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FIAES Rio Lempa Watershed PES - El Salvador Debt-for-Nature Conservation Programme

El Salvador · San Salvador · See the El Salvador profile

World's largest debt-for-nature swap (US$1 billion, October 2024) directs US$200 M over 20 years to protect the Rio Lempa watershed, which supplies 68% of El Salvador's water; FIAES has invested US$90 M+ over 31 years of operation.

90+ US$ million
FIAES cumulative investment since 1993 (1993-2024 (31 years))
54+
Documented conservation projects funded (1993-2024)
1 US$ billion
Size of October 2024 debt-for-nature swap (October 2024)
200 US$ million
New conservation fund directed to the Lempa basin (over 20 years)
75,000 hectares
Protected aquifer recharge zone target (by 2044)
68 %
Share of national freshwater supplied by the Rio Lempa watershed
FIAES Rio Lempa Watershed PES - El Salvador Debt-for-Nature Conservation Programme

Details

Maturity
Scaling
Promoter
FIAES (Fondo de la Iniciativa para las Americas - El Salvador) / CRS
Period
1993-present
Keywords
watershed conservation, debt-for-nature swap, water security, PES

Context

The Fondo de la Iniciativa para las Americas - El Salvador (FIAES) was established in 1993 through a debt-for-nature swap between El Salvador and the United States. The Rio Lempa watershed it protects covers 49% of El Salvador's territory and supplies approximately 68% of national freshwater needs for around 6 million people.

Objectives

In October 2024, El Salvador completed the world's largest debt-for-nature swap for river and watershed conservation — a US$1 billion operation backed by the US International Development Finance Corporation (DFC) — creating a fund that will direct US$200 million over 20 years to conservation and restoration in the Lempa basin, with 75,000 hectares of protected aquifer recharge zones committed by 2044.

Activities

Conservation projects financed through this mechanism pay farmers, cooperatives, and community organisations for sustainable land management in designated watershed zones — an avoided-cost watershed PES in which protecting upstream ecosystems avoids far greater spending on water treatment infrastructure. The new fund is co-managed by Catholic Relief Services (CRS) and FIAES.

Results

Over three decades, FIAES invested more than US$90 million in over 54 documented conservation projects protecting coastal, marine, and terrestrial ecosystems across El Salvador.

Conclusions

FIAES's 31-year track record is credible, but the Lempa Conservation and Restoration Program created by the 2024 debt swap is at an early implementation stage; independently verified outcomes will require several years before formal assessment.

Implementation
Indicative cost
Very high (> €5M) — US$1 billion debt-for-nature swap completed October 2024, directing US$200 million over 20 years; FIAES has invested US$90M+ since 1993.
Time to results
Long (> 3 years) — FIAES founded 1993; new debt swap completed October 2024; aquifer recharge zone targets run through 2044.
Staffing & skills
FIAES (Fondo de la Iniciativa para las Americas - El Salvador), Catholic Relief Services (CRS), co-manager of the new conservation fund, US International Development Finance Corporation (DFC)

Conditions for success

  • 31-year institutional track record of FIAES
  • Sovereign debt-for-nature agreement backed by DFC
  • Co-management structure between FIAES and CRS

Common failure modes

  • The Lempa Conservation and Restoration Program is at an early implementation stage; independently verified outcomes will require several years before formal assessment

Where it fits

Governance type
bilateral debt-for-nature swap with NGO co-management
Scale
national watershed (49% of national territory)
Income level
lower-middle-income

Data sources

Where this practice's information was retrieved from, and when.

Attachments

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