Water DayUNFCCC – Bonn intersess ional meet ings

The Nature ConservancyJune , 2010

Financing – Mobilizing Finance for Adaptation in the

Water Sector

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 Northern Andes

Outline

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.”

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 Northern Andes

Outline

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

Sources, Agents & Channels

Source: SEI, 2009

Diff erent ‘pots’ of fi nance available by institutions can be arranged by: Grants Lending Equity Credit Lines Carbon Finance and other environmental

services

Types of Financial Instruments

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

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 Northern Andes

Outline

Water Fund Model & Mechanism

Users

CLEANWATER

Providers

$ $WaterFund

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

+

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

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

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

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

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 R A 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