Pedro Moncayo Water Fund — A 5%-of-Tariff Páramo Fund for a Small Ecuadorian Municipality, Stalled by Governance Gaps

The Pedro Moncayo Water Fund (Ecuador) was set up by CARE with the municipality of Pedro Moncayo and its public water utility, with initial support from the L'Oréal Foundation in 2019. It is a public–community financial mechanism meant to protect and restore the páramos and wetlands of the Mojanda lake system, which supply drinking water to about 200,000 people. Its only revenue source is a 5% contribution of the utility's annual water-user revenue.
The fund was created in coordination with the Mojanda Conservation and Sustainable Use Area (ACUS, declared 2019, 6,000 hectares of páramos and wetlands) and, later, the Mojanda Water Protection Area (APH, 2021). Its ordinance was developed through a multi-stakeholder process including farmer groups, neighbourhood organisations and women-led producer groups. It builds on an older local tradition: since 1998 the municipality and a consortium of water boards had pooled water charges into a Mojanda micro-watershed reforestation fund (2006 Markets for Watershed Services profile).
Evidence and honest limits: CARE's 2025 ex-post evaluation reports that about US$300,000 had accumulated over six years but that no funds had been disbursed for direct conservation activities; the management committee has been inactive since 2019 because of staff turnover and the lack of a formal legal agreement giving it authority over budget decisions. The fund also depends on a single revenue source and has low public awareness. No ecological outcomes attributable to the fund are reported; the 6,000 ha figure describes the protected area, not fund results.
Why it matters: it is a rare documented example of a water fund designed for small and medium municipalities (CARE cites populations under 60,000), including candid lessons: formalise delegation of decisions in regulation, keep money in a separate account, widen the committee to water boards and women's producer groups, and diversify revenue. CARE is using the model to start funds in other Ecuadorian districts.

Read the full analysis: https://www.care.org/resources/locally-financed-water-funds-in-ecuador/