Water Fund seeks to protect the tri-national Lempa river basin

• El Salvador, Honduras and Guatemala would benefit from the feasibility assessment to be carried out by a CATIE team specialized in environmental economics.

March 14, 2022. With a length of 422 km, the main channel of the Lempa River covers Salvadoran, Honduran and Guatemalan territories, encompassing the Trifinio Region, home to approximately 960,000 inhabitants. This area is characterized by its rich biodiversity and water capacity, which is currently facing increasing stress. 

Due to the relevance of the Trifinio area, the main objective of the process to be developed by the economists of the Environmental Economics and Sustainable Agribusiness Unit (UEAAS/EfD) of CATIE (Tropical Agricultural Research and Higher Education Center) participated in the report. 

Róger Madrigal, UEAAS/EfD coordinator and principal investigator for the implementation of this assessment, added that they will also work on understanding the risks related to water security and how the proposed financial mechanism could positively help to reduce such threats. 

"Additionally, the analysis to be carried out is important for these three countries and for Central America in general, because it constitutes an innovative mechanism for the shared governance of a transboundary basin," said Madrigal.

Involvement of partners during the process 

The strategic involvement of key partners will be a necessary step from the beginning of the work, in order to guarantee the creation of technical capacities in the project's impact zone, as well as to achieve adequate coordination with government entities, academic organizations, private companies, experts and, specifically, with the Trifinio Plan's Tri-national Executive Secretariat. 

In addition, the participation of these partners will be essential during the five phases recommended for the Water Fund, such as feasibility, design, creation, operation and maturity. In the specific case of this project, progress will be made with the first phase, corresponding to feasibility, which will contribute to making informed decisions in the future. 

Therefore, the information generated from the project will seek to understand the water security challenges in the area and estimate the potential of a Water Fund to address these challenges. It will also delve deeper into the situation and define the effectiveness of the Water Fund, as well as whether it is recommended to move forward to the design phase. 

Madrigal stressed that this first phase will be very important to increase confidence in the potential Water Fund for the Lempa River Basin, and being a participatory process, it will allow the involvement of stakeholders and the development of a shared understanding of the main challenges and problems identified.

What can be understood by a Water Fund?

According to the Latin American Alliance of Water Funds, these financial mechanisms emerge as a local response to the challenge of water security from a vision mainly focused on the conservation aspects of watersheds and propose the implementation of different solutions based on nature, such as the maintenance of wetlands, reforestation, restoration of riparian habitat or the protection of forests and grasslands, among others.

About the project

The project "Feasibility for a Water Fund in the trinational basin of the Lempa River: El Salvador, Guatemala and Honduras" is executed by the UEEAS/EfD, of CATIE, and financed by the Inter-American Development Bank (IDB).