Green Water Credit Scheme as a Policy Tool for Managing Water for Sustainable Agriculture:
An Ex-ante Assessment In Malawi
Ajayi OC, Akinnifesi FK, Sileshi G, Beedy T, Ajayi AO, Mng’omba S, Nyoka. BI
Email: [email protected] World Agroforestry Centre (ICRAF)
Southern African Regional Program, Lilongwe
Presented at the CTA Week
22 – 26 November, 2010, Johannesburg, South Africa
IntroductionIntroductionHigh population density in Zambia- similar human
population size but a third of the land size of Zambia
Low per capita land avalability ► deforestation/land degradation & degradation of watersheds ► major constraint in rainfed agric
CC increases risks of unpredictability in water supplies in rain-fed farming, affects food security
Tree cutting
Immediate products
Long term effects
Response?Response? Policy options to challenge?
Regulation- “command and control” Moral persuasion- “sensitization”
Payment for Ecosystem Services- “Green Water Credit” reward land users for good land mgt practices & environmental stewardship.
Shire watershed- Economically most important, >90% national electricity, 185 persons/km2 (139 nationally) NSO 2008
Planning without facts? Cost of degradation of Shire Basin?, Who is affected? How?
ObjectiveObjective General
Provide information on cost of degradation of Shire water Basin to make informed policy decisions on the prospects for GWC in Malawi
SpecificEstimate economic cost of degradation of Shire Basin to
stakeholdersAssess willingness of public electricity consumers to co-finance
green water creditsEvaluate opportunities and challenges to implement Green
Water credit in Shire River Basin.
ProcedureProcedureConsultative meetings & interviews with different
stakeholders (utility, NGOs, etc)
Primary data from the electricity company (ESCOM) to assess remedial actions and operational costs due to the siltation and degradation of River Basin
Stratified sample of 520 electricity consumers to estimate to estimate “Willingness To Pay” for co-financing GWC
Table 1: Stakeholders consulted and overview of the effects of degradation of . the Water Basin on their operations in Malawi, 2009
Stakeholder Implications of degradation of Shire River
Electricity Supply Company of Malawi (ESCOM)
Hydro power generation problem due to flow and silt load & weeds
High operational costs to maintain turbines due to siltation Lost revenue resulting from “black outs”
Blantyre Water Board(BWB)
High cost of treating water Lost revenue Higher electricity costs for pumping water
Private plantation & farm households
Reduction of quantity of water for irrigation Destruction of water pumping plants & irrigation structure
due to floods Reduction in soil fertility due to soil erosion
Fishermen Destruction of artificial and natural fish habitats Reduction of fish stock
Fig 1 : Annual cost (US$) of weeding and remedial actions incurred by electricity utility on power stations on Shire River
Table 2: Cost of lost revenue (US$ per annum) in electricity power stations on Shire River, 2009
Name of power station
Capacity relative to
Nkula station
# of power outage (hours)
Energy lost(MegaWatt)
Lost Revenue (US $)
Nkula 100% 8,316 107,874 770,523
Tedzani 25% 2,079 26,969 192,631
Kapichira 25% 2,079 26,969 192,631
Total lost revenue 12,474 161,811 1,155,785
Willingness of consumers to co-finance GWC Degradation of Shire basin is of strategic economic
importance: affects key institutions & generates over 90% of total national electric power.
The willingness of electricity consumers to pay for GWC is high. Half of electricity consumers (54%) are willing to pay extra to ensure regular power supply.
The average amount they are willing to pay for co-financing GWC is MK 1229 (US$ 8.8), equivalent to 42% of an average monthly electricity bill
Summary & “Take home” messageClear consumer support and potential to mobilize
local resources to support green water credit as a policy option to degradation of Shire Basin.
GWC as a scheme to ensure water for sustainable agriculture is feasible, subject to hydrological assessments, effective governance arrangements, and appropriate.
Similar assessments need be carried out to evaluate the cost of degradation of the river basin to other stakeholders (e.g. Water Boards).
Thank you
