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Case Studies of Water-Related PES Schemes in East Africa

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Case Studies of Water-Related PES Schemes in East Africa PES farm under conservation with Napier grass (Pennisetum purpureum) strips along contours (left) and indigenous (Dombeya spp.) Photo: World Wide Fund for Nature/ Nyongesa JM Suggested Citation: Sang J, Mwanyoka I, Nyongesa J, Lopa D and Mwangi J. 2017. Case studies of water-related PES schemes in East Africa. In: Namirembe S, Leimona B, van Noordwijk M, Minang P, eds. Co-investment in ecosystem services: global lessons from payment and incentive schemes. Nairobi: World Agroforestry Centre (ICRAF). Chapter 8 | 1 CHAPTER 8 Case studies of water-related PES schemes in East Africa Joseph Sang, Iddi Mwanyoka, Josephat Nyongesa, Dosteus Lopa and John Mwangi Highlights • Payment for Environmental Services (PES) schemes have been implemented in various parts of East Africa. • Bio-physical and socio-economic baseline studies involving various experts and local land owners underpinned the assessment and design of the PES project. • The projects were at various levels of implementation at the time of writing. 8.1 Background The water-related PES schemes in East Africa considered in this chapter are Sasumua, Lake Naivasha - Malewa River Basin Integrated Water Resource Management (IWRM) Programme, Upper Tana-Nairobi Water Fund and Uluguru project. The Uluguru and Usambara projects are located in Tanzania; the other PES projects in Kenya. These PES schemes are initiated by various organizations and NGOs in collaboration with government agencies, and were at different stages of implementation at the time of writing. The Lake Naivasha - Malewa PES program is located in the Lake Naivasha basin, which supports important biodiversity conservation areas: Aberdare National Park, Aberdare Forest Reserve, and agro-ecosystems on which indigenous communities depend for their well-being in the upper catchment, and the Oserian Sanctuary, the Hell’s Gate National Park, the Lake Naivasha Ramsar Site (145 km2) and associated riparian land in the lower catchment1,2. Lake Naivasha is an inland freshwater lake of economic importance in Rift Valley, Kenya. The Lake is a vital source of water in a semi-arid area, and supports a flourishing horticulture industry with a substantial contribution to Kenya’s export trade. Designated as Kenya’s second Ramsar site without surface outflows 3,, the Lake carries great importance for fishing communities, tourism, recreation, geothermal generation and the biodiversity around it. These sub-sectors in turn are dependent on the health of lake whose recharge in turn depends on water supply from the River Malewa’s upper catchments and the proper functioning of the riparian zones biofilter. However, deforestation, agricultural intensification and related unsustainable farming practices including cultivating on high slopes and riparian zones in the upper catchment threaten ecological functions in the basin. These activities have decreased the water quality and quantity of rivers flowing to Lake Naivasha causing increased sediment load and eutrophication in the Lake. This has negative consequences for commercial horticulture, Chapter 8 | 1 biodiversity and local communities that depend on water from the Lake. Deteriorating water quality and quantity also affects tourism as wildlife numbers dwindle and geothermal power stations have trouble sourcing sufficient amounts of water for drilling, cooling and construction4. The Sasumua project is an innovative PES project, which was still under development at the time of writing, and which aims to improve the quality of water flowing into the Sasumua Reservoir. It operates upstream of the Sasumua Dam where land-use changes, driven by population pressure, have increased the inflow of sediments and other pollutants to the Reservoir. The Sasumua Reservoir is of vital importance to Nairobi City, contributing 20% of its water supply. The cost of treating water at the Sasumua Dam could be lowered by improving the quality of incoming raw water. This can be achieved by incentivizing upstream landowners to adopt sustainable land management practices on their farms. The Nairobi Water Fund covers the entire Upper Tana River, the main source of water for the four million inhabitants of Nairobi City. The river flows from the Aberdare Range and Mt. Kenya to the Indian Ocean. In addition to supplying water to Nairobi, the river is also the main source of hydro-electricity in Kenya. As the Sasumua PES project site falls within the Upper Tana, both PES projects can complement each other. Figure 8.1 Location of Uluguru PES project The Uluguru Project is located in the Uluguru Mountains and East Usambara is in the East Usambara Mountains (Figure 8.1). The Uluguru and East Usambara form part of the famous