The Water Fund is a public-private partnership model where downstream water beneficiaries contribute finances to support upstream landowners and conservation managers to sustain good land management practices that yield higher quantities of better quality of water that’s economical to treat and distribute to the city based users while support upstream conservation and livelihood activities. In 2011, TNC and their partners in African countries decided to pilot application of the Water Fund Model in African cities where there is increasing water insecurity in dire need of innovative solutions. TNC launched a water fund in Nairobi in 2012 and are beginning to scope one for Lusaka with the hope to spread the other cities in the coming years.
African cities have continued to grow in population as well as industrial importance over the last few decades. This has exposed them to severe challenges regarding sanitation, water infrastructure and development planning. Demand for farmlands and land ownership has also placed pressure local water sources negatively affecting both quality of water and its availability. Some of the critical water sources for these cities include natural and indigenous forests protected as parks and forests as well as plantation forests and farmlands. The forests have faced pressure from timber sector activities as well as human encroachments. In addition, growing demand for agricultural production has driven cultivation into very hilly and steep areas, covered by very erodible andosols which resulted in landslides and heavy erosion during wet seasons. In the Upper Tana watershed in Kenya, cultivated river riparian lands that losing vegetation cover, currently supply water to the City of Nairobi and to hydropower generating systems responsible for over 50% of Kenya electricity supply. The challenge In Lusaka City and the Greater Kafue ecosystem, water resources are shared by large scale farming concerns, power generators and the city of Lusaka. Challenges, very similar to Nairobi are being faced in terms of availability in addition to increasing mining interest upstream of the city water intake. TNC is engaging with a team of Zambian stakeholders to initiate dialogue and discuss necessary actions.
The Water Fund is a public-private partnership model that is built around local opportunities and regulations local context and stakeholders all with the goal of securing investment for watershed conservation. Large water users such as water utilities and local industries serve as fund counterparties, committing to long-term payment obligations that provide secure, enduring funding for watershed protection. Fees from downstream users, collected over time, create a source of capital for conservation efforts in the watershed. Partnership is necessary to make a Water Fund work. For example, in Nairobi, TNC is collaborating with government water management entities and water users such as KenGen, to quantify the services nature provides in key watersheds and to develop a sustainable financing model for management programs that benefit conservation and business interests. The model focuses on identifying and developing a strong institutional structure and transparent sustainable financing solution that can be agreed upon by key stakeholders and ensure investments and financing are achieving desired goals of the Fund.
Some of the key lessons learnt from the Water Fund Model include:
- Good watershed conservation is key to cities sustainable water supply and growth
- Upstream residents are able and willing to protect the watersheds that yield water for cities but lack good information and/or resources to undertake the correct scale of interventions
- Public – Private Partnership can yield results that are complementary to government efforts
- The Water Fund model is replicable to many watersheds across Africa and other developing countries
Initiated in cities across Latin America, Water Funds are now a well- tested tool for long term watershed stewardship and conservation. The Water Fund model has demonstrated:
- Better quality water for residents and downstream users
- Improved water quantities in rivers and streams the year round
- Improved livelihoods for watershed residents and better economic growth for beneficiary countries.