Third PES Agreement in Bhutan


The third Payment for Environmental Services agreement in Bhutan was signed on 29th Oct 2015for 5 years (1st Jan 2016 to 31 Dec 2020) between the Namey Nichu Watershed Management Group (WMG) which consists of 29 households(Provider of environmental services) from NameyNichu village under Tsentoggeog of Paro Dzongkhag and the Drinking water users (Environmental service Users) consisting of five hotels and Satsham Water Association.

The environmental services (ES) provided by the NameyNichu WMG are four additional activities that will contribute towards improving quality of drinking water and protection of the watershed for the users. The intermediaries are Dzongkhag Forestry Office of Paro Dzongkhag and Watershed Management Division under the Department of Forests and Park Services (DoFPS) with technical assistance from SNV Bhutan through the “Integrating PES and REDD+ in Bhutan” project – a collaborative project between SNV Bhutan and Watershed Management Division funded by blue moon fund USA and Bhutan Trust Fund for Environmental Conservation.

Annually, the ES providers shall be paid Nu.142,000only upon compliance to the four agreed activities and after verification by the PES Verification Team. The agreed activities are given below:

1.1 A buffer area of 50 m radius shall be maintained on both sides of the two streams (Komatsa and MarpChorChor) wherein no vegetation/trees shall be harvested to protect the streams’ banks from soil erosion for improving quality of water.

1.2 The ES Provider shall guard the NameyNichu Watershed area from illegal extractions of forest resources and against grazing by cattle and horses from other areas which will ensure vegetation cover and reduce discharge of cow/horse dungs and urine in the water source. 

1.3 The ES Provider shall clear fallen trees, branches, twigs and debris from the 2 streams within the NameyNichu Watershed area to ensure smooth flow of drinking water to the storage tanks of the Users. This activity will contribute towards increasing quantity of water available from the watershed area. For the first cleaning, the ES Users will also join to assist the Provider.

1.4 Only cattle from Namey Nichu village shall be grazed only during daytime in the NameyNichu Watershed area and shall be brought back to the cattle sheds in the village in the evening to reduce discharge of cow dungs and urine in the water source area at night.

Clear terms and conditions were developed and explained to the stakeholders. PES Verification and Monitoring Team is formed representing ES users, ES provider and intermediaries. Simple Verification and Monitoring format had been developed for the PES Verification Team. The Verification and Monitoring Team will conduct monitoring twice a year to see if the activities are implemented as agreed. Based on the results of the monitoring, the ES provider shall be paid an annual fee.

Since there are many users, the collection of annual fee shall be coordinated by Utpal representative of Satsam Water Association and representative of Zhiwaling Hotel. The contribution from each user is given in the image below.