Eastern Arc Mountains in Tanzania. Both are critical mountain ranges providing a wide range of ecosystem services. The Uluguru Mountain is the source of the Ruvu River, which supplies about 90% of Dar es Salaam’s water5. The project emphasized the fair and equitable distribution of benefits accrued from the sale of ecosystem services to downstream users, 2 | Case studies of water-related PES schemes in East Africa and is centred on the Kibungo sub-catchment in the south-eastern Uluguru Mountains. On the other hand, the East Usambara Mountain is the source of Zigi River which supplies 100% of the water needs of the City of Tanga5. Over the years, the Uluguru and East Usambara Mountains have suffered from degradation attributed to human activity, thus threatening the continued supply of the watershed services6. The degradation prompted the implementation of a PES scheme banking on the readiness of the communities to participate in the project through implementation of various improved land-use practices including tree planting, terrace farming and grass-strip farming, as well as the willingness shown by other stakeholders including the Tanzanian government and major downstream water users, particularly the Dar es Salaam Water Supply Corporation (DAWASCO) and Coca-Cola Kwanza Ltd with the understanding that the interventions will positively affect their business in the long term7. 8.2 Assessment and design Initial feasibility studies in PES implementation8 (Chapter 5) are important as they provide the baseline information necessary for the project implementation. Feasibility studies were conducted before implementing the Naivasha and Sasumua PES schemes. For both Naivasha and Sasumua cases, baseline information was obtained through questionnaire surveys, interviews with farmers, direct measurement of variables and through model simulations using the Soil and Water Assessment Tool (SWAT). The information obtained served as a starting point against which to measure impacts of PES implementation and to develop a business case. A policy, legal and institutional review was also carried out to determine the viability of PES under the existing legal and institutional framework. A summary of the various technical studies carried out is shown in Figure 8.2. - Defining core - Assessment of the impact - CBA showed that - Conducted buyers/sellers hydrological/water of current land use business as usual is proofing study. problems (soil erosion, practices on livelihoods/ unsustainable. - Identified criteria for the run-off, sedimentation, poverty and watershed - Several alternatives selection of buyers and turbidity, etc.). conditions. available, but either too sellers. - Identification of hotspots - Identified unsustainable costly or unsustainable - Assess willingness and within Uluguru watershed. land use as the underlying in the long-run. ability to sell and buy. causes of poverty. - Identified EPWS as - Assessment of existing potential viable option. policy/legal framework for - Developed business relevance to EPWS. case for investment, - Establish if there was which led to the business case between development of MoU. potential sellers and buyers - CBA estimate is of watershed ecosystem important to determine services. the opportunity cost. - Identify access rights to natural resources, institutional capacity and currents conservation incentives. Technical Reports Figure 8.2 typical baseline studies for the development of PES Chapter 8 | 3 In the case of the Uluguru and East Usambara Mountains in Tanzania, the Equitable Payments for Watershed Services (EPWS) projects were established as part of the broader PES concept to ensure the continued and sustainable provision of watershed services to beneficiaries via a mechanism that promotes articulation of conservation practices while directly effecting poverty alleviation. The programmes were designed to be implemented through two interconnected phases. The first phase (2005–2007) consisted of feasibility to build a business case and gather knowledge to structure the new market suitable to local conditions and equitable outcomes. Thus, a number of studies6,9,10,11 were conducted during this phase: hydrological assessment, buyer profiling, seller livelihood analysis and capacity assessment, cost-benefit analysis and legal and institutional framework analysis (Figure 8.2). A key finding was that deforestation, ‘extensification’ of agriculture and poor farming practices have reduced the ability of the Uluguru catchments to supply Dar es Salaam with a reliable supply of high-quality water and that since the 1970s, forested areas in the Uluguru mountains have decreased in size by approximately 25%. Since 1995, land under cultivation in the Uluguru mountains has doubled. In the Kibungo sub-catchment alone, the extent of cultivated land has increased by 300% since 1995.
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