Water Funds

One of the greatest benefits of The Nature Conservancy’s global reach is the knowledge transfer that occurs among staff in state and country programs – the sharing of lessons learned as we advance our mission around the world. This type of exchange occurred in November when Conservancy staff from the Latin America Region treated a group of Delaware Chapter staff, trustees and conservation partners to a presentation about implementing water funds.

The Nature Conservancy pioneered the concept of water funds in Latin America to encourage large businesses and government agencies to invest in the protection of water sources rather than more expensive treatment options. This was accomplished by creating financial tools which direct investments made by water users towards the conservation of key upstream lands to both ensure a sufficient source of clean water remains available and critical habitat for native plants and wildlife remains preserved. State chapters like Delaware are now accessing enabling conditions for launching water funds in the United States.

“In a water fund, users – such as public entities and private businesses – pay to help protect the forests and grasslands at the water’s source and along streams flowing into an urban area’s faucets to ensure a sufficient quantity and quality of water for less money,” said Julio Carcamo, Director of the Conservancy’s Northern Andes and Southern Central America Program. “It is a creative, and we are learning, effective strategy during a time when clean and abundant water is becoming a scarce commodity.”

The Nature Conservancy entered into the business of market-based funding mechanisms for conserving water upstream in Quito, Ecuador in 2000. There, the city’s two million residents rely on clean water coming from three protected areas known collectively as the Condor Bioreserve, which contains critical habitat for species such as the spectacled, or Andean, bear. Financed by investors – primarily the city’s water utility, a brewer, a bottler and a hydroelectric company – the water fund revenue is used to cover some of the conservation work in the Bioreserve to protect the water, and wildlife, and to build an endowment fund.

The Quito trust fund, thought to be the first of its kind, draws on elements of other watershed-protection programs, including one in New York City, where municipal funds dedicated towards building a water infrastructure were diverted to buying land around reservoirs, restoring habitat, paying farmers to implement best management practices, upgrading sewage treatment plants and limiting development in the Catskills watershed. By letting nature do the work of cleaning the water, the city ultimately avoided paying between $4 billion and $6 billion in water treatment costs.

According Mauricio Bedoya, the NASCA Program’s Associate Director of Philanthropy, water funds are currently operating in Ecuador and Colombia and are in development in Venezuela, Panama and Costa Rica. The Delaware Chapter believes the water fund concept may be applicable to places like the Brandywine River, which provides 100% of Wilmington’s drinking water. The Nature Conservancy is working with the University of Delaware’s Water Resource Agency to explore whether suitable enabling conditions exist within the Brandywine-Christina watershed to make a water fund viable.

“We are working to apply Latin America’s water fund playbook and lessons learned to conserve Delaware’s freshwater resources,” says Richie Jones, the Conservancy’s State Director in Delaware. “As we research the implementation of a water fund in the Brandywine-Christina watershed, it is extremely helpful to rely on prior efforts of our colleagues in Latin America who are the preeminent experts in the field.”


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