NDF - Financing for climate change and development projects

Investment in disaster risk reduction pays off

Photo: NDF
Photo: NDF

Final evaluation and impact study find positive impacts of investments in disaster risk reduction and climate change awareness in Nicaragua.

The Disaster Management and Climate Change Project, completed earlier this year, aimed at reducing damage linked to climate change in two watersheds in northern Nicaragua. A final evaluation plus an impact study of the project have now been carried out. The findings show that the project has not only enabled thousands of smallholder farmers to become aware of climate change but also allowed them to tackle the impacts through new agricultural practices. The evaluation found that the farmers have increased their agricultural production by more than 18% so that on average each farm increased its annual revenues by nearly USD 200 per hectare of cultivated land.

Almost 5,000 smallholder farmers benefited from the project through a financial incentive and training in environmental restoration systems management. As a result, the tree cover and soil conservation management of almost 22,500 hectares of land (more than 220 km2) improved, enhancing soil-carbon sequestration.

The project financed the construction of more than 4,000 small, medium and large water harvesting infrastructures with a total capacity of 300,000 m3 water stored in reservoirs for the dry season. NDF financed the construction of four large-scale reservoirs that benefit the neighbouring communities. Almost 50,000 people living in vulnerable sites are now protected through the construction of 51 flood mitigation works. In this case, NDF financed large-scale drainage canals, flood retention walls, and several bridges across rivers. In addition, 42 municipal and local disaster prevention, mitigation, and response committees were strengthened through training and equipment. At the community level, more than 7,700 people were trained in risk management, environmental conservation, and climate change.

The project demonstrated clearly that investing in smallholder farming can be a triple win. Individual farmers increase their household income, while becoming more resilient to the impacts brought by a changing climate. And at the same time, we all benefit from the larger carbon sequestration in the soil that is a result of the new agricultural practices.

The project was implemented by the Ministry of Environment and Natural Resources (MARENA) in coordination with a total of nine municipalities in two watersheds that feed the San Juan River (the Lake Apanas and Río Viejo watersheds). The project financed activities in three components: (1) support for the adoption of environmental restoration systems; (2) infrastructure to reduce losses caused by climatic events; and (3) capacity-building and development of instruments for risk management, local compensation mechanisms for environmental services, and adaptation to climate change.

The intervention logic was to reduce damage to the population and basic and productive infrastructure through: (i) in upper watersheds, the promotion of profitable agronomic practices for soil management and erosion control that reduce risks of landslides and adapt producers to climate change; and (ii) in lower watersheds, sustainable investments in infrastructure for flood control and protection of waterways to reduce risks of damages and losses. These interventions were coupled with actions to strengthen the national institutional framework for disaster risk management to provide sustainability.

The NDF support was focused on components 2 and 3: Infrastructure (EUR 1.4 million) and capacity (EUR 1.1 million). The project was co-financed with a loan from IDB of USD 10 million and during the implementation the Swiss Development Cooperation joined the project with an additional USD 4.0 million.

More information
Disaster Management and Climate Change Project [NDF C17]