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Financing – Mobilizing Finance for Adaptation in the Water Sector

Financing – Mobilizing Finance for Adaptation in the Water Sector. Water Day UNFCCC – Bonn intersessional meetings The Nature Conservancy June, 2010. Outline. TNC and Climate Change Climate Finance: overall picture Needs & Distribution of Responsibilities Sources, Agents & Channels

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Financing – Mobilizing Finance for Adaptation in the Water Sector

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  1. Financing – Mobilizing Finance for Adaptation in the Water Sector WaterDay UNFCCC – Bonn intersessionalmeetings The Nature Conservancy June, 2010

  2. Outline TNC and Climate Change Climate Finance: overall picture 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

  3. 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.”

  4. Outline TNC and Climate Change Climate Finance: overall picture 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

  5. Needs & Distribution of Responsibilities Distribution of Responsibilities Source: KfW Analysis based on EU COM – SEC, 2009

  6. Sources, Agents & Channels Source: SEI, 2009

  7. Types of Financial Instruments Different ‘pots’ of finance available by institutions can be arranged by: Grants Lending Equity Credit Lines Carbon Finance and other environmental services

  8. 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

  9. Outline TNC and Climate Change Climate Finance: overall picture 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

  10. Water Fund Model & Mechanism Users Providers $ $ Water Fund CLEAN WATER

  11. Water Fund Model & Mechanism Water users capitalize the fund Fund Watershed protected % of profits from the water company, electricity company Financial revenue Conservation programs and projects + + Donor Catalyst Grants Additional resources of projects

  12. 2000: $21,000 start-up • 2008: $6,000,000 Fund Progress • 2 million residents • Condor Bioreserve: 2.5 million acres, exceptional biodiversity, including 760 bird species; 28 rivers Importance • 2008: provided $700,000 for conservation in watersheds: park guards, environmental education, sustainable livelihoods. Conservation Progress • EMPAAQ (Quito’s water agency); Quito Electric Company; TNC; USAID; Swiss Development Corporation; Cerveceria National (beer company); Tesalia Springs Co. Partners Quito Water Fund (FONAG)

  13. 2000: $21,000 start-up • 2008: $6,000,000 Fund Progress • 2 million residents • Condor Bioreserve: 2.5 million acres, exceptional biodiversity, including 760 bird species; 28 rivers Importance • 2008: provided $700,000 for conservation in watersheds: park guards, environmental education, sustainable livelihoods. Conservation Progress • EMPAAQ (Quito’s water agency); Quito Electric Company; TNC; USAID; Swiss Development Corporation; Cerveceria National (beer company); Tesalia Springs Co. Partners Quito Water Fund (FONAG) http://www.fonag.org.ec

  14. 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

  15. 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

  16. Water fund / EBA Proof of Concept“Agua para La Vida Fund” East Cauca Valley near Cali, Colombia Watersheds: Tuluá-Morales, Nima, Amaime, Bolo, Desbaratado, Frayle, Guabas, Palo and Zabaletas en el Departamento del Valle del Cauca (cuenca del Magdalena) – Parque Nacional Las Hermosas

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