Pressroom  >  Press Releases  >  Investments in Natural Infrastructure for Water Security in Peru Increased 30x in Five Years

  • According to the study “State of Investment in Natural Infrastructure” last year US $6.3 million (PEN21.3 million) was invested in natural infrastructure for water security, of which more than 90% came from public investment projects. The private sector accounts for only 6% of investment. Subnational governments are the most active funders of natural infrastructure, with an estimated US $5.5 million (PEN18.5 million).
  • The majority of projects are in water planting and harvesting practices, including 1,400 year-old pre-Incan infiltration systems, as well as reforestation and high-altitude peat bog (“bofedal”) recovery.
  • The study, presented at the National Forum on Natural Infrastructure in Peru, was developed by Forest Trends with funding from USAID and the Government of Canada. 

November 18, 2019 │Lima, Peru

Between 2013 and 2018, Peru increased its investment by 30 times in natural infrastructure for water security, primarily looking to ensure the availability of water in the dry season. Now, Peru faces the challenge of ensuring that these investments are sustainable over time.

Peru is one of the most vulnerable countries in the world to water risks associated with climate change. The majority of the population lives on the arid coast, where only 2% of water resources can be found. Major cities including the capital city of Lima frequently experience extreme droughts and floods. Inland, melting glaciers threaten water supplies for people and agriculture.

Natural infrastructure, such as grasslands, wetlands, and river systems, can help manage these water and climate risks. A recent study found that ancestral technologies such as amunas can increase the water supply by 33% during the dry season in Lima. Amunas are 1400-year-old diversion canals that channel water into underground storage where it can be gradually released during dry months.

However, natural ecosystems and traditional water systems like amunas rarely are the target of investments to maintain and protect them. Peru faces the risk of losing its natural infrastructure to degradation. In 2014 and 2015, Peru passed historic laws that allows water utilities and other public entities to invest public funds in natural infrastructure for water security.

Yet until now, no one knew how much is actually being invested. That is why Forest Trends, within the framework of the Natural Infrastructure for Water Security project funded by USAID and the Government of Canada, conducted a study to benchmark investments in natural infrastructure for water security, in order to document how much is being invested, where investments are taking place, by whom, and why. Findings were previewed at the National Natural Infrastructure Forum in Lima. The full report will be published in January 2020.

According to the report, in 2018 US $6.3 million (PEN21.3 million) has been invested in natural infrastructure for water security. More than 90% came from the state, through public investment projects in medium-term initiatives with targeted impacts. Subnational governments invested the most, at an estimated US $5.5 million (PEN 18.5 million).

An investment boom has taken place since 2013. Investment in natural infrastructure for water security has increased 30 times from 2013 levels. Growth comes mainly from the environment sector, but has been joined in recent years by investments from the agricultural sector, the sanitation sector, and public companies providing drinking water services.

“Despite this growth in investment, this research has identified a widening gap between the funds allocated by the State for these purposes and the funds that were actually executed. For example, only 55% of the funds allocated in 2018 were spent on projects on the ground that year, which clearly speaks to the efficiency of spending,” said Lucas Benites, Lead of Cross-cutting Themes at Forest Trends and a lead author of the report.

“The difference between allocation and implementation is going to continue to occur because, being a relatively new field, there are few specialists who can implement projects,” stated Jessica Armas, Investment Specialist from the NGO CONDESAN, part of the Natural Infrastructure for Water Security Project,.

“We need to develop implementation capabilities for these types of projects. All of this is new. It is important to create technical guidance to help implement these measures, recognizing that measures will vary across Peru, depending on the ecosystems and populations involved,” said Ursula Fernández Baca, Senior Advisor on Biodiversity, German Cooperation, during the presentation of the study.

Another important key finding was that it takes an average of four and half years from the time of project conception to implementation in the field. This delay means opportunities are being lost to achieve project goals. For example, a fragile ecosystem like a bofedal (a high-altitude peat bog unique to the Andes) may be completely lost during that time, due to illegal extraction of peat to sell for fuel or as a horticultural growing medium.

The study also found that despite anecdotal evidence of the benefits of interventions, the calculation of project benefits and beneficiaries is not standardized across Peru. Since these vary between projects, it is very difficult to implement monitoring and evaluation at a broad scale. Standardization could help identify ways to improve the efficiency of project investments, as well as providing evidence of results of project interventions.

One of the most noteworthy findings was a lack of reference to the participation of women in the projects evaluated by the study. Women may have different perceptions of the needs that these investments must meet.

“We need to take into account gender gaps when developing a project. For example, community heads, who are usually men, will prioritize irrigation, but women often want investments in grasslands. Both are valid, but very different approaches,” said Luis Acosta of Peru’s National Superintendence of Sanitary Services (SUNASS).

Finally, the description of the projects does not suggest that long-term sustainability of natural infrastructure investments is always a consideration, whether in terms of ensuring institutional, environmental, financial, social, and technological/monitoring sustainability.

“Given the current low rate of project implementation, we need to ensure that projects are sustainable, that they are maintained over time. This is only achieved hand-in-hand with the community,” Fernandez Baca concluded.