European Union supports investment in Timor-Leste’s water sector

Thanks to close cooperation between representatives of the EU, the European Investment Bank and the local government, three new investment projects have been developed to support the socio-economic development of Timor-Leste. The latest meeting of the Steering Committee of the Project Preparation and Implementation Program (PPIP) in this regard was held on October 24. One of the initiatives in question concerns support for Timor-Leste’s water management.

New EU aid for East Timor

Relations between the European Union and Timor-Leste date back to 1999, but closer cooperation did not begin until 2006. It was then that representatives of the Timorese government signed the Cotonou Agreement on partnership between the EU and African, Caribbean and Pacific countries. Recall that it aims to eradicate poverty, promote sustainable development and economic integration.

For almost 20 years, representatives of the EU and Timor-Leste have met annually at Political Dialogue sessions to discuss achievements and new challenges in the partnership. So far, however, assistance has consisted of a limited array of instruments: grants, technical and budgetary support. Now, as part of the implementation of the innovative GlobalGatewaystrategy, assistance from the EU has been expanded to include loans and guarantees, and EU Ambassador Marc Fiedrich speculates that in the future it may also include private investment.

The budget for the PPIP project preparation program, managed by the European Investment Bank, is €5 million, of which €4.75 million is technical assistance from the EU, while €250,000 comes from Cotonou Agreement funds.

Three projects: forestry, waste and water

Under the new cooperation, three key projects have been prepared to actively promote sustainable development in East Timor. The first is in the forestry sector, and aims to convert underutilized state-owned areas in the municipalities of Covalina and Bobonaro to increase the production of wood for firewood and construction. In the process, thousands of jobs will be created for members of local communities.

The second project focuses on the development of the state’s waste management system. It aims to implement safe and effective waste management methods to reduce the amount of pollution entering the environment.

Under the third project, key municipalities are to gain better access to clean water. The initiative will be implemented in urban and rural areas, responding to local needs, including sanitation. Together, the three projects will require an investment of 260 million euros.

Why is this initiative so important?

The new era in partnership between the EU and Timor-Leste has been met with much favorable feedback. European Investment Bank (EIB) Vice President Ambroise Fayolle said the focus on the forestry, water and waste management sectors will not only help meet the most pressing social needs, but also lay the groundwork for stable economic growth. The EIB, as the financial arm of the EU, will provide the funds necessary to turn these projects into tangible investments, in line with its “Gateway to the World” strategy.

Timor government officials also expressed deep satisfaction with the development of the cooperation. Minister of Planning and Strategic Investment Gastão Francisco de Sousa stressed that the new projects have great potential for the long-term development of urban and rural environments and are in line with national priorities in each sector.

Timor-Leste’s Minister of Agriculture, Forestry and Fisheries Marcos da Cruz expressed gratitude for the commitment of the EU and EIB, adding that the development of commercial forestry on state-owned wastelands will be an important step toward increasing employment and profits from forest management, as well as re-greening the island. State Administration Minister Tomás do Rosário Cabral, in turn, referred to the project to develop a waste management system, pointing to the urgent need to protect the terrestrial and marine environments, as well as reduce the health risks associated with the ballast of unmanaged garbage.

Challenges facing East Timor

According to UNICEF , in Timor-Leste 80 percent of the rural population and 96 percent of the urban population have access to water. In reality, however, this is access at the most basic level, that is, to an improved water source within a 30-minute round trip. This information does not mean that the water is clean and safe. In 2 percent of rural households, it still takes more than half an hour to get water.

The state of sanitation is even more dramatic, with only 49 percent of rural residents and 74 percent of Timor-Leste’s urban population using it. In addition, the practice of taking care of one’s physiological needs in nature is still common in 27 percent of rural households. The consequences are serious and far-reaching – during the preparation of the 2016 demographic census, it was found that as many as 11 percent of all children under the age of 3 suffered from diarrhea.

OZN’s monitoring of the implementation of the Sixth Sustainable Development Goal (6th SDG) reports that only 28 percent of Timor-Leste’s population has a sink and soap at home. The implementation rate of integrated water resources management was only 14 percent in 2023. While development progress over the past two decades has been visible and consistent, huge investments in water and wastewater infrastructure are still needed.

“Gateway to the World” strategy – investments for the water sector

Europe’s Gateway to the World strategy aims to support global initiatives related to digitalization, climate and energy, transportation, health, education and research in regions of the world where lack of capital for infrastructure investment is a problem. It has a budget of 300 billion euros for the period 2021-2027 for its implementation. Some of these funds will be used for water projects.

In October this year. The EIB announced €100 million in loans to support investments in water supply, sewerage construction, waste management improvements and stormwater management in Caribbean countries. An additional 24.4 million euros will support the construction of wastewater treatment plants and the repair of water supply networks in five districts in Guyana. The African island of São Tomé received €14 million in support a year ago to improve its water infrastructure.

It is safe to say that the Gateway to the World strategy is Europe’s response to global challenges from which it is difficult to insulate itself in today’s world – from the staggering water and energy crisis to the challenges of spreading disease and social inequality. Still, the initiative has many opponents, pointing to arbitrary settlements that further exacerbate global inequality and tangibly benefit select European companies.