Southern Ecuador Water Fund Established
July 2009

After more than two years of negotiations, NCI is proud to announce the formation of a regional water trust fund – FORAGUA – that will serve the Provinces of Loja, El Oro and Zamora Chinchipe. FORAGUA will help to guarantee the protection of this region’s water resources while simultaneously conserving highly threatened and biodiverse ecosystems.

FORAGUA provides legal mechanisms to assist municipalities in creating reserves over the watersheds that preserve their drinking water supply, and will serve as a repository of fees charged by municipalities to water users that will be used to safeguard these watersheds. The trust has been capitalized with lands and other resources with an initial value of over $530,000, with the largest contributions coming from the municipality of Loja and Nature and Culture International, as well as the municipalities of Celica, Puyango, Macara and Pindal. Ongoing operation of the trust will be funded through water fees collected in each of the five municipalities currently participating, in addition to support from international organizations and through local businesses and institutions. It is expected that in upcoming months at least four additional municipalities in the region will join the water fund as well, providing additional funds to protect water resources and save even more of the region’s rapidly disappearing forests.

The trust has been established for an initial term of 80 years, which will guarantee the fund’s stability in the face of an often volatile political climate. The fund will also be managed by an independent body, the National Financial Corporation with over 41 years of experience, to ensure transparent and secure accounting. This is the first fund of its type in the country that will not only help protect water resources for the larger cities of the region, but will also assist even the smallest municipalities and rural townships.

The fund will address a number of pressing issues in the region including persistent water deficits, deforestation, water quality issues, and generally weak and highly dispersed policy-making institutions. Funded activities will include land purchases, land protection and management, compensation for environmental services, educational campaigns, fire control, fencing, reforestation, and natural regeneration.

Previous to the establishment of the Trust, nearly 50,000 acres of reserves have been created by municipalities, communities and land owners, encouraged by economic incentives and the necessity to protect water sources. Support for this process has been made by the municipalities involved, NCI, the Overbrook Foundation, and the World Land Trust-US.