

Alberto Escolar Vega – Director General

16 Corporación Autónoma Regional del Canal del Dique

Robert Romero – Secretario de Planeación

17 Corporación Autónoma Regional del Valle del Cauca

Sonia Collazos - Directora General

18 Corporación Vallecaucana de las Cuencas Hidrográficas y el Medio Ambiente CALI

Diego Escobar Rivero - Director de Proyectos

19 Fedesarrollo Mauricio Olivera – Investigador

20 Fondo de Adaptación Pedro Luis Jiménez - Director Obras de Infraestructura

21 Gobernación de Cundinamarca German Rodríguez – Secretario de Planeación 22 Gobernación de Sucre Javier Cardona - Asesor

23 Instituto Geografico Agustin Codazzi - Universidad Javeriana

Francisco Londoño – Consultor - Docente

24 Sociedad Portuaria Regional de Barranquilla

Mónica Olivares – Medio Ambiente

25 Universidad Nacional de Colombia – Medellín - Proyecto Mojana

Lilian Posada – investigadora

26 Zona Franca de Bogotá Jorge Merchán – Asuntos Ambientales 27 Zona Franca Palmaseca Humberto Palomino

2108993011/iro Annex 7

The Netherlands

Nr Company/Institution Name

1 Agentschap NL / EVD International Corina Kerkmans

Michiel Pool

2 Avéco de Bondt bv Jorge Andrés Martina

3 Both Ends Izabella Diaz

4 Colombian Embassy in The Hague, The Netherlands:

Antonio Dimaté

Sra. Elba Lucia Pacheco

5 Deltares Micha Werner

6 Ecorys Teun Botterweg

7 HKV -lijn in water Marjolein de Jong

8 NWP

Paul Koppen

Femke Smeets

Peter v/d Kolk

9 Robusta Julian van Dijk

10 Rotterdam Maritime Group (RMG) and Dendra

Bart Winder

11 Royal Haskoning Martijn van Elswijk

Jan-Willem Jongbloed

12 Water Board "De Dommel" Louis Bijlmakers

13 Water Governance Centre (WGC) Maarten Hofstra

14 Waterwatch Ernesto Bastidas Obando

15 Wavin Frans Elferink

16 Witteveen + Bos Harry Mols