Peru approves innovative regulation to accelerate investment in natural infrastructure

Communities Water Feb 18, 2020
Gena Gammie, Lucas Benites and Yessica Armas
Minister of Environment Fabiola Muñoz speaking at the 2019 National Forum on Natural Infrastructure in LIma, Peru.
Minister of Environment Fabiola Muñoz speaking at the 2019 National Forum on Natural Infrastructure in Lima, Peru.

Peru’s Ministry of Environment has approved new guidelines permitting public expenditures to protect and rehabilitate natural infrastructure in the same way the government maintains built infrastructure, opening the door to reducing up to 90% of the time it takes to initiate public expenditures for nature protection and restoration.

Across the Chillon, Rimac, and Lurin watersheds that supply Lima, Peru, networks of pre-Incan infiltration canals, called amunas, hold the potential to significantly reduce the city’s water deficit. By channeling water from streams during the rainy season to infiltration areas, the amunas have been shown to effectively regulate water, making it available weeks or even months later when it is needed. While early movers have begun to restore these canals in select upstream communities, it is estimated that perhaps 60 more amuna canals exist, unrestored, across Lima’s watersheds, representing vast, untapped potential.

Under new guidelines approved by Peru’s Ministry of Environment on December 31, 2019, public efforts to restore these amunas could be dramatically accelerated. The guidelines define how the IOARR implementation mechanism for public funds—which stands for Investments for Optimization, Marginal Expansion, Replacement, and Rehabilitation and is widely applied to gray infrastructure—can be applied for natural infrastructure.

The IOARR implementation mechanism holds enormous potential to accelerate investment by simplifying the project design and justification process, even going far beyond restoring the amunas that hold so much potential for Lima’s water security. For example, a regional government might utilize IOARR to act rapidly to respond to forest fires and to restore areas affected by such fires. Using IOARR will allow these public agencies to avoid extended bureaucratic analyses and approvals, associated with the alternative public investment project mechanism. IOARR also allows public entities to rapidly acquire or replace monitoring equipment for natural and ancestral infrastructure, including for hydrological monitoring.

Applying IOARR to natural infrastructure represents a significant shift in the conceptualization of nature in public investment in Peru. By defining strategic assets associated with natural and indigenous infrastructure in the new guidelines, the state recognizes that natural assets such as amunas, forests, and wetlands, already exist. They do not need to be constructed, but rather need to be protected, restored, and maintained.

CONDESAN, the Peruvian Society for Environmental Law (SPDA), and Forest Trends provided technical and strategic support for the IOARR guidelines under the Natural Infrastructure for Water Security project (NIWS) in Peru, which is funded by the United States Agency for International Development (USAID) and the Government of Canada.

Fernando Momiy, NIWS Chief of Party and Director of Forest Trends’ Peru office, said of the innovation, “For natural infrastructure investments that do not require large-scale restoration or expansion of vegetative cover, IOARR will be a much more appropriate and efficient investment instrument than public investment projects. Training project developers and evaluators on the appropriate use of this instrument for natural infrastructure could eliminate months or years between the time that we identify the need to invest and project implementation.”

Acting quickly to respond to threats to ecosystems can make all the difference. Once natural infrastructure like forests and wetlands are degraded or destroyed, it can take decades and enormous sums of investment to restore their original functions – and in many cases, full restoration may not even be possible. Losing these functions have consequences for society, which can include increased risk of drought, flood, fires, landslides, and damage to built infrastructure. Protecting and restoring these ecosystems also contributes directly to achieving Peru’s targets under their National Determined Contributions, including targets on ecosystem restoration, avoided degradation, and carbon sequestration.

The opportunity to accelerate public investment in natural infrastructure through IOARR was one of several solutions highlighted by NIWS at the National Forum on Natural Infrastructure held in November 2019, where Minister of Environment Fabiola Muñoz committed to finalizing the guidelines and recognized the urgency of acting decisively to protect and restore ecosystems that play a critical role in Peru’s water security and resilience to climate change.

“As the Government of Peru, we have made the decision to work with a great sense of urgency, so that everyone understands that we can contribute to protecting natural infrastructure,” said Minister Muñoz during the National Forum on Natural Infrastructure on November 14, 2019. “This is not an issue that just happens to be in fashion, it is a matter of survival. Today we are discussing a topic that ensures the survival of the planet, if we do things right, perhaps we may have the chance to survive.”

The publication on which this post is based was made possible through support provided by the U.S. Agency for International Development and the Government of Canada. The opinions expressed herein are those of the author(s) and do not necessarily reflect the views of the U.S. Agency for International Development or the Canadian Government.

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