How El Salvador is designing local finance to safeguard its water

As the NDC Partnership marks 10 years, we are sharing five stories of how its support has helped countries turn climate commitments into action. Since 2020, GWPO has mobilised NDC Partnership funding for 16 projects across 12 countries with US$900K funding from NDC Partnership Climate Action Enhancement Package (CAEP) and US$1.3M from the NDC Partnership Action Fund, combined with technical assistance from GWP Regional Water Partnerships and GWPO to catalyse over USD$60M in climate-resilient water investments. Our second story comes from El Salvador.

The challenge

Around 94% of El Salvador lies within the Central American Dry Corridor, and water and ecosystems are central to the country’s adaptation priorities. Protecting the recharge zones that feed community water systems needs reliable, long-term funding, and local water providers rarely have it.

The support

With USD 218,000 in funding from the NDC Partnership, GWP Central America worked with the Ministry of Environment and Natural Resources (MARN) to design economic instruments for water governance in three priority micro-watersheds: the Sucio, San Juan and Tempisque rivers in Cuscatlán and San Salvador.

Site visits, interviews with community water boards, irrigators and farmers, stakeholder mapping, and validation workshops with local actors and MARN narrowed five initial ideas down to two instruments:

  • A water fund that pools contributions from water boards, municipalities, public institutions, businesses, NGOs and international partners. It is governed by its members and invested in restoring and conserving the micro-watersheds.
  • A conservation water tariff, a small additional charge on water bills of as little as USD 0.25 to USD 1 a month per user. Community water boards collect it and ring-fence it to protect the recharge zones of their springs and wells.

Both instruments come with practical tools: governance models, step-by-step tariff calculations, templates for action plans and project profiles, and awareness programmes for schools, farmers, women and businesses.

What’s emerging

The same approach is now shaping a larger ambition. GWP and the Development Bank of Latin America and the Caribbean (CAF) have worked on a proposal to the Adaptation Fund for drought resilience in Eastern El Salvador. It includes multipurpose reservoirs, early warning systems and ecosystem restoration. Economic instruments are built in from the start.

Infrastructure and restoration last only as long as someone pays to maintain them. By helping communities design finance they own, a modest grant is laying the foundations for national climate commitments to be sustained locally.

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