Addressing Peru’s Mounting Water Security Crisis with Natural Infrastructure

In June 2018, the United States Agency for International Development (USAID) and the Government of Canada announced an investment of US$27 5 million towards environmentally sustainable water infrastructure through the creation of the Natural Infrastructure for Water Security (NIWS) project. The goal of NIWS is to address climate and water risk through mainstreaming natural infrastructure. The NIWS project is being implemented by Forest Trends together with a consortium including CONDESAN, the Peruvian Society for Environmental Law (SPDA), EcoDecisión, and experts from Imperial College London. NIWS has set out to provide a platform for more integrated management of water resources by bringing together local, national, regional, public, and private stakeholders. In November 2018, NIWS took action to this end by hosting Peru’s first National Water Summit. Resilient SWP was identified as a key element to securing regional water security. Peru had already been supporting national policies around natural infrastructure in the water sector for the past decade. Through a program known as the Ecosystem Service Compensation Mechanism, regulations allow utilities to allocate portions of user fees to investments in watershed health and climate change adaptation. Landowners around source waters are compensated for good land stewardship, providing financial incentive for long-term sustainability.

Coordinated stakeholder engagement and developing a shared vision around shifting source waters has been critical. The National Water Summit brought together representatives from 23 water utilities representing 14 regions of Peru. These representatives signed the Piuray Declaration, a commitment to protect the country’s source water areas and surrounding ecosystems (Bennett, 2018), creating a framework for implementing resilient SWP at a national level. The Piuray Declaration also prioritizes gender equality in the water resources and sanitation sectors. Financing natural infrastructure in Peru has been a multi-pronged approach and complements the national policy framework for resilience. Using portions of user fees, public water utilities have already set aside US$30 million for natural infrastructure and US$86 million for climate adaptation and disaster risk management (Forest Trends, 2019). Funds are already being used to compensate upstream land managers in exchange for care and protection of water sources. NIWS hopes that the Ecosystem Service Compensation Mechanism can serve as a long-term sustainable funding source for incentivizing sustainable management of source water areas.