Watch this short video for an introduction to the Water Funds Toolbox.
This is the beta-version of the Water Funds Toolbox. The Nature Conservancy and its partners are actively working to enhance this important guide for scoping, designing, operating, and monitoring water funds. You are invited to directly support this highly collaborative effort by contributing your ideas, experience, and resources (see link above for contact information).
Why has a Toolbox been developed?
The Nature Conservancy and its partners have been working to standardize their +15 years of experience developing water funds to help meet the rapid increase in demand for guidance on how to scope, design, and operate water funds. This Toolbox has been designed by water funds practitioners for practitioners and advocates of the water fund concept. Accordingly, the Toolbox is an opportunity to further synergize the capacity of staff and partners across the world by utilizing the provided guidance and collaborating to enhance this iterative support-tool.
A Brief History of Water Funds
The Nature Conservancy has been helping to secure water for downstream water users for over 15 years by facilitating targeted investments by businesses and governments in source water conservation. Through over 120 local partnerships across 10 countries, the Conservancy has developed a replicable financial and governance model – water funds – that allows water users to invest collectively in the conservation of key lands upstream. These lands include upstream areas that filter and regulate water supply, while simultaneously protecting critical terrestrial and aquatic biodiversity that support the integrity of ecosystems and the life they sustain.
Traditional urban water management systems that focus on engineered solutions – like aqueducts, pipes, and drains – will likely be insufficient to deal with the pressures of global urbanization and climate change. These “business as usual” solutions are expensive, degrade over time, and can have devastating effects on the health of rivers, floodplains, and wetlands. Accordingly, water funds provide an attractive vehicle to investors, such as food and beverage companies, water utilities and others, to minimize treatment costs and reduce the likelihood of future water shortages. The transparent, multi-stakeholder structure of water funds can furthermore improve relationships with local communities and host governments, leading to more favorable policy and regulatory environments. In short: water funds offer the promise of a transformative and lasting approach – through innovative finance and governance – to secure the health and productivity of water sources that are fundamental to sustainable growth and prosperity.
The water fund model was first applied in Quito, Ecuador in 2000, in response to the degradation of the natural landscape where water sources are located. While the structure of subsequent water funds varies from place to place depending on local opportunities and investor need, the track-record of delivery pioneered in Latin America has led to replication in the East Africa, China, and the United States. In total, there are 25 water funds actively operating and more than 40 in development across the world. Visit the water funds around the world section to learn more!
What are some of the benefits of developing a water fund?
Water funds can produce a wide range of benefits. From water services, to protecting critical biodiversity, to sequestering carbon amidst a rapidly changing climate, a number of benefits can be accrued for people and for nature. For instance, just a few of these benefits may include:
● regulation of the water cycle.
● improved water quality.
● protection or restoration of aquatic and terrestrial biodiversity.
● job creation.
● economic alternatives for communities (livelihoods).
● prevention of catastrophic wildfires.
● enhanced health and well-being (e.g. prevention of pollen, disease).
● mitigation of risk to business operations.
● protection of water supplies for future generations.
Explore the many sections below to learn more about water funds and the Water Funds Project Cycle!
What is a Water Fund?
Learn more about the key principles behind the water fund concept and watch selected videos that highlight some of TNC and partners' experience around the world.
Water Funds around the World
Learn more about the many water funds being developed around the world and the flexibility of this innovative model. This section includes brief profiles for regions in which water funds are being developed and key resources for learning more.
Interesting in reading the most current reports, fact sheets, and publications for water funds? Visit this section to access a range of innovative research, including the Urban Water Blueprint, the water funds manual, the Monitoring Primer for water funds, and more.
What are ecosystem services? Ecosystem services are the benefits people obtain from ecosystems, such as the flows of materials, energy, and information from nature that combine with industrial and human capital to provide human well-being. In the context of water funds, ecosystem services that provide specific water services are typically targeted, including the regulation of the water cycle, sediment control, and the improvement of water quality. Learn more about ecosystem services by visiting this section.
What are conservation activities? Conservation activities are typically implemented in pursuit of benefits for people and for nature in the form of ecosystem services. Ecosystem Services are the benefits people accrue from nature. A wide range of conservation activities can be implemented under the water fund model to achieve specific conservation goals. Learn more about selected conservation activities in the context of water funds by visiting the following sections:
WATER FUNDS PROJECT CYCLE
The Nature Conservancy has centralized its 15+ years of experience developing water funds around 5 phases and 4 components that collectively comprise the Water Funds Project Cycle. The 5 phases progress sequentially as follows: Feasibility, Design, Creation, Operation, and Maturity. Guidance has been developed for 4 key components that occur across these 5 phases: Multi-stakeholder Governance, Science-based Decision-making, Finance, and Deployment of Program Activities. While the order and scope of the recommended steps will vary between water funds, the Conservancy's experience indicates that water funds tend to proceed through these 5 phases sequentially. Consult this section of the Toolbox to learn more about each step of the project cycle and to access examples of how they were completed for selected water funds.
This high-level flowchart of the water funds project cycle was created to provide greater clarity as to the typical process for developing water funds. Note that this is only an example of the general process, the exact process followed for developing a water fund will vary depending on local conditions and context.
Do you want to make a contribution or have a question?
Access the 'Submit' button below to:
● describe your experience;
● contribute documents, videos, images, stories; and
● share your comments and ideas to enhance the Toolbox!
You may also contact the Toolbox administrator if you have specific questions you'd like to discuss.Back to Top