Investing in reforestation, conservation and restoration solutions to guarantee water security for Latin American cities is profitable - Fondos de Agua

Today, the Report “Natural Infrastructure in the Water Supply System of Guandú, in Rio de Janeiro” was made public during an event at the Museum of the Future in Rio de Janeiro, Brazil. This report is the second in a series of studies of natural infrastructure for water in Brazil and Mexico.

The first report entitled “Natural Infrastructure in the Sao Paulo Water System” evaluated Sao Paulo’s water supply and found that restoring 4,000 hectares could generate a return on investment of US$69M over a 30-years period.

In the case of the City of Rio de Janeiro, we also found a solid economic argument for investing in forests:

Investing in the restoration of 3,000 hectares would deliver a 13% return on investment for CEDAE, Rio’s state-owned water company. The investment required for the targeted restoration of these 3,000 hectares of native forest would be of about $103 million BRL (approximately US$25M). However, this investment would avoid incurring water treatment costs equivalent to $259 million BRL (approximately US$64M), which results in a net profit of $ 156 million BRL (approximately US$39M) over 30 years. The report shows that reducing sediment pollution would avoid the use of 4 million tons of chemical products and 260MWh of energy in the water treatment station over the next 30 years.

The study used WRI’s Green Gray Assessment method to evaluate the financial performance of alternative natural infrastructure investment options. It allows water-dependent companies and water sector investors to examine the costs and benefits of utilizing green infrastructure in combination with traditional, grey infrastructure, and can be replicated across geographies.

The study was produced by WRI Brazil, Boticario Group Foundation for Nature Protection and The Nature Conservancy (TNC), and was supported by FEMSA Foundation, International Union for the Conservation of Nature (IUCN), Instituto BioAtlántica (IBio) and Natural Capital coalition. The participation of TNC was funded by the Latin American Water Funds Partnership.

Learn more about this study here.