Peru made water utilities fund pre-Incan 'water planting' out of customer bills

Peru is among the world's most water-insecure countries: Lima, home to a third of the population, sits on a desert plain with 13mm of annual rain and depends on three rivers born in the Andes. Its utility Sedapal could supply customers only 21 hours a day, and a 2019 World Bank report concluded existing strategies would be inadequate by as early as 2030.

So Peru's leaders did something radical: national laws now require water utilities to invest a percentage of customers' bills in 'natural infrastructure' through MRSE — Mecanismos de Retribucion por Servicios Ecosistemicos. Before, utility investment in the watershed counted as misuse of public funds; now it is required, one of the world's first efforts to integrate nature into water management at national scale.

By 2021, 40 of Peru's 50 water utilities were collecting MRSE funds and had raised more than $30 million, with Sunass expecting at least $43 million by 2024 across more than 60 projects. Among Sedapal's supported projects is the repair of amunas around Huamantanga — canals built by the ancient Huari civilisation that divert wet-season stream flow into rocky infiltration basins, where it seeps through gravel and emerges downslope from springs months later, extending water into the dry season for farmers and, eventually, Lima.

In 2018 Global Affairs Canada and USAID pledged $27.5 million over five years to the NGO Forest Trends to provide technical know-how for the programme, which had been slowed by five presidents in five years and ingrained practices in the water sector.

The funding is compulsory and come from the tariff base itself, so the programme does not depend on annual budget politics.

The amunas need no engineers or concrete: repairing rock-lined canals restores storage the landscape already provides, releasing water exactly when it is scarce.

The water 'planted' in Huamantanga's highlands soaks back into the same rivers that supply Lima, so upstream farmers' storage doubles as the city's.

Nature-based works stack benefits — carbon storage, habitat for threatened species — that a dam or desalination plant does not provide.

The cheapest storage is the landscape you already have: a tariff line item can finance thousand-year-old infrastructure that no dam can match for slow release.

Forty of Peru's 50 utilities were collecting MRSE funds by 2021, with more than $30 million raised for 60-plus projects and Sunass projecting at least $43 million by 2024; Sedapal was funding amuna restoration and protection of high-altitude cushion bogs. Implementation remained slow, hampered by political turnover.