Project Report:
Implementing Ecosystem Valuation as a Global Conservation and Economic Development Strategy
- Investigates the causes of economic imbalances.
- Investigates the effect of the global financial system and/or the monetary system in fostering a sustainable economy.
- Explores and develops market-based solutions.


In Colombia, a third of the population gets drinking water from protected areas. Some municipalities there and elsewhere in Latin America, are beginning to realize that investing in watershed protection is less expensive than mitigating the problems that result from watershed degradation. Recognizing the opportunity to capitalize upon this cost-benefit analysis to enhance freshwater conservation, the Conservancy has developed, tested and implemented a plan that incorporates financing watershed conservation and protection through water trust funds capitalized by user fees and private contributions. Buttressed by our longstanding protected-areas and ecotourism work in the region, these strategies are preserving freshwater for people while simultaneously conserving critical habitat. We seek to create 2 new Funds, in Ecuador and Colombia.

Ecuador Water Fee
Quito, the capital of Ecuador, was the site of the first watershed protection trust fund pioneered by the Nature Conservancy. (Illustration by Barrett Walker from site visit.)


Part I: Ayampe Water Fund, Ecuador

The Ayampe watershed spans part of Machalilla National Park, a portion of the Protected Forest of Chongon-Colonche and communal lands. Funding for protected area stewardship is scarce. Downstream, more than 20,000 people in the municipality of Puerto Lopez depend on the river for their water needs, from drinking, to cooking, to irrigation. Puerto Lopez is a very impoverished region of Ecuador. Its water infrastructure system is inadequate and many residents are not able to tap directly into it for their water needs. Where access is lacking, large water trucks deliver water in bulk to residents and farmers as well as to tourist lodges. The Nature Conservancy is working to turn the situation around. By partnering with businesses, governments and others to invest in the protection of water sources; we can help set communities on track to a healthier future.

Progress to date:

• Signed cooperative agreements with the municipal governments of Manabi and Puerto Lopez to work together on the creation of the Ayampe water fund.

• Completed a water study for the Ayampe watershed by taking base line measurements on the quality and quantity of water in nine stations dispersed across the watershed. Water quality results ranged from moderate to very poor. The data was used to map water quality across the whole watershed to help identify priority areas for intervention.

• Sponsored 14 representatives from three provinces and three municipalities to participate in a two-day visit to learn from the experience of the Tungurahua water fund, which the Conservancy helped establish in 2008 to protect water sources for 100,000 people in the province of Tungurahua. Local representatives learned from their peers about the development of Tungurahua, and the critical role played by the municipal governments in its creation. They also visited projects financed by the water fund. Tungurahua secured investments from the province of Tungurahua, Municipal Water Company from Ambato, two electric companies and the indigenous organizations. The fund has now reached $500,000 and invests $250,000 per year in conservation.

• Launched a pilot project in Guale to show how the community can play an active role in improving its own water quality. About 500 residents live in the Guale, in the lower Ayampe watershed; their lives are intricately linked to the river, which fulfills most of their needs, from crop irrigation, to water for cattle, to fishing or even laundry which is done in the river itself. Working with the community we will develop a participatory plan to implement sustainable production practices.

• With support from the Manabi and Puerto Lopez municipal governments, we produced educational materials about the watershed, including a poster (2000 prints) and brochure (1000 prints), to be distributed to several communities in the municipalities of Puerto Lopez, Jipijapa, Pajan and Santa Elena.

• Held several informative sessions about the importance of the Ayampe River in which we shared results from our studies, maps and materials with many organizations in the area to garner their support for the creation of the fund.

• Completed the conservation portfolio for the Ayampe watershed which delineates conservation objectives, geographic areas of intervention, and strategies, using a variety of tools and methodologies that ensure access to the best available science.

Next steps:

• Design the financial plan for the Ayampe water fund. (The plan will establish how much money the fund will need in order to accomplish the objectives set up in the conservation plan. It will include financial projections; calculate the endowment’s rates of return, provide recommendations on endowment investment strategy, and lay out a budget for the conservation activities to be carried out and fundraising goals).

