On this page:

Integrated water management funding and financing guidelines

We commissioned the Cooperative Research Centre for Water Sensitive Cities to develop the Bridging the integrated water management funding and financing gap guide to help practitioners understand and determine an appropriate funding/financing mix for integrated water management (IWM) projects (2021).

This guide provides practical advice and a structured process to ensure practitioners who design and collaborate on IWM projects are able to:

  • understand the funding and financing context and have clear objectives.
  • consider a wide range of funding and financing options and their features, which can affect decisions.
  • develop a context appropriate and implementable funding and financing plan.

Bridging the integrated water management funding and financing gap guide

Integrated water management forum planning – a step-by-step guide for local councils

This document provides guidance on preparing local government and other water sector organisations for IWM forums.

The guide sets out a process for identifying priorities for collaboration. It can be used internally or as part of a facilitated workshop.

Preliminary project assessment guidelines

IWM strategies can include a wide range of management options that can affect one or multiple aspects of the water cycle.

Options can be implemented at a range of scales, from regional to precinct to lot. They can use different sources of water, satisfy different demands for water, and use a range of local or regional infrastructure for storage and treatment.

Feedback to DEECA has indicated that the process of shortlisting these options can be challenging.

The Preliminary assessment method (PAM) provides guidance on shortlisting options, bringing together lessons and data from previous IWM strategies and providing a methodology framework to aid shortlisting in a time-effective yet robust manner.

The PAM should not replace detailed analysis of option portfolios or underpin business case proposals. It is only intended as a high-level assessment method to aid shortlisting.

PMA for Integrated Water Management strategies

Economic evaluation and cost allocation framework

Local projects and servicing plans developed by IWM working groups will proceed through economic evaluation and approval processes that are determined and accepted by the IWM partners involved.

In most cases, cost-benefit analysis provides a robust method for evaluating the costs and benefits (including both market and non-market impacts) of a project. A multi-criteria analysis can also be used where the major benefits cannot be valued or are impractical to value.

IWM plans and projects often propose innovative investments that provide multiple benefits to many different entities.

An integrated solution may lead to costs that would typically not have been incurred by the project partners through traditional projects under current regulatory settings.

However, the additional costs do not necessarily change at the same scale as additional benefits and can be concentrated on one or 2 specific entities. Funding streams and cost recovery mechanisms are not always apparent. This can present a barrier to some IWM projects.

Cost-allocation process

DEECA has developed a cost-allocation process to respond to this issue. This provides a process to guide decision-making on funding arrangements in such situations. The cost-allocation framework will be further developed and tested collaboratively by DEECA with other Victorian Government departments and the water sector.

This approach may identify a new interested organisation willing to co-invest to achieve the benefits identified. A strong project prospectus that describes the benefits and presents a sound value proposition can be a key tool to leverage external support.

This can also be key to achieving opportunistic support and funding when the implementation context or strategic drivers change for a project or plan that has not been adopted due to funding issues.

Cost allocation framework for IWM projects

Externalities valuation

Externalities valuation focuses on assigning values to costs and benefits that are not obviously monetised, such as the community benefit of amenity improvements.

Valuing externalities for integrated water cycle management planning is a study commissioned by DEECA that provides a first point of reference when undertaking IWM analysis that involves externalities. Although guidance on using externality data is provided in this report, it should be recognised that appropriate economics expertise is important when applying it.

As with many technical disciplines, the devil is in the detail, and the robustness of the economic assessment is heavily dependent on the conditions under which the information is applied.

This topic is an acknowledged gap and work to improve understanding of this area continues.

Valuing externalities for integrated water cycle management planning

Green-blue infrastructure guidelines

DEECA has partnered with the City of Ballarat to develop Planning a green-blue city: A how-to guide for planning urban greening and enhanced stormwater management.

This guide was developed to assist cities and towns in planning for increased presence and effectiveness of green-blue infrastructure in their urban areas.

It is designed to assist local governments and their partners in:

  • developing a robust and locally tailored evidence base for the need to promote green-blue infrastructure opportunities
  • identifying green-blue infrastructure opportunities at all scales
  • reviewing opportunities for greatest community benefit and value
  • determining priority projects and key actions
  • identifying delivery pathways and funding mechanisms.

It allows local governments to develop the necessary components of a green-blue infrastructure action plan to inform and drive local government-led initiatives.

Planning a green-blue city: a how-to guide

Page last updated: 08/09/23