Hydroelectric Power (HEP) and cloud forest conservationPayment for Environmental Services Agreement • May 15th, 2012
This is one of the few direct private agreements so far: a HEP company pays the Monteverde Conservation League (MCL) for the hydrological services rendered by the Children’s Eternal Rain Forest which covers most of the hydropower plant’s upper catchments. Since this forest is already a designated conservation area, the Payment for Environmental Services (PES) scheme is unlikely to result in additional conservation. But the company contributes in this way to the management of the reserve and has also benefited from being able to build the dam and water intake on land of disputed ownership inside the reserve. The company’s PES contribution is treated as Operation and Management (O&M) cost, which represents an increase of about 20 per cent increase in annual O&M costs (note that the company receives a fixed price for the sale of electricity and therefore cannot pass on the bill to final users); contracts are signed for 99 years.