• Set up the legal structure of the Ayampe water fund.

• Identify investment priorities.

• Share advances with stakeholders, decision makers and potential water fund investors.

• Launch a pilot project in the Guale community to lessen the impact of human activities on the river while improving water quality for the 500 residents of Guale. Planned activities include: building fences to prevent cattle from eroding river banks and contaminating water sources; reforesting river bends to prevent erosion and protect riparian habitat; surveillance to stop visitors from washing their cars in the river and extracting construction material; improving sewage system to prevent contamination.

Part II: Water for Life (East Cauca Valley Water Fund), Colombia

The Conservancy, ASOCAÑA (Colombia’s sugarcane association), CVC (the local environmental authority, Corporación Autónoma regional del Valle del Cauca) and nine grassroots organizations launched the East Cauca Valley Water Fund in June, 2009. The fund supports conservation across 600 square miles of moist tropical forests and montane grasslands surrounding ten river basins that provide drinking water to 900,000 people in the cities of Palmira, El Cerrito, Pradera, Florida Tulua and Miranda. These western-Colombian cities are located in the buffer zones of Las Hermosas National Park and several regional protected areas that provide essential habitat for many endangered species, including spectacled bears, pumas, tapirs and parrots. Acknowledging the industry’s reliance on fresh water, ASOCAÑA committed $1.6 million during the first three years of the fund. CVC has pledged $1 million and the Conservancy committed $150,000. The Cauca Valley water fund is one of the first to include climate change modeling to help direct investments.

Progress to date:
• Completed climate change adaptation study to guide the fund’s conservation investments. Carried out by our partner CIAT, this study focused on impacts on biodiversity and hydrological ecosystems services commonly used by the sugar cane sector (water regulation, sediments retention), juxtaposing various climate change scenarios.
• Completed the first five conservation projects financed by the water fund. With a total budget of $500,000, the projects focused on water conservation strategies, sustainable production and soil conservation.
Next Steps:
• Design monitoring protocol to measure impacts of water fund investments on biodiversity (hydrological and terrestrial) and local communities (socioeconomic impacts).


The two water funds supported by the Alex C. Walker Foundation are especially important models in the Conservancy’s water fund portfolio because of their roles in informing regional and global replication—the Cauca Valley for its incorporation of climate adaption methodology and the Ayampe watershed for helping determine how to establish water funds in impoverished regions.

Water funds have the potential to revolutionize watershed conservation worldwide. The approach is simple, efficient, and replicable. The Nature Conservancy, FEMSA Foundation, the Inter-American Development Bank and Global Environment Facility joined efforts to create the Latin American Water Funds Partnership, sharing a common vision for the future: to preserve healthy watersheds and help protect important water supplies in the region. The partnership will invest $27 million dollars to create, implement and capitalize at least 32 water funds across Latin America. This will support the conservation of more than 7 million acres of watershed that, in turn, could benefit approximately 50 million people in rural and urban areas. This represents a ground-breaking initiative to engage the private and public sectors and civil society on water funds.

Water Fund Photos


The purposes of the objectives for which we seek the Foundation’s support are to:

1. develop ecosystem services models that aim to counter economic imbalances and which are globally replicable,
2. contribute to the global financial system through the fostering of sustainable local economies, and
3. explore and develop market-based solutions.


This project is in Latin America; it's applications/replications are expected to have worldwide impact

Amount Approved
$30,854.00 on 9/15/2010 (Check sent: 11/29/2006)

  Related Organizations
The Nature Conservancy  

Ayampe River communities. © Jaime Camacho
Ayampe River communities. © Jaime Camacho

Ayampe River communities. © Jaime Camacho
Ecuador Water Fee
report attachment with photos (Doc)
Water Fund Photos

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Dan Quinn
John LaBine
Senior Writer - Global Priorities, The Nature Conservancy

Posted 9/1/2010 11:39 AM
Updated   10/25/2011 6:34 PM

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