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Good practice Imported

Peru's National Mechanism for Retribution for Ecosystem Services (MERESE, Ley 30215)

Peru · Lima · See the Peru profile · See the Lima profile

Evidence: Observational / pre–post Top 81% 33/100 · Ask Evidence Copilot about this practice

Peru's 2014 MERESE law lets water utilities reserve tariff revenue for watershed conservation - 45 of 50 utilities have a mechanism, S/132M raised by 2024 - but only 18 utilities actually disburse funds, and a 2024 retrospective rated overall impact just 5-7/10.

45 of 50 utilities
Water utilities with a MERESE Hidrico mechanism (2023)
18 utilities
Water utilities actually disbursing funds (2023)
~8,224 people
People reached directly in basin communities (2023)
32 utilities
Utilities that had begun implementation (October 2024)
>132 S/ million
Funds raised nationally (by October 2024)
~454,000 US$
SEDAPAR (Arequipa) execution (2022-23)
243.9 ha
Bofedales restored by SEDAPAR (2022-23)
19 qochas
Qochas (rainwater-harvesting ponds) built by SEDAPAR (2022-23)
38 km
Irrigation canals built by SEDAPAR (2022-23)
1.5 US$ million
Additional SEDAPAR funding committed (2024-26)
5-7 out of 10
Aquafondo 10-year retrospective rating of MERESE's overall impact (2024 retrospective)
Peru's National Mechanism for Retribution for Ecosystem Services (MERESE, Ley 30215)

Details

Maturity
Scaling
Promoter
Ministerio del Ambiente (MINAM) / SUNASS, Peru
Period
2014-present
Keywords
payments for ecosystem services, watershed conservation, water utilities, wetland restoration, environmental policy

Context

Peru's Ley No. 30215 (Ley de Mecanismos de Retribucion por Servicios Ecosistemicos, MERESE), enacted in 2014 and regulated by Decreto Supremo No. 009-2016-MINAM, created the country's national legal framework for ecosystem-service payment agreements between 'contributors' (those who protect an ecosystem) and 'retributors' (those who benefit from and pay for the service). The Ministerio del Ambiente (MINAM) sets policy and runs the national MERESE registry; for water specifically, Legislative Decree 1280 and SUNASS Resolucion No. 039-2019-SUNASS let water utilities (EPS) reserve a share of tariff revenue for upstream watershed conservation, the MRSE Hidrico sub-mechanism.

Results

By 2023, 45 of Peru's 50 water utilities had a MERESE Hidrico mechanism in place, though only 18 were actually disbursing conservation funds, reaching an estimated 8,224 people directly in basin communities in Huancavelica, Ilo, Cusco and Ayacucho. By October 2024, 32 utilities had begun implementation and over S/132 million had been raised nationally for watershed and ecosystem-recovery projects. At the utility level, Arequipa's SEDAPAR executed roughly USD 454,000 in 2022-23 to restore 243.9 hectares of bofedales (high-Andean wetlands), build 19 qochas (rainwater-harvesting ponds) and 38 km of irrigation canals, with USD 1.5 million more committed for 2024-26.

Conclusions

A ten-year retrospective published by the water fund Aquafondo in 2024 rated MERESE's overall impact only 5-7 out of 10, citing weak institutional capacity, slow deployment of raised funds, and risk of funding discontinuity, and calling for institutional reforms to accelerate implementation. Figures on how many mechanisms are actually registered and active vary across sources (12, 17, 32 and 45 all appear in different reports depending on year and whether a mechanism is merely registered or actually disbursing funds), and MINAM's own MERESE registry does not publish a consolidated national dashboard - a transparency gap even for a decade-old flagship law.

Implementation
Indicative cost
Medium (€50k–€500k) — Over S/132 million raised nationally by October 2024; a utility-level example (SEDAPAR, Arequipa) executed about US$454,000 in 2022-23 with US$1.5 million more committed for 2024-26.
Time to results
Long (> 3 years) — Law enacted in 2014; utility coverage and disbursement have expanded gradually over 10 years, with implementation still rated weak/slow by an independent 2024 retrospective.
Staffing & skills
Ministerio del Ambiente (MINAM), Direccion General de Economia y Financiamiento Ambiental - national policy and registry, SUNASS - water utility regulator setting tariff-reservation rules, Individual water utilities (EPS, e.g. SEDAPAR Arequipa) - fund executors

Conditions for success

  • A national legal framework (Ley 30215, 2014) plus an implementing decree and a dedicated SUNASS tariff-reservation regulation for water utilities
  • Utility-level execution capacity matters: SEDAPAR (Arequipa) shows what disbursement looks like when a utility has capacity (US$454,000 executed with concrete works), a standard most of the other utilities with a nominal mechanism have not matched

Common failure modes

  • Only 18 of 45 utilities with a mechanism actually disburse funds as of 2023 - a large implementation gap between having a mechanism and using it
  • An independent 2024 retrospective (Aquafondo) rated overall impact only 5-7 out of 10, citing weak institutional capacity, slow fund deployment and risk of funding discontinuity
  • Reported counts of active mechanisms are inconsistent across official sources (12, 17, 32 and 45 all appear), and MINAM's registry does not publish a consolidated national dashboard - a transparency gap

Where it fits

Governance type
national regulatory framework implemented by decentralised water utilities
Scale
national (50 water utilities)
Income level
upper-middle income (Peru)

Commonly funded by

National / regional programmes

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Data sources

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