Water Day UNFCCC – Bonn intersessional meetings The Nature Conservancy June, 2010 Financing – Mobilizing Finance for Adaptation in the Water Sector

 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 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 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 Outline

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

Sources, Agents & Channels Source: SEI, 2009

 Different ‘pots’ of finance 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 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 Outline

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

Water Fund Model & Mechanism Fund Water 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) c

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” 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