Collective and organized action is crucial to reduce corruption and inefficiency. Water Funds are a good approach to make this a reality.
– Mr. Alejandro Calvache (TNC)
The Nature Conservancy (TNC) is a charity organization that works globally to protect ecologically important lands and waters for nature and people. TNC works together with communities, businesses, governments, multilateral institutions and other non-profit organizations.
TNC launched the Latin American Water Funds partnership across Latin America and, more recently, Water Fund projects in North America, Asia and Africa. Water Funds are a model of long-term environmental conservation for watersheds that supply water to cities and communities.
Mr. Alejandro Calvache is the coordinator of the Water Funds programme* in The Northern Andes and Southern Central America Region. He leads the use of technical and financial tools to promote long-term conservation schemes of supplying water basins.
The governance of water supply systems has always been a pivotal theme for TNC, especially in Latin America. As a consequence, integrity is both a concern and a target. Water Funds are meant to offer a solid and transparent structure to channel public and private funds into trustworthy platforms for conservation initiatives.
In this context, integrity can a) increase the effectiveness of such platforms, b) help achieve greater credibility and reduce reputational risks, c) foster long-term engagement with investors and communities, and d) build more trust among involved stakeholders.
We conducted an interview with Mr. Calvache, who has worked with TNC for almost ten years, to find out why Water Funds have been so successful and what challenges TNC still faces in further promoting water integrity in the water sector of Latin America.
How is TNC currently contributing to transparency in the water sector in Latin America?
TNC has advanced a game-changing approach to improve key ecosystems responsible for water provision in several cities across Latin America. The Water Fund approach combines state-of-the-art science, better governance models, economic principles and collaboration with key stakeholders from the public and private sectors as well as civil society.
This encourages participation and transparency in the water sector in Latin America. By focusing on the governance of water provision, TNC is committed to ensuring that water is used and supplied in a transparent manner, where all investments are glassy and expenditures are properly tracked.
In Water Funds, large water users in cities like Bogota, Medellin, Quito, Rio de Janeiro, Mexico City and others, now invest in watershed protection projects. These projects are varied and can focus directly on reforestation or also contribute to helping local farmers improve their practices and diversify their income.
By reducing the flow of sediments into the water, such activities have led to improved water quality at a fraction of the cost of building water treatment plants. Nature benefits from these projects too: restored forests and grasslands are key to capturing water and sheltering wildlife. To date, TNC has established 20 Water Funds in Latin America, which seek to increase public-private partnerships and collective action to increase transparency in water management.
What current and future challenges do you see to reducing corruption in the water sector in Latin America?
With regard to current challenges, we see the difficulty for public and private water-related initiatives to be articulated in an organized manner. We are working very hard to avoid dispersion. Collective and organized action is crucial to reduce corruption and inefficiency. Water Funds are a good approach to making this a reality.
As for future challenges, these relate more to the ability to secure long-term financing for watershed conservation based on nascent water regulation frameworks, with clear control mechanisms in which civil society plays a permanent role.
What factors have ensured that the Water Fund in Medellin has become so successful?
First, the commitment from key stakeholders from the early stages of the design phase was crucial to setting up a successful Water Fund in Medellin.
For example, Empresas Publicas de Medellin, the environmental authorities, and the private sector were strongly involved from early on. Second, cutting-edge science helped identify Water Fund goals in terms of areas for intervention and return on investment. Third, a clear and balanced public/private governance model established to operate the Water Fund was crucial.
Finally, permanent dialogue between different Water Funds within Colombia and across the Latin-American region plays an important part in ensuring that the Water Funds operate successfully.
What did the collaboration between TNC and WIN bring so far to the already ambitious objective of the Water Funds?
The collaboration between WIN and TNC has brought additional tools that help evaluate and improve the performance of Water Funds. A first gulp from the glass of water integrity, which also helped in starting this collaboration, was the analysis of the governance structure in the Medellin Water Fund.
The collaboration between WIN and TNC allowed the Medellin Water Fund team to assess current results and propose solutions to increase efficiency and transparency. Both these elements are very important to build trust and secure Water Fund operations in the long run. We are exploring how to use the methodology in other operational Water Funds in Latin America.
There are several actions that TNC wants to focus on in the future to further promote participation and transparency in the way Water Funds operate. These actions have been explored in collaboration with WIN. We want to further strengthen governance models of operational Water Funds. This could mean defining clear enabling conditions for consideration before the design of new Water Funds, to make sure any new Water Fund is efficient, transparent and sustainable.
TNC will also be implementing robust science-based monitoring protocols to quantify key impacts in water quality, water regulation, and economic and socio-economic benefits delivered by Water Funds on a regular basis.
Where do you see key areas of collaboration with the Water Integrity Network in further pushing for more integrity in the water sector of Latin America?
Together with the WIN, we see opportunities to share best practices, lessons learnt and experiences in designing Water Funds in the region. TNC would like to replicate the Water Fund model in different geographies across the world. Collaboration with partners can help us jointly improve the health of watersheds and can play a role in increasing the scale of results in watershed conservation initiatives.
The experience WIN is bringing into this partnership transcends the mere integrity assessment and supports the need for more participated approaches in funding the water sector. WIN can help TNC in identifying replicable ways to ensure the right balance of interests gravitates towards watersheds. And, since WIN is a global network, strong collaboration is essential to reach such a scale across the world.
*About The Water Fund Programme
Water Funds operate through investments and leveraged resources generated and assigned to preserve the basin through conservation actions. These funds aim to invest in nature to increase water security in 40 Latin American cities by 2020. These investments are focused on keeping intact natural areas, restoring the lands along the watershed and river corridors and implementing management practices that minimize the impacts of the activities of land use in the quality and quantity of water.
The Water Fund in Medellin, Colombia is one of the most successful Water Funds in the region. This particular Water Fund is capable of collecting public and private funds for the conservation of the watersheds providing water to Valle de Aburrá, including the City of Medellin.
In early 2016, WIN discussed with TNC the possibility of making Funds even more transparent, secure for investors and communities, and capable of building trust among stakeholders. It is crucial to have mechanisms to strengthen accountability and promote different levels of participation, to ensure that people of the basins can have access to relevant information on results.