Protecting Bolivia’s forest watersheds with sustainable finance

By Christina Van Winkle, Forest Impact Accelerator Manager 

High on the southern slope of Tunari National Park in Bolivia, more than 80% of the country’s remaining ancient Kewiña forest clings to steep Andean ridges. These high-altitude native forests are fragile but vital. 

They stabilise slopes, regulate water flows and support unique endemic wildlife found nowhere else on Earth, including Near Threatened Cochabamba Mountain-finch. They also protect the watershed that supplies more than 1 million people in the Cochabamba metropolitan region.

For decades, the park has been under pressure from fires, deforestation and urban expansion. Communities living within have often had tense relationships with the managing authorities, making long-term conservation difficult.

Today that dynamic is beginning to change. Restoration is underway, communities are playing a stronger leadership role, and a new idea is taking shape that could secure the future of the forest: a Payment for Ecosystem Services (PES) mechanism that channels long term financing into restoration and watershed protection.

The work is being developed by our Partner Asociación Armonía, with support from the Forest Impact Accelerator.  

Header Image: Tunari National Park, Bolivia © Asociación Armonía.

Why financing matters for forest restoration 

Over the past several years, Armonía and local communities have made significant progress restoring parts of the Tunari protected area. To date they have planted 1.25 million trees, with more than half of these planted in the Tiquipaya municipality. Community wildfire brigades have been strengthened, reservoirs built to secure water, and new systems created for communities to participate in watershed management.

One of the most important actions was strengthening the structure and function of a watershed governance body, known as Organismo de Gestión de Cuencas (OGC). This coordinates restoration activities and helps design sustainable development strategies for the communities living in the park, helping rebuild trust between them, park authorities and conservation organisations. Women leaders have played an important role in shaping this work. 

However, a major challenge was highlighted – restoration takes decades, but most conservation funding arrives through short-term projects. Without stable long-term financing, restoration gains are difficult to maintain. 

How the financing model would work 

The proposed PES mechanism would collect small contributions directed into a transparent trust fund with independent governance. Resources would then be invested in three main areas: 

• Forest restoration and protection – Communities would receive incentives for protecting existing forest and payments tied to successful restoration outcomes. 

• Community sustainable development – Investments would support livelihood activities that reduce pressure on the forest, such as sustainable agriculture, water management and local enterprises. 

• Strengthening park management – Funds would help support ranger capacity, wildfire prevention and long-term monitoring within Tunari National Park. 

For communities, the system recognises their role as custodians of the watershed. For urban residents, it offers a practical way to support the ecosystems that provide their water. For public and private partners, it creates a transparent structure for long-term investment in landscape restoration.

Once fully implemented, the mechanism could generate an estimated £3 million per year for watershed protection and restoration.  

Designing a Payment for Ecosystem Services mechanism  

Over the past two years, Armonía has worked with municipalities, communities and regional institutions to explore how a PES mechanism could work in the Cochabamba region.

The PES concept is straightforward. Communities living in the upper watershed protect and restore forests that provide essential services such as water regulation, erosion control and biodiversity conservation. Downstream users who benefit from these services contribute financially to support that stewardship.

Through the Accelerator process, Armonía undertook studies, assessments and consultations across the Cochabamba metropolitan area’s seven municipalities. Many residents recognised that protecting the forest is directly linked to their water security. Based on these encouraging results, Armonía and their partners are developing a regional trust fund.  

Building the institutions behind the mechanism 

The financing system is only one piece of the puzzle – strong governance and community participation are also essential. With FIA support, Armonía is now helping communities develop ten-year sustainable development strategies that identify restoration priorities and income opportunities. A multi-stakeholder platform will oversee the initiative and guide decisions, while the park administration is also receiving support to strengthen monitoring, prevent wildfires and improve co-ordination.  

A new model for watershed protection 

The work underway in Tunari is about more than planting trees. It’s about building a durable system that links ecological restoration, community leadership and long-term financing. Once the mechanism is operational, it could transform how the Tunari watershed is managed. Instead of relying on intermittent  projects, the region would have a locally supported financing system that rewards stewardship and protects the Kewiña forests that has supported life in the Andes for centuries. 

Since the start of this project in 2020, several donors have been essential to supporting the initiative. A huge thanks to Accion Andina, Darwin Initiative (direct funding and through the Accelerator), Trillion Trees – BirdLife International, and FFBT (Flanders State of the Art – Agency Nature & Forest).

The Forest Impact Accelerator has run for five successful years with generous support from the Hempel Foundation, Waterloo Foundation and the King Charles III Charitable Fund, as well as £6 million of additional funding sourced in collaboration with our Partners. Overall, it is benefitting 38,000 local people, has improved protection for 400 threatened species, and has impacted over 1 million hectares. This year, we were awarded an important Darwin Initiative Extra grant through the UK government’s Biodiversity Challenge Awards, a programme that supports global biodiversity conservation, reduces poverty, and addresses climate change. The £4,978,335 award will expand and scale these achievements to secure 1 million hectares of Key Biodiversity Areas while generating economic benefits for 200,000 local people.