Handbook for the Implementation of Nature-based Solutions for Water Security: Guidelines for designing an implementation and financing arrangement

About this report:

Climate impacts challenge our status quo. The frequency of extreme events keeps increasing driven by climate change. The World Bank (2016) indicates that the impacts of climate change will be channelled primarily through the water cycle and that water scarcity could cost some regions up to 6% of their GDP. Our experience of COVID-19 is a stark reminder that a shift in our economic development paradigm is urgent. As urged by the GCA (2019), we need three revolutions for a better future: a revolution in understanding, in planning and in finance.

In this context, Nature-based Solutions (NbS) emerge as important pillars of new models of economic growth, as they enable a win-win between economy and environment while helping us mitigate water and climate risks. Unfortunately, NbS implementation at scale remains limited. In most cases, NbS are still being implemented as pilot projects of limited size and following parallel processes from mainstream procurement practices. This is what we call in our newly published Handbook the implementation gap.

With an ambition to close this gap, we have developed a collaborative and inclusive project preparation approach titled Financing Framework for Water Security (FFWS) which aims to set in motion a multisectoral and transdisciplinary process that bridges strategic planning and investment planning phases.

The primary objective is to guide the development of investable NbS projects by developing a fit-for-purpose implementation arrangement, including governance, funding, financing and contracting choices. It offers project preparation guidelines, including hands-on formats that project proponents can use iteratively to develop the full business case of NbS, enabling them to go from the idea stage towards an investment proposal that can be effectively assessed by potential public and/or private sector investors.

The handbook is aimed at NbS project proponents like NGOs, communities and government agencies wanting to learn about the investor’s perspective and vice versa; investors willing to increase their exposure to NbS, ecosystem conservation or restoration projects for water security. This makes the handbook a comprehensive and first-of-a-kind document that customizes the process of developing a business case to the specificities of NbS investments.

Between 2016 and 2020, the FFWS has been continuously developed and successfully implemented in seven countries at different scales. Within the project NAIAD, 23 partners from across Europe worked together in its further development for NbS water security projects.

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