Experts in the field of water resources management explored opportunities for investment in green infrastructure through funds managed by drinking water operators.
On October 11 and12, 2016, representatives of the public and private sectors and academia, national and international, met in Lima to share recent and innovative experiences in green financing in the water sector and in other environment-related sectors worldwide that could be used as models to prepare practical proposals for public-private investments in green infrastructure that may secure water supply for the Latin American populations.
The focus of the first day was centered on Innovative models for financing green infrastructure, that is, identifying financing models for ‘gray’ infrastructures and other sectors, which may be applied to green infrastructure in the water sector; learn about emerging financing models for green investment around the world; and share experiences of intervention models for green infrastructure that may have been implemented through water operators in different parts of the world.
In this respect, the panel on Investment Financing Models in the Water Sector was moderated by Cesarina Quintana, Senior National Program Officer of Swiss Cooperation SDC, specialist in Water topics. Presentations were given by David Brand, Executive Director of New Forests and Jhon Tobin, Professor in Practice from Cornell University. The comments panel was made up by specialists on the field from different sectors: Ángel Revatta Vera, Head of the Trusts Section of Banco de la Nación, Fausto Roncal, from the Environmental Affairs Office of the Ministry of Housing, Construction and Sanitation; Aaron Drayer, Representative in the country of Global Green Growth Institute.
Left to right: Jhon Tobin, Professor in Practice from Cornell University; David Brand, Executive Director of
New Forests; Fausto Roncal, from the Environmental Affairs Office of the Ministry of Housing, Construc-
tion and Sanitation; Ángel Revatta Vera, Head of the Trusts Section of Banco de la Nación; and Aaron
Drayer, Representative in the Country ofe Global Green Growth Institute.
Below is a brief summary of the most relevant parts of the discussion.
Mr. Brand shared the experience of New Forests on investment in forestry, which he calls “natural infrastructure”. He mentioned he importance of generating an environmental market, indicating that forests are a non-conventional asset, and stressed the need to have clear rules and policies to gain the confidence of investors to invest in these infrastructures, promoting an environment of trust so that these business models may be developed. Furthermore, he indicated that it is necessary to adequately manage the risks that may arise in this type of models, favoring a “shared value and risk” model.”
In turn, Professor Tobin shared the initiative that is being implemented through the Coalition they have formed with 30 institutions from different sectors to scale up private investment and create new investment opportunities and tools to assist in the implementation of conservation projects in the market. He pointed out the importance of working together in a pre-competitive manner, willing to sacrifice short-term earnings to develop investment models that will become significant business in the long term.
Thereafter, Fausto Roncal stated that the Housing sector is working on including the environmental variable in their investment projects and that a special fund has been created for the water and sanitation sector, which is one of the axes prioritized by the current administration.
Ángel Revatta, commented that one interesting way to obtain investment in these eco systems is through trusts, underscoring that the delicate part is how to manage these funds. “Through trusts we have guaranteed an adequate management of the funds,” he emphasized.
Aaron Drayer, mentioned that “the Government’s work is to create the legal framework and that the investors’ language is the language of results. That is why not many investments are materialized. Languages differ” and ended saying that “the role of cooperation is to lay out bridges, as it understands both languages.”
The second day, in the morning, drinking water operators and financial experts, who form part of the Work Group on Green Infrastructure of the Association of Drinking Water and Sanitation Regulatory Entities (ADERASA) worked together to design financing strategies relevant to the needs of these drinking water operators, which were thoroughly assessed towards achieving concrete opportunities for investment. The evaluation of the designed models was based on economic and financial criteria, as well as water benefits for each drinking water operator.
Finally, in the afternoon, in a public session called “Scale up Potential,” key financing opportunities found were presented, as well as the next steps identified by the work groups; and the experts panel discussed how to achieve scaling up and the potential for the water sector in the next 10 years.
The following video shows details of the visit to Piuray and the meetings “Katoomba Marketplace: “Opportunities for investment in Green Infrastructure” were completed successfully. It was a great opportunity for national and foreign participants to observe the progress made by SEDACUSCO in the works engaged for the conservation of the lagoon, hand in hand with the people of the Community of Chinchero.
|Video in Spanish|
This initiative forms part of the Incubator of Projects and is fostered by the Ministry of the Environment with the technical and financial support of the Global Program for Water Initiatives of the Swiss Agency for Development and Cooperation SDC, CONDESAN and EcoDecisión, in alliance with Forest Trends; the goal is to improve the implementation of Retribution Mechanisms for Water Eco Systemic Services (MRSEH).
The Katoomba Group is an international network of individuals who work to promote and improve global capacity in environmental service markets and payments. The Group doubles as a forum for the exchange of ideas and strategic information on eco systemic service transactions and their market and a space to promote collaboration among project operators and payment programs for environmental services.
Program click here.
Project CSH, project sheet, Swiss Embassy, Swiss Agency for Development and Cooperation SDC
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