Qiandao Lake Water Fund takes page from high finance playbook to protect water for 10 million Chinese residents

Water fund aims to improve water quality and quantity, lower carbon footprint, and build healthier, more resilient communities

Arlington, VA / Beijing, China | February 27, 2018

Leveraging strategies from the world of high finance, The Nature Conservancy, along with the Alibaba Foundation, Minsheng Insurance Foundation, and Wanxiang Trust have launched the Qiandao Lake Water Fund to help secure clean drinking water for approximately 10 million people in cities and towns throughout Zhejiang Province, China.

“Cities around China, like many cities around the world, are facing increasing water quality and security challenges,” said Giulio Boccaletti, Chief Strategy Officer and global managing director, water, The Nature Conservancy, which provided the scientific analysis of the Qiandao Lake watershed which underpins the Water Fund. “Investing in natural solutions, like water funds, is a powerful strategy to secure clean water, to mitigate and adapt to climate change, protect biodiversity, and support human health and well-being across watersheds.”

Qiandao Lake, China’s largest artificial lake, faces increasing pressures from non-point source pollution such as land use and degradation, excessive fertilizer and pesticide use, and livestock waste. These pollution sources are scattered around the watersheds with on long-term management strategies in place to solve the problem. Because of these pressures, developing and implementing long-term solutions to protect water at its source has become critical as development in the area increases.

“Protecting Qiandao Lake for future generations is of the utmost importance,” said Huang, Haifeng, party secretary for Chun’an County, Hangzhou City, Zhejiang Province. “The Qiandao Lake Water Fund will not only help reduce pollution of the watershed but will leverage new ideas and technologies to protect the area’s ecology and environment while balancing the needs of local residents and development.”

The Qiandao Lake Water Fund was established with first phase funds of $1.58 million (10 million RMB) to reduce non-point source pollution using the best available science, work with businesses and industry to reduce their impacts to the environment, and collaborate with government, communities and other philanthropic institutes to develop long-term watershed management system for non-point source pollution.

To grow sustainably, cities around the world will need to play an active role in protecting the water sources on which people and nature depend. Research by The Nature Conservancy identified that between 2011 and 2016, China spent $8 billion annually on its national eco-compensation programs. In comparison, investing in natural solutions that could improve water quality by 10 percent in China’s 30 fastest growing cities would cost about $300 million each year. In 50 percent of the cities analyzed in the report, savings in water treatment could offset a significant portion of the catchment conservation costs.

“Businesses play an important role in bringing about positive change for society writ large,” said Sun Lijun, vice president, Alibaba Foundation. “The Qiandao Lake Water Fund promises to bring about tangible, economically-viable, and sustainable results.”

The Nature Conservancy developed water funds to enable downstream water users to jointly invest in upstream land conservation and restoration, to secure improved water quality, and regulate water supply. Over the past 15 years, The Nature Conservancy has helped establish 29 water funds worldwide and currently has another 30 in development. In addition to the fund in the Qiandao watershed, The Nature Conservancy also helped establish a fund in the Longwu Reservoir, which provides water to 4,000 people in China. Each water fund is unique, and conservation activities vary from place to place depending on local opportunities and regulations. By investing upstream, cities can save significantly on annual water treatment costs and can lower their carbon footprint, protect critical ecosystems and build healthier, more resilient communities and economies.

To learn more about water funds, please visit: Water Funds Toolbox.


The Nature Conservancy is a global conservation organization dedicated to conserving the lands and waters on which all life depends. Guided by science, we create innovative, on-the-ground solutions to our world's toughest challenges so that nature and people can thrive together. We are tackling climate change, conserving lands, waters and oceans at an unprecedented scale, providing food and water sustainably and helping make cities more sustainable. Working in 72 countries, we use a collaborative approach that engages local communities, governments, the private sector, and other partners. To learn more, visit www.nature.org or follow @nature_press on Twitter.

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Ciaran Clayton
Director, Global Media

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