This presentation, given during a virtual training course, outlines the motivations for governance (and explains what is meant by governance) in collective action projects - and gives five different global examples.

1. Governance
considerations
Examples of models
supporting collective
action on water security
Jacqueline Dudley
Input to Design Phase Training
Water Funds
The Nature Conservancy
September 2020

2. Role of Governance in a Water Fund

3. Governance Due Diligence BEFORE
a Water Fund is started
• Critical Due Diligence on Existing Structures in the Basin
• What will the new Governance structure do, that has not already been done?
• Forums operating?
• What are their objectives/focus?
• Who is participating?
• Are participants also key stakeholders for the Water Fund?
• Expected push-back?

4. Why Governance?
• Trust / Ownership
• Equitable Representation /
Accountability
• Efficient Allocation of Resources
• Explicit Roles and Responsibilities
• Equitable Results / M&E
• Builds on existing structures (not
duplication)
• Early Risk Analysis / Potential
problem areas objectified through
‘Due Process’
• Less scope for misunderstanding
(lack of shared vision etc.)
• Maintain traction if individuals
change
• Longevity/Permanence
• Brings credibility
• Facilitates interventions
• Make effective decisions at scale
• Work plan is efficient and
sustainable
• Co-ordinate actions
• Ensure accountability

5. When should the Governance
mechanism be formed?
• Feasibility
• Design
• During Implementation
• Longevity/Permanence
Not too early: requires collaboration, stakeholder buy-in,
systems, Business Case, funding

6. Roles and Responsibilities
• What will the Governance structure do?
• How will the Partners align?
• How will funding flow?

7. How to approach Governance?
Describe the Governance mechanism in writing
 Facilitates joint understanding
 Increases certainty; prevents conflict
 Ensures thorough negotiation and risk analysis
 Checklist of provisions addressing important issues
 Tool for high-level buy-in and organizational commitment
 Formalizes processes for changes, conflict, withdrawl and termination

8. Governance Options?

9. Do you need a new, formal organisation?
Consider
New Entity
Existing
Groups?
First
Stakeholders
+ Shared
Interests
Not necessarily..

10. If you choose NOT to establish a new legal entity
1. A Memorandum of Understanding
2. A Collaboration and Administration Agreement
3. A Trust Fund
4. An Existing National Environment Fund or other government-sponsored
entity

11. Two Key Types of Governance Models
Government
For Profits
Non-
Profits
Government
Partner
Partner
Partner
Partner
MULTI-STAKEHOLDER GOVERNMENT-OPERATED
ADVISORY COUNCIL

12. Legal arrangement
• Public-private collaborative agreement
organized per MOU
Key activities
• Outcome: Reduce wildfire risk & improve
water quality
• Measures: Strategic forest thinning &
controlled burns
Budget breakdown (collaborative
charter)
Private
donors
2%
Direct public
funds
12%
Leveraged public funding* (Forest
Service, Bureau of Land management,
city water authorities)
86%
12
Charter Signatories
(100)
Working
Group
Executive Committee
Working
Group
Working
Group
Working
Group
Working
Group
Working
Group
* Denotes primarily in-kind contribution
Example I: Rio Grande Water Fund, New Mexico

13. Legal arrangement
• Trust fund managed by private entity
• Voting rights by historical endowment
contributions (87% by water utility, as a
result of 2% dedicated tariff charge)
Key activities
• Outcome: Maintaining water quantity,
quality and retention for city of Quito
• Measures: Paramo protection, vegetation
restoration, riparian management
Budget breakdown (endowment)
Endowment
returns
25%
Multilaterals (USAID)
& private donors
20%
Annual member
contributions
55%
13
FONAG Water Fund
Board of Trustees
Technical Secretariat
(~50 employees)
Implementation Partners
Public agencies, Contractors
EPMAPS
Tariff
Proceeds
Additional
member
contributions
Private &
public
donors
Example II: Quito Water Fund, Ecuador

14. Legal arrangement
• Independent Kenyan registered charitable
trust
• Mission: funding soil & water conservation
activities in the Upper Tana watershed.
Key activities
• Outcome: Water quality & quantity to
downstream smallholder farmers, hydro,
and city water supply
• Measures: Buffer strips, reforestation, &
agroforestry
Budget breakdown (endowment)
GEF
15%
Private Sector
21%
Beneficiaries*
32%
NGOs &
Counties*
7%
TNC*
25%
14
Upper Tana Nairobi
Water Fund
Board of Trustees
Board of Management
Technical Secretariat
Implementation Partners
Public agencies, NGO, CBO
Catchment Smallholder Farm
Householders
Advisory Committee
(National & County
Level)
Example III: Upper Tana Nairobi Water Fund, Kenya
* Denotes primarily in-kind contribution

15. Example IV: Guayaquil, Ecuador - FONDAGUA/EMAPAG
15
Legal arrangement
• FONDAGUA is a public/private trust organized in 2015
• Voting based on equal shares arrangement; board directors
(meets quarterly – TNC is one member out of a total of five)
chosen by the Board of Trustees (meets annually – TNC is
one member out of group of ten)
• Technical Secretariat is the arm responsible for organizing
implementation (principally contracted externally)
Development history
• Currently have voluntary contributions, made by Interagua,
of $30k/year based on established MoU
• New EMAPAG tariff being organized, beginning in 2020, for a
specific new amount on the water bill. This amount will
compensate Interagua for green infrastructure maintenance
(historically only compensated for grey infrastructure
maintenance).
• New tariff expected to raise $1.5 - $3mm/annually
Funding amount & complementarity
• Water fund had 2019 spending of $400k; expected to ramp
significantly subsequent to tariff implementation
• Similar to Interagua MoU, FONDAGUA has funding &
implementation MoUs with 3-5 other contributing members
(white box at top right)
FONDAGUA
Water Fund
Board of Directors
Technical Secretariat
(3-5 employees)
EMAPAG
(regulator)
Additional
member / donor
contributions
Contractor Implementation Partners
(significant external implementation)
Interagua
(Veolia- owned
utility)
Technical
advisors
(e.g. Min Env.;
SENAGUA)
Water fund as
Technical
Secretariat &
Implementer
$
$
Board of
Trustees

16. Board
Managing Director
ReportingSteering
Technical FinancialOperations Administrative
Founding Members
GCTWF Members
AGM / Funders Forum
Nominating
Managing
Example V: Greater Cape Town Water Fund, South Africa

17. FOR MORE INFORMATION VISIT:
https://waterfundstoolbox.org/
THANK YOU!