Financing – Mobilizing Finance for Adaptation in the Water Sector
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Transcript of Financing – Mobilizing Finance for Adaptation in the Water Sector
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Water DayUNFCCC – Bonn intersess ional meet ings
The Nature ConservancyJune , 2010
Financing – Mobilizing Finance for Adaptation in the Water
Sector
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TNC and Cl imate Change
Cl imate F inance : overa l l p ic ture Needs & Distribution of Responsibilities Sources, Agents & Channels Types of Financial Instruments Fast-start Finance: why is it important
On the ground: Water Funds in Nor thern Andes
Outline
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Why Climate Change Matters to The Nature Conservancy?
“Every acre of land and mile of coast protected by The Nature Conservancy, every state and nation where we work, will be affected by climate change. The Nature Conservancy’s commitment to mission compels us to act. Our science, reputation and experience call us to lead.”
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TNC and Cl imate Change
Cl imate F inance : overa l l p ic ture Needs & Distribution of Responsibilities Sources, Agents & Channels Types of Financial Instruments Fast-start Finance: why is it important?
On the ground: Water Funds in Nor thern Andes
Outline
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Distr ibut ion o f Respons ib i l i t i es
Needs & Distribution of Responsibilities
Source: KfW Analysis based on EU COM – SEC, 2009
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Sources, Agents & Channels
Source: SEI, 2009
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Different ‘pots’ of finance available by institutions can be arranged by: Grants Lending Equity Credit Lines Carbon Finance and other environmental
services
Types of Financial Instruments
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Fast-start Finance: Why is it important?
Jumpstart action on climate change Builds momentum in climate
negotiations Brings to forefront structural gaps:
Donor countries: go beyond business as usual financial structures
Recipient countries: institutional arrangement and policy design
Lessons to be learned and applicable for post 2012 regime
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TNC and Cl imate Change
Cl imate F inance : overa l l p ic ture Needs & Distribution of Responsibilities Sources, Agents & Channels Types of Financial Instruments Fast-start Finance: why is it important
On the ground: Water Funds in Nor thern Andes
Outline
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Water Fund Model & Mechanism
Users
CLEANWATER
Providers
$ $WaterFund
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Water Fund Model & Mechanism
FundWater users capitalize the fund
% of profits from the water company, electricity company
Financial revenue
Additional resources of projects
Conservation programs
and projects
Watershed protected
+Donor Catalyst
Grants
+
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Quito Water Fund (FONAG)
Importance• 2 million residents
• Condor Bioreserve: 2.5 million acres, exceptional biodiversity, including 760 bird
species; 28 rivers
Partners• EMPAAQ (Quito’s water agency); Quito Electric
Company; TNC; USAID; Swiss Development Corporation; Cerveceria National (beer
company); Tesalia Springs Co.
Conservation Progress
• 2008: provided $700,000 for conservation in watersheds: park guards, environmental
education, sustainable livelihoods.
Fund Progress
• 2000: $21,000 start-up• 2008: $6,000,000
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Importance• 2 million residents
• Condor Bioreserve: 2.5 million acres, exceptional biodiversity, including 760 bird
species; 28 rivers
Partners• EMPAAQ (Quito’s water agency); Quito Electric
Company; TNC; USAID; Swiss Development Corporation; Cerveceria National (beer
company); Tesalia Springs Co.
Conservation Progress
• 2008: provided $700,000 for conservation in watersheds: park guards, environmental
education, sustainable livelihoods.
Fund Progress
• 2000: $21,000 start-up• 2008: $6,000,000
Quito Water Fund (FONAG)
http://www.fonag.org.ec
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Why water funds and Protected Areas
are a good adaptation strategy?
Water Funds Multiple Benefits: Conservation, Social, Economic Adaptation
Maintain regular water supply• Conserving ecosystems that are biologically adapted to store and
regulate water release Maintain Integrity and Resilience of the ecosystems and
watershed system• PA and landscape focus – improved connectivity, threat
abatement (cattle ranching), soil stabilization
Enhance people’s resilience to change• Best management practices on productive systems (soil stability-
fertility-water retention, etc)• Income diversification
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Why water funds are a good adaptation strategy?
Water Funds Multiple Benefits: Conservation, Social, Economic Adaptation
Economic Benefits Cost-effectiveness (ex. sedimentation costs) Ensuring viability of economic development (ex. sugarcane
industry)
Multi-sectoral Governance Structure• Decision-making board that includes representatives from multiple
user groups of water resources • Long term mechanism – good framework to work on climate
change
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Water fund / EBA Proof of Concept“Agua para La Vida Fund”
E A S T C A U C A VA L L E Y N E A R C A L I , C O LO M B I A
WAT E R S H E D S : T U L U Á - M O RA L E S , N I M A , A M A I M E , B O L O , D E S B A R ATA D O , F R AY L E , G U A B A S , PA L O A N D Z A B A L E TA S E N E L
D E PA RTA M E N T O D E L VA L L E D E L C A U C A ( C U E N C A D E L M A G D A L E N A ) – PA R Q U E N A C I O N A L L A S H E R M O S A S