THE National Irrigation Administration (NIA) said many irrigation projects are currently unattractive for public-private partnership (PPP) financing because of the low likelihood of earning commercial returns, but added that it is considering ways to raise the return on investment (RoI) for private partners.
It described irrigation projects as being of “low economic viability” because their primary purpose is to provide irrigation to farmers for a nominal fee.
“NIA is thus currently exploring the addition of investment opportunities that may improve the financial aspect of NIA projects potentially to be applied in PPP projects to provide a reasonable RoI to the partner-investors,” it added.
It said the potential market for irrigation PPPs is about 964,000 hectares of agricultural land currently lacking irrigation, on which it estimates about P1 trillion worth of facilities can be built. The NIA said it has received expressions of interest to build projects on the unirrigated land.
It said President Ferdinand R. Marcos, Jr. has issued instructions to explore the PPP mode of financing for irrigation.
According to the NIA, if irrigation is provided to unserved land, it expects 95% of it to be planted to rice.
“At present, our irrigated lands of 2.49 million hectares are able to produce only a total of 11.28 billion kg of palay or 6.77 billion kg of rice per year, an annual shortage of about 550 million kg of rice,” the agency said.
The NIA is considering 50 irrigation projects alongside other infrastructure.
“NIA has in its pipeline… a ‘menu’ (of) potential investment opportunities, including aquaculture farming, hydro-electric power generation, floating solar panels in the dams, covering the irrigation canals with solar panels to both generate power and at the same time minimize water evaporation, and the possibility of bulk water distribution that may be integrated in each NIA project,” it added. — Luisa Maria Jacinta C. Jocson