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This case study outlines the application of the Physical Climate Risk Appraisal Methodology for an equity investment into East Africa Marine Transport (EAMT) for the design, construction, and operation of MV Mpungu. Provided by Private Infrastructure Development Group (PIDG).
MV Mpungu is an operational logistics and freight vessel operating in Lake Victoria, capable of transporting up to 21 fully laden trucks between Uganda and Tanzania. The ferry was commissioned as a purpose-built vessel and development of the service also included upgrades to Port Bell, Kampala, to improve the port infrastructure.
PIDG is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and South and Southeast Asia. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia and Sweden, and Global Affairs Canada.
The study was conducted as a collaborative project between IIGCC, PIDG, the Environmental Change Institute at the University of Oxford and the London School of Economics Grantham Research Institute on Climate Change and the Environment.
Making the case for resilience investment
The effective operation of the vessel on Lake Victoria is highly dependant on lake water levels. At high extremes, elevated water levels may inundate the quay and associated infrastructure. At the other end, significantly low water levels increase the risk of vessel grounding.
After conducting PCRAM scoping and data gathering and a materiality assessment, an adaptative pathways approach was proposed as a strategy for building long-term asset resilience and sustaining investor returns. This approach was further supported by modelled lake projections, which indicate chronic, multi-year changes.
Two trigger thresholds were defined to simulate the points at which investment would be required in two distinct trigger options. These triggers were combined with a range of climate projections to model potential future scenarios for the asset, accounting for disruption levels, revenue losses, and the costs of resilience-building measures.
Considering all climate models - General Circulation Models (GCMs) - and emissions scenarios, 49 distinct futures were assessed. PIDG then used PCRAM's value enhancement assessment to map direct and indirect benefits from resilience investment.
Lessons learned
In applying the PCRAM methodology, PIDG identified benefits in dealing with uncertainty, in this case using adaptive pathways to allow flexible, iterative decision-making, avoiding reliance on a single forecast.
System interdependencies were highlighted as an important point of consideration, in this case the viability of lake transport is linked to hydropower operations, with trade-offs between energy generation and navigability.
Wider considerations reinforced the importance of public-private collaboration in identifying, funding, and managing resilience measures as part of a collaborative approach to adaptation. Future studies will explore the potential of nature-based solutions to enhance resilience.
Read more in the cases study below.