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Saving just a small amount of the more than 90 percent of water in water-scarce regions around the world that goes to irrigated agriculture can free up a great volume of water for cities, other farmers and nature.

Nature, however, is often last in line when it comes to getting more water, even when farmers use less. Creative financing solutions that leverage existing water markets can help drive balanced water use and support important conservation goals.

Operating within existing water markets, The Nature Conservancy has developed a concept called “Water Sharing Investment Partnerships” (WSIPs) to acquire water-use rights from willing sellers. WSIPs deploy investor capital and other revenue sources to acquire these rights, which can then be reallocated to depleted freshwater ecosystems, or sold or leased to other water users seeking more supplies, thereby generating financial returns for investors.

The approach is explored in a new report, “Water Share,” co-authored by the organization’s Water program and impact investment unit, NatureVest. WSIPs can keep farmers farming and give them an opportunity to increase their revenues by “growing water” in addition to crops. This water can then be moved back into the environment to meet critical conservation needs.

Read on at: Impact Alpha