Improving Water Supplies, Saving Forests:The Example of Southern Ecuador´s

Regional Water Fund

Matt ClarkNature and Culture International

Presentation Overview

• Background – Forest ecosystem services

• Problems -- Deforestation & poor watershed mngt.

• A Solution --- FORAGUA Regional Water Fund

• Initial results – Improved water & conserved forests

• Next steps

Ecuador on the map

Roughly the size of Colorado or the UK

Ecosystem Services

– Retain and filter water

– Incredible biodiversity

Horizontal precipitation (clouds and mist)

Water retention – 21,000 gal. per acre

High Andean Páramo

Tropical Andes - Biodiversity HotspotOne-sixth of the world´s vascular plant species in 1% of the world´s land area

1515 bird species in Ecuador

The Challenges

Deforestation: 1.4% a year

Silica mining in Nangaritza Valley

Cattle in Loja´s potable water source

Deforestation & Poor Watershed Management

↓ Water Quality ↑ Water-borne diseases

↓ Available Water Supply

↓ Biodiversity

Annual cases of water-borne disease300% to 400% increase over 20 years

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ZAMORA LOJA EL ORO

Water shortages

Western Andean Slope - Dry forest

Two to four hours of water a day

A Solution

A funding mechanism and a legal & managementframework for watershed conservation & restoration

FORAGUA Service Area:Three Southern Provinces

FORAGUA = Public Trust Fund

Five founding municipalities and Natureand Culture International

– National Finance Corporation as fiduciary

Participating municipalities levy a fee onwater users

90% funds → Municipalities´own watersheds

10% funds → Technical Secretariat

15 municipalities enrolled(39 eligible)

How to join FORAGUA?

• Voluntary

• Municipalities must adoptan ordinance:– Declare municipal

watershed reserves

– Charge water users a fee• Only for watershed

management

– Authorize enrollment in FORAGUA

Fee structure

• 4 to 15 cents per m3 of water

• $521K = Total collected in 2014

Loja - $459K

Centinela del Cóndor - $2K

What makes FORAGUA innovative?

• Integrates multiple municipalities into a single fund

• Pooled resources enables small municipalities toparticipate

– Access to Technical Secretariat (admin. & tech. support)

– Access to external funds → $2.1M raised to date (supplementing water use fees)

FORAGUA Accomplishments to date

• 174,028 acres protected– Plus 37,681 acres purchased

• $388,651 average annual revenue

• 432,000 people served

With FORAGUA funds, City of Loja bought 90% of watershed(2050 acres)

Removed 200 cows

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Fecal coliforms El Carmen MPN per 100ml

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EXPENDITURE FOR CHEMICAL INPUTS FOR WATER TREATMENT

IN LOJA MUNICIPALITY

Pisaca Municipal Reserve

Water catchment for Catacocha

Protects 1000 acres of Tumbesian Dry Forest (only 5%

remaining)

Loja´s Municipal Reserves: Buffer zone for Podocarpus Natl. Park

Next steps for FORAGUA Scale up. Deliver impact.

• Enroll 24 remaining municipalities– 278,000 more acres protected

– 850,000 more people served

– $700K per year more for watersheds

• Support municipalities in implementing projects

• Monitor results → Demonstrate impact

Challenge to achieving scaleEnrollment bottleneck

• Time and labor intensive

• Lack of capacity (and stable work force) at municipal level

• Opportunity costs for Technical Secretariat

A Water School as a solution

• Phased training → Guide a cohort of municipal technicians through enrollment process

• Operational efficiencies

• Builds capacity at municipal level, reduces reliance on outside experts

Need for diversified revenue

• Tech. Secy´s Annual Budget– 50% Loja´s contribution

– 30% from external grantoverhead

• Enrolling new municipalities– Decrease reliance on Loja

– Unfunded work

• Addl. recurring revenue?– Fee for service?

– Endowment?

Opportunity toleverage partnerships

• Technical Working Group recently formed

– Focus effective water management in s. Ecuador

• Revenue opportunities, operational efficiencies within this network?

Recap

• FORAGUA – Funding mechanism and

management framework

• Water quality (primary driver)

• Biodiversity / ecosystem conservation

Questions?

• mclark@naturalezaycultura.org

• mattclark72@gmail.com