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An innovative scheme in Mbeliling that sells drinking water to fund conservation and protect forest is a promising example of sustainable finance.

Usually when you pay for drinking water, you are paying a water company for its services: filtration, sanitation, maintenance of supply, staff overheads and more. But what if that company was nature itself? Is it possible for a forested landscape to be recognised for the freshwater service it provides, filtering rainwater down through the soil, releasing a clean, steady flow? Can the local people living there be rewarded for protecting this forest? In the Mbeliling landscape on Flores Island, Indonesia, the answer is a resounding yes.

Nature provides a multitude of benefits for our survival and wellbeing but is often taken for granted. However, the work of Burung Indonesia (BirdLife Partner) in Mbeliling is proving that innovative schemes such as Payment for Ecosystem Services (PES) are a great way to ensure recognition of nature’s direct value and help keep forests standing. It’s also tackling one of conservation’s biggest challenges: how to break free from unsustainable funding models and tap into the huge scale of the private sector. Get it right and, like clean water from a spring, the potential flow of support is huge.

A patchwork landscape

Mbeliling consists mainly of locally managed protected forests and production forests, including mixed smallholder agroforestry systems, rice-crops and animal husbandry. It is a stunning patchwork of smallholdings and tropical rainforest, crucial habitat for threatened birds such as Flores Monarch (Endangered) and Flores Hanging-parrot (Vulnerable). As a key catchment area, the landscape supplies fresh water to 36 villages and the district capital, Labuan Bajo, which is increasingly becoming a popular tourist destination.

The trouble is, the growth of the tourism sector in recent years has led to conversion of agroforestry farms to tourist facilities, reducing the water absorption and retention capacity of the landscape. As a result, Labuan Bajo is facing water scarcity and the cost of water has increased for residents. Moreover, the local income opportunities of tourism are not shared equally. A more sustainable solution is needed to meet the needs of the people, increase the vegetation cover of the natural landscape and conserve its threatened species.

Burung Indonesia’s work with local communities on Flores between 2007-2020 has stabilised 30,000 hectares of forest increased forest cover by a further 10,000 – as well as stabilising populations of endemic wildlife without incidents of poaching and illegal trade.

Selling water to fund conservation

Using seed funding from the BirdLife Accelerator, Burung identified a PES scheme as a fair cost-sharing arrangement that would solve these issues. Tiburtius Hani, Programme Manager of Burung Indonesia in Flores explains: “Payment for Ecosystem Services is a way to take collective action among upstream communities and water consumers to conserve spring water and the water catchment area within the landscape in a sustainable and equitable way.”

In 2020, Burung Indonesia established a social enterprise selling drinking water to fund conservation activities, to test the willingness to of the private sector and consumers to pay for conservation upstream. After a successful trial, 28 small water companies signed up for the Labuan Bajo Water Care Entrepreneurs Association. With support from the BirdLife Accelerator, Burung aims to formally register the Association, start collecting payments for ecosystem services from its members, and manage these funds for conservation activities transparently.

Water processing was initiated by Burung as part of a Payment for Ecosystem Services initiative © Burung Indonesia

Effect on the landscape

Burung have been working in the landscape since 2007 and have built close ties with the local communities, through local conservation agreements, promoting alternative livelihoods and businesses and more. Adi Widyanto, Head of Conservation and Development at Burung has seen the impact their work has had on the landscape: “So far, our Flores Programme has managed to stabilise land-use and forest cover throughout the landscape. In particular, by 2021 about 10,000 hectares of forest area has undergone a significant natural succession from a degraded state to a mature secondary forest. Such an impact can only be achieved when forest is guarded from disturbance over a considerable time – allowing the forest to restore itself.”

The next step is to scale-up the water payment trial and now, with further support from the BirdLife Accelerator and communications training from Terranomics, Burung are pitching to larger private companies. Permata Qua, a water processing company in Labuan Bajo is on board with the scheme. “This is an important initiative that needs to be supported by all parties,” says Rius Surianto, the company’s director. “Protecting water catchment areas means maintaining business sustainability and better meeting the needs of the community.”

More support would mean they could expand the scheme onto priority farmlands in the landscape for forest restoration efforts – creating a ‘demonstration plot’.

“This innovative project gets to the heart of what the BirdLife Accelerator is about,” says Aron Marshall, Forest Programme Officer for BirdLife International. “Burung are demonstrating what can be achieved when investment is made into the small, innovative ideas that are working on the ground and scaling them up. It’s creating the kind of transformation that will allow conservation to sustainably finance itself in the future.”

Some members of the Water Processing Company Association © Burung Indonesia

Now in its third year, the BirdLife Accelerator (aka BirdLife Forest Landscape Sustainability Accelerator) has seen considerable success, from pioneering feasibility studies, to building conservation enterprises, to shipping sustainable commodities worldwide. We are building on this success through expanding our portfolio, further advancing some of the major projects from the last two phases, whilst bringing on several newcomers who have ideas with huge potential. Not only this, but with the introduction of our new forest carbon portfolio into the Accelerator, we are supporting Partners to explore the potential for the multi-million dollar carbon market in their landscapes.

Trillion Trees

Trillion Trees is a joint venture between BirdLife International, Wildlife Conservation Society (WCS) and WWF to urgently speed up and scale up the positive power of forests. Our work helps protect and restore forests all over the world for the benefit of people, nature and climate. To learn more about how we’re improving forest protection, advancing restoration and ending deforestation visit and follow us on Twitter @1TrillionTrees.