Ecuador transformed its water services by setting up water funds.
It's not always necessary to build new things to provide infrastructure services.
Ecuador offers a great example of this in how it funds water supply across the country.
By using water funds to improve and maintain its lakes, rivers, wetlands, and coasts, the country has shown how low- or no-build solutions can deliver essential services.
Principle 3 of the Enabling Better Infrastructure guidance highlights how infrastructure investment should consider needs across sectors and factor in the best intervention to meet them. This doesn’t always include building.
Read on to find out how Ecuador’s approach to water funding embodies this principle.
Understanding Ecuador’s infrastructure needs
In Ecuador, access to clean and safe water is a key concern.
Poor services, limited technology, and water shortages all present challenges.
This affects Ecuador’s ability to deliver clean water to communities.
At first, Ecuador considered building infrastructure to address these issues. But this wouldn’t have tackled the root problem – how Ecuador manages and maintains its ecosystem.
Instead, the country took a no-build approach to maintaining and improving the function of its natural watersheds.
Watersheds are areas of land that channel rainfall and melted snow into bodies of water like rivers, lakes and oceans.
How Ecuador addresses these needs
To maintain and improve watersheds, Ecuador introduced water funds.
These funds receive payments from water users, public utilities, companies, and non-governmental organisations to fund nature-based solutions for water security.
To manage the payments, Ecuador established two trust funds that will last for 80 years. This stable approach allows long-term planning and encourages investment from different types of stakeholders.
Read more: how can governments gain the clarity they need to deliver on infrastructure needs?
Drawing on local knowledge and needs
Maintaining and improving watersheds requires participation from all types of stakeholders.
The way water funds are managed/governed allows a broad range of stakeholders to set priorities and oversee conservation activities.
This wide range of stakeholders reflects local knowledge and needs, which has helped build a sustainable and inclusive culture around water infrastructure in Ecuador.
How water funds have transformed Ecuador
Water funds have improved watersheds, supply and quality.
They have also supported Ecuadorian ecosystems threatened by climate change and land degradation by replanting local vegetation, fixing fencing alongside bodies of water and purchasing land for conservation.
Since it was implemented in 2000, the Quito Water Fund has helped reduce erosion around water sources and cut pollutants in drinking water.
It has provided much-needed cleaning and purifying functions, and protected 33,000 hectares of key ecosystems and restored 2,500 hectares of degraded areas.
Within five years, the regional water fund in southern Ecuador (FORAGUA) had established 174,028 acres of reserves, protecting and restoring watershed ecosystems that supply water for 432,196 individuals.
Ecuador’s water fund approach has been successful in other Latin American countries, including Colombia, the Dominican Republic, and Mexico.
Ecuador’s future focus
The next steps for Ecuador include evolving the original fund model to further help the country deliver on its infrastructure needs.
Using the key findings from this initiative, Ecuador can look ahead to ensure it benefits all communities.
Principle 4 of the Enabling Better Infrastructure guidance emphasises the importance of considering all social and environmental benefits of infrastructure.
This includes thinking about the sustainability measures preferred by certain funders, such as the local government and public utility companies.
This will help the Ecuadorian government avoid any financial, technical, or implementation barriers later in the infrastructure life cycle.
Find out more about the EBI programme and its eight guiding principles.
