Lessons Learned & Next Steps
With a view to establishing a trial for a watershed Payments for Ecosystem Services (PES) scheme in the Atay River (“Stung Atay”) catchment, Fauna & Flora International (FFI), with EU funding, explored the case and means for investment in hydrodam catchments in the Cambodian Cardamom Mountains.
Our research showed that investment in forest protection could mitigate the risk of reduced hydropower production which could lead to revenue loss from the Stung Atay hydrodam by USD 180 million over 30 years or an average of USD 6 million per year. The study also showed that whilst forest protection should be undertaken at a regional scale, protection of the Stung Atay catchment would cost less than USD 100,000 per year on an ongoing basis.
Despite a demonstrable economic rationale for trial investment in protection of the Stung Atay catchment, the project was not successful in mobilising either funds for investment, either privately through PES investments, or with public funds through a sustainable financing mechanism.
The research identified the following two-stage transaction structure for implementation of a PES or sustainable financing mechanism (Figures 1 & 2). In stage 1, funds set aside for catchment management by the hydrodam operator under the EIA could be matched by funding from conservation NGOs channeled through a trust fund. In Stage 2, funding would be channeled through government administered funds, such as the Environment Endowment Fund, Protected Areas Fund or National Forestry Development Fund, the creation of which are currently in government policy although these have not yet established by the Royal Government of Cambodia (RGC).
Please read the following document in PDF for more details about Lessons Learned & Next Steps:
Our research showed that investment in forest protection could mitigate the risk of reduced hydropower production which could lead to revenue loss from the Stung Atay hydrodam by USD 180 million over 30 years or an average of USD 6 million per year. The study also showed that whilst forest protection should be undertaken at a regional scale, protection of the Stung Atay catchment would cost less than USD 100,000 per year on an ongoing basis.
Despite a demonstrable economic rationale for trial investment in protection of the Stung Atay catchment, the project was not successful in mobilising either funds for investment, either privately through PES investments, or with public funds through a sustainable financing mechanism.
The research identified the following two-stage transaction structure for implementation of a PES or sustainable financing mechanism (Figures 1 & 2). In stage 1, funds set aside for catchment management by the hydrodam operator under the EIA could be matched by funding from conservation NGOs channeled through a trust fund. In Stage 2, funding would be channeled through government administered funds, such as the Environment Endowment Fund, Protected Areas Fund or National Forestry Development Fund, the creation of which are currently in government policy although these have not yet established by the Royal Government of Cambodia (RGC).
Please read the following document in PDF for more details about Lessons Learned & Next Steps: