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Cost-benefit analysis and ideas for cost sharing of groundwater irrigation: evidence from north-eastern Ethiopia

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  • Gebrehaweria Gebregziabher
  • Karen G. Villholth
  • Munir A. Hanjra
  • Muleta Yirga
  • Regassa E. Namara

Abstract

The government of Ethiopia has invested in groundwater development for smallholder irrigation in the Raya Valley and Kobo Valley, north-eastern Ethiopia, where the hydrogeological potential is large but not fully developed. A cost-benefit analysis shows that investment in deep groundwater irrigation development is viable at a 9.5% discount rate in 75% of the wells. Assuming full cost recovery of capital investment, the annual payment rates (annuity) that irrigation users should pay over the wells' service life (25 years) were estimated. It is recommended that future investment be based on cost sharing rather than full cost recovery to facilitate uptake and address financial realities.

Suggested Citation

  • Gebrehaweria Gebregziabher & Karen G. Villholth & Munir A. Hanjra & Muleta Yirga & Regassa E. Namara, 2013. "Cost-benefit analysis and ideas for cost sharing of groundwater irrigation: evidence from north-eastern Ethiopia," Water International, Taylor & Francis Journals, vol. 38(6), pages 852-863, October.
    • Handle: RePEc:taf:rwinxx:v:38:y:2013:i:6:p:852-863
    DOI: 10.1080/02508060.2014.847006
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    References listed on IDEAS

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    1. Easter, K. William & Hearne, Robert R. & DEC, 1993. "Decentralizing water resource management : economic incentives, accountability, and assurance," Policy Research Working Paper Series 1219, The World Bank.
    2. Easter, K. W., 2005. "Cost recovery and water pricing for irrigation and drainage projects," IWMI Working Papers H046176, International Water Management Institute.
    3. Awulachew, Seleshi Bekele, 2007. "Water resources and irrigation development in Ethiopia," IWMI Working Papers H040631, International Water Management Institute.
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    Cited by:

    1. Berhe, Gebremeskel Teklay & Baartman, Jantiene E.M. & Veldwisch, Gert Jan & Grum, Berhane & Ritsema, Coen J., 2022. "Irrigation development and management practices in Ethiopia: A systematic review on existing problems, sustainability issues and future directions," Agricultural Water Management, Elsevier, vol. 274(C).
    2. Amjath-Babu, T.S. & Krupnik, Timothy J. & Kaechele, Harald & Aravindakshan, Sreejith & Sietz, Diana, 2016. "Transitioning to groundwater irrigated intensified agriculture in Sub-Saharan Africa: An indicator based assessment," Agricultural Water Management, Elsevier, vol. 168(C), pages 125-135.

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