AQUAFONDO for Lima and Callao

AQUAFONDO, the Water Fund for Lima and Callao is a financial mechanism that designs and facilitates governance processes in order to integrate relevant stakeholders of the river basin to promote water security in the metropolitan area of Lima through the implementation of conservation actions. As such, the fund supports public, private and civil society actors to implement measures on water security through nature-based solutions and sustainable watershed management in the three river basins Chillón, Rímac and Lurín. By promoting sustainable investments in ecosystem services the fund supports public policies with a transdisciplinary approach. The projects are financed by voluntary contributions from private companies and international cooperation. AQUAFONDO was created in 2010 with the support of The Nature Conservacy on behalf of the Latin American Alliance of Water Funds and was incorporated as a non-profit civil association in 2016.

Overview

Type of instrument:

Financing mechanisms /market-based instruments (e.g. taxes to generate revenue)

Challenges addressed

Water management (e.g. reuse)
Watershed restoration/water quality
Drought and fire risk
Social equity
Human health, comfort and well-being

Consideration of nature-based solutions:

Depending on the respective project, AQUAFONDO funds different NBS related to the hydrological resources in Lima, such as restructuring the ancestral (micro-)reservoirs, called amunas. This aims at mitigating flood risks and providing water as well as sustainable irrigation system to the communities.

Targeted (peri-)urban areas:

Blue areas

Green areas for water management

Good practice characteristics:

Support multifunctional NBS

Sustainable in the long-term

Locally appropriate

Potential to be replicated / upscaled

Innovative

Governance

Non-governmental actor(s)

Initiating body:

Citizens or community groups / NGOs

Details about how the instrument was designed:

Created in 2010 with the support of The Nature Conservancy (TNC) on behalf of the Latin American Alliance of Water Funds, it was incorporated as a non-profit civil association in 2016. In addition, it has the participation of the private sector.

Targeted actors:

Public sector institution (e.g. school or hospital)

Private: household, real estate developer, business , financial

Researchers, university

Citizens or community groups (CBOs), NGOs

Details about the implementation:

AQUAFONDO works in cooperation with the Peruvian Ministry for Agricultual Development and Irrigation and the National Water Authority, the National Superintendence of Sanitation Services (SUNASS), and the Ministry of Environment.

How did the government support the instrument?:

At the national level, the Sanitation Services Modernization law published in 2013 (driven by the Ministry of Housing Construction and Sanitation) established an environmental compensation mechanism linked to watershed management and planning. In 2014, the Ministry of the Environment led the way for the Mechanisms for Ecosystem Services Compensation law and promoted the involvement of public and private sectors in the conservation of ecosystem services. These legislations support the establishment of self-sustaining mechanisms to fund water source protection throughout the country.

Financing

Sources of funding:

Corporate investment

Funds provided by non-governmental organization

International cooperation

Details about instrument financing:

The fund supporting the project implementation depends on voluntary contributions from private companies and international cooperation. A donation can be submitted, inter alia, via the AQUAFONDO webpage.

Monitoring, evaluation and impacts

Is a monitoring framework in place?:

Yes

It carries out hydrological monitoring of existing interventions to scientifically demonstrate the potential water recharge that is carried out per project.

Achieved outcomes and impacts:

- To date, 57 workshops have been implemented, reaching over 1,500 people - To date, the financed projects contribute more than 5.8 million m3 water per year to the Chillon, Rimac and Lurin river basins. - To date, 22km of amunas (ancestral water infiltration canals) have been recovered - Reservoirs have been restored and efficient irrigation systems established in the upper, middle and urban areas of the Chillón, Rímac and Lurín river basins.

Success factors and lessons learned:

AQUAFONDO channels private, cooporate and international funds in concrete interventions to support water security, availability and quality. Such projects are implemented in a participatory manner together with strategic partners and the communities.

Sources and further information

References

List of references:

The Nature Conservancy (2022). Lima Water Fund. https://www.nature.org/en-us/about-us/where-we-work/latin-america/peru/aquafondo-the-water-fund-for-lima/ (accessed 11 July 2022)

AQUAFONDO (2022). Aquafondo website. https://aquafondo.org.pe/nosotros/ (accessed 11 July 2022)

Fondo de aqua (2022). Aquafondo. https://www.fondosdeagua.org/es/los-fondos-de-agua/mapa-de-los-fondos-de-agua/peru/agua-fondo-lima-peru/?tab_q=tab_container_copy_c-tab_element_951750004 (accessed 11 July 2022)

Photos

@ Flickr