Payment-for-watershed services study in Uganda’s Rwenzori mountains

Case Summary: 

This feasibility study reports the benefits of a payment for watershed services system for two watershed systems, Mubuku and Nyamwamba that have their headwaters in the Rwenzori Mountains National Park region in Uganda. Payments for watershed services is a methodology by which a market economy in created for services that relate to protecting ecosystems. In this case, the benefit would be to support the conservation of nature as well as critical water users that are downstream of these watersheds systems. At present, unsustainable land use practices by farmers are resulting in soil erosion and reduced water quality/quantity. These factors are adversely affecting the many downstream industries such as hydropower and mining. The payment for watershed services approach aims to financially assist upstream communities with proper sustainable land management practices, specifically communities whose livelihood depends on these water resources with interventions that prevent the downstream water quantity and quality from depreciating. The benefits of this program are wide spread, primarily in hydropower, irrigation, and water supply. The result of this study will be used to engage downstream users such as utilities and corporations to contribute to water conservation via payment for watershed services.

Actions profiled

Key land management practices that were feasible for this region were identified in this study by using methods such as field data collection, streamflow sampling, agronomic assessment and water resource analysis and simulations. The change in the area that has occurred with improper use was analyzed via satellite imaging. Finally, a stakeholder analysis lead to identifying many entities that benefit from this water resource such as; private landowners, local government agencies, the directorate of water resources and the National Environment Management Authority.


A major impact of this pilot study is that it leads to a better understanding of the value of water resources and the types of mediations needed to protect this resource. Mapping out the distribution of the water resources, identifying the key stakeholders and the drivers that will enable a change in behaviour are the major impacts of this study. This pilot study showed that with a 25% implementation of the above mentioned land use practices, reduced high-flows by 10% for the Mubuku watershed and 35% for Nyamwamba (the agriculture land area is different in these two watersheds) is expected. However, for the low-flow case, there would be an increase in flow of 20% in Mubuku and 40% for Nyamwamba watersheds. The impact on the sediment load is also significant, with a 10% reduction in Mubuku and a 30% reduction in Nyamwamba. The payment for watershed services program will also impact downstream hydropower plants through sediment reduction, which reduces wear and tear in the turbines and thereby reduces maintenance costs. Increased flow in the dry season can result increased hydropower production during the dry season. Therefore these power plants are strong potential stakeholders in this program as buyers of the payment for watershed services system. Additionally, recently, the World Wild Life Fund has recognized the link between conservation and extreme poverty and has implemented “Sustainable Financing of the Rwenzori Mountains National Park (SFRMNP) Project” with funding from the European Union (EU) and the French Funds for Global Environment (FFEM).

Sub-Saharan Africa
Action Area 
Planning and Implementation Activity 
Analysis and Data Collection, Developing and Implementing Policies and Measures
Sectors and Themes 
Agriculture, Water
Future Water
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